I 

i 


LEGISLATIVE 


AND 


DOCUMENTARY  HISTORY 


OF   THE 


BANK  OF  THE  UNITED  STATES: 


INCLUDING    THE    ORIGINAL 


BANK  OF    NORTH    AMERICA 


• 



COMPILED 

BY  M.  ST.  CLAIR  CLARKE   &  D.  A.  HALL, 


WASHINGTON: 

PRINTED    BY    GALES    AND    SEATON. 

1832. 


—  •*•  JS-*   %. 


X  ^ 


PREFACE. 


THE  Editors  present  to  the  public  the  following  pages, 
with  the  hope  that  they  may  impart  useful  knowledge  in 
regard  to  the  past  legislation  of  Congress,  upon  the  highly 
important  subject  of  which  they  treat.  It  has  been  their 
design  to  collect  and  embody,  in  as  brief  compass  as  pos- 
sible, the  entire  proceedings,  debates,  and  resolutions,  of 
Congress,  upon  the  various  bills  and  projects  for  a  National 
Bank,  which,  at  any  time  during  the  existence  of  the  Fe- 
deral Government,  have  been  brought  forward  or  discussed. 
In  their  proper  connexion,  they  have  also  embraced  such 
reports  of  committees  and  public  officers,  as  had  relation 
to  the  establishment,  constitutionality,  or  public  uses  of  a 
bank.  The  Debates,  which  form  the  great  body  of  the 
collection,  will  be  found  to  contain  the  opinions  and  ela- 
borate arguments  of  the  most  distinguished  men  of  our 
country,  both  for,  and  against,  the  establishment  of  such 
an  institution.  For  current  reference,  or  preservation  of 
speeches,  in  convenient  form,  this  part  of  the  work  is  cal- 
culated to  be  permanently  useful.  In  the  statement  of  the 
decision  of  important  questions,  the  journals  of  Congress 
have,  as  far  as  possible,  been  relied  on;  it  will  occur,  how- 
ever, to  those  familiar  with  the  proceedings  of  Congress, 
that  very  much  of  the  action  of  that  body,  on  all  bills  of 
public  interest,  finds  no  place  in  their  daily  record.  All 
proceedings  in  Committee  of  the  Whole  are  excluded  from 
the  journals  of  the  House;  and,  if  they  become  matter  of 
record  at  all,  it  is  in  the  pages  of  the  gazettes  of  the  day. 


PREFACE. 


For  the  history  of  the  proceedings  and  the  debates  in  Com- 
mittee of  the  Whole,  the  files  of  the  National  Intelligencer 
have  been  consulted:  these  furnish,  during  a  considerable 
period  of  our  legislative  history,  the  most  correct  sources 
of  information.  It  has  been  a  leading  object  with  the 
editors,  to  collect  with  accuracy,  and  state  with  fidelity, 
the  acts  that  have  been  done,  and  the  opinions  which  have 
been  uttered  in  Congress,  and  the  Executive  Departments, 
on  the  establishment  and  perpetuation  of  a  National  Bank. 
Errors  and  unimportant  omissions  may,  perhaps,  be  de- 
tected; but  none,  it  is  hoped,  which  can  detract  from  the 
merit,  which  the  editors  claim,  of  general  accuracy. 


CONTENTS 


CHAPTER  I. 

The  institution  of  the  Bank  of  North  America,  page  9:  Proposition  in  the 
old  Congress,  for  a  bank,  10:  Resolution  in  favor  of  establishing  a  bank,  ibid: 
Ayes  and  noes  on  resolution,  11:  Plan  of  the  bank,  ibid:  Ordinance  incorpo- 
rating Bank  of  North  America,  12. 

CHAPTER  II. 

Bank  of  the  United  States  projected — Hamilton's  report,  15:    Hamilton's 
plan  of  bank,  31:    Bill  introduced  into  Senate— proceedings  thereon,  35:  Be- 
rn the  House,  on  the  bill,  37—84:    Vote  on  the  passage  of  the  bill,  85: 
•ii  of  Edmund  Randolph,  attorney  general,  given  to  the  President, 
again  uonality  of  the  bill,  86— 89:    Of  Thomas  Jefferson,  Secre- 

tary of  State,  on  the  same  subject,  91:   Of  Alexander  Hamilton,  Secretary  of 
the  Treasury,  in  favor  of  the  bill,  95:  Supplementary  acts,  114. 

CHAPTER  III. 

Memorials  presented  for  the  renewal  of  the  charter  of  bank,  115:  Gallatin's 

1S09,  116:  Dividends  of  old  bank,  120:  Bill  to  establish  a 

lai  Bank,  reported  by  Mr.  Love/from  select  committee,  122:  Bill  to  re- 

sie  old  charter,  reported  by  Mr.  Taylor,  of  S.  C.,  133:  Bill  for  the  same 

purpose,  reported  4th  of  January,  1811,  by  Mr.  Burwell,  137:  Debates  in  the 

Hous«  jill,  139 — 299:    Ayes  and  noes  on  postponement  of  bill,  274: 

Menu  ^nate  for  renewal— bill  reported — letter  of  Mr.  Gallatin,  300:* 

Debates  in  Senate  on  bill  to  renew  charter,  302 — 446:    Bill  rejected,  by  the 

casting  vote  of  Vice  President,  446:   Debate  in  House,  on  Mr.  Taylor's  bill, 

449 — 171. 

CHAPTER  IV. 

Various  propositions  for  the  establishment  of  a  National  Bank,  and  pro- 
ceedings thereon,  472—480:  Letter  of  Secretary  Dallas,  to  Committee  of 
Ways  and  Means,  on  a  bank  481:  Mr.  Fisk,  of  N.  Y.  reports  a  bill,  487: 
Proceedings  and  debates  thereon,  488—518:  Same  bill,  as  amended,  519: 
Bill  rejected— ayes  and  noes,  534:  Secretary  Dallas  to  Mr.  Lowndes,  535: 
Bill  reported  in  Senate,  by  Mr.  King,  539:  Passed,  ayes  and  noes,  549:  Re- 
ported to  the  House,  with  amendments,  and  debated,  549—559:  Ordered  to 
a  third  reading,  560:  Recommitted,  561:  Again  ordered  to  a  third  reading, 
562:  Mr.  Webster's  motion  to  recommit,  and  speech,  562-3:  Bill  rejected, 
by  casting  vote  of  Speaker,  571:  Vote  reconsidered,  574:  Passed  the  House, 
579:  Amendments  in  House  and  Senate,  580—585:  Bill  as  it  passed  both 


vi  CONTENTS. 

Houses,  585:  President's  ve/o,  594:  Bill  reported  in  Senate,  by  Mr.  Barbour, 
596:  Passed  the  Senate,  605:  Indefinitely  postponed  in  the  House,  13th  Feb- 
ruary, 1815,  608. 

CHAPTER  V. 

On  the  grant  of  the  charier  of  1816 — Mr.  Madison,  on  the  defects  of  the 
currency,  609:  Mr.  Dallas  proposes  a  bank  to  remedy  these  defects,  612: 
His  letter  on  currency,  and  a  bank,  613 — 619:  Bill  reported  by  Mr.  Calhoun, 
621:  Mr.  Calhoun's  speech  on  bill,  630:  Mr.  Sergeant  moves  to  reduce  capi- 
tal of  bank,  635:  Mr.  Smith's  speech  on  said  motion,  636:  Messrs.  Sergeant, 
Randolph,  Ward,  and  Tucker,  of  Virginia,  speak  on  the  motion,  640 — 646: 
Further  debates  on  motion,  by  Mr.  Webster,  Mr.  Cuthbert,  Mr.  Hopkinson, 
Mr.  Sharp,  and  Mr.  Calhoun,  646 — 653:  Motion  overruled,  653:  Motion  to 
dispense  with  Government  subscription  of  seven  millions,  and  debate  on  said 
motion,  653 — 658:  On  the  appointment  of  five  directors  by  the  Government— 
debate  in  committee  thereon,  661 — 666:  Same  in  the  House,  with  vote,  678— 
679:  Speech  of  Mr.  Clay,  669:  Yarious  amendments  proposed,  672—676: 
Motion  to  locate  bank  at  New  York,  carried,  676:  This  vote  reversed,  677: 
Bill  ordered  to  be  engrossed,  680:  Passed  the  House,  681:  Considered  aj«f 
debated  in  the  Senate,  683—692:  Speech  of  Mr.  Wells,  694:  Passed  the/Se- 
nate,  with  amendments,  706:  Amendments  considered  in  the  House,  707— 
712:  Agreed  to,  713:  Bill  approved  by  the  President,  713. 

CHAPTER  VI. 

Certain  proceedings  after  the  bank  went  into  operation— Mr.  Spencer's  re- 
solution for  appointing  a  committee  to  inspect  hank  books,  &c.,  714:  Com- 
mittee appointed— their  report,  714—732:  Mr.  Trimble's  motion  for  a  scire 
facias,  732:  Mr.  Spencer's  resolutions  for  withdrawing  Government  depo- 
sites,  for  scire  facias,  &c.  732:  Mr.  Johnson's  resolution  for  a  repeal  of  the 
charter,  734:  President  Jackson's  suggestions  in  regard  to  the  bank,  734: 
Mr.  McDuffie's  reportin  1830,  735:  Mr.  Smith's  report  in  Senate,  773:  Let- 
ters of  Mr.  Madison,  in  1831,  to  C.  J-  Ingersoll,  778:  Judicial  decisioi 
bank  charter,  781:  Justice  Marshall's  opinion,  782. 


LEGISLATIVE 

........     .j**e, 


AXD 


DOCUMENTARY     HISTORY 


I \\ITED    STATES    BANK, 


CHAPTER    T. 

BANK   OF  NORTH   AMKWCA: 
PROC'FEDIXOS  IX   CONGRESS  OX  ITS  ORIGINAL  INSTITUTION. 

IN  tracing  the  history  of  the  Bank  of  the  Tinted  States,  it  seems  proper 

logive  some  account  of  that  moneyed  institution,  which,  deriving  its  incipient 

'•3  from  the  General  Govcrninc-iit,  may  l.c  considered  as  the  prototype 

of  the  corporations  which  have  more  recently  borne  that  name.    The  Bank  of 

,  which  was  the  precursor  of  that  of  the  United  States,  was 

incorporated  in  1781,  by  an  ordinance  of  the  American  Congress.    Its 

dependence,  however,  upon  this  creating  power,  was  of  short  continuance: 

year,  it  accepted  of  a  charter  from  the  State  of  Pennsylvania, 

ace  been  content  to  derive  its  powers  from  that  source.    All  that  is 

.  in  relation  to  it,  is  to  give  the  proceedings  of  Congress,  on  its 

i;il  institution,  from  the  first  introduction  of  the  plan  of  the  bank,  to  its 

tinal  consummation,  in  the  grant  of  the  ordinance;  and  these  are  given  in  the 

r  ot  their  dates,  and  chiefly  in  the  words  of  the  Journals  of  Congre&s, 

from  which  they  are  taken. 

oceedings  on  the  enactment  of  this  ordinance,  together  with  those 
in  the  subsequent  chapters,  will  place  the  reader  in  possession  of  the  en- 
•  •gislation  of  Congress,  both  before  and  since  the  adoption  of  the  consti- 
•.  upon  the  subject  of  a  bank. 

Proposition  for  the  establishment  of  a  Bank. 

IN  CONGRESS,  June  21,  1780. 

A  letter  of  this  day,  from  the  Board  of  War,  was  read,  informing  "that  a 
number  of  patriotic  persons,  having  formed  a  plan  for  the  establishment  of  a 
bank,  whose  object  is  the  public  service;  that  the  directors  have  applied  to 
that  Board,  to  represent  to  Congress  the  desire  of  the  company  that  a  com- 
mitttee  of  this  body  maybe  appointed  to  confer  with  the  inspectors  and  direc- 
tors on  the  subject,  to-morrow  morning:"  Whereupon, 

Ordered,  That  a  committee  of  three  be  appointed,  for  the  purpose  above 
mentioned.  The  members  chosen  were,  Mr.  Ellsworth,  Mr.  Duane,  and  Mr. 
Scott. 

2 


10  BANK    OF   NORTH    AMERICA. 

JUNE  22,  1780. 

The  committee  appointed  to  confer  with  the  inspectors  and  directors  of  the 
proposed  bank,  brought  in  a  report,  which  was  read. 

The  committee  also  laid  before  Congress,  the  plan  of  the  bank,  communi- 
cated to  them  at  the  said  conference,  which  being  read,  Congress,  thereupon, 
came  to  the  following  resolutions: 

Whereas  a  number  of  the  patriotic  citizens  of  Pennsylvania  have  com- 
municated to  Congress  a  liberal  offer,  on  their  own  credit,  and  by  their  own 
exertions,  to  supply  and  transport  three  millions  of  rations,  and  300  hogsheads 
of  runij  for  the  use  of  the  army,  and  have  established  a  bank,  for  the  sole  pur- 
pose of  obtaining  and  transporting  the  said  supplies,  with  the  greater  facility 
and  despatch:  And  whereas,  on  the  one  hand,  the  associators,  animated  to 
this  laudable  exertion  by  a  desire  to  relieve  the  public  necessities,  mean  not 
to  derive  from  it  the  least  pecuniary  advantage;  so,  on  the  other,  it  is  just  and 
reasonable,  that  they  should  be  fully  reimbursed  and  indemnified:  Therefore, 

Resolved,  unanimously,  That  Congress  entertain  a  high  sense  of  the  liberal 
offer  of  the  said  associators  to  raise  and  transport  the  beforementioned  sup- 
plies for  the  army,  and  do  accept  the  same  as  a  distinguished  proof  of  their 
patriotism. 

Resolved,  That  the  faith  of  the  United  States  be,  and  the  same  hereby  is, 
pledged,  to  the  subscribers  to  the  said  bank,  for  their  effectual  reimburse- 
ment in  the  premises. 

Resolved,  That  the  Board  of  Treasury  be  directed  to  deposite,  in  the  said 
bank,  bills  of  exchange  in  favor  of  the  directors  thereof,  on  the  ministers  of 
these  United  States  in  Europe,  or  any  of  them,  and  in  such  sums  as  shall  be 
thought  convenient,  but  not  to  exceed,  in  the  whole,  £150,000  sterling;  that 
the  said  bills  are  to  be  considered,  not  only  as  a  support  of  the  credit  of  the  said 
bank,  but  as  an  indemnity  to  the  subscribers  for  all  defi ciences  of  losses  and  ex- 
penses which  they  may  sustain,  on  account  of  their  said  engagements,  and  which 
shall  not,  within  six  months  from  the  date  hereof,  be  made  good  to  them  out  of 
the  public  treasury;  and,  in  case  of  failure,  such  a  proportion  of  said  bills  as 
shall  be  requisite  to  make  good  the  deficiency ,.shall  be  negotiated  for  that  pur- 
pose, by  the  said  directors,  and  the  residue  returned  into  the  treasury. 

Resolved*  That,  upon  representation  made,  that  the  bank  stands  in  need  of 
occasional  assistance,  Congress  will  advance  as  much  of  their  current  money 
as  can  be  spared  from  other  services. 

Resolved,  That  a  standing  committee  of  Congress  be  appointed,  to  confer 
with  the  officers  of  the  said  bank,  as  occasion  may  require.  The.members 
chosen  are  Mr.  Ellsworth,  Mr.  Duane,  and  Mr.  Scott. 

JUNE  23, 1780. 

Ordered,  That  two  members  be  added  to  the  committee  appointed  to  con- 
fer with  the  directors  and  inspectors  of  the  proposed  bank,  in  the  room  of 
Mr.  Duane  and  Mr.  Ellsworth,  who  are  absent.  The  members  chosen  are 
Mr.  Livingston  and  Mr.  Adams. 

Whether  the  preceding  proposition  and  resolutions  had  any  immediate 
connexion  with  the  plan  that  was  subsequently  submitted,  as  hereafter  exhi- 
bited, by  Robert  Morris,  and  adopted  by  Congress,  does  not  appear. 

Proceedings  on  the  incorporation  of  the  Bank  of  North  America. 

MAY  26,  1781. 

On  the  report  of  a  committee,  consisting  of  Messrs.  Witherspoon,  Sulli- 
van, M.  Smith,  and  Clymer,  to  whom  was  referred  a  letter  from  Mr.  R.  Mor- 
ris, with  the  plan  of  a  bank: 

Resolved,  That  Congress  do  approve  of  the  plan  for  establishing  a  national 
bank,  in  these  United  States,  submitted  to  their  consideration  by  R.  Morns, 
on  the  17th  May,  1781,  and  that  they  will  promote  and  support  the  same,  by 


CHARTERED  BY  CONGRESS.  JJ 

such  ways  and  means,  from  time  to  time,  as  may  appear  necessary  for  the  in- 
stitution, and  consistent  with  the  public  good. 

That  the  subscribers  to  the  said  bank  shall  be  incorporated  agreeably  to  the 
principles  and  terms  of  the  plan,  und-cr  the  name  of  the  4*  President,  Directors, 
and  Company  of  the  Bank  of  North  America,"  so  soon  as  the  subscription 
shall  be  filled,  the  directors  and  president  chosen,  and  application  for  that 
purpose  made  to  Congress,  by  the  president  and  directors  elected. 

On  the  question  to  agree  to  this  paragraph,  the  yeas  and  nays  being  re- 
quired by  Mr.  T.  Smith,  were  as  follows: 

New  Hampshire,         .         .         .         .         Mr.  Sullivan,  ay.  7 

Livermore,       ay.  5      ' 
MattachutctUt  ....         Mr.  Lovell,  n0.  ?  no 

Ward,  no.  5 

Rhode  Island,  Mr.  Varnum,  ay. 

Connecticut,  -         -         Mr.  Huntington,      ay. 

New  Jersey,  Mr.  Witherspoon,  ay.  ?  a 

Houston,  av.  5 

Pennsylmtoto,  Mr.  Clymer,  ay.  I  divided 

T.  Smitl),          no.  ^ 

Maryland,  Mr.  Jenifer,  ay.-) 

Carroll,  *Z'\ 

Virginia,  .         Mr.  Jones,  ay.-T 

Madison,  no.  I  av 

Bland,  ay.  f  y' 

M.  Smith,          ay.  I 
.\nrth  Carolina,  Mr.  Sharp,  ay.  7 

Johnson,  ay.  v  &y* 

South  ('(irnhiHi,  Mr.  Matthews,         ay.-) 

Bee,  ay.£ay- 

Motte,  ay.  \ 

Mr.  Walton,  a.* 


Howly,  av.  S 

So  it  was  roolvcd  in  the  affirmative. 

Resolved,  Thai  it  be  recommended  to  the  several  States,  by  proper  laws 
for  that  purpose,  to  provide  that  no  other  bank  or  bankers  shall  be  established 
or  permitted  within  the  said  States,  respectively,  during  the  war. 

fasolvcd,  That  the  notes  hereafter  to  be  issued  by  the  said  bank,  payable 
on  demand,  shall  Irc  receivable  in  payment  of  all  taxes,  duties,  and  debts,  due, 
or  that  may  become  due  or  payable  to  the  United  States, 

Resvlved,  That  Congress  will  recommend  to  the  several  Legislatures  to 

laws    making  it  ielony,  without  benefit  of  clergy,  for  any  person  to 

counterfeit  bank  notes,  or  to  pass  such  notes,  knowing  them  to  be  counter- 

:  also,  making  it  felony,  without  benefit  of  clergy,  for  any  president,  in- 

spector, director,  officer,  or  servant  of  the  bank,  to  convert  any  of  the  pro- 

perty, money,  or  credit,  of  the  said  bank,  to  his  own  use,  or  in  any  other  way 

bank1  °r  embexzlemcnt>  as  an  officer  or  servant  of  the  said 

The  plan  of  the  bank  above  referred  to  is  as  follows: 

1st.  That  a  subscription  be  opened  for  400,000  dollars,  in  shares  of  400  dol- 
lars each,  to  be  paid  in  gold  or  silver. 

T  ~d-  ^hat  th6  subscription  te  paid  into  the  hands  of  George  Clymer  and 
John  Nixon,  Esquires,  or  their  agents. 

3d.  That  every  subscriber  of  less  than  five  shares  shall  pay  the  whole  sum 
«n  the  day  ot  his  subscription, 

hat  every  subscriber  of  five  shares  or  upwards  pay  one  half  of  the 
subscription,  and  the  other  half  within  three  months  of 


4th.  T 
sum  on 
that  da 


tat    a 

5th.  That  every  holder  of  a  share  shall  be  entitled  to  vote  by  himself  his 
agent,  or  proxy,  properly  appointed,  at  all  elections  of  directors,  and  that  he 


12  BANK    OF    NORTH    AMERICA. 

have  as  many  votes  as  he  holds  shares?  and  that  every  subscriber  may  sell  or 
transfer  his  share  or  shares  at  pleasure,  the  transfer  being  made  in  the  bank 
books,  in  presence  and  with  the  approbation  of  the  proprietor,  or  his  lawful 
attorney,  the  purchaser  then  to  become  entitled  to  the  right  of  voting,  &c. 

6th.  That  there  be  twelve  directors  chosen  from  among  those  entitled  to 
vote,  who,  at  their  first  meeting,  shall  choose  one  as  president. 

7th.  That  there  be  a  meeting  of  directors  quarterly,  for  the  purpose  of  regu- 
lating the  affairs  of  the  bank,  and  seven  of  the  directors  to  make  a  Board,  and 
that  the  Board  have  power  to  adjourn  from  time  to  time. 

8th.  That  the  Board  of  Directors  determine  the  manner  of  doing  business, 
and  the  rules  and  forms  to  be  pursued,  appoint  the  various  officers  which  they 
may  find  necessary,  and  dispose  of  the  money  and  credit  of  the  bank,  for  the 
interest  and  benefit  of  the  proprietors,  and  make,  from  time  to  time,  such  divi- 
dends out  of  the  profits,  as  they  may  think  proper. 

9th.  That  the  Board  be  empowered,  from  time  to  time,  to  open  new  subscrip- 
tions for  the  pu rose  of  increasing  the  capital  of  the  bank,  on  such  terms  and 
conditions  as  they  shall  think  proper. 

10th.  That  the  Board,  at  every  quarterly  meeting,  shall  choose  two  directors 
to  inspect  and  control  the  business  of  the  bank  for  the  ensuing  three  months, 

lira.  That  the  inspectors,  so  chosen,  shall,  on  the  evening  of  every  day,  Sun- 
days excepted,  deliver  to  the  superintendent  of  the  finances  of  America,  a 
state  of  the  cash  account,  and  of  the  notes  issued  and  received, 

12th.  That  the  bank  notes,'payable  on  demand,  shall,  by  law,be  made  receiv- 
able in  the  duties  and  taxes  of  every  State  in  the  Union,  and  from  the  respec- 
tive States,  by  the  treasury  of  the  United  States,  as  specie. 

13th.  That  the  superintendent  of  the  finances  of  America  shall  have  a  right, 
at  all  times,  to  examine  into  the  affairs  of  the  bank,  and  for  that  purpose 
shall  have  access  to  all  the  books  and  papers, 

14th.  That  any  director  or  officer  ot  the  bank,  who  shall  convert  any  of  the 
property,  moneys,  or  credits  thereof,  to  his  own  use,  or  shall,  any  other  way, 
be  guilty  of  fraud,  or  embezzlement,  shall  forfeit  all  his  share  or  stock  to  the 
company. 

15th.  That  laws  shall  be  passed,  making  it  felony,  without  benefit  of  clergy, 
to  commit  such  fraud  or  embezzlement, 

16th.  That  the  subscribers  shall  be  incorporated  under  the  name  of"  the  Pre- 
sident, Directors,  and  Company,  of  the  Bank  of  North  America/' 

17th.  That  none  of  the  directors  shall  be  entitled  to  any  pecuniary  advantage 
for  his  attendance  on  the  duties  of  his  office  as  director,  or  as  president  or 
inspector,  unless  an  alteration,  in  this  respect,  shall  hereafter  be  made,  by  the 
consent  of  a  majority  of  the  stocklvolders,  at  a  general  election. 

18th.  That,  as  soon  as  the  subscription  shall  be  filled,  George  Clymer  and 
John  Nixon,  Esquires,  shall  publish  a  list  of  the  names  and  sums  respec- 
tively subscribed,  with  the  place  of  abode  of  the  subscribers,  and  appoint  a 
day  tor  the  choice  of  directors,  to  whom,  when  chosen,  they  shall  deliver  over 
the  money  by  them  received. 

DECEMBER  29,  1781. 

An  ordinance  for  incorporating  the  subscribers  to  the  national  bank  was 
read  a  first  time. 

Ordered,  That  Monday  next  be  assigned  for  a  second  reading. 

MONDAY,  December  3 1st. 

The  said  ordinance  was  read  a  second  and  third  time,  and  agreed  to,  as  fol- 
lows: 
Jin  Ordinance  to  incorporate  the  subscribers  to  the  Bank  of  North  America. 

Whereas  Congress,  on  the  26th  day  of  May  last,  did,  from  a  conviction  of 
the  support  which  the  finances  of  the  United  States  would  receive  from  the 
establishment  of  a  National  Bank,  approve  a  plan  for  such  an  institution,  sub- 
mitted to  their  consideration  by  Robert  Morris,  Esq.  and  now  lodged  among 


CHARTERED  BY  CONGRESS.  jg 

the  archives  of  Congress,  and  did  engage  to  promote  the  same  by  the  most 
effectual  means:  And  whereas  the  subscription  thereto  is  now  fillet!,  from  an 
expectation  of  a  charter  of  incorporation  from  Congress,  the  directors  and 
president  are  chosen,  and  application  hath  been  made  to  Congress,  by  the 
said  president  and  directors,  for  an  act  of  incorporation:  And  whereas  the 
exigencies  of  the  United  States  render  it  indispensably  necessary  that  such 
an  act  be  immediately  passed: 

Be  it  therefore  ordained  and  it  is  hereby  ordained  by  the  United  States 
in  Congress  assembled,  That  those  who  are,  and  those  who  shall  become,  sub- 
scribers to  the  said  bank,  be,  and  forever  after  shall  be,  a  corporation  and  body 
politic,  to  all  intents  and  purposes,  by  the  name  and  style  of  k<  The  President, 
Directors,  and  Company,  of  the  Bank  of  North  America." 

Jind  be  it  further  ordained,  That  the  said  corporation  are  hereby  declared 
and  made  able  and  capable,  in  law,  to  have,  purchase,  receive,  possess,  enjoy, 
and  retain,  lands,  rents,  tenements,  hereditaments,  goods,  chattels,  and  effects, 
of  what  kind,  nature,  or  quality,  soever,  to  the  amount  of  ten  millions  of  Spa- 
nish silver  milled  dollars,  and  no  more:  and,  also,  to  sell,  grant,  demise,  alien, 
or  dispose  of,  the  same  lands,  rents,  tenements,  hereditaments,  goods,  chattels, 
and  effects. 

And  be  it  further  ordained,  That  the  said  coporation  be,  and  shall  be,  for 
ever,  hereafter,  able  and  capable,  in  law,  to  sue  and  be  sued,  plead  and  be  im- 
pleaded,  answer  and  be  answered  unto,  defend  and  be  defended,  in  courts 
of  record,  or  any  other  place  whatsoever,  and  to  do  and  execute  all  and  singu- 
lar other  matters  and  things  that  to  them  shall  or  may  appertain  to  do. 

And  be  it  further  ordained.  That,  for  the  well  governing  of  the  said  cor- 
poration and  the  ordering  of  their  affairs,  they  shall  have  such  officers  as  they 
shall  hereafter  direct  orappoint.  Provided*  never thde99,  That  twelve  direc- 
tors, one  of  whom  shall  be  the  president  of  the  corporation,  be  of  the  number 
of  their  officer-. 

And  be  it  further  ordained,  'That  Thomas  Willing  be  the  present  president, 
and  that  the  said  Thomas  Willing  and  Thomas  Fitzsimmons,  John  Maxwell 
Nesbit,  James  Wilson,  Homy  Hill,  Samuel  Osgood.  Cadwallader  Morris, 
Andrew  Caldwell,  Samuel  Inglis,  Samuel  Meredith,  William  Hinghani, 
Timothy  Matlack,  be  the  present  directors  of  the  said  corporation  ^  and  shall 
so  continue  until  another  president  and  other  directors  shall  be  chosen,  ac- 
cording to  the  laws  and  regulations  of  the  said  corporation. 

And  be  it  further  ordainc  d*  That  the  president  and  directors  of  the  said 
corporation  shall  be  capable  of  exercising  such  power  for  the  well  governing 
and  ordering  of  the  affairs  of  the  said  corporation,  and  of  holding  such  occa- 
sional meetings  for  that  purpose,  as  shall  be  described,  fixed,  and  determined, 
by  the  laws,  regulations,  and  ordinances,  of  the  said  corporation. 

Jlnd  be  it  further  ordained.  That  the  said  corporation  may  make,  ordain, 
establish,  and  put  in  execution,  such  laws,  ordinances,  and  regulations,  as 
shall  seem  necessary  and  convenient  to  the  government  of  the  said  corpora- 
tion . 

Provided*  always.  That  nothing  herein  before  continued  shall  be  construed 
to  authorize  the  said  corporation  to  exerci/e  any  powers,  in  any  of  the  United 
States,  repugnant  to  the  laws  or  constitution  of  such  State. 

Ana  be  it  further  ordained,  That  the  said  corporation  shall  have  full  power 
and  authority  to  make,  have,  and  use,  a  common  seal,  with  such  device  and 
inscription  as  they  shall  think  proper,  and  the  same  to  break,  alter,  and  renew, 
at  their  pleasure. 

Jlnd  be  it  further  ordained.  That  this  ordinance  shall  be  construed  and 
taken  most  favorably  and  beneficially  for  the  said  corporation. 

Done  by  the  United  States  in  Congress  assembled,  &c. 

Resolved,  That  it  be  recommended  to  the  Legislature  of  each  State  to  pass 
such  laws  as  they  may  judge  necessary,  for  giving  the  foregoing  ordinance  its 
full  operation,  agreeably  to  the  true  intent  and  meaning  thereof,  and  accord- 


|4  BANK    OF    NORTH    AMERICA 

« 

ing  to  the  recommendations  contained  in  the  resolutions  of  the  26th  day  ot 
May  last. 

NOTE. — By  the  kindness  of  the  author,  the  editors  are  enabled  to  lay  before  their 
readers  the  following-  interesting-  extract  in  relation  to  this  bank,  from  the  life  of  Go- 
verneur  Morris,  recently  published. 

"  One  of  the  first  acts  of  the  Superintendent  of  Finance  was  to  propose  the  plan  of 
a  bank,  which  was  incorporated  by  Congress,  under  the  name  of  the  Bank  of  North 
America.  Mr.  Governcur  Morris  says,  in  a  letter  to  a  friend,  written  not  long1  before  his 
death,  « the  first  bank  in  this  country  was  planned  by  your  humble  servant.'  By  this, 
he  probably  meant,  that  he  drew  up  the  plan  of  the  bank,  and  the  observations  accom- 
panying-;t,  which  were  presented  to  Congress,  and  not,  that  he,  individually,  origi- 
nated the  scheme .  This  was  doubtless  matured  in  conjunction  with  the  superintendent. 
A  warm  friendship  had  subsisted  between  them  for  some  time,  which,  it  may  be  pre- 
sumed, was  increased  by  a  similarity  in  their  turn  of  mind  for  financial  pursuits.  To 
Hamilton,  also,  may  properly  be  ascribed  a  portion  of  the  merit  in  forming1  this  bank. 
About  two  weeks  before  the  plan  was  sent  to  Congress,  Hamilton  wrote  a  letter  to 
Robert  Morris,  enclosing-  an  elaborate  project  for  a  bank.  In  a  letter  acknowledging 
the  reception  of  this  paper,  the  financier  speaks  of  it  with  commendation.  He  says, 
'I  have  read  your  performance  with  that  attention  which  it  justly  deserves,  and  finding- 
many  parts  of  it  to  coincide  with  my  own  opinions  on  the  subject,  it  naturally  strength- 
ened that  confidence,  which  every  man  ought  to  possess,  to  a  certain  degree,  in  his 
own  judgment.'  He  then  tells  him  that  he  shall  communicate  it  to  the  directors  of 
the  bank,  to  aid  them  in  their  deliberation  on  certain  points,  which  it  was  not  thought 
expedient  to  embrace  in  the  plan  itself,  particularly  that  of  interweaving  a  security 
with  the  capital. 

"  This  bank  had  an  extraordinary  effect  in  restoring  public  and  private  credit  in  the 
country,  and  was  of  immense  utility  in  aiding  the  future  operations  of  the  financier, 
although  it  was  begun  with  the  small  capital  of  $400,000.  Hamilton's  project  contem- 
plated a  vastly  larger  sum,  in  which  Mr.  Morris  agreed  with  him,  but  its  immediate 
success,  on  so  large  a  scale,  was  doubtful,  and  if  it  failed  in  the  outset,  it  could  not  be 
revived;  whereas,  by  beginning  with  a  small  capital,  and  establishing  a  credit  with 
the  public,  gradually,  it  would  be  easy  afterwards  to  increase  the  amount,  and,  in  the 
end,  all  needful  advantages  would  be  derived,  to  the  utmost  extent  of  banking  facilities. " 
— See  Sparks'  Life  of  Governeur  Morris,  vol.  1,  page  235. 

In  the  same  valuable  work  will  be  found,  also,  an  address  of  Mr.  Morris  to  the  Gen- 
eral Assembly  of  Pennsylvania,  in  behalf  of  the  said  bank,  in  1785,  on  an  occasion 
when  a  proposition  had  been  made  to  abolish  its  charter.  It  is  written  with  uncom- 
mon ability  and  knowledge  of  the  subject,  considering  the  infancy,  at  that  period,  of 
banking  operations  in  this  country. — Sec  vol.  Ill,  page  437. 


CHAPTER    II. 

BANK  OF  THE  UNITED  STATES. 

PROCEEDINGS  ON  THE  GRANT  OF  THE  FIRST  CHARTER,    IN  1791. 

HorsE   OF   REPRESENTATIVES,  ? 

i  'ungresa,   Third  Session.  5 

ON  the  14th  December,  1790,  as  appears  by  the  Journals  of  the  House  of 
Representatives  of  that  date,  (see  vol.  1,  page  336>  the  Secretary  of  the 
Treasury,  Alexander  Hamilton,  transmitted  to  the  House  a  letter,  accom- 
panying his  Report,  No.  2,  of  a  plan  for  the  institution  of  a  National  15ank; 
which  was  read  and  ordered*  to  be  referred  to  a  Committee  of  the  \Vhol<» 
House,  on  that  day  se'nnight. 

On  the  xJ3d  of  December,  it  was 

Ordered,  That  the  Clerk  of  the  House  do  communicate  to  the  Senate  thai, 
this  House  has  received  a  report  from  the  Secretary  of  the  Treasury,  contain- 
ing a  plan  for  a  National  Bank,  and  that  he  cany  an  attested  copy  of  the  said 
report  to  the  Senate.  The  report  was  as  follows: 

In  obedience  to  the  order  of  the  House  of  Representatives,  of  the  ninth  day 
of  August  last,  requiring  the  Secretary  of  the  Treasury  to  prepare  and  re-- 
port, on  this  day,  such  further  provision  as  may,  in  his  opinion,  be  neces- 
sary for  establishing  the  public  credit,  the  said  Secretary  further  respect- 
fully reports:  t 

That,  from  a  conviction  that  a  National  Hank  is  an  institution  of  primary 
importance  to  the  prosperous  administration  of  the  finances,  and  would  be  of 
the  greatest  utility  in  the  operations  connected  with  the  support  of  the  public 
credr&Shis  attention  has  been  drawn  to  devising  the  plan  of  such  -an  institu- 
tion, upon  a  scale  which  will  entitle  it  to  the  confidence,  and  be  likely  to 
render  it  equal  to  the  exigencies  of  the  public. 

Previously  to  entering  upon  the  detail  of  this  plan,  he  intreats  the  indul- 
gence of  the  House  towards  some  preliminary  reflections  naturally  arising  out 
of  the  subject,  which  he  hopes  will  be  deemed  neither  useless  nor  out  of  place. 
Public  opinion  being  the  ultimate  arbiter  of  every  measure  of  government,  it 
can  scarcely  appear  improper,  in  deference  to  that,  to  accompany  the  origi- 
nation of  any  new  proposition  with  explanations,  which  the  superior  informa- 
tion of  those  to  whom  it  is  immediately  addressed,  would  rentier  superiiuous. 

It  is  a  fact,  well  understood,  tha^public  banks  have  found  admission  and 
patronage  among  the  principal  and  most  enlightened  commercial  nations. 
They  have  successively  obtained  in  Italy,  Germany,  Holland,  England,  and 
France,  as  well  as  in  the  United  States.  *  Ami  it  is  a  circumstance  which 
cannot  but  have  considerable  weight,  in  a  candid  estimate  of  their  tendency, 
that,  after  an  experience  of  centuries,  there  exists  not  a  question  about  their 
utility,  in  the  countries  in  which  they  have  been  so  long  established.  Theo- 
rists and  men  of  business  unite  in  the  acknowledgment  of  it. 
y  Trade  and  industry,  wherever  they  have  been  tried,  have  been  indebted  to 
them  for  important  aid.  And  government  has  been  repeatedly  under  the 
greatest  obligations  to  them  in  dangerous  and  dirt,  ^hm  emergencies.  That 


1(3  BANK   OF   THE    UNITED    STATES. 

of  the  United  States,  as  well  in  some  of  the  most  critical  conjunctures  of  the 
late  war,  as  since  the  peace,  has  received  assistance  from  those  established 
among  us,  with  which  it  could  not  have  dispensed.  "N 

With  this  twofold  evidence  before  us,  it  might  be  expected  that  there  would 
be  a  perfect  union  of  opinions  in  their  favor. -Yet  doubts  have  been  enter- 
tained: jealousies  and  prejudices  have  circulated;,  and,  though  the  experi- 
ment is  every  day  dissipating  them,  within  the  spheres  in  which  effects  are 
best  known,  yet  there  are  still  persons  by  whom  they  have  not  been  entirely 
renounced.  To  give  a  full  and  accurate  view  of  the  subject,  would  be  to 
make  a  treatise  of  a  report;  but  there  are  certain  aspects  in  which  it  may  be 
cursorily  exhibited,  which  may  perhaps  conduce  to  a  just  impression  of  its 
merits.  These  will  involve  a  comparison  of  the  advantages  with  the  disad- 
vantages, real  or  supposed,  of  such  institutions. 

The  following  are  among  the  principal  advantages  of  a  bank: 
First.  The  augmentation  of  the  active  or  productive  capital  of  a  country. 
Gold  and  silver,  when  they  are  employed  merely  as  the  instruments  of  ex- 
change and  alienation,  have  been,  not  improperly,  denominated  dead  stock; 
but  when  deposited  in  banks,  to  become  the  basis  of  a  paper  circulation,  which 
takes  their  character  and  place,  as  the  signs  or  representatives  of  value,  they 
then  acquire  life,  or,  in  other  words,  an  active  and  productive  quality  X  This 
idea,  which  appears  rather  subtile  and  abstract,  in  a  general  form,  may  be 
made  obvious  and  palpable,  by  entering  into  a  feTv  particulars.  It  is  evident, 
for  instance,  that  th<Hmoriey  which  a  merchant  keeps  in  his  chest,  waiting 
for  a  favorable  opportunity  to  employ  it,  produces  nothing  till  that  opportu- 
nity arrives.  But  if,  instead  of  locking  it  up  in  this  manner,  he  either  de- 
posites  it  in  a  bank,  or  invests  it  in  the  stock  of  a  bank,  it  yields  a  profit 
during  the  interval,  in  which  he  partakes,  or  not,  according  to  the  choice  he 
may  have  made  of  being  a  depositor  or  a  proprietor^  and  when  any  advanta- 
geous speculation  offers,  in  order  to  be  able  to  embrace  it,  he  has  only  to 
withdraw  his  money,  if  a  depositor-,  or,  if  a  proprietor,  to  obtain  a  loan  from 
the  bank,  or  to  dispose  of  his  stock— an  alternative  seldom  or  never  attended 
with  difficulty,  when  the  affairs  of  the  institution  are  in  a  prosperous  train. 
vHis  money,  thus  deposited  or  invested,  is  a  fund  upon  which  himself  and 
•others  can  borrow  to  a  injich  larger  amount.  V  It  is  a  well  established  feet.  \ 
that  banks  in  good  credit  can  circulate  a  far  greater  sum  than  the  actual 
quantum  of  their  capital  in  gold  and  silver./  The  extent  of  the  possible  ex- 
cess seems  indeterminate;  though  it  has  been  conjecturally  stated  at  the  pro- 
portions of  two  and  three  to  one.  This  faculty  is  produced  in  various  ways. 
1st.  A  great  proportion  of  the  notes  which  are  issued,  and  pass  current  as 
cash,  are  indefinitely  suspended  in  circulation,  from  the  confidence  which 
each  holder  has,  that  he  can,  at  any  moment,  turn  them  into  gold  and  silver. 
2dly.  Every  loan  which  a  bank  makes,  is,  in  its  first  shape,  a  credit  given  to 
the  borrower  on  its  books,  the  amount  of  which  it  stands  ready  to  pay,  either 
in  its  own  notes,  or  in  gold  or  silver,  at  his  option.  But,  in  a  great  number  of 
cases,  no  actual  payment  is  made  in  either.  The  borrower  frequently,  by  a 
check  or  order,  transfers  his  credit  to  some  other  person,  to  whom  he  has  a 
payment  to  make;  who,  in  his  turn,  is  as  often  content  with  a  similar  credit, 
pecause  he  is  satisfied  that  he  can,  whenever  he  pleases,  either  convert  it 
into  cash,  or  pass  it  to  some  other  hand,  as  an  equivalent  for  it.  And  in  this 
manner  the  credit  keeps  circulating,  performing  in  e'very  stage  the  office  of 
money,  till  it  is  extinguished  by  a  discount  with  some  person  who  has  a  pay- 
ment to  make  to  the  bank,  to  an  equal  or  greater  amount.^Thus  large  sums 
are  lent  and  paid,  frequently  through  a  variety  of  hands,  without  the  inter- 
vention of  a  single  piece  of  coin,  \ficlly.  There  is  always  a  large  quantity  of 
gold  and  silver  m  the  repositories  of  the  bank,  besides  its  own  stock,  which 
is  placed  there,  with  a  view  partly  to  its  safe  keeping,  and  partly  to  the  ac- 
commodation of  an  institution,,  which  is  itself  a  source  of  general  accommoda- 
tion. %  These  deposites  are  of  immense  consequence  in  the  operations  of  a 
bank.  Though  liable  to  be  redrawn  at  any  moment,  experience  proves  that 


CHARTER   OF    1791.  17 

die  money  so  much  oftener  changes  proprietors  than  place,  and  that  what  is 
drawn  out  is  generally  so  speedily  replaced,  as  to  authorize  the  counting 
upon  the  sums  deposited,  as  an  effective  fund,  which,  concurring  with  the 
stock  of  the  bank,  enables  it  to  extend  its  loans,  and  to  answer  all  the  de- 
mands for  coin,  whether  in  consequence  of  those  loans,  or  arising  from  the 
occasional  return  of  its  note?. 

These  different  circumstances  explain  the  manner  in  which  the  ability  of  a 
bank  to  circulate  a  greater  sum  than  its  actual  capital  in  coin,  is  acquired. 
This,  however,  must  be  gradual,  and  must  be  preceded  by  a.  firm  establish- 
ment of  confidence — a  confidence  which  mav  be  bestowed  on  the  most  rational 
grounds,  since  the  excess  in  question  will  always  be  bottomed  on  good  secu- 
rity of  one  kind  or  another.  This,  every  well  conducted  bank  carefully  re- 
quires, before  it  will  consent  to  advance  either  its  money  or  its  credit,  and 
where  there  is  an  auxiliary  capital,  (as  will  be  the  case  in  the  plan  hereafter 
submitted)  which,  together  with  the  capital  in  coin,  define  the  boundary  that 
shall  not  be  exceeded  by  the  engagements  of  the  bank,  the  security  may.  con- 
sistently with  all  the  maxims  of  a  reasonable  circumspection,  be  regarded  as 
complete. 

;  The  same  circumstances  illustrate  the  truth  of  the  position,  that  it  is  one 
of  the  properties  of  banks  to  increase  the  active  capital  of  a  country.  This, 
in  other  words,  is  the  sum  of  them:  the  money  of  one  individual,  while  he  is 
waiting  for  an  opportunity  to  employ  it,  by  being  either  deposited  in  the  bank 
for  safe  keeping,  or  invested  in  its  stock,  is  in  a  condition  to  administer  to 
the  wants  or  others,  without  being  put  out  ot  his  own  reach  when  occasion 
presents.  This  yields  an  extra  profit,  arising  from  what  is  paid  for  the  use  of 
nis  money  by  others,  when  he  could  not  himself  make  use  of  it,  and  keeps 
the  money  itself  in  a  state  of  incessant  activity.  In  the  almost  infinite  vicis- 
situdes and  competitions  of  mercantile  enterprise,  there  never  can  be  danger 
of  an  intermission  of  demand,  or  that  the  money  will  remain  for  a  moment 
idle  in  the  vaults  of  the  bank.  This  additional  employment  given  to  money, 
and  the  faculty  of  a  bank  to  lend  and  circulate  a  greater  sum  than  the  amount 
of  its  stock  in  coin,  are,  to  all  the  purposes  of  trade  and  industry,  an  absolute 
increase  of  capital.  Purchases  ana  undertakings,  in  general,  can  be  carried 
on  by  any  given  sum  of  bank  paper  or  credit,  as  effectually  as  by  an  equal 
sum  of  gold  and  silver. '-And  thus,  by  contributing  to  enlarge  the  mass  of 
industrious  and  commercial  enterprise,  banks  become  nurseries  of  national 
wealth — a  consequence  as  satisfactorily  verified  by  experience,  as  it  is  clearly 
deducible  in  theory./ 

Secondly.  Greater  facility  to  tta  government,  in  obtaining  pecuniary  aids, 
especially  in  sudden  emergencies^  This  is  another,  and  an  undisputed  advan- 
tage of  public  banks — one  which,  as  already  remarked,  has  been  realized  in 
signal  instances  among  ourselves.  The  reason  is  obvious^  the  capitals  of  a 
great  number  of  individuals  are,  by  this  operation,  collected  to  a  point,  and 
placed  under  one  direction.  The  mass  formed  by  this  union,  is,  in  a  certain 
sense,  magnified  by  the  credit  attached  to  itj  and  while  this  mass  is  always 
ready,  and  can  at  once  be  put  in  motion,  in  aid  of  the  government,  the  inter- 
est of  the  bank  to  afford  that  aid,  independent  of  regard  to  the  public  safety 
and  welfare,  is  a  sure  pledge  for  its  disposition  to  go  as  far  in  its  compliances 
as  can  in  prudence  be  desired.  There  is,  in  the  nature  of  things,  as  will  be 
more  particularly  noticed  in  another  placeman  intimate  connexion  of  i 
between  the  government  and  the  bank  of  a  nation,/ 

Thirdly.  The  facilitating  of  the  payment  of  taxes.,?  This  advantage  is  pro-' 
duced  in  two  ways.  /Those  who  are  in  a  situation  to  have  access  to  the  bank, 
can  have  the  assistance  of  loans,  to  answer,  with  punctuality,  the  public  calls 
upon  them.-¥This  accommodation  has  been  sensibly  felt  in  the  payment  of  the 
duties  heretofore  laid  by  thf)se  who  reside  where  establishments  of  this  nature 
exist.  This,  however,  though  an  extensive,  is  not  an  universal  benefit.  -The 
other  way  in  which  the  effect  here  contemplated  is  produced,  and  in  which 
the  benefit  is  general,  isthe  increasing  of  the  quantity  of  circulating  medium, 
and  the  quickening  of  circulation."  The  manner  in  which  the  first  happens, 
3 


18  BANK   OF  THE   UNITED    STATES. 

has  already  been  traced.  The  last  may  require  some  illustration.  When 
payments  are  to  be  made  between  different  places,  having  an  intercourse  of 
business  with  each  other,  if  there  happen  to  be  no  private  bills  at  market,  and 
there  are  no  bank  notes  which  have  a  currency  in  both,  the  consequence  is, 
that  coin  must  be  remitted.  This  is  attended  with  trouble,  delay,  expense, 
and  risk.  If,  on  the  contrary,  there  are  bank  notes  current  in  both  places, 
the  transmission  of  these  by  the  post,  or  any  other  speedy  or  convenient  con- 
veyance, answers  the  purpose^and  these  again,  in  the  alternations  of  de- 
mand, are  frequently  returned,  veiy  soon  after,  to  the  place  from  whence 
they  were  first  sent:  whence  the  transportation  and  re -transportation  of  the 
metals  are  obviated,  and  a  more  convenient  and  more  expeditious  medium  of 
payment  is  substituted.  Nor  is  this  all :  the  metals,  instead  of  being  sus- 
pended from  their  usual  functions  during  this  process  of  vibration  from  place 
to  place,  continue  in  activity,  and  administer  still  to  the  ordinary  circulation, 
which,  of  course,  is  prevented  from  suffering  either  diminution  or  stagnation. 
These  circumstances  are  additional  causes  oif  what,  in  a  practical  sense,  or 
to  the  purposes  of  business,  may  be  called  greater  plenty  of  money*  And 
it  is  evident,  that  whatever  enhances  the  quantity  of  circulating  money,  adds 
to  the  ease  with  which  every  industrious  member  of  the  community  may  ac- 
quire that  portion  of  it  of  which  lie  stands  in  need,  and  enables  him  the  better 
to  pay  his  taxes,  as  well  as  to  supply  his  other  wants.  Even  where  the  cir- 
culation of  (he  bank  paper  is  not  general,  it  must  still  have  the  same  effect, 
though  in  a  less  degree:  for,  whatever  furnishes  additional  supplies  to  the 
channels  of  circulation,  in  one  quarter,  naturally  contributes  to  keep  the 
streams  fuller  elsewhere.  This  last  view  of  the  subject  serves  both  to  illus- 
trate the  position  that  banks  tend  to  facilitate  the  payment  of  taxes,  and  to 
exemplify  their  utility  to  business  of  every  kind  in  which  money  is  an  agent. 
It  would  be  to  intrude  too  much  on  the  patience  of  the  House,  to  prolong 
the  details  of  the  advantages  of  banks;  especially,  as  all  those  which  might 
still  be  particularized,  are  readily  to  be  inferred  as  consequences  from  those 
which  have  been  enumerated.  Their  disadvantages,  real  or  supposed,  are 
now  to  be  reviewed.  The  most  serious  of  the  charges  which  have  been  brought 
against  them,  are, 

/     That  they  serve  to  increase  usury; 

That  they  tend  to  prevent  other  kinds  of  lending; 

£     That  they  furnish  temptations  to  overtrading; 

*  That  they  afford  aid  to  ignorant  adventurers,  who  disturb  the  natural  and 
beneficial  course  of  trade; 

5  That  they  give  to  bankrupt  and  fraudulent  traders  a  fictitious  credit,  which 
enables  them  to  maintain  false  appearances,  and  to  extend  their  impositions; 
and,  lastly, 

t    That  they  have  a  tendency  to  banish  gold  and  silver  from  the  country. 

There  is  great  reason  to  believe  that,  on  a  close  and  candid  survey,  it  will 
be  discovered  that  these  charges  are  either  destitute  of  foundation,  or  that,  as 
far  as  the  evils  they  suggest  nave  been  found  to  exist,  they  have  proceeded 
from  other,  or  partial,  or  temporary  causes;  are  not  inherent  in  the  nature 
and  permanent  tendency  of  such  institutions;  or  are  more  than  counterba- 
lanced by  opposite  advantages.  This  survey  shall  be  had,  in  the  order  in  which 
the  charges  nave  been  stated.  The  first  of  them  is — 

^  That  banks  serve  to  increase  usury. 

It  is  a  truth,  which  ought  not  to  be  denied,  that  the  method  of  conducting 
business,  which  is  essential  to  bank  operations,  has,  among  us,  in  particular 
instances,  given  occasion  to  usurious  transactions.  The  punctuality  in  pay- 
ments, which  they  necessarily  exact,  has  sometimes  obliged  those  who  have 
adventured  beyond  both  their  capital  and  their  credit,  to  procure  money  at 
any  price,  and,  consequently,  to  resort  to  usurers  for  aid. 

But  experience  and  practice  gradually  bring  a  cure  to  this  evil.  A  general 
habit  of  punctuality  among  traders  is  the  natural  consequence  of  the  neces- 


CHARTER    OF    1791.  1Q 

sity  of  observing  it  with  the  bank;  a  circumstance  which,  itself,  more  than 
compensates  for  any  occasional  ill  which  may  have  sprung  from  that  necessi- 
ty, in  the  particular  under  consideration.  As  far,  therefore,  as  traders  depend 
on  each  other  for  pecuniary  supplies,  they  can  calculate  their  expectations 
with  greater  certainty;  and  are  in  proportionably  less  danger  of  disappoint- 
ments, which  might  compel  them  to  have  recourse  to  so  pernicious  an  expe- 
dient as  that  of  borrowing  atusury^the  mischiefs  of  which,  after  a  few  ex- 
amples, naturally  inspire  great  care  in  all  but  men  of  desperate  circumstan- 
ces, to  avoid  the  possibility  of  being  subjected  to  them.  One,  and  not  the 
least  of  these  evils  incident  to  the  Hse  of  that  expedient,  if  the  fact  be  known, 
or  even  strongly  suspected,  is"  loss  of  credit  with  the  bank  itself. 

The  directors  of  a  bank,  too,  though,  in  order  to  extend  its  business  and  its 
popularity,  in  the  infancy  of  an  institution,  they  may  be  tempted  to  go  fur- 
ther in  accommodation  than  the  strict  rules  of  prudence  will  warrant,  grow 
more  circumspect,  of  course, *&s  its  affairs  become  better  established,  and 
as  evils  of  too  great  facility  are  experimentally  demonstrated.  They  be- 
come more  attentive  to  the  situation  and  conduct  of  those  with  whom  they 
deal;  they  observe  more  narrowly  their  operations  and  pursuits;  they  econo- 
mize the  credit  they  give  to  those  of  suspicious  solidity^  they  refuse  it  to  those 
•whose  career  is  more  manifestly  hazardous.  In  a  word,  in  the  course  of 
practice,  from  the  very  nature  of  things,  the  interest  will  make  it  the  policy 
of  a  bank  to  succor  the  wary  and  industrious;  to  discredit  the  rash  and  un- 
thrifty; to  discountenance  both  usurious  lenders  and  usurious  borrowers. 

There  is  a  leading  view,  in  which  the  tendency  of  banks  will  be  seen  to  be, 
to  abridge  rather  than  to  promote  usury.  This  relates  to  their  property  of  in- 
creasing the  quantity  and  quickening  the  circulation  of  money.  If  it  be  evi- 
dent that  usury  will  prevail  or  diminish,  according  to  the  proportion  which 
the  demand  for  borrowing  bears  to  the  quantity  of  money  at  market  to  be 
lent;,  whatever  has  the  property  just  mentioned,  whether  it  be  in  the  shape 
of  paper  or  cohvl^y  contributing  to  render  the  supply  more  equal  to  the  de- 
mand, must  tend  to  counteract  the  progress  of  usury. 

—  But  bank  lending,  it  is  pretended,  is  an  impediment  to  other  kinds  of  lend- 
ing;  which,  by  confining  the  resource  of  borrowing  to  a  particular  class,  leaves . 
the  rest  of  the  community  more  destitute,  and,  therefore,  more  exposed  to 
the  extortions  of  usurers.  As  the  profits  of  bank  stock  exceed  me  legal 
rate  of  interest,  the,  possessors  of  money,  it  is  urged,  prefer  investing  it  in 
that  article  to  lending  it  at  this  rate^  to  which  there  are  the  additional  mo- 
tives of  a  more  prompt  command  of  the  capital,  and  of  more  frequent  and 
exact  returns,  without  trouble  or  perplexity  in  the  collection.  This  consti- 
tutes the  second  charge  which  has  been  enumerated- 

The  fact  on  which  this  charge  rests  is  not  to  be  admitted  without  several 
<iualifications;  particularly  in  reference  to  the  state  of  things  in  this  country. 
first.  The  greajt  bulk  of  the  stock  of  a  bank  will  consist  of  the  funds  of  men 
in  trade,  among^ ourselves,  and  moneyed  foreigners^  the  former  of  whom  could 
not  spare  their  capitals  out  of  their  reach,  to  be  invested  in  loans  for  long 
periods,  on  mortgages  or  personal  security;  and  the  latter  of  whom  would 
not  be  willing  to  be  subjected  to  the  casual ties,[delays,  and  embarrasments, 
of  such  a  disposition  of  their  money,  in  a  distant  country.  Secondly.  There 
will  always  be  a  considerable  proportion  of  those  who  are  properly  the  money 
lenders  of  a  country,  who,  from  that  spirit  of  caution  which  usually  character- 
izes this  description  of  men,  will  incline  rather  to  vest  their  funds  in  mort- 
gages on  real  estate,  than  in  the  stock  of  a  bank,  which  they  are  apt'to  consi- 
der as  a  more  precarious  security. 

These  considerations  serve,  in  a  material  degree,  to  narrow  the  foundation 
of  the  objection,  as  to  the  point  of  fact,  But  there  is  a  more  satisfactory  an- 
swer to  it.  The  effect  supposed,  as  far  as  it  has  existence,  is  temporary.  The 
reverse  of  it  takes  place  in  the  general  and  permanent  operation  of  the  thing. 
The  capital  of  every  public  bank  will,  of  course,  be  restricted  within  a  cer- 
tain denned  limit.  It  is  the  province  of  legislative  prudence  so  to  adjust  this 
limit,  that,  while  it  will  not  be  too  contracted  for  the  demand  which  the  course 


20  BANK   OF   THE    UNITED   STATES. 

of  business  may  create,  and  for  the  security  which  the  public  ought  to  have 
for  the  solidity  of  the  paper  which  may  be  issued  by  the  bank,  it  will  still  be 
within  the  compass  of  the  pecuniary  resources  of  the  community;  so  that  there 
may  be  an  easy  practicability  of  completing  the  subscriptions  to  it.  When 
this  is  once  done,  the  supposed  effect  of  necessity  ceases.  There  is  then  no 
longer  room  for  the  investment  of  any  additional  capital.  Stock  may  indeed 
change  hands  by  one  person  selling  and  another  buy  ing;  but  the  money  which 
the  buyer  takes  out  of  the  common  mass  to  purchase  the  stock,  the  seller  re- 
ceives and  restores  to  it.  Hence,  the  future  surplusses  which  may  accumulate 
must  take  their  natural  course,  and  lending  at  interest  must  go  on  as  if  there 
were  no  such  institution. 

It  must,  indeed,  flow  in  a  more  copious  stream.  The  bank  furnishes  an 
extraordinary  supply  for  borrowers,  within  its  immediate  sphere.  A  largev 
supply  consequently  remains  for  borrowers  elsewhere.  In  proportion  as  the 
circulation  ot  the  bank  is  extended,  there  is  an  augmentation  of  the  aggre- 
gate mass  of  money  for  answering  the  aggregate  mass  of  demand.  Hence* 
greater  facility  in  obtaining  it  for  every  purpose. 

It  ought  not  to  escape  without  a  remark,  that,  as  far  as  the  citizens  of  other 
countries  become  adventurers  in  the  bank,  there  is  a  positive  increase  of  the 
gold  and  silver  of  the  country.  It  is  true,  that,  from  this,  a  half  yearly  rent 
is  di^yn  back,  accruing  from  the  dividends  upon  the  stock..  But  as  this 
rent  arises  from  the  employment  of  the  capital  by  our  own  citizens,  it  is  pro- 
bable that  it  is  more  than  replaced  by  the  profits  of  that  employment.  It  i& 
also  likely  that  a  part  of  it  is,  in  the  course  of  trade,  converted  inta  the  pro- 
ducts of  our  country;  and  it  may  even  prove  an  incentive,  in  some  cases,  to 
emigration  to  a  country,.  i*1  which  the  character  of  citizen  is  as  easy  to  be  ac- 
quired as  it  is  estimable  and  important..  This  view  of  the  subject  furnishes 
an  answer  to  an  objection  whicn  has  been  deduced  from  the  circumstance 
here  taken  notice  of,  namely,  the  income  resulting  to  foreigners  from  the  part 
of  the  stock  owned  by  them,  which  has  been  represented  as  tending  to  drain, 
the  country  of  its  specie.  In  this  objection,  the  original  investment  of  the 
capital,  and  the  constant  use  of  it  afterwards,  seem. both  to  have  been  over-- 


"^That  banks  furnish,  temptations  to  overtrading,  is  the  third  of  the  enumerated 
objections.  This  must  mean,  that,  by  affording  additional  aids  to  mercantile 
enterprise,  they  induce  the  merchant  sometimes  to  adventure  beyond  the 
prudent  or  salutary  point.  But  the  very  statement  of  the  thin^  shows  that  the 
subject  of  the  charge  is  an  occasional  ill,  incident  to  a  general  good.  Credit 
of  every  kind,  (as  a  species  of  which  only,  can  bank  lending  have  the  effect 
supposed)  must  be,  in  different  degrees,,  chargeable  with  the  same  inconve- 
nience. It  is  even  applicable  to  gold  and  silveiv  when  they  abound  in  circula- 
tion. But  would  it  be  wise,  on  this  account,  to  decry  the  precious  matals,  to. 
root  out  credit,  or  to  proscribe  the  means  of  that  enterprise  which  is  the  main- 
spring of  trade,  and  a  principal  source  of  national  wealth,  because  it  now  and 
then  runs  into  excesses,,  of  which  overtrading  is  one.^ 

If  the  abuses  of  a  beneficial  thing  are  to  determine  its  condemnation  there 
is  scarcely  a  source  of  public  prosperity  which  will  not  speedily  be  closed- 
In  every  case  the  evil  is  to  be  compared  with  the  good;  and  in  the  present 
ease,  such  a  comparison  will  issue  in  this,  that  the  new  and  increased  energies 
derived  to  commercial  enterprise,  from  the  aid  of  banks,  are  a  source  of  gen- 
eral profit  and  advantage,  which  greatly  outweigh  the  partial  ills,  the  over- 
trading of  a  few  individuals  at  particular  times,  or  of  numbers  in  particular 
conjunctures. 

^  The  fourth  and-  fifth  charges  may  be  considered  together..  These  relate  to 
the  aid  which  is  sometimes  afforded  by  banks  to  unskilful  adventurers  and 
fraudulent  traders*  These  charges  also  have  some  degree  of  foundation, 
though  far  less  than  has  been  pretended;  and  they  add  to  the  instances  of 

s  partial  ills,  connected  with  more  extensive  and  overbalancing  benefits. 

The  practice  of  giving  fictitious  credit  to  improper  persons,  is  one  of  those 
evils  which  experience,  guided  by  interest,  speedily  corrects.  The  bank  itself 


CHARTER   OF    1791.  £1 

is  in  so  much  jeopardy  of  being  a  sufferer  by  it,  that  it  has  the  strongest  of  all 
inducements  to  be  on  its  guard.  It  may  not  only  be  injured  immediately  by 
the  delinquencies  of  the  persons  to  whom  such  credit  is  given,  but  eventually 
by  the  incapacities  of  others,  whom  their  impositions  or  failures  may  have 
ruined. 

Nor  is  there  much  danger  of  a  bank's  being  betrayed  into  this  error  from 
want  of  information.  The  directors  themselves  being,  for  the  most  part,  se- 
lected from  the  class  of  traders,  are  to  be  expected  to  possess  individually  an 
accurate  knowledge  of  the  characters  and  situations  of  those  who  come  within 
that  description.  And  they  have,  in  addition  to  this,  the  course  of  dealing 
of  the  persons  themselves  with  the  bank,  to  assist  their  judgment,  which  is 
in  most  cases  a  good  index  of  the  state  in  which  those  persons  are-  The  arti- 
fices and  shifts  which  those  in  desperate  or  declining  circumstances  are  obli- 
ged to  employ,  to  keep  up  the  countenance  which  the  rules  of  the  bank  re- 
quire, and  the  train  ot  their  connexions,  are  so  many  prognostics,  not  difficult 
to  be  interpreted,  of  the  fate  which  awaits  them.  Hence,  it  not  unfrequently 
happens,  that  banks  are  the  first  to  discover  the  unsoundness  of  such  charac- 
ters, and,  by  withholding  credit,  to  announce  to  the  public  that  they  are  not 
entitled  to  it. 

If  banks,  in  spite  of  every  precaution,  are  sometimes  betrayed  into  giving 
a  false  credit  to  the  persons  described,  they  more  frequently  enable  honest 
and  industrious  men,  of  small,  or,  perhaps,  of  no  capital,  to  undertake  and  pro  - 
secute  business  with  advantage  to  themselves  and  to  the  community;  and  as- 
sist merchants,  of  both  capital  and  credit,  who  meet  with  fortuitous  and  un- 
foreseen shocks,  which  might,  without  such  helps,  prove  fatal  to  them  and  to 
others,  to  make  head  against  their  misfortunes,  and  finally  to  retrieve  their 
affairs — circumstances  which  form  no  inconsiderable  encomium  on  the  utility 
of  banks. 

~~  But  the  last  and  heaviest  charge  is  still  to  be  examined:  this  is,  that  banks 
tend  to  banish  the  gold  and  silver  of  the  country. 

The  force  of  this  objection  rests  upon  their  being  an  engine  of  paper  credit, 
which,  by  furnishing  a  substitute  for  the  metals,  is  supposed  to  promote  their 
exportation.  It  is  an  objection,  which,  if  it  has  any  foundation,  lies  not  against 
banks  peculiarly,  but  against  every  species  of  paper  credit. 

The  most  common  answer  given  to  it  is,  that  the  thing  supposed  is  of  little 
or  no  consequence;  that  it  is  immaterial  what  serves  the  purpose  of  money, 
whether  paper  or  gold  and  silver;  that  the  effect  of  both  upon  industry  is  the 
same;  and  that  the  intrinsic  wealth  of  a  nation  is  to  be  measured,  not  by  the 
abundance  of  the  precious  metals  contained  in  it,  but  by  the  quantity  of  the. 
productions  of  its  labor  and  industry. 

This  answer  is  not  destitute  of  solidity,  though  not  entirely  satisfactory.  It 
is  certain,  that  the  vivification  of  industry,  by  a  full  circulation,  with  the  aid  of 
a  proper  and  well  regulated  paper  credit,  may  more  than  compensate  for  the 
loss  ot  a  part  of  the  gold  and  silver  of  a  nation,  if  the  consequence  of  avoiding 
that  loss  should  be  a  scanty  or  defective  circulation. 

But  the  positive  and  permanent  increase  or  decrease  of  the  precious  metals 
in  a  country  can  hardly  ever  be  a  matter  of  indifference.  As  the  commodity 
taken  HI  lieu  of  every  other,  it  is  a  species  of  the  most  effective  wealth;  and 
as  the  money  of  the  world,  it  is  of  great  concern  to  the  State,  that  it  possess 
a  sufficiency  of  it  to  face  any  demands  which  the  protection  of  its  external 
interests  may  create. 

The  objection  seems  to  admit  of  another  and  more  conclusive  answer,  which 
controverts  the  fact  itself.  A  nation  that  has  no  mines  of  its  own,  must  derive, 
the  precious  metals  from  others;  generally  speaking,  in  exchange  for  the 
products  of  its  labor  and  industry.  The  quantity  it  will  possess,  will,  there- 
lore,  in  the  ordinary  course  of  things,  be  regulated  by  the  favorable  or  unfa- 
vorable balance  of  its  trade;  that  is,  by  the  proportion  between  its  abilities  to 
supply  foreigners,  and  its  wants  of  them;  between  the  amount  of  its  exporta- 
tions  and  that  of  its  importations.  Hence,  the  state  of  its  agriculture  and 
manufactures,  the  quantity  and  quality  of  its  labor  and  industry,  must,  in  the 


22  BANK   OF   THE    UNITED    STATES. 

main,  influence  and  determine  the  increase  or  decrease  of  its  gold  and  silver. 
If  this  be  true,  the  inference  seems  to  be,  that  well  constituted  banks  favor 
the  increase  of  the  precious  metals.  It  has  been  shown  that  they  augment,  in 
different  ways,  the  active  capital  of  a  country.  This  it  is  which  generates 
employment;  which  animates  and  expands  labor  and  industry.  Every  addi- 
tion which  is  made  to  it,  by  contributing  to  put  in  motion  a  greater  quantity 
ofbqthj  tends  to  create  a  greater  qi  lantity  of  the  products  of  both;  and,  by 
furnishing  more  materials  for  exportation,  conduces  to  a  favorable  balance  of 
trade,  and,  consequently,  to  the  introduction  and  increase  of  gold  and  silver. 

This  conclusion  appears  to  be  drawn  from  solid  premises.  There  are,  how- 
ever, objections  to  be  made  to  it. 

It  may  be  said  that,  as  bank  paper  affords  a  substitute  for  specie,  it  serves 
to  counteract  that  rigorous  necessity  for  the  metals,  as  a  medium  of  circulation, 
which,  in  the  case  of  a  wrong  balance,  might  restrain,  in  some  degree,  their 
exportation;  and  it  may  be  added,  that,  from  the  same  cause,  in  the  same 
case,  it  would  retard  those  economical  and  parsimonious  reforms  in  the  manner 
of  living,  which  the  scarcity  of  money  is  calculated  to  produce,  and  which 
might  be  necessary  to  rectify  such  wrong  balance. 

There  is,  perhaps,  some  truth  in  D9th  these  observations;  but  they  appear 
to  be  of  a  nature  rather  to  form  exceptions  to  the  generality  of  the  conclusion, 
than  to  overthrow  it.  The  state  of  things  in  whicn  the  absolute  exigencies  of 
circulation  can  be  supposed  to  resist,  with  any  effect,  the  urgent  demands  for 
specie  which  a  wrong  balance  of  trade  may  occasion,  presents  an  extreme  case. 
And  a  situation  in  which  a  too  expensive  manner  of  living  of  a  community, 
compared  with  its  means,  can  stand  in  need  of  a  corrective,  from  distress  or 
necessity,  is  one  which,  perhaps,  rarely  results  but  from  extraordinary  and 
adventitious  causes:  such,  for  example,  as  a  national  revolution;  which  unset- 
tles all  the  established  habits  of  the  people,  and  inflames  the  appetite  for  extra- 
vagance, by  the  illusions  of  an  ideal  wealth,  engendered  by  the  continual 
multiplication  of  a  depreciating  currency,  or  some  similar  cause.  There  is  a 
good  reason  to  believe,  that,  where  the  laws  are  wise  and  well  executed,  and 
the  inviolability  of  property  and  contracts  maintained,  the  economy  of  a  people 
will,  in  the  general  course  of  things,  correspond  with  its  means. 

The  support  of  industry  is,  probably,  in  every  case,  of  more  consequence 
towards  correcting  a  wrong  balance  of  trade,  than  any  practicable  retrench- 
ments in  the  expenses  of  families  or  individuals;  and  the  stagnatiou  of  it  would 
be  likely  to  have  more  effect  in  prolonging,  than  any  such  savings  in  shorten- 
ing, its  continuance.  That  stagnation  is  a  natural  consequence  of  an  inade- 
quate medium,  which,  without  the  aid  of  bank  circulation,  would,  in  the  cases 
supposed,  be  severely  felt. 

It  also  deserves  notice,  that,  as  the  circulation  is  always  in  a  compound 
ratio  to  the  fund  upon  which  it  depends,  and  to  the  demand  for  it,  and  as  that 
fund  is  itself  affected  by  the  exportation  of  the  metals,  there  is  no  danger  of 
its  being  overstocked,  as  in  the  case  of  paper  issued  at  the  pleasure  of  the 
government,  or  of  its  preventing  the  consequences  of  any  unfavorable  balance 
from  being  sufficiently  felt  to  produce  the  reforms  alluded  to,  as  far  as  cir- 
cumstances may  require  and  admit. 

Nothing  can  be  more  fallible  than  the  comparisons  which  have  been  made 
between  different  countries,  to  illustrate  the  truth  of  the  position  unfler  con- 
sideration. The  comparative  quantity  of  gold  and  silver,  in  different  countries 
depends  upon  an  infinite  variety  of  facts  and  combinations,  all  of  which  ought 
to  be  known  in  order  to  judge  whether  the  existence  or  non-existence  of  paper 
currencies  has  any  share  in  the  relative  proportions  they  contain:  the  mass 
and  value  of  the  productions  of  the  labor  and  industry  of  each,  compared  with 
its  wants;  the  nature  of  its  establishments  abroad;  the  kind  ot  wars  in  which 
it  is  usually  engaged;  the  relations  it  bears  to  the  countries  which  are  the 
original  possesors  of  those  metals;  the  privileges  it  enjoys  in  their  trade;— these, 
and  a  number  of  other  circumstances,  are  all  to  be  taken  into  the  account, 
and  render  the  investigation  too  complex  to  justify  any  reliance  on  the  vague 
and  general  surmises  which  have  been  hitherto  hazarded  on  the  point. 


CHARTER    OF    1791.  23 

In  the  foregoing  discussion,  the  objection  has  been  considered  as  applying  to 
the  permanent  expulsion  and  diminution  of  the  metals-  Their  temporary  ex- 
portation, for  particular  purposes,  has  not  been  contemplated.  This,  it  must 
be  confessed,  is  facilitated  by  banks,  from  the  faculty  they  possess  of  sup- 
plying their  place.  But  their  utility  is  in  nothing  more  conspicuous  than  m 
these  very  cases.  They  enable  the  government  to  pay  its  foreign  debts,  and 
to  answer  any  exigencies  which  the  external  concerns  of  the  community  may 
have  produced.  They  enable  the  merchant  to  support  his  credit,  (on  which 
the  prosperity  of  trade  depends)  when  special  circumstances  prevent  remit- 
tances in  other  modes.  They  enable  him  also  to  prosecute  enterprises  which 
ultimately  tend  to  an  augmentation  of  the  species  of  wealth  in  question.  It  is 
evident  that  gold  and  silver  may  often  be  employed  in  procuring  commodities 
abroad,  which,  in  a  circuitous  commerce,  replace  the  original  fund,  with  con- 
siderable addition.  But  it  is  not  to  be  inferred,  from  this  facility  given  to  tem- 
porary exportation,  that  banks,  which  are  so  friendly  to  trade  and  industry, 
are,  in  their  general  tendency,  inimical  to  the  increase  of  the  precious  metals. 

These  several  views  of  the  subject  appear  sufficient  to  impress  a  full  con- 
viction of  the  utility  of  banks,  and  to  demonstrate  that  they  are  of  great  im- 
portance, not  only  in  relation  to  the  administration  of  the  finances,  but  in  the 
general  system  of  the,  political  economy. 

The  judgment  of  many  concerning  them  has,  no  doubt,  been  perplexed,  by 
the  misinterpretation  of  appearances  which  were  to  be  ascribed  to  other  causes. 
The  general  devastation  or  personal  property,  occasioned  by  the  late  war,  na- 
turally produced,  on  the  one  hand,  a  great  demand  for  money,  and,  on  the 
other,  a  great  deficiency  of  it  to  answer  the  demand.  Some  injudicious  laws, 
which  grew  out  of  the  public  distresses,  by  impairing  confidence,  and  causing 
a  part  of  the  inadequate  sum  in  the  country  to  be  locked  up,  aggravated  the 
evil.  The  dissipated  habits  contracted  by  many  individuals,  during  the  war, 
which,  after  the  peace,  plunged  them  into  expenses  beyond  their  incomes;  the 
number  of  adventurers  without  capital,  and,  in  many  instances,  without  in- 
formation, who  at  that  epoch  rushed  into  trade,  and  were  obliged  to  make  any 
sacrifices  to  support  a  transient  credit;  the  employment  of  considerable  sunis 
in  speculations  upon  the  public  debt,  which,  from  its  unsettled  state,  was  in- 
capable of  becoming  itself  a  substitute:  all  these  circumstances  concurring, 
necessarily  led  to  usurious  borrowing,  produced  most  of  the  inconveniences, 
and  were  the  true  causes  of  most  of  the  appearances,  which,  where  banks  were 
established,  have  been  by  some  erroneously  placed  to  their  account — a  mistake 
which  they  might  easily  have  avoided  by  turning  their  eyes  towards  places 
where  there  were  none,  and  where,  nevertheless,  the  same  evils  would  have- 
been  perceived  to  exist,  even  in  a  greater  degree  than  where  those  institutions 
had  obtained. 

These  evils  have  either  ceased  or  been  greatly  mitigated.  Their  more  com- 
plete extinction  may  be  looked  for  from  that  additional  security  to  property 
which  the  constitution  of  the  United  States  happily  gives;  (a  circumstance  of 
prodigious  moment  in  the  scale,  both  of  public  and  private  prosperity)  from  the 
attraction  of  foreign  capital,  under  the  auspices  of  that  security,  to  be  employ- 
ed upon  objects,  and  in  enterprises,  for  which  the  state  of  this  country  opens  a 
wide  and  inviting  field;  from  the  consistency  and  stability  which  the  public 
debt  is  fast  acquiring,  as  well  in  the  public  opinion  at  home  and  abroad,  as,  in 
fact,  from  the  augmentation  of  capital  which  that  circumstance  and  the  quarter- 
yearly  payment  of  interest  will  afford;  and  from  the  more  copious  circulation 
which  will  be  likely  to  be  created  by  a  well  constituted  national  bank. 

The  establishment  of  banks  in  this  country  seems  to  be  recommended  by  |j 
reasons  of  a  peculiar  nature.    Previously  to  the  Revolution,  circulation  was  in  H 
a  great  measure  carried  on  by  paper  emitted  by  the  several  local  governments. 
In  Pennsylvania  alone,  the  quantity  of  it  was  near  a  million  and  a  half  of  dol- 
lars.    This  auxiliary  may  be  said  to  be  now  at  an  end.    And  it  is  generally 
supposed  that  there  has  been,  for  some  time  past,  a  deficiency  of  circulating 
medium.    How  far  that  deficiency  is  to  be  considered  as  real  or  imaginary,  is 
not  susceptible  of  demonstration;  but  there  are  circumstances  and  appear- 


24  BANK   OF  THE    UNITED    STATES. 

ances,  which,  in  relation  to  the  country  at  large,  countenance  the  supposition  of 
its  reality. 

The  circumstances  are,  besides  the  .fact  just  mentioned  respecting  paper 
emissions,  the  vast  tracts  of  waste  land,  and  the  little  advanced  state  of  manu- 
factures. The  progressive  settlement  of  the  former,  while  it  promises  ample 
retribution,  in  the  generation  of  future  resources,  diminishes  or  obstructs,  in  the 
mean  time,  the  active  wealth  of  the  country.  It  not  only  draws  off  a  part  of 
the  circulating  money,  and  places  it  in  a  more  passive  state,  but  it  diverts,  into 
its  own  channels,  a  portion  of  that  species  of  labor  and  industry  which  would 
otherwise  be  employed  in  furnishing  materials  for  foreign  trade,  and  which,by 
contributing  to  a  favorable  balance,  would  assist  the  introduction  of  specie. 
In  the  early  periods  of  new  settlements,  the  settlers  not  only  furnish  no  sur- 
plus for  exportation,  but  they  consume  apart  of  that  which  is  produced  by  the 
labor  of  others.  The  same  thing  is  a  cause  that  manufactures  do  not  advance, 
or  advance  slowly.  And,  notwithstanding  some  hypotheses  to  the  contrary, 
there  are  many  things  to  induce  a  suspicion,  that  the  precious  metals  will  not 
abound  in  any  country  which  has  not  mines,  or  variety  of  manufactures. 
They  have  been  sometimes  acquired  by  the  sword ;  but  the  modern  system  of 
war  has  expelled  this  resource,  and  it  is  one  upon  which  it  is  to  be  hoped  the 
United  States  will  never  be  inclined  to  rely. 

The  appearances  alluded  to  are,  greater  prevalency  of  direct  barter  in  the 
more  interior  districts  of  the  country  which,  however,  has  been  for  some 
time  past  gradually  lessening,  and  greater  difficulty, generally,  in  the  advanta- 
geous alienation  of  improved  real  estate,  which,  also,  has  of  late  diminished,  but 
is  still  seriously  felt  in  different  parts  of  the  Union.  The  difficulty  of  getting 
money,  \yhich  has  been  a  general  complaint,  is  not  added  to  the  number,  be- 
cause it  is  the  complaint  of  all  times,  and  one  in  which  imagination  must  ever 
have  too  great  scope  to  permit  an  appeal  to  it. 

If  the  supposition  of  such  a  deficiency  be  in  any  degree  founded,  and  some  aid 
,    to  circulation  be  desirable,  it  remains  to  inquire  what  ought  to  be  the  nature 
of  that  aid. 

The  emitting  of  paper  money  by  the  authority  of  Government  is  wisely  pro- 
hibited to  the  individual  States  by  the  national  constitution,  and  the  spirit  of 
that  prohibition  ought  not  to  be  disregarded  by  the  Government  of  the  United 
States.  Though  paper  emissions,  under  a  general  authority,  might  have  some 
advantages  not  applicable,  and  be  free  from  some  disadvantages  which  are  ap- 
plicable to  the  like  emissions  by  the  States,  separately,  yet  they  are  of  a  na- 
ture so  liable  to  abuse— and,  it  may  even  be  affirmed,  so  certain  of  being  abus- 
ed—that the  wisdom  of  the  Government  will  be  shown,  in  never  trusting  itself 
with  the  use  of  so  seducing  and  dangerous  an  expedient.  In  times  of  tranquil- 
lity, it  might  have  no  ill  consequence;  it  might  even  perhaps  be  managed  in  a 
way  to  be  productive  of  good;  but,  in  great  and  trying  emergencies,  there  is  al- 
most a  moral  certainty  of  its  becoming  mischievous.  The  stamping  of  paper  is 
an  operation  so  much  easier  than  the  laying  of  taxes,  that  a  government  in  the 
practice  of  paper  emissions,  would  rarely  fail,  in  any  such  emergency,  to  indulge 
itself  too  far  in  the  employment  of  that  resource,  to  avoid  as  much  as  possible 
one  less  auspicious  to  present  popularity.  If  it  should  not  even  be  carried  so 
far  as  to  be  rendered  an  absolute  bubble,  it  would  at  least  be  likely  to  be  ex- 
tended to  a  degree  which  would  occasion  an  inflated  and  artificial  state  of 
things,  incompatible  with  the  regular  and  prosperous  course  of  the  political 
economy. 

Among  ot-iier  material  differences  between  a  paper  currency,  issued  by  the 

,  mere  authority  of  government,  and  one  issued  by  a  bank,  payable  in  coin,  is 

|«this:  that,  in  the  first  case,  there  is  no  standard  to  which  an  appeal  can  be 

"  made,  as  to  the  quantity  which  will  only  satisfy,  or  which  will  surcharge  the 

circulation;  in  the  last,  that  standard  results  from  the  demand.    If  more  should 

be  issued  than  is  necessary,  it  will  return  upon  the  bank.     Its  emissions,  as 

elsewhere  intimated,  must  always  be  in  a  compound  ratio  to  the  fund  and  the 

demand;  whence  it  is  evident,   that  there  is  a  limitation  in  the  nature  of  the 


'CHARTER   OF  1791.  25 

thing;  while  the  discretion  of  the  government  is  the  only  measure  of  the  extent 
of  the  emissions,  by  its  own  authority. 

This  consideration  further  illustrates  the  danger  of  emissions  of  that  sort, 
and  the  preference  which  is  due  to  bank  paper. 

The  payment  of  the  interest  of  the  public  debt,  at  thirteen  different  places,  is 
a  weighty  reason,  peculiar  to  our  immediate  situation,  for  desiring  a  bank  cir- 
culation. Without  a  paper  in  general  currency,  equivalent  to  gold  and  sil- 
ver, a  considerable  proportion  of' the  specie  of  the  country  must  always  be  sus- 
pended from  circulation,  and  left  to  accumulate,  preparatory  to  each  day  of 
payment;  and  as  often  as  one  approaches,  there  must  in  several  cases  be  an  ac- 
tual transportation  of  the  metals,  at  both  expense  and  risk,  from  their  natural 
and  proper  reservoirs,  .to  distant  places,  M  his  necessity  will  be  felt  very  in- 
juriously to  the  trade  of  some  of  the  States:  and  will  embarrass,  not  a  little, 
the  operations  of  the  treasury  in  those  States  It  will  also  obstruct  those  ne- 
gotiations, between  different  parts  of  the  Union,  by  the  instrumentality  of  trea- 
sury bills,  which  have  alreacfy  afforded  valuable  accommodations  to  trade  in 
general, 

Assuming  it,  then,  as  a  consequence,  from  what  has  been  said,  that  a  na- 
tional bank  is  a  desirable  institution,  two  inquiries  emerge:  Is  there  no  such  in- 
stitution, already  in  being,  which  has  a  claim  to  that  character,  and  which  su- 
persedes the  propriety  or  necessity  of  another?  If  there  be  none,  what  are  the 
principles  upon  which  one  ought  to  be  established? 

There  are  at  present  three, banks  in  the  United  States:  that  of  North  Ame- 
rica, established  in  the  city  of  Philadelphia:  that  of  New  York /established  in 
the  citv  of  New  York;  that  of  Massachusetts,  established  in  the  tovvn  of  Bos- 
ton. Of  these  three,  the  first  is  the  only  one  which  has  at  any  time  had  a 
direct  relation  to  the  Government  of  the  United  States^ 

The  Bank  of  North  America  originated  in  a  resolution  of  Congress  of  the 
2Gthof  May,  1781,  founded  upon  a  proposition  of  the  Superintendent  of  Fi- 
nance, which  was  afterwards  carried  into  execution  by  an  ordinance  of  the  31st 
of  December  following,  entitled  "An  ordinance  to  incorporate  the  subscribers 
to  the  Bank  of  North  America." 

The  aid  afforded  to  the  United  States  by  this  institution,  during  the  re- 
maining period  of  the  war,  was  of  essential  consequence;  and  its  conduct 
towards  them  since  the  peace,  has  not  weakened  its  title  to  their  patronage 
and  favor.    So  far,  its  pretensions  to  the  character  in  question  are  respecta- 
ble; but  there  are  circumstances  which  militate  against  them,  and  considera- 
tions which  indicate  the  propriety  of  an  establishment  on  different  principles. 
The  directors  of  this  bank,  on  behalf  of  their  constituents,  have  since 
accepted  and  acted  under  a  new  charter  from  the  State  of  Pennsylvania,  ma-  / 
terially  variant  from  their  original  one,  and  which  so  narrows  the  foundation  - 
of  the  institution,  as  to  render  it  an  incompetent  basis  for  the  extensive  pur-  > 
poses  of  a  national  bank.  • 

The  limit  assigned  by  the  ordinance  of  Congress  to  the  stock  of  the  bank, 
is  ten  millions  of  dollars.  The  last  charter  of  Pennsylvania  confines  it  to 
two  millions.  Questions  naturally  arise,  whether  there  be  not  a  direct  re- 
pugnancy between  two  charters  so  differently  circumstanced?  and  whether 
the  acceptance  of  the  one  is  not  to  be  deemed  a  virtual  surrender  of  the 
other?  But,  perhaps  it  is  neither  advisable  nor  necessary  to  attempt  a  solu- 
tion of  them. 

There  is  nothing  in  the  acts  of  Congress  which  imply  an  exclusive  right, 
in  the  institution  to  which  they  relate,  except  during  the  term  of  the  war. 
There  is,  therefore,  nothing,  if  the  public  good  require  it,  which  prevents  the 
establishment  of  another.  It  may,  however,  be  incidentally  remarked,  that, 
in  the  general  opinion  of  the  citizens  of  the  United  States,  the  Bank  of  North 
America  has  taken  the  station  of  a  bank  of  Pennsylvania  only.  This  is  a 
strong  argument  for  a  new  institution,  or  for  a  renovation  of  the  old,  to  re- 
store it  to  the  situation  in  which  it  originally  stood  in  the  view  of  tb?  United 
States. 

4 


20  BANK  OF  THE  UNITED  STATES. 

But,  though  the  ordinance  of  Congress  contains  no  grant  of  exclusive  pri- 
vileges, there  may  be  room  to  allege  that  the  Government  of  the  United 
States  ought  not,  in  point  of  candor  and  equity,  to  establish  any  rival  or  in- 
terfering institution,  in  prejudice  of  the  one  already  established;  especially 
as  this  has,  from  services  rendered,  well  founded  claims  to  protection  and 
regard. 

The  justice  of  such  an  observation,  ought,  within  proper  bounds,  to  be  ad- 
mitted. A  new  establishment  of  the  sort,  ought  not  to  be  made  without  co- 
gent and  sincere  reasons  of  public  good.  And  in  the  manner  of  doing  it, 
every  facility  should  be  given  to  a  consolidation  of  the  old  with  the  new, 
upon  terms  not  injurious  to  the  parties  concerned.  But  there  is  no  ground 
to  maintain,  that,  in  a  case  in  which  the  Government  has  made  no  condition 
restricting  its  authority,  it  ought  voluntarily  to  restrict  it,  through  regard  to 
the  interests  of  a  particular  institution,  when  those  of  the  State  dictate  a  dif- 
ferent course;  especially,  too,  after  such  circumstances  have  intervened,  as 
characterise  the  actual  situation  of  the  Bank  of  North  America. 

The  inducements  to  a  new  disposition  of  the  thing  are  now  to  be  consider- 
ed. The  first  of  them  which  occurs  is,  the  at  least  ambiguous  situation  in 
.which  the  Bank  of  North  America  has  placed  itself,  by  the  acceptance  of  its 
last  charter.  If  this  has  rendered  it  the  mere  bank  of  a  particular  State,  lia- 
ble to  dissolution  at  the  expiration  of  fourteen  years,  to  which  term  the  act  of 
that  State  has  restricted  its  duration,  it  would  be  neither  fit  nor  expedient  to 
accept  it  as  an  equivalent  for  a  bank  of  the  United  States. 

The  restriction  of  its  capital,  also,  which,  according  to  the  same  supposition, 
cannot  be  extended  beyond  two  millions  of  dollars,  is  a  conclusive  reason  for 
a  different  establishment.  So  small  a  capital  promises  neither  the  requisite 
aid  to  Government,  nor  the  requisite  security  to  the  community.  It  may  an- 
swer very  well  the  purposes  of  local  accommodation,  but  is  an  inadequate 
foundation  for  a  circulation  co-extensive  with  the  United  States,  embracing 
the  whole  of  their  revenues,  and  effecting  every  individual  into  whose  hands 
the  paper  may  come. 

An*',  inadequate  as  such  a  capital  would  be  to  the  essential  ends  of  a  na- 
tional bank,  it  is  liable  to  be  rendered  still  more  so,  by  that  principle  of  the 
constitution  of  the  Bank  of  North  America,  contained  equally  in  its  old  and  in 
its  new  charter,  which  leaves  the  increase  of  the  actual  capital  at  any  time 
(now  far  short  of  the  allowed  extent)  to  the  discretion  of  the  directors  or 
stockholders.  It  is  naturally  to  be  expected,  that  the  allurements  of  an  ad- 
vanced price  of  stock,  and  of  large  dividends,  may  disincline  those  who  are 
interested  to  an  extension  of  capital,  from  which  they  will  be  apt  to  fear  a 
diminution  of  profits.  And  from  this  circumstance,  the  interest  and  accom- 
modation of  the  public,  (as  well  individually  as  collectively)  are  made  more 
subordinate  to  the  interest,  real  or  imagined,  of  the  stockholders,  than  they 
ought  to  be.  It  is  true,  that,  unless  the  latter  be  consulted,  there  can  be  no 
bank,  (in  the  sense  at  least  in  which  institutions  of  this  kind,  vyorthy  of  con- 
Ifidence,  can  be  established  in  this  country.")  But,  it  does  not  follow  that  this 
lis  alone  to  be  consulted,  or  that  it  even  ougnt  to  be  paramount.  Public  utility 
I  is  more  truly  the  object  of  public  banks  than  private  profit.  And  it  is  the 
business  of  Government  to  constitute  them  on  such  principles,  that,  while  the 
latter  will  result  in  a  sufficient  degree  to  afford  competent  motives  to  engage 
in  them,  the  former  be  not  made  subservient  to  it.  To  effect  this,  a  principal 
object  of  attention  ought  to  be  to  give  free  scope  to  the  creation  of  an  ample 
capital,  and  with  this  view,  fixing  the  bounds  which  are  deemed  safe  and  con- 
venient, to  leave  no  discretion  either  to  stop  short  of  them,  or  to  overpass 
them.  The  want  of  this  precaution,  in  the  establishment  of  the  Bank  of  North 
America,  is  a  further  and  an  important  reason  for  desiring  one  differently 
constituted. 

There  may  be  room  at  first  sight  for  a  supposition,  that,  as  the  profits  of  a 
bank  will  bear  a  proportion  to  the  extent  of  its  operations,  and  as.  for  this  rea- 
son, the  interest  of  the  stockholders  will  not  be  disadvantageous^  affected  by 
any  necessary  augmentations  of  capital,  there  is  no  cause  to  apprehend  that 


<  HARTER   OF    1/91.  2? 

will  be  indisposed  to  such  augmentations.  But  most  men.  in  matters  of 
ts  nature,  prefer  the  certainties  they  enjoy,  to  probabilities  depending  on 
untried  experiments,  especially  when  these  promise  rather  that  they  will  not 
be  injured  than  that  they  will  be  benefitted. 

From  the  influence  of  this  principle,  and  a  desire  of  enhancing  its  profits, 
the  directors  of  a  bank  will  be  more  apt  to  overstrain  its  faculties,  in  an  at- 
tempt to  face  the  additional  demands  which  the  course  of  business  may  create, 
than  to  set  on  foot  new  subscriptions,  which  may  hazard  a  diminution  of  the 
profits,  and  even  a  temporary  reduction  of  the  price  of  stock. 

Banks  are  among  the  best  expedients  for  lowering  the  rate  of  interest  in  a 
country:  but,  to  have  this  effect,  their  capitals  must  be  completely  equal  to 
all  the  demands  of  business^  and  such  as  will  tend  to  remove  the  idea,  that 
the  accommodations  they  afford  are  in  any  degree  favors — an  idea  very  apt  to 
accompany  tjie  parsimonious  dispensation  of  contracted  funds.  In  this,  as  in 
every  other  case,  the  plenty  of  the  commodity  ought  to  beget  a  moderation  of 
the  price. 

1  he  want  of  a  principle  of  rotation  in  the  constitution  of  the  Bank  of  North  i 
America  is  another  argument  for  a  variation  of  the  establishment.  Scarcely 
one  of  the  reasons  which  militate  against  this  principle  in  the  constitution  of  a 
country,  is  applicable  to  that  of  a" bank;  while  there  are  strong  reasons  in 
favor  of  it,  in  relation  to  the  one,  which  do  not  apply  to  the  other.  The  know- 
ledge to  be  derived  from  experience  is  the  only  circumstance  common  to  both, 
which  pleads  against  rotation  in  the  directing  officers  of  a  bank. 

But  the  objects  of  the  government  of  a  nation,  and  those  of  the  government 
of  a  bank,  are  so  widely  different,  as  greatly  to  weaken  the  force  of  that  con- 
sideration in  reference  to  the  latter.  Almost  eveiy  important  case  of  legisla- 
tion requires,  towards  a  right  decision,  a  general  and  accurate  acquaintance 
with  the  affairs  of  the  State,  and  habits  of  thinking,  seldom  acquired  but  from 
a  familiarity  with  public  concerns.  The  administration  of  a  bunk,  on  the  con- 
trary, is  regulated  by  a  few  simple  fixed  maxims,  the  application  of  which  is 
not  difficult  to  any  man  of  judgment,  especially  if  instructed  in  the  principles 
of  trade.  It  is,  in  general,  a  constant  succession  of  the  same  details. 

But,  though  this  be  the  case,  the  idea  of  the  advantages  of  experience  is  not 
to  be  slighted.  Room  ought  to  be  left  for  the  regular  transmission  of  official 
information,-  and,  for  this  purpose,  the  head  of  the  direction  ought  to  be  ex- 
cepted  from  the  principle  of  rotation.  With  this  exception,  and  with  the  aid 
of  the  information  of  the  subordinate  officers,  there  can  be  no  danger  of  any  ill 
•effects  from  want  of  experience  or  knowledge;  especially  as  the  periodical 
exclusion  ought  not  to  reach  the  whole  of  the  directors  at  one  time. 

The  argument  in  favor  of  the  principle  of  rotation  is  this:  that,  by  lessening 
the  danger  of  combinations  among  the  directors,  to  make  the  institution  sub- 
servient to  party  views,  or  to  the  accommodation,  preferably,  of  any  particu- 
lar set  of  men,  it  will  render  the  public  confidence  more  firm,  stable,  and  un- 
qualified. 

AVhen  it  is  considered  that  the  directors  of  a  bank  are  not  elected  by  the 
great  body  of  the  community,  in  which  a  diversity  of  views  will  naturally 
prevail  at  different  conjunctures,  but  by  a  small  and  select  class  of  men, 
among  whom  it  is  far  more  easv  to  cultivate  a  steady  adherence  to  the  same 
persons  and  objects,  and  that  those  directors  have  it  in  their  power  so  imme- 
diately to  conciliate,  by  obliging  the  most  influential  of  this  class,  it  is  easy  to 
perceive  that,  without  the  principle  of  rotation,  changes  in  that  body  can 
rarely  happen,  but  as  a  concession  which  they  may  themselves  think  it  expe- 
dient to  make  to  public  opinion. 

The  continual  administration  of  an  institution  of  this  kind,  by  the  same 
persons,  will  never  fail,  with  or  without  cause,  from  their  conduct^  to  excite 
distrust  and  discontent.  The  necessary  secrecy  of  their  transactions  gives 
unlimited  scope  to  imagination  to  infer  that  something  is  or  may  be  wrong. 
And  this  inevitable  mystery  is  a  solid  reason  for  inserting  in  the  constitution 
of  a  bank  the  necessity  of  a  change  of  men.  As  neither  me  mass  of  the  par- 
ties interested,  nor  the  public  in  general,  can  be  permitted  to  be  witnesses  of 


2g  BANK  OF  THE  UNITED  STATES. 

the  interior  management  of  the  directors,  it  is  reasonable  that  both  should  h.u  <; 
that  check  upon  their  conduct,  and  that  security  against  the  preyalency  of  a 
partial  or  pernicious  system,  which  will  be  produced  by  the  certainty  of  peri- 
odical changes.  Such,  too,  is  the  delicacy  of  the1  credit  of  a  bank,  that  every 
thing  which  can  fortify  confidence  and  repel,  suspicion,  without  injuring  ite 
operations,  ought _  carefully  to  be  sought  after  in  its  formation. 
*  A  further  consideration  in  favor  of  a  change,  is  the  improper  rule  by  which 
the  right  of  voting  for  directors  is  regulated  in  the  plan  upon  which  the  Bank 
of  North  America  was  originally  constituted,  namely,  a  vote  for  each  share, 
and  the  want  of  a  rule  in  the  last  charter;  unless  the  silence  of  it,  on  that 
point,  may  signify  that  every  stockholder  is  to  have  an  equal  and  a  single  vote; 
which  would  be  a  rule  in  a  different  extreme,  not  less  erroneous.  It  is  of  im- 
portance that  a  rule  should  be  established  on  this  head,  as  it  is  one  of  those 
things  which  ought  not  to  be  left  to  discretion;  and  it  is,  consequently,  of 
equal  importance  that  the  rule  should  be  a  proper  one. 

A  vote  for  each  share  renders  a  combination  between  a  few  principal  stock- 
holders, to  monopolize  the  power  and  benefits  of  the  bank,  too  easy.  An 
equal  vote  to  each  stockholder,  however  great  or  small  his  interest  in  the  in- 
stitution, allows  not  that  degree  of  weight  to  large  stockholders  which  it  is 
reasonable  they  should  have,  and  which,  perhaps,  their  security,  and  that  of 
the  bank,  require.  A  prudent  mean  is  to  be  preferred.  A  conviction  of  this 
has  produced  a  by-law  of  the  corporation  of  the  Bank  of  North  America, 
which  evidently  aims  at  such  a  mean.  But  a  reflection  arises  here,  that  a 
like  majority  with  that  which  enacted  this  law,  may,  at  any  moment,  repeal  it. 

The  last  inducement  which  shall  be  mentioned,  is  the  want  of  precautions 
to  guard  against  a  foreign  influence  insinuating  itself  into  the  direction  of  the 
bank.  It  seems  scarcely  reconcileable  with  a  due  caution,  to  permit  that  any 
but  citizens  should  be  eligible,  as  directors  of  a  national  bank,  or  that  non- 
resident foreigners  should  be  able  to  influence  the  appointment  of  directors 
by  the  votes  of  their  proxies.  In  the  event,  however,  of  an  incorporation  of 
the  Bank  of  North  America,  in  the  plan  it  may  be  necessary  to  qualify  this 
principle,  so  as  to  leave  the  right  of  foreigners,  who  now  hold  shares  of  its 
stock,  unimpaired;  but  without  the  power  of  transmitting  the  privilege  in 
question  to  foreign  alienees. 

It  is  to  be  considered  that  such  a  bank  is  not  a  mere  matter  of  private  pro- 
perty,  but  a  political  machine  of  the  greatest  importance  to  the  State, 

There  are  other  variations  from  trie  constitution  of  the  Bank  of  North 
America,  not  of  inconsiderable  moment,  which  appear  desirable,  but  which 
are  not  of  magnitude  enough  to  claim  a  preliminary  discussion.  These  will 
be  seen  in  the  plan  which  will  be  submitted  in  the  sequel. 

If  the  objections  which  have  been  stated,  to  the  constitution  of  the  Bank  of 
North  America,  are  admitted  to  be  well  founded,  they  will,  nevertheless, 
not  derogate  from  the  merit  of  the  main  design,  or  of  the  services  which  that 
bank  has  rendered,  or  of  the  benefits  which  it  lias  produced.  The  creation 
of  such  an  institution,  at  the  time  it  took  place,  was  a  measure  dictated  by 
wisdom.  Its  utility  has  been  amply  evinced  by  its  fruits — American  inde- 
pendence owes  much  to  it;  and  it  is  very  conceivable,  that  reasons  of  the 
moment  may  have  rendered  those  features  in  it  inexpedient,  which  a  revision, 
with  a  permanent  view,  suggests  as  desirable. 

The  order  of  the  subject  leads  next  to  an  inquiry  into  the  principles  upon 
which  a  national  bank  ought  to  be  organized. 

The  situation  of  the  United  States  naturally  inspires  a  wish  that  the  form 
of  the  institution  could  admit  of  a  plurality  of  branches.  But  various  con- 
siderations discourage  from  pursuing  this  idea.  The  complexity  of  such  a 
plan  would  be  apt  to  inspire  doubts,  which  rnisht  deter  from  adventuring  in 
it.  And  the  practicability  of  a  safe  and  orderly  administration,  though  not 
to  be  abandoned  as  desperate,  cannot  be  made  so  manifest  in  perspective,  as 
to  promise  the  removal  of  those  doubts,  or  to  justify  the  Government  in  adopt- 
ing the  idea  as  an  original  experiment.  The  most  that  would  seem  advisa- 
ble, on  this  point,  is  to  insert  a  provision  which  may  lead  to  it  hereafter,  if 


(  HARTER  OF   1701,  29 

experience  shall  nlore  clearly  demonstrate  its  utility,  and  satisfy  those  who 
may  have  the  direction,  that  it  may  be  adopted  with  safety.  It  is  certain 
that  it  would  have  some  advantages,  both  peculiar  and  important.  Besides 
more  general  accommodation,  it  would  lessen  the  danger  of  a  run  upon  the 
bank, 

The  argument  against  it  is,  that  each  branch  must  be  under  a  distinct, 
though  subordinate  direction,  to  which  a  considerable  latitude  of  discretion 
must  of  necessity  be  entrusted.  And  as  the  property  of  the  whole  institution 
would  be  liable  for  the  engagements  of  each  part,  that  and  its  credit  \yould 
be  at  stake,  upon  the  prudence  of  the  directors  of  every  part.  The  misma- 
nagement of  either  branch  might  hazard  serious  disorder  in  the  whole. 

Another  wish,  dictated  by  the  particular  situation  of  the  country,  is,  that 
the  bank  could  be  so  constituted  as  to  be  made  an  immediate  instrument  of  loans 
to  the  proprietors  of  land;  but  this  wish  also  yields  to  the  difficulty  of  accom- 
plishing it.  Land  is  alone  an  unlit  fund  fora  bank  circulation.  If  the  notes 
issued  upon  it  were  not  to  be  payable  in  coin,  on  demand,  or  at  a  short  date, 
this  would  amount  to  nothing  more  than  a  repetition  of  the  paper  emissions, 
which  are  now  exploded  by  the  general  voice.  If  the  notes  are  to  be  payable 
in  coin,  the  land  must  first  be  converted  into  it  by  sale,  or  mortgage.  The 
difficulty  of  effecting  the  latter,  is  the  very  thing  which  begets  the  desire  of 
finding  another  resource,  and  the  former  would  not  be  practicable  on  a  sudden 
emergency,  but  with  sacrifices  which  would  make  the  cure  \yorse  than  the 
disease.  Neither  is  the  idea  of  constituting  the  fund  partly  of  coin  and  part- 
ly of  land,  free  from  impediments.  These  two  species  of  property  do  not, 
for  the  most  part,  unite  m  the  same  hands.  Will  the  moneyed  man  consent  to 
enter  into  a  partnership  with  the  land  holder,  by  which  the  latter  will  share  in 
the  profits  which  will  be  made  by  the  money  of  the  former?  The  money,  it 
is  evident,  will  be  the  agent  or  efficient  cause  of  the  profits — the  land  can 
only  be  regarded  as  an  additional  security.  Itjs  not  difficult  to  foresee,  that 
an  union,  on  such  terms,  will  not  readily  be  formed.  If  the  landholders  are 
to  procure  the  money  by  sale  or  mortgage  of  a  part  of  their  lands,  this  they 
can  as  well  do  when  the  stock  consists  wholly  of  money,  as  if  it  were  to  be 
compounded  of  money  and  land. 

To  procure  for  the  landholders  the  assistance  of  loans,  is  the  great  desi- 
deratum. Supposing  other  difficulties  surmounted, and  a  fund  created,  corn- 
posed  partly  of  coin  and  partly  of  land,  yet  the  benefit  contemplated  could 
only  then  be  obtained,  by  the  bank's  advancing  them  its  notes  for  the  whole, 
or  part,  j»f  the  value  ot  the  lands  they  had  subscribed  to  the  stock.  If  this 
advance'was  small,  the  relief  aimed  at  would  not  be  given;  if  it  was  large, 
the  quantity  of  notes  issued  would  be  a  cause  of  distrust;  and,  if  receivecfat 
all,  they  would  be  likely  to  return  speedily  upon  the  bank  for  payment; 
which,  after  exhausting  its  coin,  might  be  under  a  necessity  of  turning  its 
lands  into  money,  at  any  price  that  could  be  obtained  for  them,  to  the  irre- 
parable prejudice  of  the  proprietors. 

Considerations  of  public  advantage  suggest  a  further  wish,  which  is?  that 
the  bank  could  be  established  upon  principles  that  would  cause  the  profits  of 
it  to  redound  to  the  immediate  benefit  ol  the  State.  This  is  contemplated 
by  many  who  speak  of  a  national  bank,  but  the  idea  seems  liable  to  insupera- 
ble objections.  To  attach  full  confidence  to  an  institution  of  this  nature,  it 
appears  to  be  an  essential  ingredient  in  its  structure,  that  it  shall  be  under  a 
private  not  a  public  direction — under  the  guidance  of  individual  interest,  not 
of  public  policy;  which  would  be  supposed  to  be,  and,  in  certain  emergencies, 
under  a  feeble  or  too  sanguine  administration,  would  really  be,  liable  to  being 
too  much  influenced  by  public  necessity.  The  suspicion  of  this  would  most 
probably  be  a  canker  that  would  continually  corrode  the  vitals  of  the  credit 
of  the  bank,  and  would  be  most  likely  to  prove  fatal  in  those  sitaations  in 
which  the  public  good  would  require  that  they  should  be  most  sound  and 
vigorous.  It  would,  indeed,  be  little  less  than  a  miracle,  should  the  credit 
of  the  bank  be  at  the  disposal  of  the  Government^  if,  in  a  long  series  of  time, 
there  was  not  experienced  a  calamitous  abuse  of  it.  It  is  true,  that  it  would 


;3Q  BANK  OF  THE  UNITED  STATES. 

be  (he  real  interest  of  the  Government  not  to  abuse  it;  its  genuine  policy,  to 
husband  and  cherish  it  with  the  most  guarded  circumspection,  as  an  inesti- 
mable treasure.  But  what  government  ever  uniformly  consulted  its  true  in- 
terests in  opposition  to  the  temptations  of  momentary  exigencies?  What 
nation  was  ever  blessed  with  a  constant  succession  of  upright  and  wise  ad- 
ministrators? 

The  keen,  steady,  and,  as  it  were,  magnetic  sense  of  their  ovyn  interest,  as 
proprietors,  in  (he  directors  of  a  bank,  pointing  invariably  to  its  true  pole, 
the  prosperity  of  the  institution,  is  the  only  security  that  can  always  be  relied 
upon  lor  a  careful  and  prudent  administration.  It  is,  therefore,  the  only 
basis  on  which  an  enlightened,  unqualified,  and  permanent  confidence  can  be 
expected  to  be  erected  and  maintained. 

The  precedents  of  the  banks  established  in  several  cities  of  Europe,  Am- 
sterdam, Hamburgh,  and  others,  may  seem  to  militate  against  this  position. 
Without  a  precise  knowledge  of  all  the  peculiarities  of  their  respective  con- 
stitutions, it  is  difficult  to  pronounce  how  far  this  may  be  the  case.  That  of 
Amsterdam,  however,  which  we  best  know,  is  rather  under  a  municipal  than 
a  governmental  direction.  Particular  magistrates  of  the  city,  not  officers  of 
the  republic,  have  the  management  of  it.  It  is  also  a  bank  of  deposite,  not 
of  loan,  or  circulation;  consequently  less  liable  to  abuse,  as  well  as  less  use- 
ful. Its  general  business  consists  in  receiving  money  for  safe  keeping,  which, 
if  not  called  for  within  a  certain  time,  becomes  a  part  of  its  stock,  and  irre- 
claimable. But  a  credit  is  given  for  it  on  the  books  of  the  bank,  which,  being 
transferable,  answers  all  the  purposes  of  money. 

The  directors  being  magistrates  of  the  city,  and  the  stockholders  in  general 
its  most  influential  citizens,  it  is  evident  that  the  principle  of  private  interest 
must  be  prevalent  in  the  management  of  the  bank.  And  it  is  equally  evi- 
dent, that,  from  the  nature  of  its  operations,  that  principle  is  less  essential  to 
it  than  to  an  institution  constituted  with  a  view  to  the  accommodation  of  the 
public  and  individuals,  by  direct  loans  and  a  paper  circulation. 

As  far  as  may  concern  the  aid  of  the  bank,  within  the  proper  limits,  a 
good  government  has  nothing  more  to  wish  for  than  it  will  always  possess, 
though  the  management  be  in  the  hands  of  private  individuals.  As  the  in- 
titution,  if  rightly  constituted,  must  depend  for  its  renovation,  from  time  to 
time,  on  the  pleasure  of  the  government,  it  will  not  be  likely  to  feel  a  dis- 
position to  render  itself,  by  its  conduct,  unworthy  of  public  patronage.  The 
government,  too,  in  4he  administration  of  its  finances,  has  it  in  its  power  to 
reciprocate  benefits  to  the  bank,  of  not  less  importance  than  those  which  the 
bank  affords  to  the  government,  and  which,  besides,  are  never  unattended 
with  an  immediate  and  adequate  compensation.  Independent  of  these  more 
particular  considerations,  the  natural  weight  and  influence  of  a  good  govern- 
ment will  always  go  far  towards  procuring  a  compliance  with  its  desires;  and, 
as  the  directors  will  usually  be  composed  of  some  of  the  most  discreet,?respect- 
able,  and  well  informed  citizens,  it  can  hardly  ever  be  difficult  to  make  them 
sensible  of  the  force  of  the  inducements  which  ought  to  stimulate  their  exertions. 

It  will  not  follow,  from  what  has  been  said,  that  the  State  may  not  be  the 
holder  of  a  part  of  the  stock  of  a  bank,  and  consequently  a  sharer  in  the  pro- 
fits of  it.  It  will  only  follow  that  it  ought  not  to  desire  any  participation  in 
the  direction  of  it,  and  therefore  ought  not  to  own  the  whole  or  a  principal 
part  of  the  stock:  for,  if  the  mass  of  the  property  should  belong  to  the  public, 
and  if  the  direction  of  it  should  be  in  private  hands,  this  would  be  to  commit 
the  interests  of  the  State  to  persons  not  interested,  or  not  enough  interested 
in  their  proper  management. 

There  is  one  thing,  however,  which  the  Government  owes  to  itself  and  to 
the  community,  at  least  to  all  that  part  of  it  who  are  not  stockholders,  which 
is,  to  reserve  to  itself  a  right  of  ascertaining,  as  often  as  may  be  necessary, 
the  state  of  the  bank-— excluding,  however,  all  pretension  to  control.  This 
right  forms  an  article  in  the  primitive  constitution  of  the  Bank  of  North 
America,  and  its  propriety  stands  upon  the  clearest  reasons.  If  the  paper 
of  a  bank  is  to  be  permitted  to  insinuate  itself  into  all  the  revenues  and  re- 


CHARTER  OF  1791.  gj 

ceipts  of  a  country;  if  it  is  even  to  be  tolerated  as  the  substitute  for  gold  and 
silver,  in  all  the  transactions  of  business;  it  becomes,  in  either  view,  a  national 
concern  of  the  first  magnitude.  As  such,  the  ordinary  rules  of  prudence  re- 
quire that  the  government  should  possess  the  means  of  ascertaining,  when- 
ever it  thinks  tit,  that  so  delicate  a  trust  is  executed  with  fidelity  and  care. 
A  right  of  this  nature  is  not  only  desirable,  as  it  respects  the  government, 
but  it  ought  to  be  equally  so  to  all  those  concerned  in  the  institution,  as  an 
additional  title  to  public  and  private  confidence,  and  as  a  thing  which  can 
only  be  formidable  to  practices  that  imply  mismanagement.  The  presump- 
tion must  always  be,  that  the  characters  who  would  be  entrusted  with  the 
exercise  of  this  right,  on  behalf  of  the  government,  will  not  be  deficient  in  the 
discretion  which  it  may  require;  at  least,  the  admitting  cf  this  presumption 
cannot  be  deemed  too  great  a  return  of  confidence  for  tnat  very  large  portion 
of  it  which  the  government  is  required  to  place  in  the  bank. 

Abandoning,  therefore,  ideas  which,  however  agreeable  or  desirable,  are 
neither  practicable  nor  safe,  the  following  plan,  for  the  constitution  of  a  na- 
tional bank,  is  respectfully  submitted  to  the  consideration  of  the  House. 

1.  The  capital  stock  of  the  bank  shall  not  exceed  ten  millions  of  dollars, 
divided  into  twenty -five  thousand  shares,  each  share  being  four  hundred  dol- 
lars; to  raise  which  sum,  subscriptions  shall  be  opened  on  the  first  Monday  of 
April  next,  and  shall  continue  open  until  the  whole  shall  be  subscribed. 
Bodies  politic  as  well  as  individuals  may  subscribe. 

2.  The  amount  of  each  share  shall  be  payable,  one-fourth  in  gold  and  sil- 
ver coin,  and  three-fourths  in  that  part  of  the  public  debt  which,  according 
to  the  loan  proposed  by  the  act  making  provision  for  the  debt  of  the  United 
States,  shall  bear  an  accruing  interest,  at  the  time  of  payment,  of  six  per  cent, 
per  annum. 

3.  The  respective  sums  subscribed  shall   be  payable  in  four  equal  parts,  as 
well  specie  as  debt,  in  suncs-ion,  and  at  the  distance  of  six  calendar  months 
from  each  other;  the  first  payment  to  bo  made  at  the  time  of  subscription. 
If  there  shall  be  a  failure  in  any  subsequent  payment,  the  party  failing  shall 
lose  the  benefit  of  any  dividend  which  may  have  accrued  prior  to  the  time  for 
making  such  payment,  and  during  the  delay  of  the  same. 

4.  Ihe  subscribers  to  the  bank,  and  their  successors,  shall  be  incorporated, 
and  shall  so  continue,  until  the  final  redemption  of  that  part  of  its  stock  which 
shall  consist  of  the  public  debt. 

5.  The  capacity  of  the  corporation  to  hold  real  and  personal  estate,  shall  be 
limited  to  fifteen  millions  of  dollars,  including  the  amount  of  its  capital  or 
original  stock.     The  lands  and  tenements  which  it  shall  be  permitted  to  hold, 
shall  be  only  such  as  shall  be  requisite  for  the  immediate  accommodation  of  the 
institution;  and  such  as  shall  have  been  bona  fide  mortgaged  to  it  by  way  of 
security,  or  conveyed  to  it  in  satisfaction  of  debts  previously  contracted,  in 
the  usual  course  of  its  dealings,  or  purchased  at  sales  upon  judgments  which 
shall  have  been  obtained  for  such  debts. 

(5.  The  totality  of  the  debts  of  the  company,  whether  by  bond,  bill,  note, 
or  other  contract,  (credits  for  deposites.  excepted)  shall  never  exceed  the 
amount  of  its  capital  stock.  In  case  of  excess,  the  directors,  under  whose 
administration  it  shall  happen,  shall  be  liable  for  it  in  their  private  or  separate 
capacities.  Those  who  may  have  dissented,  may  excuse  themselves  from  this 
responsibility,  by  immediately  giving  notice  of  the  fact,  and  their  dissent,  to 
the  President  of  the  United  States,  and  to  the  stockholders,  at  a  general  meet- 
ing, to  be  called  by  the  President  of  the  Bank,  at  their  request. 

7.  The  company  may  sell  or  demise  its  lands  and  tenements,  or  may  sell 
the  whole  or  any  part  of  the  public  debt,  whereof  its  stock  shall  consist;  but 
shall  frade'm  nothing  except  bills  of  exchange,  gold  and  silver  bullion,  or  in 
the  sale  of  goods  pledged  for  money  lent;  nor  shall  take  more  than  at  the 
rate  of  six  per  centum  per  annum,  upon  its  loans  or  discounts. 

8.  No  loan  shall  be  made  by  the  bank  for  the  use,  or  on  account  of,  the 
Government  of  the  United  States,  or  of  either  of  them,  to  an  amount  exceed- 


32  BANK  OF  THE  UNITED  STATES. 

ing  fifty  thousand  dollars,  or  of  any  foreign  Prince  or  State,  unless  previously 
authorized  by  a  law  of  the  United  States. 

9.  The  stock  of  the  bank  shall  be  transferable,  according  to  such  rules  as 
shall  be  instituted  by  the  company  in  that  behalf. 

10.  The  affairs  of  the  bank  shall  be  under  the  management  of  twenty-five 
directors,  one  of  whom  shall  be  the  president;  and  there  shall  be,  on  the  first 
Monday  of  January,  in  each  year,  a  choice  of  directors,  by  a  plurality  of  suf- 
frages of  the  stockholders,  to  serve  for  a  year.     The  directors,  at  their  first 
meeting  after  each  election,  shall  choose  one  of  their  number  as  president. 

11.  The  number  of  votes  to  which  each  stockholder  shall  be  entitled,  shall 
be  according  to  the  number  of  shares  he  shall  hold,  in  the  proportions  follow- 
ing, that  is  to  say:  For  one  share,  and  not  more  than  two  shares,   one  vote; 
for  every  two  shares  above  two,  and  not  exceeding  ten,  one  vote;  for  every 
four  shares  above  ten,  and  not  exceeding  thirty,  one  vote;  for  every  six  shares 
above  thirty,  and  not  exceeding  sixty,  one  vote;  for  every  eight  shares  above 
sixty,  and  not  exceeding  one  hundred,   one  vote;   and  for  every  ten  shares 
above,  one  hundred,  one  vote;  but  no  person,  co-partnership,  or  body  politic, 
shall  be  entitled  to  a  greater  number  than  thirty  votes.    And,  after  the  first 
election,  no  share  or  shares  shall  confer  a  right  of  suffrage,  which  shall  not 
have  been  holden  three  calendar  months  previous  to  the  day  of  election. 
Stockholders  actually  resident  within  the  United  States,  and  none  other,  may 
vote  in  the  elections  by  proxy. 

12.  Not  more  than  three-fourths  of  the  directors  in  office,  exclusive  of  the 
president,  shall  be  eligible  for  the  next  succeeding  year.     But  the  director 
who  shall  be  president  at  the  time  of  an  election,  may  always  be  re-elected. 

13.  None  but  a  stockholder  being  a  citizen  of  the  United  States,  shall  be 
eligible  as  a  director. 

14.  Any  number  of  stockholcbrs,  not  less  than  sixty,  who,  together,  shall 
be  proprietors  of  two  hundred  snares  or  upwards,  shall  have  power,  at  any 
time,  to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to 
the  institution;  giving  at  least  six  weeks'  notice,  in  two  public  gazettes,  of  the 
place  where  the  bank  is  kept,  and  specifying  in  such  notice  the  object  of  the 
meeting. 

15.  In  case  of  the  death,    resignation,  absence  from  the  United  States,  or 
removal  ot  a  director  by  the  stockholders,  his  place  may  be  filled  by  a  new 
choice  for  the  remainder  of  the  year. 

16.  No  director  shall  be  entitled  to  any  emolument,  unless  the  same  shall 
have  been  allowed  by  the  stockholders  at  a  general   meeting.    The  stock- 
holders shall  make  such  compensation  to  the  president,  for  his  extraordinary 
attendance  at  the  bank,  as  shall  appear  to  them  reasonable. 

17.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transac- 
tion of  business. 

18.  Every  cashier  or  treasurer,  before  he  enters  on  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfaction 
of  the  directors,  in  a  sum  not  less  than  twenty  thousand  dollars,  with  condi- 
dition  for  his  good  behavior. 

19.  Half-yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable;  and,  once  in  every  three 
years,  the  directors  shall  lay  before  the  stockholders,  at  a  general   meeting, 
for  their  information,  an  exact  and  particular  statement  of  the  debts  which 
shall  have  remained  unpaid,  after  the  expiration  of  the  original   credit,  for  a 
period  of  treble  the  term  of  that  credit,  and  of  the  surplus  of  profit,  if  any, 
after  deducting  losses  and  dividends. 

20.  The  bills  and  notes  of  the  bank  originally  made  payable,  or  which  shall 
have  become  payable,  on  demand,  in  gold  and  silver  coin,  shall  be  receivable 
in  all  payments  to  the  United  States. 

21.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United 
States  shall  be  furnished,  from  time  to  time,  as  often   as  he  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  the  capital  stock  of 
the  bank,  and  of  the  debts  due  to  the  same,  of  the  moneys  deposited  therein. 


CHARTER   OF    1791.  33 

of  the  notes  in  circulation,  and  of  the  cash  in  hand;  and  shall  have  a  right  to 
inspect  such  general  accounts  in  the  books  of  the  bank,  as  shall  relate  to  the 
said  statements;  provided  that  this  shall  not  be  construed  to  imply  a  right  of 
inspecting  the  account  of  any  private  individual  or  individuals  with  the  bank. 

22.  No  similar  institution  shall  be  established  by  any  future  act  of  the 
United  States,  during  the  continuance  of  the  one  hereby  proposed  to  be  es- 
tablished. 

23.  It  shall  be   lawful    for  the  directors  of  the  bank   to   establish  offices 
wheresoever  they  shall  think  fit,  within  the  United  States,  for  the  purposes 
of  discount  and  deposite,  only,  and  upon  the  same  terms,  and  in  the  same 
manner,  as  shall  be  practised  at  the  bank,  and  to  commit  the  management  of 
the  said  offices,  and  the  making  of  the   said  discounts,  either  to  agents  spe- 
cially appointed  by  them,  or  to  such  persons  as  may  be  chosen  by  the  stock- 
holders residing  at  the  place  where  any  such  office  shall  be,  under  such  agree- 
ments, and  subject  to  such  regulations,  as  they  shall  deem  proper,  not  being 
contrary  to  law,  or  to  the  constitution  of  the  bank. 

24.  And  lastly,  the  President  of  the  United  States  shall  be  authorized  to 
cause  a  subscription  to  be  made  to  the  stock  of  the  said  company,  on  behalf 
of  the  United  States,  to  an  amount  not  exceeding  two  millions  of  dollars,  to 
be  paid  out  of  the  moneys  which  shall  be  borrowed  by  virtue  of  either  of  the 
acts,  the  one,  entitled  "  An  act  making  provision  for  the  debt  of  the  United 
Strtes,"  and  the  other,  entitled  "  An  act  making  provision  for  the  reduction 
of  the  public  debt;"  borrowing  of  the  bank  an  equal  sum,  to  be  applied  to  the 
purposes  for  which  the  said  moneys  shall  have   been  procured,  reimbursable 
in  ten  years,  by  equal  annual  instalments;   or  at  any  time  sooner,  or  in  any 
greater  proportions,  that  the  Government  may  think  tit. 

The  reasons  for  the  several  provisions  contained  in  the  foregoing  plan,  have 
been  so  far  anticipated,  and  will,  for  the  most  part,  be  so  readily  suggested  by 
the  nature  of  those  provisions,  that  any  comments  which  need  further  be 
made,  will  be  both  few  and  concise. 

The  combination  of  a  portion  of  the  public  debt,  in  the  formation  of  the 
capital,  is  the  principal  thing  of  which  an  explanation  is  requisite.  The  chief 
object  of  this  is  to  enable  me  creation  of  a  capital  sufficiently  large  to  be 
the  basis  of  an  extensive  circulation,  and  an  adequate  security  for  it.  As  has 
been  elsewhere  remarked,  the  original  plan  of  the  Bank  of  North  America 
contemplated  a  capital  of  ten  millions  of  dollars,  which  is  certainly  not  too 
broad  a  foundation  for  the  extensive  operations  to  which  a  national  bank  is 
destined.  But,  to  collect  such  a  sum  in  this  country,  in  gold  and  silver,  into 
one  depository,  may,  without  hesitation,  be  pronounced  impracticable.  Hence 
the  necessity  of  an  auxiliary,  which  the  public  debt  at  once  presents. 

This  part  of  the  fund  will  be  always  ready  to  come  in  aid  of  the  specie;  it 
will  more  and  more  command  a  ready  sale;  and  can  therefore  expeditiously 
be  turned  into  coin,  if  an  exigency  of  the  bank  should  at  any  time  require  it. 
This  quality  of  prompt  convertibility  into  coin,  renders  it  an  equivalent  for 
that  necessary  agent  of  bank  circulation,  and  distinguishes  it  from  a  fund  in 
land,  of  which  the  sale  would  generally  be  far  less  compendious,  and  at  great 
disadvantage,  v  The  quarter  yearly  receipts  of  interest  will  also  be  an  actual 
addition  to  the  specie  fund,  during  the  intervals  between  them,  and  the  half 
yearly  dividends  of  profits.  The  objection  to  combining  land  with  specie, 
resulting  from  their  not  being  generally  in  possession  of  the  same  persons, 
does  not  apply  to  the  debt,  which  will  always  be  found  in  considerable  quan- 
tity among  the  moneyed  and  trading  people. 

The  debt  composing  part  of  the  capital,  besides  its  collateral  effect  in  ena- 
bling the  bank  to  extend  its  operations,  and  consequently  to  enlarge  its  pro- 
fits, will  vproduce  a  direct  annual  revenue  of  six  per  centum  from  the  Go- 
vernment, which  will  enter  into  the  half  yearly  dividends  received  by  the 
stockholders.  \ 

When  the  present  price  of  the  public  debt  is  considered,  and  the  effect 
which  its  conversion  into  bank  stock,  inc9rporated  with  a  specie  fund,  would, 
in  all  probability,  have  to  accelerate  its  rise  to  the  proper  point,  it  will  easily 
5 


34  BANK   OF   THE  UNITED   STATES. 

be  discovered  that  the  operation  presents,  in  its  outset,  a  very  considerable 
advantage  to  those  who  may  become  subscribers;  and  from  the  influence 
which  that  rise  would  have  on  the  general  mass  of  the  debt,  a  proportional 
benefit  to  all  the  public  creditors,  and,  in  a  sense  which  has  been  more  than 
once  adverted  to,  to  the  community  at  large. 

There  is  an  important  fact  which  exemplifies  the  fitness  of  the  public  debt 
for  a  bank  fund,  and  which  may  serve  to  remove  doubts  in  some  minds  on 
this  point:  it  is  this,  that  the  iJank  of  England,  in  its  first  erection,  rested 
wholly  on  that  foundation.  *>  The  subscribers  to  a  loan  to  Government  of  one 
million  two  hundred  thousand  pounds  sterling,  were  incorporated  as  a  bank, 
of  which  the  debt  created  by  the  loan,  and  the  interest  upon  it,  were  the  sole 
fund.  The  subsequent  augmentations  of  its  capital,  which  now  amounts  to 
between  eleven  and  twelve  millions  of  pounds  sterling,  have  been  of  the  same 
nature. 

The  confining  ol  the  right  of  the  bank  to  contract  debts  to  the  amount  of 
its  capital,  is  an  important  precaution,  which  is  not  to  be  found  in  the  consti- 
tution of  the  Bank  of  North  America,  and  which,  while  the  fund  consists 
wholly  of  coin,  would  be  a  restriction  attended  with  inconveniences,  but  would 
be  free  from  any,  if  the  composition  of  it  should  be  such  as  is  now  proposed. 
The  restriction  exists  in  the  establishment  of  the  Bank  of  England,  and,  as  a 
source  of  security,  is  worthy  of  imitation.  The  consequence  of  exceeding  the 
limit,  there,  is,  that  each  stockholder  is  liable  for  the  excess,  in  proportion  to 
his  interest  in  the  bank.  When  it  is  considered  that  the  directors  ovye  their 
appointments  to  the  choice  of  the  stockholders,  a  responsibility  of  this  kind, 
on  the  part  of  the  latter,  does  not  appear  unreasonable;  but,  on  the  other  hand, 
it  may  be  deemed  a  hardship  upon  those  who  may  have  dissented  from  the 
choice.  And  there  are  many  among  us  whom  it  might  perhaps  discourage 
from  becoming  concerned  in  the  institution.  These  reasons  have  induced  the 
placing  of  the  responsibility  upon  the. directors  by  whom  the  limit  prescribed 
should  be  transgressed. 

The  interdiction  of  loans  on  account  of  the  United  States,  or  of  any  parti- 
cular State,  beyond  the  moderate  sum  specified,  or  of  any  foreign  Power,  will 
serve  as  a  barrier  to  Executive  encroachments,  and  to  combinations  inauspi- 
cious to  the  safety,  or  contrary  to  the  policy  of  the  Union. 

The  limitation  of  the  rate  of  interest  is  dictated  by  the  consideration,  that 
different  rates  prevail  in  different  parts  of  the  Union;  and  as  the  operations 
of  the  bank  may  extend  through  the  whole,  some  rule  seems  to  be  necessary. 
There  is  room  for  a  question,  whether  the  limitation  ought  not  rather  to  be  to 
five  than  to  six  per  cent,  as  proposed.  It  may,  ^vith  safety.be  taken  for 
granted,  that  the  former  rate  would  yield  an  ample  dividend,  perhaps  as  much 
as  the  latter,  by  the  extension  which  it  would  give  to  business.  Ihe  natural 
effect  of  low  interest  is  to  increase  trade  and  industry;  because  undertakings 
of  every  kind  can  be  prosecuted  with  greater  advantage.  This  is  a  truth 
generally  admitted;  but  it  is  requisite  toliave  analyzed  the  subject  in  all  its 
relations,  to  be  able  to  form  a  just  conception  of  the  extent  ol  that  ettect.  feucn 
an  analysis  cannot  but  satisfy  an  intelligent  mind,  that  the  difference  ot  one 
per  cent,  in  the  rate  at  which  money  may  be  had,  is  often  capable  ot  making 
an  essential  change  for  the  better  in  the  situation  of  any  country  or  place. 

Every  thing,  therefore,  which  tends  to  lower  the  rate  of  interest,  is  peculi- 
arly worthy  of  the  cares  of  legislators.  And  though  laws,  which  violently  sink 


the  legal  rate  of  interest  greatly  below  the  market  level  are  not  to  be  com- 
mended, because  they  are  not  calculated  to  answer  their  aim,  yet,  whatever 
has  a  tendency  to  effect  a  reduction,  without  violence  to  the  natural  c 
of  things,  ought  to  be  attended  to  and  pursued.  Banks  are  among  the  means 
most  proper  to  accomplish  this  end;  and  the  moderation  of  the  rate  at  which 
their  discounts  are  made,  is  a  material  ingredient  towards  it;  with  which  their 
own  interest,  viewed  on  an  enlarged  and  permanent  scale,  does  not  appear  1 

L  But,  as  the  most  obvious  ideas  are  apt  to  have  greater  force  than  those 
lich  depend  on  complex  and   remote  combinations,  there  would  be  danger 


CHARTER   OF    1791.  35 

that  the  persons,  whose  funds'must  constitute  the  stock  of  the  bank,  would  be 
diffident  of  the  sufficiency  of  the  profits  to  be  expected,  if  the  rate  of  loans 
and  discounts  were  to  be  placed  below  the  point  to  which  they  have  been  ac- 
customed,- and  might,  on  this  account,  be  indisposed  to  embarking  in  the  plan. 
There  is,  it  is  true,  one  reflection,  vyhich,  in  regard  to  men  actively  engaged 
in  trade,  ought  to  be  a  security  against  this  danger;  it  is  this:  that  the  ac- 
commodations which  they  might  derive  in  the  way  of  their  business,  at  a  low 
rate,  would  more  than  indemnify  them  for  any  difference  in  the  dividend, 
supposing  even  that  some  diminution  of  it  were  to  be  the  consequence.  But, 
upon  the  whole,  the  hazard  of  contrary  reasoning  among  the  mass  of  moneyed 
men,  is  a  powerful  argument  against  the  experiment.  The  institutions  of  the 
kind  already  existing  add  to  the  difficulty  of  making  it.  Mature  reflection, 
and  a  large  capital,  may,  of  themselves,  lead  to  the  desired  end. 

The  last  thing  which  requires  any  explanatory  remark  is  the  authority  pro- 
posed to  be  given  to  the  President  to  subscribe  the  amount  of  two  millions 
of  dollars  on  account  of  the  public.  The  main  design  of  this  is  to  enlarge 
the  specie  fund  of  the  bank,  and  to  enable  it  to  give  a  more  early  extension 
to  its  operations.  Though  it  is  proposed  to  borrow  with  one  hand  what  is 
lent  with  the  other,  yet  the  disbursement  of  what  is  borrowed  will  be  pro- 
gressive, and  bank  notes  may  be  thrown  into  circulation  instead  of  the  gold 
and  silver.  Besides,"1;n^re  is  to  be  an  annual  reimbursement  of  a  part  of  the 
sum  borrowed,  which  will  finally  operate  as  an  actual  investment  of  so  much 
specie.  In  addition  to  die  inducements  to  this  measure,  which  result  from 
the  general  inti'iv-i  of  the  Government  to  enlarge  the  sphere  of  the  utility  of 
the  qank,  there  is  this  more  particular  consideration,  to  wit:  that,  as  far  as 
the  dividend  on  the  stock  shall  exceed  the  interest  paid  on  the  loan,  there  is 
a  positive  profit. 

The  Secretary  begs  leave  to  conclude  with  this  general  observation:  That, 
if  the  Bank  of  North  America  shall  come  forward  with  any  propositions  which 
have  Jor  their  object  the  engrafting  upon  that  institution,  the  characteristics 
whicfi  shall  appear  to  the  Legislature  necessary  to  the  due  extent  and  safety 
of  a  national  bank,  there  are,  in  his  judgment,  weighty  inducements  to  giving 
every  reasonable  facility  to  the  measure.  Not  only  the  pretensions  of  that 
institution,  from  its  original  relation  to  the  Government  of  the  United  States, 
am?  from  the  services  it  has  rendered,  are  such  as  to  claim  a  disposition  favora- 
ble to  it,  if  those  who  are  interested  in  it  are  willing,  on  their  part,  to  place 
it  on  a  footing  satisfactory  to  the  Government,  and  equal  to  the  purposes  of  a 
Bank  of  the  United  States,  but  its  co-operation  would  materially  accelerate 
the  accomplishment  of  the  great  object;  and  the  collision,  which  might  other- 
wise arise,  might,  in  a  variety  of  ways,  prove  equally  disagreeable  and  inju- 
rious. The  incorporation  or  union  here  contemplated,  may  be  effected  in 
different  modes,  under  the  auspices  of  an  act  of  the  United  States,  if  it  shall 
be  desired  by  the  Bank  of  North  America,  upon  terms  which  shall  appear 
expedient  to  the  Government. 

All  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 
Secretary  of  the  Treasury. 

TREASURY  DEPARTMENT,  December  13,  1790. 

IN  SENATE,  December  23,  1790. 

On  the  reception  of  the  copy  of  the  said  report,  in  the  Senate,  it  was,  on 
motion, 

Ordered,  That  Messrs.  Strong,  of  Massachusetts,  Morris,  of  Pennsylvania, 
Schuyler,  of  New  York,  Butler,  of  South  Carolina,  and  Ellsworth,  of  Con-    // 
necticut,  be  a  committee  to  take   into  consideration  the  report  of  the  Secre-   /  / 
tary  of  the  Treasury,  upon  the  plan  of  a  national  bank,  and  to  prepare  a  bill 
upon  that  subject. 

On  the  3d  of  January,  1791,  Mr.  Strong,  from  the  said  committee,  reported 
a  bill  "  to  incorporate  the  subscribers  to  the  bank  of ." 


3(5  BANK   OF  THE   UNITED    STATES. 

The  history  of  this  bill,  on  its  passage  through  the  Senate,  is  to  be  learnt 
from  one  source  only — the  journals  of  that  body.  Its  debates  and  proceed- 
ings were  not  then,  as  now,  open  to  the  public. 

From  the  journals,  howevei>  we  learn  that,  on  the  6th,  10th,  llth,  and  12th 
days  of  January,  1791,  the  bill  was  under  consideration,  and  on  the  13th  of 
January  it  was  agreed  to  fill  the  blank  in  the  title  with  these  words:  "  the 
United  States  of  America." 

A  motion  was  made  to  limit  the  term  of  incorporation  to  seven  years,  and 
another  to  extend  it  to  March  4th,  1815.  On  this  latter  motion,  the  yeas  and 
nays  were: 

YEAS — Messrs.  Bassett,  Dickinson,  Ellsworth,  Elmer,  Johnson,  King-,  Langdon, 
Morris,  Read,  Schuyler,  and  Strong — 11. 

NATS — Messrs.  Butler,  Few,  Foster,  Hawkins,  Henry,  Johnston,  Izard,  Maclayr 
Monroe,  and  Wingate — 10. 

So  it  passed  in  the  affirmative. 

A  motion  was  made  to  subjoin  to  the  last  clause  agreed  to,  as  follows: 
"  Provided^  nevertheless,  that  nothing  herein  contained  shall  be  construed 
to  exclude  the  right  of  amending  the  same,  on  giving  twelve  months'  noticey 
from  and  after  the  first  of  January,  1800." 

On  the  1 4th  of  January,  the  question  being  taken  on  this  amendment,  it 
passed  in  the  negative. 

On  motion,  it  was  agreed  to  reconsider  the  term  of  incorporation  agreed  to 
yesterday,  and  to  limit  it  to  the  4th  of  March,  1811. 

On  the  18th  of  January,  the  bill  being  under  consideration,  it  was  ordered 
that  it  be  recommitted  tor  further  amendments;  and  Mr.  Strong,  from  the 
committee  to  whom  it  was  referred,  reported  sundry  amendments;  which 
were  agreed  to. 

On  the  19th,  a  motion  being  made  to  expunge  the  12th  section,  to  writt 
"  And  be  it  further  enacted,  That  no  other  bank  shall  be  established,  by  any 
future  law  of  the  United  States,  during  the  continuance  of  the  corporation 
hereby  created,  for  which  the  faith  of  the  United  States  is  hereby  pledged," 
it  passed  in  the  negative. 

20th  January,  1791.  "On  motion  to  reconsider  the  term  of  incorporation, 
and  limit  it  to  the  year  1801,  instead  of  1811,"  the  vote  was  as  follows:  . 

YEAS — Messrs.  Butler,  Few,  Gunn,  Hawkins,  Izard,  and  Monroe — 6. 

NATS — Messrs.  Bassett,  Dalton,  Dickinson,  Ellsworth,  Elmer,  Foster,  Johnson, 
King,  Langdon,  Maclay,  Morris,  Read,  Schuyler,  Stanton,  Strong,  and  Wingate — 16. 

On  motion  to  expunge  the  twelfth  section,  quoted  above,  it  passed  in  the 
negative. 

Whereupon, 

Resolved,  That  this  bill  do  pass;  that  the  title  of  it  be,  "An  act  to  incor- 
porate the  subscribers  to  the  Bank  of  the  United  States." 

The  bill  was  then  transmitted  to  the  House  of  Representatives  for  concur- 
rence. 

HOUSE  OF  REPRESENTATIVES. 

The  bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States 
was,  on  the  21st  of  January,  read  a  first  and  second  time,  and  committed  to 
a  Committee  of  the  Whole  House. 

On  the  31st,  the  House  resolved  itself  into  a  Committee  of  the  Whole, 
(Mr.  Boudinot  in  the  chair)  and  the  bill  was  read  by  paragraphs;  and  no 
amendments  being  offered,  the  chairman  reported  it  to  the  House,  which  voted 
that  it  should  be  read  the  third  time  on  the  succeeding  day. 

FEBRUARY  1,  1791. 

\fter  the  bill  was  read  the  third  time,  Mr.  Smith,  of  South  Carolina,  hav- 
ing moved  that  the  bill  be  recommitted  to  a  Committee  of  the  Whole  House, 
it  was  determined  by  ayes  and  noes,  in  the  negative,  and  it  was 

Ordered,  That  the  bill  do  lie  on  the  table. 


CHARTER   OF    1791, 


DEBATE  ON   THE  MOTION  OF  MR.  SMITH,  OF  SOUTH  CAROLINA,  TO 
RECOMMIT  THE  BILL. 

FEBRUARY  1,  1791. 

Mr.  SMITH,  of  South  Carolina,  observed,  that  the  bill  being  taken  up  rather 
unexpectedly  yesterday,  gentlemen  did  not  appear  prepared  to  discuss  the 
subject;  it,  therefore,  was  suffered  to  be  read  in  Committee  of  the  Whole,  and 
passed  to  the  third  reading,  in  his  opinion  rather  informally,  as  the  mem- 
bers were,  thereby,  deprived  of  giving  their  sentiments  in  the  usual  manner, 
on  a  bill  of  the  greatest  importance. 

He  thought  it  susceptible  of  various  amendments.  [The  SPEAKER  having 
observed  that  the  bill,  agreeable  to  the  rules  of  the  House,  could  not  be  amend- 
ed without  being  recommitted,]  Mr.  Smith  moved  that  the  bill  should  be  re- 
committed for  the  purpose  of  making  sundry  alterations  and  removing  objec- 
tions which  he  thought  the  bill  liable  to.  He  then  enumerated  several  objec- 
tions. Those  who  are  to  receive  the  subscriptions,  he  said,  are  not  obliged 
to  give  any  bonds  for  their  fidelity.  He  thought  the  clause  which  excluded 
foreigners  from  voting  by  proxy  exceptionable.  And  the  time  in  which  sub- 
scriptions are  to  be  received,  he  thought  too  contracted. 

Mr.  JACKSON  said  he  was  in  favor  of  the  motion  for  a  recommitment,  but 
not  for  the  reasons  offered  by  the  gentleman  from  South  Carolina.  He  was, 
he  said,  opposed  to  the  principles  of  the  bill  altogether.  He  then  adverted  to 
the  situation  of  the  United  States,  and  observed  that  it  was  so  different  from 
that  of  Great  Britain,  at  the  time  the  bank  was  established  in  that  country, 
that  no  reason  in  favor  of  the  institution  could  be  deduced  from  thence.  He 
adverted  to  the  argument  arising  from  the  facility  which  banks  afford,  of  an- 
ticipating the  public  resources  in  cases  of  emergency.  This  idea  of  anticipa- 
tions he  reprobated,  as  tending  to  involve  the  country  in  debt,  and  an  end- 
less labyrinth  of  perplexities.  This  plan  of  a  National  Bank,  said  he,  is  cal- 
culated to  benefit  a  small  part  of  the  United  States  —  the  mercantile  interest 
only  5  the  farmers,  the  yeomanry  of  the  country,  will  derive  no  advantage 
from  it.  as  the  bank  bills  will  not  circulate  to  the  extremities  of  the  Union. 
He  said  he  had  never  seen  a  bank  bill  in  the  State  of  Georgia;  nor  will  they 
ever  benefit  the  farmers  of  that  State,  or  of  New  Hampshire.  He  urged  that 
there  was  no  necessity  for  instituting  a  new  bank;  there  is  one  already  esta- 
blished in  this  city,  under  the  style  of  the  Bank  of  North  America.  This  pro- 
posed institution  is  an  infringement  of  the  charter  of  that  bank,  which  cannot 
be  justified.  He  urged  the  unconstitutional  of  the  plan;  called  it  a  mo- 
nopoly, such  an  one  as  contravenes  the  spirit  of  the  constitution  —  a  monopoly 
of  a  very  extraordinary  nature  —  a  monopoly  of  the  public  moneys  for  the  bene- 
fit of  the  corporations  to  be  created.  He  then  read  several  passages  from  the 
Federalist,  which,  he  said,  were  directly  contraiy  to  the  assumptions  of  the 
power  proposed  by  the  bill.  He  hoped,  therefore,  it  would  be  recommitted, 
and  he  could  not  help  hoping,  also,  that  it  would  be  deferred  to  the  next 
session. 

Mr.  LAWRENCE  observed,  that  the  friends  of  the  institution  proposed,  had 
been  unjustly  charged  with  precipitating  the  bill;  but,  he  said,  it  had  long 
been  in  the  hands  of  the  members;  they  have  had  time  to  consider  it;  the 
usual  forms  have  been  observed  in  its  progress,  thus  far,  and  if  those  who  are 
opposed  to  the  bill  did  not  see  proper  to  come  forward  with  their  objections,  it 
surely  is  their  own  fault,  and  the  advocates  of  the  bill  are  not  justly  chargea- 
ble with  precipitancy.  He  then  particularly  replied  to  the  objections  offered 
by  Mr.  Smith,  of  South  Carolina,  and  after  considering  them,  said  that  those 
objections  did  not,  in  his  opinion,  constitute  sufficient  reasons  to  induce  a 
recommitment  of  the  bill.  He  then  noticed  the  constitutional  objections  of 
Mr.  Jackson,  and  said  the  Government  of  the  United  States  is  vested,  by  the 
constitution,  with  the  power  of  borrowing  money,  and,  in  pursuance  of  this 


38  BANK   OF  THE   UNITED    STATES. 

idea,  they  have  a  right  to  create  a  capital  by  which  they  may,  with  greater 
facility,  cany  the  powers  of  borrowing,  on  any  emergency,  into  effect.  Under 
the  late  confederation,  the  Pennsylvania  bank,  called  the  Bank  of  North 
America,  was  instituted.  He  presumed  that  it  would  not  be  controverted, 
that  the  present  Government  is  vested  with  powers  equal  to  those  of  the  late 
confederation.  He  said  that  he  had  no  doubt  its  operations  would  benefit, 
not  only  the  centre,  but  the  extremities  also,  of  the  Union.  The  commer- 
cial, mechanical,  and  agricultural  interests  of  the  United  States,  are  so  com- 
bined, that  one  cannot  be  benefitted  without  benefiting  the  other.  He  con- 
cluded by  observing  that  he  thought  the  Legislature  of  the  United  States  could 
not  better  answer  the  purposes  ot  their  appointment,  than  by  passing  this  bill. 
He  hoped,  therefore,  it  would  not  be  recommitted,  but  that  it  would  now 
pass. 

Mr.  LEE  observed,  that,  having  been  confined  by  sickness,  he  was  preclud- 
ed from  attending  the  House  yesterday;  but,  sick  as  he  was,  had  he  supposed 
there  was  a  prospect  of  a  bill  of  such  magnitude  and  importance  passing,  with- 
out a  discussion  of  its  principles,  he  certainly  would  have  attended,  and  offered 
his  objections  to  various  parts  of  it,  which  he  thought  very  exceptionable.  He 
hoped,  therefore,  it  would  now  be  recommitted,  that  a  bill  which  is  so  une- 
qual and  so  partial  may  undergo  a  thorough  discussion. 

Mr.  TUCKER  was  in  favor  of  recommitment.  He  acknowledged  that  those 
who  had  their  objections  to  the  bill  were  certainly  blameable  for  not  coming 
forward  with  them  yesterday.  He  then  stated  sundry  objections  to  the  bill. 
The  time  allowed  to  receive  the  subscriptions,  he  said,  is  too  short,  arid  will 
benefit  those  only  in  the  vicinity  of  the  bank.  The  clause  which  authorizes 
the  loaning  $100,000  to  the  Government,  without  express  provision  by  law, 
he  thought  exceptionable,  as  the  Executive  will  be  able,  by  this  means,  to 
borrow,  at  any  time,  without  being  authorized,  to  almost  any  amount,  of  the. 
bank.  The  loan  of  $2,000,000,  by  the  United  States,  to  the  bank,  he  objected 
to,  as  diverting  that  sum  from  the  particular  object  for  which  it  was  borrowed. 
There  is  no  appropriation,  said  he,  of  the  half  yearly  dividend  of  profits  ac- 
cruing; to  the  United  States,  which,  he  observed,  was  a  very  essential  defect. 
Mr.  Tucker  stated  other  objections  as  reasons  fora  recommitment. 

Mr.  WILLIAMSON  was  in  favor  of  the  recommitment,  to  give  those  who  say 
thev  have  not  had  an  opportunity  of  offering  their  objections,  time  to  do  it; 
and  if  the  motion  is  not  agreed  to,  he  should  not  give  his  vote  for  the  bill. 
He  then  adverted  to  the  objections  deduced  from  the  constitution,  and  ex- 
plained the  clause  respecting  monopolies,  as  referring  altogether  to  commer- 
cial monopolies. 

Mr.  SHERMAN  objected  to  the  recommitment.  He  said,  that,  though  the 
bill  could  not  be  amended  without  its  being  recommitted,  yet  it  was  open  to 
discussion  and  objection,  previous  to  taking  a  vote  on  its  passing.  He  did  not 
think  the  objections  offered,  afforded  sufficient  reasons  for  a  recommitment. 
He  replied  to  the  9bservations  offered  by  several  gentlemen  who  had  spoken 
in  favor  of  the  motion. 

Mr.  GERRY  expressed  his  surprise  at  the  observations  of  the  gentlemen  who 
had  neglected  to  offer  their  objections  to  the  bill  before,  and  said  it  could  only 
be  imputed  to  their  own  neglect,  and  not  to  any  precipitancy  on  the  part  of 
the  friends  of  the  bill.  Mr.  Gerry  noticed  the  several  objections  which  had 
been  offered,  and  said,  if  nothing  more  important  could  be  offered,  he  thought 
it  unjustifiable  in  the  House  to  go  into  a  committee. 

Mr.  MADISON  observed,  that  at  this  moment  it  was  not  of  importance  to 
determine  how  it  has  happened  that  the  objections  which  several  gentlemen, 
now  say  they  have  to  oner,  against  the  bill,  were  not  made  at  the  proper 
time;  it  is  sufficient  for  them,  if  the  candor  of  the  House  should  lead  them 
now  to  recommit  the  bill,  that,  in  a  Committee  of  the  Whole,  they  may  have 
an  opportunity  to  offer  their  objections. 


CHARTER    OF    1791. 

Mr.  AMES  replied  to  Mr.  Madison.    He  said  he  did  not  cone „.„,.  „„ 

appeal  now  made  to  the  candor  of  the  House  was  in  point.  The  gentlemen 
who  object  to  the  bill  had  an  opportunity  to  offer  their  objections;  the  cus- 
tomary forms  have  been  attended  to,  and  the  whole  question  for  recommit- 
ment turns  on  the  force  of  the  objections  which  are  now  offered  to  the  §ej 
ral  principles  of  the  bill,  altogether;  the  candor  of  the  House,  lie  conceivi 
was  entirely  out  of  the  question,  and  therefore  not  to  be  appealed  to;  but  the 
justice  due  to  their  constituents  in  the  proper  discharge  of  the  duty  reposed  in 
them.  He  said  it  appeared  to  him  absurd  togo  into  a  Committee  of  the  Whole. 
to  determine  whether  the  bill  is  constitutional  or  not;  if  it  is  unconstitutional, 
that  amounts  to  a  rejection  of  it  altogether. 

Mr.  MADISON  thought  there  was  the  greatest  propriety  in  discussing  a  con  - 
stitutional  question  in  the  Committee  of  the  Whole. 

Mr.  STONE  and  Mr.  GILES  were  in  favor  of  recommitment;  they  objected 
to  the  unconstitutionality  of  the  bill,  and  to  several  of  its  particular  clauses. 

Mr.  VIXING  said  he  thought  it  was  a  subject  of  congratulation  that  the  bill 
was  in  its  present  situation;  it  had  happily  passed  to  the  third  reading  with- 
out that  tedious  discussion  which  bills  usually  receive.  The  subject  has 
been  a  considerable  time  before  the  House,  and  the  gentlemen  have  had  time 
to  contemplate  it.  The  bill  is  now  in  the  stage  to  which  gentlemen  very  usu- 
ally reserve  themselves  to  state  their  objections  at  large;  he  hoped  they  would 
now  do  it.  He  was  not  perfectly  satisfied  as  to  the  constitutional  point;  he 
therefore  hoped  gentlemen  would  slate  their  objections,  that  those  who  are 
satisfied  on  that  point,  may  otter  their  reasons. 

Mr.  BOUDINOT  stated  the  process  of  the  business  yesterday.  He  observed 
he  had  then  the  honor  to  be  in  the  chair;  he  had  reau  the  bill  very  distinctly 
and  deliberately,  with  proper  pauses;  he  thought  that  the  fullest  opportunity 
had  been  offered  for  gentlemen  to  come  forward  with  their  objections;  he  was 
opposed  to  the  recommitment,  as  it  would,  he  feared,  issue  in  a  defeat  of  the 
bill,  this  session.  He  had  one  difficulty,  however,  respecting  the  unconstitu- 
tionality of  the  bill;  this  he  hoped  to  have  removed,  and  he  noped  that  a  full 
discussion  of  its  general  principles  would  take  place. 

FEBRUARY  2,  1791. 

On  the  question,  "  Shall  the  bill  pass  ?"  the  following  debate  took  place. 

Mr.  MADISON  began  with  a  general  review  of  the  advantages  and  disadvan- 
tages of  banks.  The  former  he  stated  to  consist  in,  First.  The  aids  they 
afford  to  merchants,  who  can  thereby  push  their  mercantile  operations  far- 
ther, with  the  same  capital.  Second.  The  aids  to  merchants  in  paying  punc- 
tually, the  customs.  Phird.  Aids  to  the  Government,  in  complying  punctu- 
ally with  its  engagements,  when  deficiencies  and  delays  happen  in  the  reve- 
nue. Fourth.  In  diminishing  usury.  Fifth.  In  saving  the  wear  of  gold  and 
silver,  kept  in  the  vaults,  and  represented  by  notes.  Sixth.  In  facilitating 
occasional  remittances  from  different  places  where  notes  happen  to  circulate. 
The  effect  of  the  proposed  bank  in  raising  the  value  of  stock,  he  thought,  had 
been  greatly  overrated.  It  no  doubt  would  raise  that  of  the  stock  subscribed 
into  the  bank,  but  could  have  little  effect  on  stock  in  general,  as  the  interest 
on  it  would  remain  the  same,  and  the  quantity  taken  out  of  the  market  would 
be  replaced  by  the  bank  stock. 

The  principal  disadvantage  consisted  in,  First.  Banishing  the  precious 
metals,  by  substituting  another  medium  to  perform  their  office.  This  effect 
was  inevitable.  It  was  admitted  by  the  most  enlightened  patrons  of  banks, 
particularly  by  Smith  on  the  Wealth  of  Nations.  The  common  answer  to  the 
objection  was,  that  the  money  banished  was  only  an  exchange  for  something 
equally  valuable,  that  would  be  imported  in  return.  He  admitted  the  weight 
of  this  observation,  in  general,  but  doubted  ^vhether,  in  the  present  habiis*  of 
this  country,  the  return  would  not  be  in  articles  of  no  permanent  use  to  it. 


40  BANK   OF  THE   UNITED   STATES. 

Second.  Exposing  the  public  and  individuals  to  all  the  evils  of  a  run  on  the 
bank,  which  would  be  particularly  calamitous  in  so  great  a  country  as  this, 
and  might  happen  from  various  causes,  as  false  rumors,  bad  management  of 
the  institution,  an  unfavorable  balance  of  trade,  from  short  crops,  &c.  It  was 
proper  to  be  considered,  also,  that  the  most  important  of  the  advantages  would 
be  better  obtained  by  several  banks,  properly  distributed,  than  by  a  single  one. 
The  aids  to  commerce  could  only  be  afforded  at,  or  very  near,  the  seat  of  the 
bank.  The  same  was  true  of  aids  to  merchants  in  the  payment  of  customs. 
Anticipations  of  the  Government  would,  also,  be  most  convenient  at  the 
different  places  where  the  interest  of  the  debt  was  to  be  paid.  The  case  in 
America  was  different  from  that  in  England;  the  interest  there  was  all  due 
at  one  place,  and  the  genius  of  the  monarchy  favored  the  concentration  of 
wealth  and  influence  at  the  metropolis. 

He  thought  the  plan  liable  to  other  objections;  it  did  not  make  so  good  a 
bargain  for  the  public  as  was  due  to  its  interests.  The  charter  to  the  Bank 
of  England  had  been  granted  only  for  eleven  years,  and  was  paid  for  by  a 
loan  to  the  Government,  on  terms  better  than  could  be  elsewhere  got.  Every 
renewal  of  the  charter  had,  in  like  manner,  been  purchased;  in  some  in- 
stances at  a  very  high  price.  The  same  had  been  done  by  the  banks  of  Genoa, 
Naples,  and  other  like  banks  of  circulation.  The  plan  was  unequal  to  the 
public  creditors;  it  gave  an  undue  preference  to  the  holders  of  a  particular 
demonination  of  the  public  debt;  and  to  those  at,  and  within  reach  of,  the 
seat  of  Government.  If  the  subscriptions  should  be  rapid,  the  distant  holders 
of  paper  would  be  excluded  altogether. 

In  making  these  remarks  on  the  merits  of  the  bill,  he  had  reserved  to  him- 
self, he  said,  the  right  to  deny  the  authority  of  Congress  to  pass  it.  He  had 
entertained  this  opinion  from  the  date  of  the  constitution.  His  impressions 
might,  perhaps,  be  the  stronger,  because  he  well  recollected  that  a  power  to 
grant  charters  of  incorporation  had  been  proposed  in  the  general  convention, 
and  rejected.  Is  the  power  of  establishing  an  incorporated  bunk  among  the 
powers  vested  by  the  constitution,  in  the  Legislature  of  the  United  States? 
This  is  the  question  to  be  examined. 

After  some  general  remarks  on  the  limitations  of  all  political  power,  he  took 
notice  of  the  peculiar  manner  in  which  the  Federal  Government  is  limited. 
It  is  not  only  a  general  grant  out  of  which  particular  powers  are  excepted;  it 
is  a  grant  of  particular  powers,  leaving  the  general  mass  in  other  hands.  So 
it  had  been  understood  by  its  friends  and  its  foes;  and  so  it  was  to  be  inter- 
preted. 

As  preliminaries  to  a  right  interpretation,  he  laid  down  the  following  rules: 

An  interpretation  that  destroys  the  very  characteristic  of  the  Government, 
cannot  be  just. 

Where  a  meaning  is  clear,  the  consequences,  whatever  they  may  be,  are 
to  be  admitted;  where  doubtful,  it  is  fairly  triable  by  its  consequences. 

In  controverted  cases,  the  meaning  of  the  parties  to  the  instrument,  if  to  be 
collected  by  reasonable  evidence,  is  a  proper  guide. 

Contemporary  and  concurrent  expositions  are  a  reasonable  evidence  of  the 
meaning  of  the  parties. 

In  admitting  or  rejecting  a  constructive  authority,  not  only  the  degree  of  its 
incidentally  to  an  express  authority  is  to  be  regarded,  but  the  degree  of  its 
importance  also;  since  on  this  will  depend  the  probability  or  improbability  ot 
its  being  left  to  construction. 

Reviewing  the  constitution  with  an  eye  to  these  positions,  it  was  not  possi- 
ble to  discover  in  it  the  power  to  incorporate  a  bank.  The  only  clauses  under 
which  such  power  could  be  pretended,  was,  either, 

tirit.  The  power  to  lay  and  collect  taxes  to  pay  the  debts  and  provide 
for  the  common  defence  and  general  welfare;  or, 

Second.  The  power  to  borrow  money  on  the  credit  of  the  United  States;  or, 

Third.  The  powers  to  pass  all  laws  necessary  and  proper  to  carry  into 
execution  those  powers. 


CHARTER   OF  1791.  41 

The  bill  did  not  come  within  the  first  power.  It  laid  no  tax  to  pay  the 
debts,  or  provide  for  the  general  welfare.  It  laid  no  tax  whatever.  It  was 
altogether  foreign  to  the  subject. 

No  argument  could  be  drawn  from  the  terms  "common  defence  and  general 
welfare."  The  power  as  to  tliese  general  purposes  was  limited  to  acts  laying 
taxes  for  them;  ami  the  general  purposes  themselves  were  limited  and  ex- 
plained by  the  particular  enumerations  subjoined.  To  understand  these  terms 
in  any  sense  that  would  justify  the  power  in  question,  would  give  to  Congress 
an  unlimited  power;  would  render  nugatory  the  enumeration  of  particular 
powers;  would  supersede  all  the  powers  reserved  to  the  State  Governments. 
These  terms  are  copied  from  the  articles  of  confederation:  had  it  ever  been 
pretended  that  they  were  to  be  understood  otherwise  than  as  here  explained? 
It  had  been  said,  that  4i  general  welfare"  meant  cases  in  which  a  general 
power  might  be  exercised  by  Congress,  without  interfering  with  the  power  of 
the  States;  and  that  the  establishment  of  a  National  Bank  was  of  this  sort. 
There  were,  he  said,  several  answers  to  this  novel  doctrine. 

First.  The  proposed  bank  would  interfere,  so  as  indirectly  to  defeat  a  State 
bank  at  the  same  place. 

Second.  It  would  directly  interfere  with  the  rights  of  States  to  prohibit,  as 
well  as  to  establish,  banks,  and  the  circulation  of  T}ank  notes.  He  mentioned 
a  law  of  Virginia,  actually  prohibiting  the  circulation  of  notes  payable  to 
bearer. 

TTiird.  Interference  with  the  powers  of  the  States  was  no  constitutional 
criterion  of  the  power  of  Congress.  If  the  power  was  not  given,  Congress 
could  not  exercise  it;  if  given,  they  might  exercise  it,  although  it  should  inter- 
fere with  the  laws,  or  even  the  constitution,  of  the  States. 

Fourth.  If  Congress  could  incorporate  a  bank,  merely  because  the  act  would 
leave  the  States  free  to  establish  banks  also,  any  other  incorporation  might  be 
made  by  Congress.  They  could  not  incorporate  companies  of  manufacturers, 
or  companies  for  cutting  canals,  or  even  religious  societies,  leaving  similarin- 
corporations  by  the  States,  like  State  banks,  to  themselves;  Congress  might 
even  establish  religious  teachers  in  every  parish,  and  pay  them  out  of  the 
treasury  of  the  United  States,  leaving  other  teachers  unmolested  in  their 
functions.  These  inadmissible  consequences  condemned  the  controverted 
principle. 

The  case  of  the  bank,  established  by  the  former  Congress,  had  been  cited 
as  a  precedent.  This  was  known,  he  said,  to  have  been  the  child  of  neces- 
sity. It  never  could  be  justified  by  the  regular  powers  of  the  articles  of  con- 
federation. Congress  betrayed  a  consciousness  of  this,  in  recommending  to 
the  States  to  incorporate  the  bank  also.  They  did  not  attempt  to  protect  the 
bank  notes,  by  penalties  against  counterfeiters.  These  were  reserved  wholly 
to  the  authority  of  the  States. 

The  second  clause  to  be  examined  is  that  which  empowers  Congress  to 
borrow  money. 

Is  this  a  bill  to  bornny  money?  It  does  not  borrow  a  shilling.  Is  there  any 
fair  construction  by  which  the  bill  can  be  deemed  an  exercise  of  the  power  to 
borrow  money?  '1  he  obvious  meaning  of  the  power  to  borrow  money,  is,  that 
accepting  from,  and  stipulating  payments  to,  those  who  are  able  and  willing 
to  lend. 

To  say  that  the  power  to  borrow  involves  the  power  of  creating  the  ability, 
where  there  may  be  the  will  to  lend,  is  not  only  establishing  a  dangerous  prin- 
ciple, as  will  be  immediately  shown,  but  is  as  forced  a  construction,  as  to  say, 
that  it  involves  the  power  of  compelling  ^the  will,  where  there  maybe  the 
ability  to  lend. 

The  third  clause  is  that  which  gives  the  power  to  pass  all  laws  necessary 
and  proper  to  execute  the  specified  powers. 

Whatever  meaning  this  clause  may  have,  none  can  be  admitted  that  would 
give  an  unlimited  discretion  to  Congress. 


42  BANK  OF  THE  UNITED  STATES. 

Its  meaning  must,  according  to  the  natural  and  obvious  force  of  the  terms 
and  the  context,  be  limited  to  means  necessary  to  the  end,  and  incident  to  the 
nature,  of  the  specified  powers. 

The  clause  is,  in  fact,  merely  declaratory  of  what  would  have  resulted,  by 
unavoidable  implication,  as  the  appropriate,  as  it  were,  technical  means  of 
executing  those  powers.  In  this  sense  it  had  been  explained,  by  the  friends 
of  the  constitution /and  ratified  by  the  State  conventions. 

The  essential  characteristic  of  the  Government,  as  composed  of  limited  and 
enumerated  powers,  would  be  destroyed,  if,  instead  of  direct  and  (incidental 
means,  any  means  could  be  used,  which,  in  the  language  of  the  preamble  to 
the  bill,  might  be  conceived  to  be  conducive  to  the  successful  conducting  of 
the  finances,  or  might  be  conceived  to  tend  to  give  facility  to  the  obtaining  of 
loans.  He  urged  an  attention  to  the  diffuse  and  ductile  terms  which  had  been 
found  requisite  to  cover  the  stretch  of  power  contained  in  the  bill.  He  com- 
pared them  with  the  terms  necessary  and  proper,  used  in  the  constitution,  and 
asked  whether  it  was  possible  to  view  the  two  descriptions  as  synonymous,  or 
the  one  as  a  fair  and  safe  commentary  on  the  other. 

If,  proceeded  he,  Congress,  by  virtue  of  the  power  to  borrow,  can  create 
th«  means  of  lending,  and,  in  pursuance  of  these  means,  can  incorporate  a 
bank,  they  may  do  any  thing  whatever  creative  of  like  means. 

The  East  India  Company  has  been  a  lender  to  the  British  Government,  as 
well  as  the  Bank,  and  the  South  Sea  Company  is  a  greater  creditor  tnan 
either.  Congress  may  then  incorporate  similar  companies  in  the  United 
States,  and  that,  too,  not  under  the  idea  of  regulating  trade,  but  under  that 
of  borrowing  money. 

Private  capitals  are  the  chief  resources  for  loans  to  the  British  Government. 
Whatever  these  may  be  conceived  to  favor  the  accumulation  of  capital,  may 
be  done  by  Congress.  They  may  incorporate  manufacturers.  They  may  give 
monopolies  in  every  branch  of  domestic  industry. 

If,  again,  Congress,  by  virtue  of  the  power  to  borrow  money,  can  create  the 


ability  to  lend,  they  may,  by  virtue  of  the  power  to  levy  money,  create  the 
ability  to  pay  it.  The  ability  to  pay  taxes  depends  on  the  general  wealth  of 
the  society,  and  this,  on  the  general  prosperity  of  agriculture,  manufactures, 

id  commerce.    Congress  may  then  give  bounties,  and  make  regulations 

11  these  objects. 

The  States  have,  it  is  allowed  on  all  hands,  a  concurrent  right  to  lav  £ 

)llect  taxes.    This  power  is  secured  to  them,  not  by  its  being  expressly 


and  commerce.  Congress  may  then  give  bounties,  and  make  regulations  on 
all  these  objects. 

The  States  have,  it  is  allowed  on  all  hands,  a  concurrent  right  to  lav  and 
collect  taxes.  This  power  is  secured  to  them,  not  by  its  being  expressly  re- 
served, but  by  its  not  being  ceded  by  the  constitution.  The  reasons  for  the 
bill  cannot  be  admitted,  because  they  would  invalidate  that  right;  why  may 
it  not  be  conceived  by  Congress,  that  a  uniform  and  exclusive  imposition  of 
taxes  would  not,  less  than  the  proposed  bank,  be  conducive  to  the  successful 
conducting  of  the  national  finances,  and  tend  to  give  facility  to  the  obtaining 
of  a  revenue  for  the  use  of  the  Government? 

The  doctrine  of  implication  is  always  a  tender  one.  The|  danger  of  it  has 
been  felt  in  other  Governments.  The  delicacy  was  felt  in  the  adoption  of 
our  own;  the  danger  may  also  be  felt,  if  we  do  not  keep  close  to  our  chartered 
authorities. 

Mark  the  reasoning  on  which  the  validity  of  the  bill  depends.  To  borrow 
money  is  made  the  end,  and  the  accumulation  of  capital  implied  as  the  means. 
The  accumulation  of  capital  is,  then,  the  end,  and  a  bank  implied  as  the 
means.  The  bank  is  then  the  end,  and  a  charter  of  incorporation,  a  monopoly, 
capital  punishments,  &c.  implied  as  the  means. 

If  implications,  thus  remote,  and  thus  multiplied,  can  be  linked  together,  a 
chain  may  be  formed,  that  will  reach  every  object  of  legislation,  every  object 
within  the  whole  compass  of  political  economy. 

The  latitude  of  interpretation  required  by  the  bill  is  condemned  by  the  rule 
furnished  by  the  constitution  itself. 

Congress  have  power  "to  regulate  the  value  of  money,"  yet  it  is  expressly 
added,  not  left  to  be  implied,  that  counterfeiters  may  be  punished.  They 
have  the  power  "to  declare  war,"  to  which  armies  are  more  incident  than 


CHARTER  OF   1791.  43 

incorporated  banks  to  borrowing,  yet  it  is  expressly  added,  the  power  "  to 
raise  and  support  armies;"  and  to  this  again,  the  express  power,  "  to  make 
rules  and  regulations  for  the  government  of  armies" — a  like  remark  is  appli- 
cable to  the  powers  as  to  a  navy. 

The  regulation  and  calling  out  of  the  militia  are  more  appurtenant  to  war* 
than  the  proposed  bank  to  borrowing;  yet  the  former  is  not  left  to  construc- 
tion. 

The  very  power  to  borrow  money  is  a  less  remote  implication  from  the 
power  of  war,  than  an  incorporated  monopoly  bank  from  the  power  of  bor- 
rowing— yet  the  power  to  borrow  is  not  leu  to  implication. 

It  is  not  pretended,  that  every  insertion  or  omission  in  the  constitution  is 
the  effect  of  systematic  attention.  This  is  not  the  character  of  any  human 
work,  particularly  the  work  of  a  body  of  men.  The  example  cited,  with  others 
that  might  be  added,  sufficiently  inculcate,  nevertheless,  a  rule  of  interpre- 
tation very  different  from  that  on  which  the  bill  rests.  They  condemn  the 
exercise  of  any  power,  particularly  a  great  and  important  power,  which  is  not 
evidently  and  necessarily  involved  in  an  express  power. 

It  cannot  be  denied  that  the  power  proposed  to  be  exercised,  is  an  import- 
ant power. 

As  a  charter  of  incorporation,  the  bill  creates  an  artificial  person,  previously 
not  existing  in  law.  It  confers  important  civil  rights  and  attributes,  which 
could  not  otherwise  be  claimed.  It  is,  although  not  precisely  similar,  at  least 
equivalent  to  the  naturalization  of  an  alien,  by  whicn  certain  new  civil  char- 
acters are  acquired  by  him.  Would  Congress  nave  had  the  power  to  natural- 
ize, if  it  had  not  been  expressly  given? 

In  the  power  to  make  by-laws,  the  bill  delegated  a  sort  of  legislative 
power,  which  is  unquestionably  an  act  of  a  high  and  important  nature.  He 
took  notice  of  the  only  restraint  on  the  by-laws,  that  they  were  not  to  be 
contrary  to  the  law  and  the  constitution  of  the  bank,  and  asked,  what  law  was 
intended?  If  the  law  of  the  United  States,  the  scantiness  of  their  code  would 
give  a  power,  never  before  given  to  a  corporation,  and  obnoxious  to  the  States, 
whose  laws  would  then  be  superseded,  not  only  by  (he  laws  of  Congress,  but 
by  the  by-laws  of  a  corporation  within  their  own  jurisdiction.  If  the  law  in- 
tended was  the  law  of  the  State,  then  the  State  might  make  laws  that  would 
destroy  an  institution  of  the  United  States. 

The  bill  gives  a  power  to  purchase  and  hold  lands:  Congress  could  not 
purchase  lands  within  a  State,  "  without  the  consent  of  its  Legislature."  How 
could  they  delegate  a  power  to  others  which  they  did  not  possess  themselves? 

It  takes  from  our  successors,  who  have  equal  rights  with  ourselves,  and 
with  the  aid  of  experience  will  be  morecapable  of/leciding  on  the  subject, 
an  opportunity  of  exercising  that  right -for  an  immoderate  term. 

It  takes  from  our  constituents  the  opportunity  of  deliberating  on  the  untried 
measure,  although  their  hands  ate  also  to  be  tied  by  it,  for  the  same  term. 

It  involves  a  monopoly  which  effects  the  equal  rights  of  every  citizen. 

It  leads  to  a  penal  regulation,  perhaps  capital  punishment — one  of  the  most 
solemn  acts  of  sovereign  authority. 

From  this  view  of  the  power  of  incorporation  exercised  in  the  bill,  it  never 
could  be  deemed  an  accessory  or  subaltern  power,  to  be  deduced  by  implica- 
tion, as  a  means  of  executing  another  power.  It  was  in  its  nature  a  distinct, 
and  independent,  and  substantive  prerogative,  which,  not  being  enumerated  in 
the  constitution,  could  never  have  been  meant  to  be  included  in  it,  and,  not 
being  included,  could  never  be  rightfully  exercised. 

He  had  adverted  to  a  distinction,  which  he  said  had  not  been  sufficiently 
kept  in  view,  between  a  power  necessary  and  proper  for  the  Government  or 
Union,  and  a  power  necessary  for  executing  the  enumerated  powers  in  the 
latter  case;  the  powers  included  in  each  of  the  enumerated  powers  were  not 
expressed,  but  to  be  drawn  from  the  nature  of  each.  In  the  former,  the  pow- 
ers composing  the  Government  were  expressly  enumerated.  This  constituted 
the  peculiar  nature  of  the  Government;  no  power,  therefore,  not  enumerated, 
could  be  inferred  from  the  general  nature  of  Government.  Had  the  power  of 


44  BANK  OT  THE  UNITED  STATES. 

making  treaties,  for  example,  been  omitted,  however  necessary  it  might  have 
been,  the  defect  could  only  have  been  lamented,  or  supplied  by  an  amend- 
ment of  the  constitution. 

But  the  proposed  bank  could  not  even  be  called  necessary  to  the  Govern- 
ment; at  most,  it  could  be  but  convenient.  Its  uses  to  the  Government  could 
be  supplied  by  keeping  the  taxes  a  little  in  advance;  by  loans  from  indivi- 
duals; by  the  other  banks  over  which  the  Government  would  have  equal  com- 
mand, nay,  greater,  as  it  may  grant  or  refuse  to  these  the  privilege,  made  a 
free  and  irrevocable  gift  to  the  proposed  bank,  of  using  their  notes  in  the  fede- 
ral revenue. 

He  proceeded  next  to  the  contemporary  expositions  given  to  the  constitution* 

The  defence  against  the  charge  founded  on  the  want  of  a  bill  of  rights,  pre- 
supposed, he  said,  that  the  powers  not  given,  were  retained;  and  that  those 
given  were  not  to  be  extended  by  remote  implication.  On  any  other  suppo- 
sition, the  power  of  Congress  to  abridge  the  freedom  of  the  press  or  the  rights 
of  conscience,  &c.  could  not  have  been  disproved. 

The  explanations  in  the  State  conventions  all  turned  on  the  same  funda- 
mental principle,  and  on  the  principle,  that  the  terms  necessary  and  proper, 
gave  no  additional  powers  to  those  enumerated.  [Here  he  read  sundry  pas- 
sages, from  the  debates  of  the  Pennsylvania,  Virginia,  and  North  Carolina 
conventions,  showing  the  ground  on  which  the  constitution  had  been  vindi- 
cated by  its  principal  advocates  against  a  dangerous  latitude  of  its  powers, 
charged  on  it  by  its  opponents.  ]  He  did  not  undertake  to  vouch  for  the  accu- 
racy or  authenticity  of  the  publications  which  he  quoted.  He  thought  it  proba- 
ble that  the  sentiments  delivered  might,  in  many  instances,  have  been  mis- 
taken, or  imperfectly  noted;  but  the  complexion  of  the  whole,  with  what  he 
himself,  and  many  others  must  recollect,  fully  justified  the  use  he  had  made 
of  them. 

The  explanatory  declarations  and  amendments  accompanying  the  ratifica- 
tions of  the  several  States,  formed  a  striking  evidence,  wearing  me  same  com- 
plexion. He  referred  those  who  might  doubt,  to  the  several  acts  of  ratifica- 
tion. 

The  explanatory  amendments,  proposed  by  Congress  themselves,jit  least, 
would  be  good  authority  with  them;  all  these  annunciations  of  power  pro- 
ceeded on  a  rule  of  construction  excluding  the  latitude  now  contended  for. 
These  explanations  were  the  more  to  be  respected,  as  they  had  not  only  been 
proposed  by  Congress,  but  ratified  by  nearly  three-fourths  of  the  States.  He 
read  several  of  the  articles  proposed,  remarking  particularly  on  the  llth  and 
12th;  the  former,  as  guarding  against  a  latitude  of  interpretation — the  latter 
as  excluding  every  source  of  power  not  within  the  constitution  itself. 

With  all  this  evidence  of  the  sense  in  which  the  constitution  was  under- 
stood and  adopted,  will  it  not  be  said,  if  the  bill  should  pass,  that  its  adoption 
was  brought  about  by  one  set  of  arguments,  and  that  it  is  now  administered  un- 
der the  influence  oi  another  set?  And  this  reproach  will  have  the  keener  sting, 
because  it  is  applicable  to  so  many  individuals  concerned  in  both  the  adoption 
and  administration. 

In  fine,  if  the  power  were  in  the  constitution,  the  immediate  exercise  of  it 
cannot  be  essential;  if  not  there,  the  exercise  of  it  involves  the  guilt  of  usurpa- 
tion, and  establishes  a  precedent  of  interpretation,  levelling  all  the  barriers 
which  limit  the  powers  of  the  General  Government  and  protect  those  of  the 
State  governments.  If  the  point  be  doubtful  only,  respect  for  ourselves, 
who  ought  to  shun  the  appearance  of  precipitancy  and  ambition;  respect  for 
our  successors,  who  ought  not  lightly  to  be  deprived  of  the  opportunity  of 
exercising  the  rights  of  legislation;  respect  for  our  constituents,  who  have 
had  no  opportunity  of  making  known  their  sentiments,  and  who  are  themselves 
to  be  bound  down  to  the  measure  for  so  long  a  period;  all  these  considerations 
require  that  the  irrevocable  decision  shouluat  least  be  suspended  until  another 
session. 

It  appeared,  on  the  whole,  he  concluded,  that  the  power  exercised  by  the 
bill  was  condemned  by  the  silence  of  the  constitution;  was  condemned  by  the 


CHARTER  OF  1791,  45 

rule  of  interpretation,  arising  out  of  the  constitution;  was  condemned  by  its 
tendency  to  destroy  the  main  characteristic  of  the  constitution;  was  con- 
demned by  the  expositions  of  the  friends  of  the  constitution,  whilst  depending 
before  the  public;  was  condemned  by  the  apparent  intentions  of  the  parties, 
which  ratified  the  constitution;  was  condemned  by  the  explanatory  amend- 
ments proposed  by  Congress  themselves  to  the  constitution;  and  he  hoped  it^ 
would  receive  its  final  condemnation  by  the  vote  of  this  House. 

FEBRUARY  3,  1791. 

A  motion  was  made  by  Mr.  WILLIAMSON,  and  seconded,  that  the  first  sec- 
tion of  the  said  bill  be  recommitted  to  a  Committee  of  the  Whole  House,  "for 
the  purpose  of  altering  the  time  or  manner  of  subscribing;  so  that  the  holders 
of  State  securities,  assumed  to  be  paid  by  the  United  States,  may  be  on  a  foot- 
ing with  the  holders  of  other  securities,  formerly  called  national  securities." 

It  passed  in  the  negative.    Ayes  21,  noes  38. 

Further  debate  arising  on  the  main  question, 

MR.  AMES  said,  little  doubt  remains  with  respect  to  the  utility  of  banks.  It 
seems  to  be  conceded,  within  doors  and  without,  that  a  public  bank  would!be 
useful  to  trade,  that  it  is  almost  essential  to  revenue,  and  that  it  is  little  short 
of  indispensable  necessity  in  time  of  public  emergency.  In  countries  whose 
forms  of  government  left  them  free  to  choose,  this  institution  has  been  adopted 
of  choice;  and  in  times  of  national  danger  and  calamity,  it  has  afforded  such 
aid  to  Government  as  to  make  it  appear,  in  the  eyes  cf  the  People,  a  neces- 
sary means  of  self  preservation.  Tne  subject,  however  intricate  in  its  nature, 
is  at  least  cleared  from  obscurity.  It  would  not  be  difficult  to  establish  its 
principles,  and  to  deduce  from  its  theory,  such  consequences,  as  would  vindi- 
cate the  policy  of  the  measure.  But  why  should  we  lose  time  to  examine  the 
theory,  when  it  is  in  our  power  to  resort  to  experience?  After  being  tried  by 
that  test,  the  world  has  agreed  in  pronouncing  the  institution  excellent.  This 
new  capital  will  invigorate  trade  and  manufactures  with  new  energy.  It 
will  furnish  a  medium  for  the  collection  of  the  revenues;  and  if  Government 
should  be  pressed  by  a  sudden  necessity,  it  will  afford  seasonable  and  effec- 
tual aid.  With  all  these,  and  many  otner  pretensions,  if  it  was  now  a  ques- 
tion whether  Congress  should  be  vested  witli  the  power  of  establishing  a 
bank,  I  trust  that  this  House, and  all  America,  would  assent  to  the  affirmative. 

This,  however,  is  not  a  question  of  expediency,  but  of  duty.  We  are  not  at 
liberty  to  examine  which  of  several  modes  of  acting  is  entitled  to  the  prefer- 
ence. But  we  are  solemnly  warned  against  acting  at  all.  We  are  told,  that 
the  constitution  will  not  authorize  Congress  to  incorporate  the  subscribers  to 
the  bank.  Let  us  examine  the  constitution;  and  if  that  forbids  our  proceed- 
ing, we  must  reject  the  bill;  though  we  shall  do  it  with  deep  regret,  that  such 
an  opportunity  to  serve  our  country  must  be  suffered  to  escape,  for  the  want 
of  a  constitutional  power  to  improve  it. 

The  gentleman  from  Virginia  considers  the  opposers  of  the  bill  as  suffer- 
ing disadvantage,  because  it  was  not  debated  as  bills  usually  are,  in  commit- 
tee of  the  whole  house.  He  has  prepared  us  to  pronounce  an  eulogium  upon 
his  consistency, by  informing  us  that  ne  voted,  in  the  old  Congress,  against  the 
Bank  of  North  America,  on  the  ground  of  his  present  objection  to  the  consti- 
tutionality. He  has  told  us,  that  the  meaning  of  the  constitution  is  to  be  in- 
terpreted by  contemporaneous  testimony.  He  was  a  member  of  the  conven- 
tion which  formed  it,  and  of  course,  his  opinion  is  entitled  to  peculiar  weight. 
While  we  respect  his  former  conduct,  and  admire  the  felicity  of  his  situation, 
we  cannot  think  he  sustains  disadvantage  in  the  debate.  Besides,  he  must 
have  been  prepared  with  objections  to  the  constitutionality,  because  he  tells 
us  they  are  ot  longstanding,  and  had  grown  into  a  settled  habit  of  thinking. 
\Vhy  then  did  he  suffer  the  bill  to  pass  the  committee  in  silence?  The  friends 
of  the  bill  have  more  cause  to  complain  of  disadvantage:  for,  while  he  has  had 
time  to  prepare  his  objections,  they  are  obliged  to  reply  to  them  without  pre- 
meditation. 


46  BANK  OF  THE  UNITED  STATES. 

In  making  this  reply,  I  am  to  perform  a  task  for  which  my  own  mind  had 
not  admonished  me  to  prepare.  1  never  suspected  that  the  objections  I  have 
heard  stated,  had  existence.  I  consider  them  as  discoveries;  and  had  not  the 
acute  penetration  of  that  gentleman  brought  them  to  light,  I  am  sure  that  my 
own  understanding  would  never  have  suggested  them. 

It  seems  strange,  too,  that,  in  our  enlightened  country,  the  public  should  have 
been  involved  in  equal  blindness.  While  the  exercise  of  even  the  lawful 
powers  of  Government  is  disputed,  and  a  jealous  eye  is  fixed  on  its  proceed- 
ings, not  a  whisper  has  been  heard  against  its  authority  to  establish  a  bank. 
Still,  however  unseasonably,  the  old  alarm  of  public  discontent  is  sounded  in 
oin^ears. 

Two  questions  occur:  May  Congress  exercise  any  powers,  which  are  not 
expressly  given  in  the  constitution,  but  may  be  deduced  by  a  reasonable  con- 
struction of  that  instrument?  And,  secondly,  will  such  a  construction  war- 
rant the  establishment  of  the  bank? 

The  doctrine,  that  powers  may  be  implied  which  are  not  expressly  vested 
in  Congress,  has  long  been  a  bugbear  to  many  worthy  persons.  They  appre- 
hend that  Congress,  by  putting  constructions  upon  the  constitution,  will 
govern  by  its  own  arbitrary  discretion;  and  therefore,  that  it  ought  to  be  bound 
to  exercise  the  powers  expressly  given,  and  those  only. 

If  Congress  may  not  make  laws  conformably  to  the  powers  implied,  though 
not  expressed  in  the  frame  of  government,  it  is  rather  late  in  the  day  to  adopt 
it  as  a  principle  of  conduct.  A  great  part  of  our  two  years'  labor  is  lost, 
and  worse  than  lost  to  the  public:  for  we  have  scarcely  made  a  law,  in  which 
we  have  not  exercised  our  discretion,  with  regard  to  the  true  intent  of  the 
constitution.  Any  words  but  those  used  in  that  instrument  will  be  liable  to 
a  different  interpretation.  We  may  regulate  trade — therefore  we  have  taxed 
ships;  erected  light  houses;  made  laws  to  govern  seamen,  &c.;  because  we  say 
they  are  the  incidents  to  that  power.  The  most  familiar  and  undisputed  acts 
of  legislation  will  shew,  that  we  have  adopted  it  as  a  safe  rule  of  action,  to 
legislate  beyond  the  letter  of  the  constitution. 

He  proceeded  to  enforce  this  idea  by  several  considerations,  and  illustrated 
it  by  various  examples.  He  said  that  the  ingenuity  of  man  was  unequal  to 
providing,  especially,  before  hand,  for  all  the  contingencies  that  would  hap- 
pen. The  constitution  contains  the  principles  which  are  to  govern  in  making 
laws;  but  every  law  requires  the  application  of  the  rule  to  the  case  in  question. 
Wre  may  err  in  applying  it;  but  we  are  to  exercise  our  judgments,  and,  on 
every  occasion,  to  decide  according  to  an  honest  conviction  of  its  true 
meaning. 

The  danger  of  implied  powers  does  not  arise  from  its  assuming  a  new  prin- 
ciple. We  have  not  only  practised  it  often,  but  we  can  scarcely  proceed 
without  it  Nor  does  the  danger  proceed  so  much  from  the  extent  of  the 
power,  as  from  its  uncertainty.  While  the  opposers  of  the  bank  exclaim 
against  the  exercise  of  this  power  by  Congress,  do  they  mark  out  the  limits 
of  the  power  which  they  will  leave  to  us  with  more  certainty  than  is  done  by 
the  advocates  of  the  bank?  Their  rules,  by  interpretation,  by  ex-tempora- 
neous  testimony,  the  debates  of  conventions,  and  the  doctrine  of  substantive 
and  auxiliary  powers,  will  be  found  as  obscure,  and,  of  course,  as  formidable, 
as  that  which  they  condemn.  They  only  set  up  one  construction  against 
another. 

The  powers  of  Congress  are  dissected.  We  are  obliged  to  decide  the  ques- 
tion according  to  truth.  The  negative,  if  false,  is  less  safe  than  the  affirma- 
tive, if  true.  Why,  then,  shall  we  be  told  that  the  negative  is  the  safe  side? 
Not  exercising  the  powers  we  have,  may  be  as  pernicious  as  usurping  those 
we  have  not.  If  the  power  to  raise  armies  had  not  been  expressed  in  the 
enumeration  of  the  powers  of  Congress,  it  would  be  implied  from  other  parts 
of  the  constitution.  Suppose,  however,  it  were  9mitted,  and  our  country 
invaded — would  a  decision  in  Congress,  against  raising  armies,  be  safer  than 
the  affirmative?  The  blood  of  our  citizens  would  be  shed,  and  shed  una- 
venged. He  thought,  therefore,  that  there  was  too  much  prepossession  with 


CHARTER  OF  1791.  47 

tome  against  the  bank,  and  the  debate  ought  to  be  considered  more  impar- 
tially, as  the  negative  was  neither  more  safe,  certain,  nor  conformable  to  our 
duty,  than  the  other  side  of  the  question.  After  all,  the  proof  of  the  affirma- 
tive imposed  a  sufficient  burden,  as  it  is  easier  to  raise  objections  than  to 
remove  them.  Would  any  one  doubt  that  Congress  may  lend  money,  that 
they  may  buy  their  debt  in  the  market,  or  redeem  their  captives  from  Algiers? 
Yet  no  such  power  is  expressly  given,  though  it  is  irresistibly  implied. 

If,  therefore,  some  interpretation  ot  the  constitution  must  be  indulged,  by 
what  rules  is  it  to  be  governed?  The  great  end  of  every  association  of  per- 
sons or  States,  is  to  effect  the  end  of  its  institution.  The  matter  in  debate 
affords  a  good  illustration.  A  corporation,  as  soon  as  it  is  created,  has  cer- 
tain powers  or  qualities  tacitly  annexed  to  it,  vyhich  tend  to  promote  the  end 
for  which  it  was  formed;  such  as,  for  example,  its  individuality,  its  powers  to 
sue  and  be  sued,  and  the  perpetual  succession  of  persons.  Government  is, 
itself,  the  highest  kind  of  corporation;  and,  from  the  instant  of  its  formation, 
it  haSj  tacitly  annexed  to  its  being,  various  powers,  which  the  individuals 
who  framed  it  did  not  separately  possess,  but  which  are  essential  to  its  effect- 
ing the  purposes  for  which  it  was  framed;  to  declare,  in  detail,  every  thing 
that  Government  may  do,  could  not  be  performed,  and  has  never  been  at- 
tempted. It  would  be  end  less,  useless,  and  dangerous;  exceptions  of  what  it 
may  not  do,  are  shorter  and  safer. 

Congress  may  do  what  is  necessary  to  the  end  for  which  the  constitution 
was  adopted,  provided  it  is  not  repugnant  to  the  natural  rights  of  man,  or  to 
those  which  they  have  expressly  reserved  to  themselves,  or  to  the  powers 
which  are  assigned  to  the  States.  This  rule  of  interpretation  seems  to  be 
safe,  and  not  a  very  uncertain  one,  independently  of  the  constitution  itself. 
By  that  instrument  certain  powers  are  specially  delegated,  together  with  all 
powers  necessary  and  proper  to  carry  theni  into  execution.  That  construc- 
tion may  be  maintained  to  be  a  safe  one,  which  promotes  the  good  of  the  society 
and  the  ends  for  which  the  Government  was  adopted,  without  impairing  the 
rights  of  any  man,  or  the  powers  of  any  State. 

This,  he  said,  was  remarkably  true  of  the  bank;  no  man  could  have  cause 
to  complain  of  it;  the  bills  would  not  be  forced  upon  any  one.  It  is  of  the 
first  utility  to  trade.  Indeed,  the  intercourse,  from  State  to  State,  can  never 
be  on  a  good  footing  without  a  bank,  whose  paper  will  circulate  more  exten- 
sively than  that  of  any  State  bank.  Whether  the  power  to  regulate  trade, 
from  State  to  State,  will  involve  that  of  regulating  inland  bills  of  exchange 
and  bank  paper,  as  the  instruments  of  the  trade  incident  to  the  power,  he 
would  not  pause  to  examine.  That  is  an  injury  and  wrong  which  violates  the 
right  of  another.  As  the  bank  is  founded  on  the  free  choice  of  those  who 
make  use  of  it,  and  is  highly  useful  to  the  People  and  to  Government,  a  libe- 
ral construction  is  natural  and  safe.  This  circumstance  creates  a  presump- 
tion in  favor  of  its  conformity  to  the  constitution.  This  presumption  is 
enforced  by  the  necessity  of  a  bank  to  other  Governments.  The  most  orderly 
governments  in  Europe  have  banks.  They  are  considered  as  indispensably 
necessary;  these  examples  are  not  to  be  supposed  to  have  been  unnoticed. 
We  are  to  pay  the  interest  of  our  debt  in  thirteen  places.  Is  it  possible  to 
transport  the  revenue  from  one  end  of  the  continent  to  the  other?  Nay,  a 
week  before  the  quarter's  interest  becomes  due,  transfers  may  be  made  which 
may  require  double  the  sum  in  Boston  which  was  expected.  To  guard 
against  this  danger,  an  extra  sum  must  be  deposited  at  the  different  loan  offices. 
This  extra  sum  is  not  to  be  had;  our  revenue  is  barely  equal  to  the  interest 
due.  This  imposes  an  absolute  necessity  upon  the  Government  to  make  use 
of  a  bank.  The  answer  is,  that  the  State  banks  will  supply  this  aid.  This 
is  risking  a  good  deal  to  the  argument  against  the  bank:  for,  will  they  admit 
the  necessity  and  yet  deny  to  the  Government  the  lawful  and  only  adequate 
means  of  providing  for  it?  Ten  of  the  States  have  no  banks;  those  who  have, 
may  abolish  theirs,  or  suffer  their  charters  to  expire.  But  the  State  banks  are 
insufficient  to  the  purpose;  their  paper  has  not  a  sufficient  circulation;  of 
course  their  capitals  are  small.  Congress  is  allowed  a  complete  legislative 


48  BANK  OF  THE  UNITED  STATES. 

power  over  its  own  finances,  and  yet,  without  the  courtesy  of  the  States,  it 
cannot  be  exercised.  This  seems  to  be  inconsistent. 

If  a  war  should  suddenly  break  out,  How  is  Congress  to  provide  for  it? 
perhaps  Congress  would  not  be  sitting;  great  expenses  would  be  incurred,  and 
thev  must  be  instantly  provided  for.  How  is  this  to  be  done?  By  taxes?  And 
will  the  enemy  wait  till  they  can  be  collected?  By  loans  at  home?  Our  citi- 
zens would  employ  their  money  in  war  speculations,  and  they  are  not,  indivi- 
dually, in  a  condition  to  lend  a  sufficient  sum  in  specie,  or  shall  we  send 
across  the  sea  for  loans?  The  disputes  between  England  and  Spain  furnish 
an  example;  the  aid  of  their  banks,  for  several  millions,  was  prompt  and  effec- 
tual. Or  will  you  say  that  Congress  might  issue  paper  money?  That  power, 
ruinous  and  fallacious  as  it  is,  is  deduced  from  implication:  for  it  is  not  ex- 
pressly given.  A  bank  only  can  afford  the  necessary  aid,  in  time  of  sudden 
emergency.  If  we  have  not  the  power  to  establish  it,  our  social  compact  is 
incomplete;  we  want  the  means  of  self  preservation. 

I  shall,  perhaps,  be  told,  that  necessity  is  the  tyrant's  plea.  I  answer 
that  it  is  a  miserable  one,  when  it  is  urged  to  palliate  the  violations  of  private 
right.  Who  suffers  by  this  use  of  our  authority?  Not  the  States:  tor  they 
are  not  warranted  to  establish  a  national  bank.  Not  individuals:  for  they 
will  be  assisted  in  trade,  and  defended  from  danger  by  it. 

Having  endeavored  to  enforce  his  argument  by  noticing  the  uses  of  banks  to 
trade,  to  revenue,  to  credit,  and,  in  cases  of  exigency,  he  adverted  to  the  au- 
thority of  our  own  precedents.  Our  right  to  govern  the  Western  territory  is 
not  disputed.  It  is  a  power  which  no  State  can  exercise.  It  must  be  exercis- 
ed, and,  therefore,  it  resides  in  Congress.  But  how  does  Congress  get  this 
power?  It  is  not  expressly  given  in  the  constitution,  but  is  derived  from  the 
nature  of  the  case,  or  by  implication  from  the  power  to  regulate  the  property 
of  the  United  States.  If  the  power  flows  from  the  nature  and  necessity  of 
the  case,  it  may  be  demanded,  is  there  not  equal  authority  for  the  bank?  If 
it  is  derived  from  the  power  of  Congress  to  regulate  the  territory  and  other 
property  of  the  United  States,  and  to  make  all  needful  rules  and  regulations 
concerning  it,  and  for  the  disposal  of  it,  a  strict  construction  would  restrain 
Congress  merely  to  the  management  and  disposal  of  property,  and  of  its  own 
property;  yet  it  is  plain  that  more  is  intended.  Congress  has,  accordingly, 
made  rules,  not  only  for  governing  its  own  property,  but  the  property  of  the 
persons  residing  there.  It  has  made  rules  which  have  no  relation  to  property,  at 
all,  for  punishing  crimes.  In  short,  it  exercises  all  power  in  that  territory. 
Nay,  it  has  exercised  the  very  power  of  creating  a  corporation.  The  Govern- 
ment of  that  territory  is  a  corporation;  and  who  will  deny  that  Congress  may 
lawfully  establish  a  bank  beyond  the  Ohio?  It  is  fair  to  reason  by  analogy 
from  a  power  which  is  unquestionable,  to  one  which  is  the  subject  of  debate. 

He  then  asked  whether  it  appeared,  on  this  view  of  the  subject,  that  the 
establishment  of  a  national  bank  would  be  a  violent  misinterpretation  of  the 
constitution?  He  did  not  contend  for  an  arbitrary,  unlimited  discretion  in 
the  Government  to  dp  every  thing.  He  took  occasion  to  protest  against  such 
a  misconception  of  his  argument.  He  had  noticed  the  great  marks  by  which 
the  construction  of  the  constitution,  he  conceived,  must  be  guided  and  limit- 
ed, arid  these,  if  not  absolutely  certain,  were  very  far  from  being  arbitrary  or 
unsafe.  It  is  for  the  House  to  judge  whether  the  construction,  which  denies 
the  power  of  Congress,  is  more  definite  and  safe. 

In  proving  that  Congress  may  exercise  powers,  which  are  not  expressly 
granted  by  the  constitution,  he  had  endeavored  to  establish  such  rules  of  in- 
terpretation, and  had  illustrated  his  ideas  by  such  observations  as  would  anti- 
cipate, in  a  considerable  degree,  the  application  of  his  principles  to  the  point 
in  question.  Before  he  proceeded  to  me  construction  of  the  clauses  of  the 
constitution  which  apply  to  the  argument,  he  observed  that  it  would  be  oro- 
per  to  notice  the  qualities  of  a  corporation,  in  order  to  take  a  more  exact  view 
of  the  controversy. 

He  adverted  to  the  individuality  and  the  perpetuity  of  a  corporation,  and 
that  the  property  of  the  individual  should  not  be  liable  for  the  debts  of  the 


CHARTER   OF    1791.  4Q 

bank  or  company.  These  qualities  are  not  more  useful  to  the  corporation 
than  conformable  to  reason;  but  Government,  it  is  said,  cannot  create  these 
qualities.  This  is  the  marrow  of  the  argument:  for  Congress  may  set  up  a 
bank  of  its  own  to  be  managed  as  public  property,  to  issue  notes  which  shall 
be  received  in  all  payments  at  the  treasury,  which  shall  be  exchangeable  into 
specie  on  demand,  and  which  it  shall  be  death  to  counterfeit.  Such  a  bank 
would  be  less  safe  and  less  useful  than  one  under  the  direction  of  private 
persons;  yet  the  power  to  establish  it  is  indisputable.  If  Congress  has  the 
authority  to  do  this  business  illy,  the  question  returns  whether  the  powers  of 
a  cprporation,  which  are  essential  to  its  being  well  done,  may  be  annexed  as 
incident  to  it.  The  bank  of  New  York  is  not  a  corporation,  yet  its  notes 
have  credit.  Congress  may  agree  with  that  bank,  or  with  a  company  of  mer- 
chants, to  take  their  notes,  and  to  cause  all  payments  to  pass  through  their 
coffers.  Every  thing  that  the  Government  requires  of,  and  will  perform  to 
the  bank,  may  be  lawfully  done  without  giving  them  corporate  powers;  but 
to  do  it  well,  safely,  and  extensively,  those  powers  are  indispensable.  This 
seems  to  bring  the  clebate  within  a  narrow  compass. 

This  led  him  to  consider  whether  the  corporate  powers  are  incidental  to 
those  which  Congress  may  exercise  by  the  constitution. 

He  entered  into  a  discussion  of  the  construction  of  that  clause,  which  em- 
powers Congress  to  regulate  the  territory  and  other  property  of  the  United 
States.  The  United  States  may  hold  property;  may  dispose  of  it;  they  may 
hold  it  in  partnership;  they  may  regulate  the  terms  of  the  partnership.  One 
condition  may  be  that  the  common  stock  only,  shall  be  liable  for  the  debts  of 
the  partnership,  and  that  any  purchaser  of  a  share  shall  become  a  partner. 
These  are  the  chief  qualities  of  a  corporation.  It  seems  that  Congress,  having 
the  power  to  make  all  needful  rules  and  regulations  for  the  property  of  the 
United  States,  may  establish  a  corporation  to  manage  it;  without  which  we 
have  seen  that  the  regulation  cannot  be  either  safe  or  useful.  The  United 
States  will  be  the  proprietor  of  one-tenth  of  the  bank  stock. 

Congress  may  exercise  exclusive  legislation,  in  all  cases  whatsover,  over 
the  ten  miles  square,  and  the  places  ceded  by  the  States  for  arsenals,  light 
houses,  docks,  &c.;  of  course,  it  may  establish  a  bank  in  those  places,  with 
corporate  powers.  The  bill  has  not  restrained  the  bank  to  this  city,  and  if  it 
had,  this  dispute  would  lose  a  part  of  its  solemity.  If,  instead  of  principles,  it 
concerns  only  places,  what  objection  is  there  to  the  constitutional  authority  of 
Congress  to  fix  the  bank  at  Sandy  Hook  or  Reedy  Island,  where  we  have  light 
houses,  and  a  right  of  exclusive  legislation?  A  bank  established  there,  or  in 
the  district  located  by  law  on  the  Potomac  for  the  seat  of  government,  could 
send  its  paper  all  over  the  Union.  It  is  true  that  the  places  are  not  the  most 
proper  for  a  bank,  but  the  authority*!  establish  it  in  them,  overthrows  the 
argument  which  is  deduced  from  the  definite  nature  of  the  powers  vested  in 
Congress,  and  the  dangerous  tendency  of  the  proposed  construction  of  them. 

The  preamble  of  the  constitution  warrants  this  remark,  that  a  bank  is  not 
repugnant  to  the  spirit  and  essential  objects  of  that  instrument. 

He  then  considered  the  power  to  borrow  money.  He  said  it  was  natural 
to  understand  that  authority  as  it  was  actually  exercised  in  Europe,  which  is 
to  borrow  of  the  bank.  He  observed,  the  power  to  borrow  was  of  narrow  use 
without  the  institution  of  a  bank,  and,  in  the  most  dangerous  crisis  of  affairs, 
would  be  a  dead  letter. 

After  noticing  the  powers  to  lay  and  collect  taxes,  he  adverted  to  the  sweep- 
ing clause,  as  it  is  usually  called,  which  empowers  Congress  to  exercise  all 
power  necessary  and  proper  to  carry  the  enumerated  powers  into  execution. 
He  did  not  pretend  that  it  gives  any  new  power,  but  it  established  the  doc- 
trine of  implied  powers.  He  then  demanded  whether  the  power  to  incorpo- 
rate a  bank  is  not  fairly  relative,  and  a  necessary  incident  to  the  entire  power 
to  regulate  trade  and  revenue,  and  to  provide  for  the  public  credit  and 
defence? 

He  entered  into  a  particular  answer  to  several  objections,  and  after  recapi- 
tulating his  argument,  he  concluded  with  observing,  that  we  had  felt  the  disad- 
7 


50  BANK   OF  THE   UNITED    STATES. 

vantages  of  the  confederation.  We  adopted  the  constitution,  expecting  to^ 
place  the  national  affairs  under  a  federal  head.  This  is  a  power  which  Congress 
can  only  exercise.  We  may  reason  away  the  whole  constitution.  All  nations 
have  their  times  of  adversity  and  danger.  The  neglect  of  providing  against 
therii  in  season,  may  be  the  cause  of  ruining  the  country. 

FEBRUARY  4. 

MR.  SEDOWIUK  said  he  would  endeavor  not  to  fatigue  the  patience  of  the 
House  in  the  observations  he  should  make  on  the  important  subject  now  under 
consideration.  Without  entering  into  a  discussion  on  a  scale  so  extensive  as 
had  been  indulged  by  some  gentlemen,,  he  would  dwell  only  on  a  few  impor- 
tant principles,  and  such  consequericees  as  were  conclusively  deducible  from, 
them,  which  had  made  a  strong  impression  on  his  mind. 

The  opposition  to  the  bill  had  called  into  question  the  constitutional  powers 
of  Congress  to  establish  the  proposed  corporation,  and  the  utility  of  banks, 
neither  of  which,  till  within  a  few  days,  did  he  suppose  was  doubted  by  airy 
intelligent  person  in  America;  and  had  charged  the  present  system  with  hold- 
ing out  unequal  terms  against  the  Government,  to  those  who  should  subscribe 
to  the  proposed  stock. 

With  regard  to  the  question  of  constitutionality ,jnuch  had  been  said,  which, 
in  his  opinion,  had  not  an  intimate  relation  to  the  subject  now  before  the  House. 
We  have  with  great  earnestness  been  warned  of  the  danger  of  grasping  power 
by  construction  and  implication— and  this  warning  has  been  given  in  very 
animated  language  by  the  gentleman  from  Virginia  (Mr.  M.)  I  do  not  wish  to 
deprive  that  member  of  the  honor  of  consistency:  but  I  well  remember  the 
time  when  the  energy;  of  his  reasoning  impressed  on  the  minds  of  a  majority 
of  this  House,  a  conviction  that  the  power  of  removal  from  offices  holdeu  at 
will,  was,  by  construction  and  implication,  vested  by  the  constitution  in  the 
President — so  there  could  be  no-pretence,  that  it  was  expressly  granted  to  him. 

He  said  he  would  observe,, in  answer  to  every  thing  that  had  been  said  of 
the  danger  of  extending  construction  and  implication,  that  the  whole  busi- 
ness of  legislation  was  a  practical  construction  of  the  powers  of  the  Legisla- 
ture, and  that  probably  no  instrument  for  the  delegation  of  power  could  be 
drawn  up  with  such  precision  and  accuracy,  as  to  leave  nothing  to  necessary 
implication.  That  all  the  different  Legislatures  in  the  United  States  !>id,  and 
this,  in  his  opinion,  indispensably  must,  construe  the  powers  which  had  been 
granted  to  them;  and  they  must  assume  such  auxiliary  powers  as  are  necessarily 
implied  in  those  which  are  expressly  granted.  In  doing  which  it  was  no  doubt 
their  duty  to  be  careful  not  to  exceed  those  limits  within  which  it  was  intend- 
ed they  should  be  restricted.  By  any  other  limitation,  said  he,  the  Govern- 
ment would  be  so  shackled  that  it  would  be  incapable  of  operating  any  of  the 
effects  which  were  intended  by  its  institution. 

He  observed  that,  on  almost  all  the  great  and  important  measures  which 
come  under  the  deliberation  of  Congress,  there  were  immense  difficulties  ta 
he  surmounted.  If  we  attempt,  said  he,  to  proceed  intone  direction,  our  ears- 
are  assailed  with  the  exclamation  of  the  constitution  is  in  danger;  if  we  at- 
tempt to  attain  our  objects,  by  pursuing  a  different  course,  we  are  told  the 
pass  is  guarded  by  the  stern  spirit  of  democracy.  Did  I  concur  with  gen- 
tlemen in  opinion  on  this  subject,  I  should  think  it  my  duty  to  go  home  to  my 
constituents,  and  honestly  declare  to  them,  that,  by  their  jealousy  of  power, 
they  had  so  restrained  the  operations  of  the  Government,  that  we  have  not 
the  means  of  effecting  any  of  the  great  purposes  for  which  the  constitution  was 
designed,  without  attempting  what,  perhaps,  would  be  found  impracticable  to- 
fix  the  general  rules,  the  nice  point  within  which  Congress  would  be  autho- 
rized to  assume  powers  by  construction  and  implication,  and  beyond  which 
they  may  be  justly  considered  usurpers. 

He  wished  gentlemen  to  reflect,  what  effect  a  single  principle,  universally 
acknowledged,  would  have,  in  determining  the  question  now  under  consider- 
ation. It  is  universally  agreed,  that  wherever  a  power  is  delegated  for  ex- 
press'purposes,  all  the  knoivn  and  usual  means  for  the  attainment  of  the  oh- 


CHARTER   OF    1791.  51 

Jccts  expressed,  are  conceded  also.  That,  to  decide  what  influence  this  ac-  V 
knowledged  principle  would  have  on  the  subject  before  the  House,  it  would  1 
be  necessary  to  reflect  on  the  powers  with  which  Congress  are  expressly  in- 
vested. He  then  repeated,  that  Congress  was  authorized  to  lay  and  collect 
taxes,  to  borrow  money  on  the  credit  of  the  United  States,  to  raise  and  sup- 
port armies,  provide  and  maintain  navies,  to  regulate  foreign  and  domestic 
trade,  to  make  all  laws  necessary  and  proper  to  carry  these,  and  the  other 
enumerated  powers,  into  effect;  they  were,  in  fine,  entrusted  with  the  exercise 
of  ail  those  powers,  which  the  People  of  America  thought  necessary  to  secure 
their  fame  and  happiness  against  the  attacks  of  internal  violence  and  external 
invasion.  And,  in  the  exercise  of  these  powers,  the  Legislature  was  authoriz- 
ed, agreeably  to  the  principles  which  he  had  mentioned,  to  exercise  all  the 
known  and  usual  means*  necessary  and  proper,  to  effectuate  the  ends  which 
are  expressed.  It  might  be  of  use  to  determine,  with  precision,  what  will 
be  the  meaning  of  the  words  necessary  and  proper.  They  do  not  restrict  the 
power  of  the  Legislature  to  enacting  such  laws  only  as  are  indispensable. 
Such  a  construction  would  be  infinitely  too  narrow  and  limited;  and  to  apply 
the  meaning  strictly,  it  would  prove,  perhaps,  that  all  the  laws  which  had 
been  passed,  were  unconstitutional;  for  few,  if  any,  of  them,  could  be  proved 
indispensable  to  the  existence  of  the  Government.  The  conduct  of  Congress 
had  a  construction  on  those  words  more  rational  and  consistent  with  common 
sense,  and  the  purposes  for  which  the  Government  was  instituted;  which  he 
conceived  to  be,  that  the  laws  should  be  established  on  such  principles,  and 
such  an  agency  in  the  known  and  usual  means  employed  in  the  execution  of 
them,  as  to  effect  the  ends  expressed  in  the  constitution,  with  the  greatest  pos- 
sible degree  of  utility.  If  banks  were  among  the  known  and  usual  means  to 
effectuate  or  facilitate  the  ends  which  had  been  mentioned,  to  enable  the  Go- 
vernment, with  the  greatest  ease  and  least  burden  to  the  People,  to  collect 
taxes,  to  borrow  money,  regulate  commerce,  raise  and  support  armies,  pro- 
vide and  maintain  fleets;  he  thought  the  argument  irrefragable  and  conclusive, 
to  prove  the  constitutionality  of  the  bill.  Pursuing,  further,  the  same  idea, 
he  asked,  for  what  purpose  were  banks  instituted  and  patronised  by  govern- 
ments which  were  unrestricted  by  constitutional  limits?  Were  they  not 
employed  as  the  means,  and  the  most  useful  engines,  to  facilitate  the  collec- 
tion of  taxes,  borrowing  of  money,  and  the  other  enumerated  powers?  Be- 
sides, he  said,  it  was  to  be  observed,  that  the  constitution  had  expressly  de- 
clared the  ends  of  legislation;  but,  in  almost  every  instance,  had  left  the 
means  to  the  honest  and  sober  discretion  of  the  Legislature.  From  the  nature 
of  things,  this  must  ever  be  the  case;  for,  otherwise,  the  constitution  must 
contain,  not  only  all  the  necessary  laws  under  the  existing  circumstances  of 
the  community,  but  also  a  code  so  extensive,  .as  to  adapt  itself  to  all  future 
possible  contingencies.  By  our  constitution,  Congress  has  power  to  lay  and 
collect  taxes;  but  every  thing  subordinate  to  that  end,  such  as  the  objects,  the 
means,  the  instruments,  and  the  purposes,  are  left  to  the  honest  and  sober 
discretion  of  the  Legislature.  The  power  of  borrowing  money  was  expressly 
granted;  but  all  the  known  and  usual  means  to  that  end,  vvere  left  in  silence. 
The  same  observations  might,  in  truth,  be  made,  respecting  the  other  dele- 
gated powers.  The  great  ends  to  be  obtained,  as  means  to  effectuate  the  ulti- 
mate end — the  public  good  and  general  welfare — are  capable,  under  general 
terms  of  constitutional  specification;  but  the  subordinate  means  are  so  nu- 
merous, and  capable  of  such  infinite  variation,  as  to  render  an  enumeration 
impracticable,  and  must,  therefore,  be  left  to  construction  and  necessary  im- 
plication. He  said,  on  this  ground  he  was  willing  to  leave  the  general  argu- 
ment— it  was  simple?  intelligible,  and  he  hoped  would  be  thought  conclusive. 
He  said,  the  constitutionality  had  been  attacked  from  another  quarter.  It 
was  said,  we  could  not  give  commercial  advantages  to  one  port  above  another. 
The  constitutional  provision  which  had  been  quoted,  was  undoubtedly  intend- 
ed to  prevent  a  partial  regulation  of  commerce;  if  extended  to  the  case  under 
consideration,  it  would  much  more  strongly  prove,  that  Congress  ought  not  to 
reside  in  any  commercial  city;  for  he  verily  believed,  that  the  commercial 


52  BANK  OF  THE  UNITED  STATES. 

/advantages  of  Philadelphia  were  incomparably  greater,  from  the  residence, 
than  they  could  be  supposed  from  the  institution  of  a  national  bank.  Indeed, 
it  was  his  opinion,  that,  considering  that  this  city  had  a  bank,  the  capital  of 
which  was  adequate  to  all  her  commercial  exigencies,  that  she  could  enlarge 
that  capital  as  her  necessity  should  require,  and  that  her  bank  will,  if  thisbUl 
shall  be  refected,  receive  the  benefit  of  national  operation,  that  the  measure 
will  not  advance  her  individual  interest. 

With  regard  to  the  utility  of  banks,  he  observed,  that  lie  would  not  attempt 
to  display  a  knowledge  of  the  subject,  by  repeating  all  he  had  read  and  heard 
m  relation  to  it,  nor  fatigue  the  House  by  a  detail  of  his  own  reflections  and 
reasoning  upon  it;  the  causes  were  unnecessary  to  be  explained;  the  effects 
had  been  such  m  all  countries  where  banks  had  been  instituted,  as  to  produce 
an  universal  opinion,  that  they  were  alike  useful  to  all  the  great  purposes  of 
government,  and  to  promote  the  general  happiness  of  the  people.  Nor  was 
our  own  experience  wanting  to  the  same  purpose.  At  a  time  when  our  public 
resources  were  almost  annihilated,  our  credit  pros trater  our  Government  im- 
becile, and  its  patronage  inconsiderable,  a  bank,  of  small  capital,  was  among 
the  most  operative  causes  which  produced  that  first  dawn  that  ultimately  ter- 
minated in  meridian  splendor,  by  the  establishment  of  peace,  independence, 
|j  and  freedom.  There  were  two  circumstances  which  he  would  take  the  liberty 
to  mention,  which  would  render  the  banks  of  more  importance  in  this  coun- 
try than  in  any  where  they  are  at  present  in  use.  The  first,  the  com- 
mercial enterprise  of  our  merchants,  compared  with  the  smallness  of  their 
capitals,  which,  as  we  had  no  large  manufacturing  capitals,  whereby  the  pre- 
cious metals  would  be  retained  in  circulation,  would  frequently,  by  their  ex- 
portation, greatly  distress  the  people;  the  other,  originated  from  a  measure  of 
the  Government.  Congress,  from  a  laudable  intention  of  accommodating 
their  constituents,  instituted  treasuries  in  all  the  States:  in  some  of  these 
there  would  be,  in  the  ordinary  course  of  events,  a  deficiency,  and  in  others* 
a  redundancy.  To  keep  them  in  equilibrio,  by  the  transportation  of  the  pre- 
cious metals,  or  by  the  purchase  of  bills  in  the  market,  would  not  be  only  in- 
convenient and  expensive,  but  would  keep  out  of  circulation  a  considerable 
part  of  the  medium  of  the  country. 

Gentlemen,  he  said,  had  been  pleased  to  consider  the  proposed  terms  as 
giving  an  undue  advantage  to  the  stockholders.  He  would  leave  this  part  of 
the  subject  to  gentlemen  who  better  understood  it,  only  observing  that,  as 
Government  must  rely  principally  on  merchants  to  obtain  the  proposed  stock, 
it  would  be  necessary  to  afford  to  them  sufficient  motives  to  withdraw  from, 
their  commercial  pursuits  a  part  of  their  capitals. 

He  said  he  would  attempt  to  answer  some  of  those  desultory  objections 
which  had  been  made;  and,  in  doing  this,  he  would  omit  to  answer  such  as  had 
been,  in  his  opinion,  already  refuted.  He  observed  that  it  had  been  said 
that  granting  charters  of  incorporation  was  a  high  prerogative  of  Government. 
He  supposed  it  was  not  intended  that  it  was,  in  the  nature  of  things,  too 
transcendent  a  power  to  be  exercised  by  a  national  government;  but  that  the 
exercise  of  it  should  only  be  in  consequence  of  express  delegation.  Let  this 
objection  be  compared  with  the  conduct  of  Congress  on  another  subject,  in  all 
respects,  at  least,  as  important.  There  is  not,  by  the  constitution,  any  power 
expressly  delegated  to  mortgage  our  revenues;  and  yet,  without  any  question 
being  made  on  the  constitutionality  of  the  measure,  we  have  mortgaged  them 
to  an  immense  amount  From  whence,  he  asked,  do  we  acquire  the  autho- 
rity to  exercise  this  power?  Not  from  express  grants,  but  being  empowered 
to  borrow  money  on  the  credit  of  the  United  States.  We  have  very  properly 
considered  the  pledged  funds  as  among  the  known  and  usual  means  necessary 
and  proper  to  be  employed  for  the  attainment  of  the  end  expressly  delegated. 

It  had  been  said  that  the  bill  authorized  the  stockholders  to  purchase  real 
estate.  He  considered  the  provision  in  the  bill,  in  that  regard,  not  a  grant, 
but  a  limitation  of  power.  Any  man,  or  body  of  men,  might,  by  the  existing 
laws,  purchase,  in  their  private  capacities,  real  estate  to  any  amount.  This 
right  was  limited  as  respects  the  proposed  corporation* 


CHARTER   OF    1791.  53 

It  is  said  there  are  banks  already,  and,  therefore,  the  proposed  incorpora- 
tion is  unnecessary.  To  this  he  answered,  that,  if  the  Government  should 
agree  to  receive  all  its  demands  in  the  paper  of  the  existing  banks,  it  would 
give  to  them  every  advantage  which,  in  the  opinion  of  gentlemen,  renders  the 
present  system  objectionable,  without  stipulating  for  any  equivalent  to  the 
Government.  But  are,  he  asked,  gentlemen  serious  in  these  observations? 
Do  they  believe  the  capitals  of  the  present  banks  adequate  to  the  exigencies 
of  the  nation?  Do  they  believe  that  those  banks  possess  any  powers  by  which 
they  can  give  a  projectile  force  to  their  paper,  so  as  to  extend  its  circulation 
throughout  the  United  States?  Or,  do  they  really  wish  to  have  the  Govern- 
ment repose  itself  on  institutions  with  which  they  have  no  intimate  connex 
ion,  and  over  which  they  have  no  control? 

Mr.  Sedgwick  concluded  by  observing,  he  was  very  confident  a  majority 
in  that  House  could  never  be  induced  to  believe  that  it  was  the  intention  of 
the  constitution  to  deprive  the  Legislature  of  one  of  the  most  important  and 
necessary  means  of  executing  the  powers  expressly  delegated. 

Mr.  LAWRENCE  said,  the  advocates  of  this  measure  stand  in  an  unfor- 
tunate situation;  for,  being  those  who,  in  general,  advocate  national  measures, 
they  are  charged  with  designs  to  extend  the  powers  of  the  Government  un- 
duly. He,  however,  consoled  himself  with  a  conscious  attachment  to  the 
constitution,  and  with  the  reflection  that  their  conduct  received  the  approba- 
tion of  their  constituents.  If  the-  present  is  contrasted  with  the  former  cir- 
cumstances of  this  country,  he  said  he  doubted  not  the  measures  of  this  Go- 
vernment would  continue  to  receive  the  approbation  of  the  People  of  the  Unit- 
ed States. 

The  silence  of  the  People  on  the  subject  now  before  the  House,  is  strongly 
presumptive  that  the  measure  of  a  bank  is  not  considered  by  them  as  uncon- 
stitutional. He  then  endeavored  to  shovy  the  constitutionality  of  the  bank 
system.  It  must  be  conceded  that  there  is  nothing  in  the  constitution  ex- 
pressly against  it,  and,  therefore,  we  ought  not  to  deduce  a  prohibition  by  con- 
struction. He  adverted  to  the  amendment  proposed  by  Congress  to  the  con- 
stitution, which  says,  "  powers  not  delegated  are  retained."  Here,  he  said, 
to  prove  that  the  bank  is  constitutional,  the  constructive  interpretation,  so 
much  objected  against,  is  recurred  to. 

The  great  objects  ol  this  Government  are  contained  in  the  context  of  the 
constitution-  He  recapitulated  those  objects,  and  inferred  that  every  power 
necessary  to  secure  these,  must  necessarily  follow:  for,  as  to  the  great  objects 
for  which  this  Government  was  instituted,  it  is  as  full  and  complete,  in  all  its 
parts,  as  any  system  that  could  be  devised.  A  full,  uncontrollable  power  to 
regulate  the  fiscal  concerns  of  this  Union,  is  a  primary  consideration  in  this 
Government;  and,  from  hence,  it  clearly  follows,  that  it  must  possess  the 
power  to  make  every  possible  arrangement  conducive  to  that  great  object. 

He  then  adverted  to  the  late  confederation,  and  pointed  out  its  defects  and 
incompetency;  and  hence,  the  old  Congress  called  on  the  States  to  enact  cer- 
tain laws,  which  they  had  not  power  to  enact.  From  hence  he  inferred,  that, 
as  the  late  confederation  could  not  pass  those  laws,  and  to  capacitate  the 
Government  of  the  United  States,  and  form  a  more  perfect  union,  the  consti- 
tion  under  which  we  now  act  was  formed.  To  suppose  that  this  Government 
does  not  possess  the  powers  for  which  the  constitution  was  adopted,  involves 
the  grossest  absurdity. 

The  deviations  from  charters,  and  the  infringement  of  parchment  rights, 
which  had  been  justified  on  the  principle  of  necessity,  by  the  gentleman  from 
Virginia,  (Mr.  MADISON)  he  said,  had  been  on  different  principles  from  those 
now  mentioned;  the  necessity,  he  contended,  did  not,  at  the  time,  exist;  and 
the  old  Congress  exercised  the  power,  as  they  thought,  by  a  fair  construction 
of  the  confederation. 

On  constructions,  he  observed,  it  was  to  be  lamented  that  they  should  ever 
be  necessary;  but  they  had  been  made;  lie  instanced  the  power  of  remova- 


54  BANK   OF   THE  UNITED    STATES. 

bility,  which  had  been  an  act  of  the  three  branches,  and  has  not  been  com- 
plained of.    It  was,  at  least,  as  important  a  one  as  the  present. 

But  the  construction  now  proposed,  he  contended,  was  an  easy  and  natural 
construction.  Recurring  to  the  collection  law,  he  observed,  that  it  was  by  con- 
struction that  the  receipts  are  ordered  to  be  made  in  gold  and  silver. 

With  respect  to  creating  a  mass  of  capital,  he  supposed  just  and  upright 
national  measures  would  create  a  will  to  form  this  capital. 

Adverting  to  the  idea  that  Congress  has  not  the  power  to  establish  compa- 
nies with  exclusive  privileges,  he  observed  that,  by  the  amendments  proposed 
by  New  Hampshire,  Msssachusetts,  and  New  York,  it  plainly  appears  that 
these  States  considered  that  Congress  does  possess  the  power  to  establish 
such  companies. 

The  constitution  vests  Congress  with  power  to  dispose  of  certain  property 
in  lands,  and  to  make  all  useful  rules  and  regulations  for  that  purpose.  Can 
its  power  be  less  over  one  species  of  its  own  property  than  over  another? 

"With  respect  to  giving  preference  to  one  State  over  another,  he  observed  that, 
ten  years  hence,  the  seat  of  Government  is  to  be  on  the  Potomac,  and,  where- 
ever  the  Government  is  finally  settled,  the  place  will  enjoy  superior  ad  vantages; 
but  still  the  Government  must  go  there,  and  the  places  not  enjoying  those  ad- 
vantages must  be  satisfied. 

It  is  said  we  must  not  pass  a  problematical  bill,  which  is  liable  to  a  super- 
vision by  the  judges  of  the  supreme  court;  but,  he  conceived  there  was  no 
force  in  this,  as  those  judges  are  invested,  by  the  constitution,  with  a  power  to 
pass  their  judgment  on  all  laws  that  may  be  passed. 

It  is  said  that  this  law  may  interfere  with  the  State  Governments;  but  this 
may  or  may  not  be  the  case;  and  in  all  interferences  of  the  kind,  the  particu- 
lar interest  of  a  State  must  give  way  to  the  general  interest. 

With  respect  to  the  C9rporation  possessing  the  power  of  passing  laws,  this, 
he  observed,  is  a  power  incidental  to  all  corporations,  and,  in  the  instance  of 
the  Western  territory,  Congress  have  exercised  the  powers  of  instituting  cor- 
porations, or  bodies  politic,  to  the  greatest  possible  extent. 

He  defended  the  right  of  Congress  to  purchase  and  possess  property,  and 
quoted  a  passage  in  the  constitution  to  show  that  they  possess  this  right. 

He  then  touched  upon  the  expediency  of  banks,  and  of  that  proposed,  in 
particular.  The  advantages  generally  derived  from  these  institutions,  he  be- 
lieved, applied  peculiarly  to  this  country.  He  noticed  the  objections,  from 
banks  banishing  the  specie;  he  said,  the  surplus  only  would  be  sent  out  of  the 
country.  But,  is  it  given  away?  No,  Sir,  it  is  sent  off  for  articles  which  are 
wanted,  and  which  will  enrich  the  country. 

With  respect  to  a  run  on  the  bank,  he  mentioned  the  circumstances  under 
which  those  runs  on  the  British  banks,  which  had  been  noticed,  took  place, 
and  showed  there  was  no  parallel  that  would  ever  take  place  in  this  country. 

From  several  particulars,  he  showed  that  the  objection  which  arose,  from 
the  United  States  not  having  made  a  good  bargain  by  the  system,  was  not 
well  founded.  He  then  mentioned  the  peculiar  advantages  which  the  Unit- 
ed States  will  enjoy  over  common  subscribers- 

The  objections  from  banks  being  already  established  in  the  several  States, 
he  obviated,  by  stating  the  mischiefs  which  might  arise  from  an  ignorance  of 
the  situation  of  those  banks:  and  concluded  by  some  remarks  on  the  inexpe- 
diency of  the  General  Government's  having  recourse  to  institutions  of  mere- 
ly a  local  nature. 

Mr.  JACKSON  said  that,  having  been  the  person  who  brought  forward  the 
constitutional  objections  against  the  bill,  he  thought  himself  bound  to  notice 
the  answers  which  had  been  offered  to  that  objection.  Newspaper  authorities, 
he  said,  have  been  alluded  to,  and  their  silence  on  the  subject  considered  as 
indicating  the  approbation  of  the  People.  He  would  meet  the  gentlemen  on 
that  ground,  and,  though  he  did  not  consider  newspapers  as  an  authority  to 
be  depended  on,  yet,  it  opinions,  thro'  that  channel,  were  to  be  regarded,  he 


CHARTER   OF    1791. 


55 


would  refer  gentlemen  to  those  of  this  city.  The  expediency  and  constitution- 
ality of  the  bill  has  been  called  in  question  by  the  newspapers  of  this  city. 

The  latitude  contended  for  in  construing  the  constitution  on  this  occasion, 
he  reprobated  very  fully.  If  the  sweeping  clause,  as  it  is  called,  extends  to 
vesting  Congress  with  such  powers, and  necessary  and  proper  means  are  an 
indispensable  implication,  in  the  sense  advanced  by  the  advocates  of  the  bill, 
we  shall  soon  be  in  possession  of  all  possible  powers,  and  the  charter  under 
which  we  sit  will  be  nothing  but  a  name.  i 

This  bill  will  essentially  interfere  with  the  rights  of  the  separate  States,  }  J 
for  it  is  riot  denied  that  they  possess  the  power  ot  instituting  banks;  but  the 
proposed  corporation  will  eclipse  the  Bank  of  North  America,  and  contravene 
the  interests  of  individuals  concerned  in  it. 

He  then  noticed  the  several  arguments  drawn  from  the  doctrine  of  impli-  « 
cation;  the  right  to  incorporate  a  national  bank  has  been  deduced  from  the 
power  to  raise  armies;  but  he  presumed  it  would  not  be  contended  that  this 
is  a  bill  to  provide  for  the  national  defence.  Nor  could  such  a  power,  in  his  opi- 
nion, be  derived  from  the  right  to  borrow  money.  It  has  been  asked  what 
the  United  States  could  do  with  the  surplus  of  their  revenue,  without  the 
convenience  of  a  bank,  in  which  to  deposite  it  with  advantage?  For  his  part, 
though  he  wished  to  anticipate  j)leasing  occurrences,  he  did  not  look  forward 
to  the  time  when  the  General  Government  would  have  this  superabundance 
at  its  disposal. 

The  right  of  Congress  to  purchase  and  hold  lands  has  been  urged,  to  prove 
that  they  can  transfer  this  power;  but  the  General  Government  is  expressly 
restricted  in  the  exercise  of  this  power;  the  consent  of  the  particular  State  to 
the  purchase,  for  particular  purposes  only,  is  required;  these  purposes  are  de- 
signated, such  as  building  light  houses,  erecting  arsenals,  &c. 

It  has  been  said  that  brinks  may  exist  without  a  charter,  but  that  this  in- 
corporation is  necessary,  in  order  that  it  may  have  a  hold  on  the  Government. 
Mr.  Jackson  strongly  reprobated  this  idea;  he  was,  he  said,  astonished  to  , 
hear  such  a  declaration,  and  hoped  that  such  ideas  would  prevent  a  majority 
of  the.  House  from  passing  a  bill  that  would  thus  establish  a  perpetual  mono- 
poly. We  have,  said  he,  I  believe,  a  perpetual  debt :  I  hope  we  shall  not  make 
a  perpetual  corporation.  /What  was  it  drove  our  forefathers  to  this  country? 
Was  it  not  the  ecclesiastical  cornorations^and  perpetual  monopolies  of  Eng- 
land and  Scotland?  Shall  vye  sufter  the  same  evils  to  exist  in  this  country,  in- 
stead of  taking  every  possible  method  to  encourage  the  increase  of  emigrants 
to  settle  among  us?  For,  if  we  establish  the  precedent  now  before  us,  there 
is  no  saying  where  it  shall  stop. 

The  power  to  regulate  trade  is  said  to  involve  this,  as  a  necessary  means; 
but  the  powers  consequent  on  this  express  power,  are  specified:  such  as  re- 
gulating light  houses,  ships,  harbors,  &c.  It  has  been  said,  that  Congress  has 
borrowed  money;  this  shews  that  there  is  no  necessity  of  instituting  any  new 
bank,  those  already  established  having  been  found  sufficient  for  the  purpose. 
He  denied  the  right  of  Congress  to  establish  banks  at  the  permanent  seat  ot 
Government,  or  on  those  sand  heaps  mentioned  yesterday:  for,  if  they  should, 
they  could  not  force  the  circulation  of  their  paper  one  inch  beyond  the  limits 
of  those  places.  But,  it  is  said,  if  Congress  can  establish  banks  in  those  si- 
tuations, the  question  becomes  a  question  of  place,  and  not  of  principle;  from 
hence,  it  is  interred  that  the  power  may  be  exercised  in  any  other  part  of  the 
United  States;  this  appeared  to  him  to  form  a  very  dangerous  construction  of 
the  powers  vested  in  the  General  Government. 

Adverting  to  the  powers  in  Congress,  in  respect  to  the  finances  of  the  Union, 
he  observed  that  those  powers  did  not  warrant  the  adoption  of  whatever  mea- 
sures they  thought  proper;  the  constitution  has  restricted  the  exercise  of  those 
fiscal  powers;  Congress  cannot  lay  a  poll  tax,  nor  impose  duties  on  exports, 
and  yet  these  undoubtedly  relate  to  the  finances. 

The  powers  exercised  in  respect  to  the  Western  territory,  he  observed, 
had  reference  to  property  already  belonging  to  the  United  States;  it  does  not 
refer  to  property  to  be  purchased,  nor  does  it  authorize  the  purchase  of  any 


56  BANK   OP  THE  UNITED   STATES. 

additional  property;  besides,  the  powers  are  express  and  definite,  and  the 
exercise  of  them,  in  making  needful  rules  and  regulations  in  the  government 
of  that  territory,  does  not  interfere  with  the  rights  of  the  respective  States. 

Mr.  Jackson  then  denied  the  necessity  of  the  proposed  institution,  and, 
noticing  the  observation  of  Mr.  Ames,  that  it  was  dangerous,  on  matters  of 
importance,  not  to  give  an  opinion,  observed,  that  he  could  conceive  of  no 
danger  that  would  result  from  postponing  that  construction  of  the  constitution 
now  contended  for,  to  some  future  Congress,  who,  when  the  necessity  of  a 
bank  institution  shall  be  apparent,  will  be  as  competent  to  the  decision  as 
the  present  House.  Alluding  to  the  frequent  representations  of  the  flourish- 

/ing  situation  of  the  country,  he  inferred  that  this  shows  that  the  necessity 
of  the  proposed  institution  does  not  exist  at  the  present  time;  why  should 
we  then  be  anticipating  for  future  generations?  State  banks  he  considered 
preferable  to  a  national  bank,  as  counterfeits  can  be  detected  in  the  States; 
but,  if  you  establish  a  national  bank,  the  checks  will  be  found  only  in  the  city 
of  Philadelphia  or  Conogocheague.  He  then  passed  an  eulogium  on  the  Bank 
of  Pennsylvania;  the  stockholders,  said  he,  are  not  speculators;  they  have  the 
solid  coin  deposited  in  their  vaults. 

He  adverted  to  the  preamble  and  context  of  the  constitution,  and  asserted 
that  this  context  is  to  be  interpreted  by  the  general  powers  contained  in  the 
instrument.  Noticing  the  advantages  it  had  been  said  would  accrue  to  the 
United  States  from  the  bank,  he  asked,  is  the  United  States  going  to  com- 
mence stockjobbers?  The  "  general  welfare"  are  the  two  words  which  are 
to  involve  and  justify  the  assumption  of  every  power.  But  what  is  this  gene- 
ral welfare?  It  is  the  welfare  of  Philadelphia,  New  York,  and  Boston:  for,  as 
to  the  States  of  Georgia  and  New  Hampshire,  they  may  as  well  be  out  ofthe 
Union,  as  to  any  advantages  they  will  receive  from  the  institution.  He  re- 

(  probated  the  idea  of  the  United  States  deriving  any  emolument  from  the  bank, 
and,  more  especially,  he  reprobated  the  influence  which  it  was  designed ithe 
Government  should  enjoy  by  it.  He  said,  the  banks  of  Venice  and  Amsterdam 
were  founded  upon  different  principles.  In  the  famous  bank  of  Venice,  the 
Government  holds  no  shares,  and  yet  has  at  command  5,000,000  ducats;  but 
the  United  States  were  to  be  immediately  concerned  in  theirs,  and  to  become 
stockjobbers.  The  Bank  of  Amsterdam  was  under  the  entire  direction  of 
the  burgomasters,  who  had  alone  the  power  of  making  by-laws  for  its  regu- 
lation; this  power,  by  the  bill,  was  given  up  by  Government,  very  improper- 
ly he  thought,  and  was  to  be  exercised  by  the  stockholders.  The  French 
bank,  he  added,  was  first  established  on  proper  principles,  and  flourished;  but 
afterwards  became  a  royal  bank;  much  paper  was  introduced,  which  destroy  - 
tlie  establishment,  and  was  near  oversetting  the  Government. 

The  facility  of  borrowing,  he  deprecated;  it  will,  said  he,  involve  the  Union 
in  irretrievable  debts;  the  facility  of  borrowing  is  but  another  name  for  antici- 
pation, whidywill,  in  its  effects,  deprive  the  Government  of  the  power  to  con- 
trol its  revenues — they  will  be  mortgaged  to  the  creditors  of  the  Government. 
Let  us  beware  of  following  the  example  of  Great  Britain  in  this  respect.  He 
said,  undue  advantages  had  been  taken  in  precipitating  the  measure,  and  the 
reasonable  proposition  respecting  the  State  debts  is  not  admitted;  this,  I  con- 
sider, as  partial  and  unjust.  A  gentleman  from  Virginia  has  well  observed, 
that  we  appear  to  be  divided  by  a  geographical  line-— not  a  gentleman,  scarcely, 
to  the  eastward  of  a  certain  line,  is  opposed  to  the  bank,  and  where  is  the  gen- 
tleman to  the  southward,  that  is  for  itr  This  ideal  line  will  have  a  tendency 
to  establish  a  real  difference.  He  added  a  few  more  observations,  and  conclud- 
ed by  urging  a  postponement,  if  any  regard  was  to  be  had  to  the  tran  • 
quillity  ofthe  Union. 

Mr.  BOUDINOT  said  he  meant  to  confine  himself  to  two  or  three  great  points, 
on  which  the  whole  argument  appeared  to  him  to  rest.  He  considered  the 
objections  to  the  bill  as  pointed  against  its  constitutionality  and  expediency. 
It  was  essential,  he  observed,  that  every  member  should  be  satisfied,  as  far 
as  possible,  of  the  first:  for,  however  expedient  it  might  be,  if  it  was  clearly 


CHARTER  OF   1791.  57 

unconstitutional,  the  bill  should  never  receive  the  sanction  of  the  Representa- 
tives of  the  People,  He  would,  in  a  great  measure,  refer  for  its  expediency, 
if  constitutional,  to  the  experience  of  every  gentleman  of  the  House,  as  the 
most  satisfactory  proof  on  that  head,  and  he  conceived  there  was  no  need  of 
much  argument  in  support  of  its  decision.  The  first  question,  then,  was,  is 
Congress  vested  with  a  power  to  grant  the  privileges  contained  in  the  bill? 
This  is  denied,  and  oyght  to  be  proved.  In  order  to  show  in  what  manner 
this  subject  had  struck  his  mind,  he  first  laid  down  these  principles: 

Whatever  power  is  exercised  by  Congress  must  be  drawn  from  the  consti- 
tution; either  from  the  express  words  or  apparent  meaning,  or  from  a  neces- 
sary implication,  arising  from  the  obvious  intent  of  the  framers. 

That  whatever  powers,  (vested  heretofore  in  any  individual  State)  not 
granted  by  this  instrument,  are  still  in  the  people  o'f  such  State,  and  cannot 
Be  exercised  by  Congress;  that  whatever  implication  destroys  the  principle  of 
the  constitution,  ought  to  be  rejected;  that,  in  construing  an  instrument,  the 
different  parts  ought  to  be  so  expounded  as  to  give  meaning  to  every  part 
which  will  admit  of  it. 

Having  stated  these  preliminaries,  Mr.  Boudinot  proceeded  to  inquire  what 
were  the  powers  attempted  to  be  exercised  by  this  bill:  for,  until  the  powers 
were  known,  the  question  of  constitutionality  could  not  be  determined, 

By  it,  Congress  was  about  to  exercise  the  power  of  incorporating  certain, 
individuals,  thereby  establishing  a  banking  company  "for  successfully  con- 
ducting  the  finances  of  the  country." 

The  next  inquiry  is,  What  rights  will  this  company  enjoy  in  this  nevv  cha- 
racter, that  they  do  not  enjoy  independent  of  itr  Every  individual  citizen 
had  an  undoubted  right  to  purchase  and  hold  property,  both  real  and  personal, 
to  any  amount  xvhatever;  to  dispose  of  this  property  to  whom,  and  on  what 
terms,  he  pleased;  to  lend  his  money,  on  legal  interest,  to  any  person  willing 
to  take  the  same;  and,  indeed,  to  exercise  the  power  over  his  property,  that 
was  contained  in  the  bill.  Individual  citizens,  then,  having  these  powers, 
might  also  associate  together  in  company  of  co-partnership,  ami,  jointly,  exer- 
cising the  same  rights,  might  hold  lands  in  joint-tenancy,  or  as  tenants  in 
common,  to  any  amount  whatever;  might  put  any  sum  of  money  into  joint 
stock:  might  issue  their  notes  to  any  amount;  might  make  by-laws,  or  arti- 
cles of  co  partnership  for  their  own  government;  and,  finally,  might  set  up  a 
bank  to  any  amount,  however  great,  and  no  authority  in  the  Government  could 
legally  interfere  with  the  exercise  of  these  rights.  The  great  difference  be- 
tween this  private  association  of  citizen*,  in  their  individual  capacities,  and 
the  company  to  be  created  in  this  bill,  and  which  is  held  up  in  so  dangerous  a 
light,  is,  that  the  one  exposes  the  company  to  the  necessity  of  using  each  indi- 
vidual's name  in  all  their  transactions;  suits  must  be  brought  in  all  their 
names;  deeds  must  be  taken  and  given  in  like  manner;  each  one,  in  his  private 
estate,  is  liable  for  the  default  of  the  rest;  the  death  of  a  member  dissolved  the 
partnership,  as  to  him;  and,  for  want  of  a  political  existence,  the  union  may 
be  dissolved  by  any  part  of  its  members,  and,  of  course,  many  obvious  incon- 
veniences must  be  suffered,  merely  of  an  official  kind.  By  the  bill,  these 
difficulties  are  to  be  removed,  by  conveying  three  qualities  to  them: 
.  First.  Individuality,  or  constituting  a  number  of  citizens  into  one  legal  ar- 
tificial body,  capable,  by  a  fictitious  name,  of  exercising  the  rights  of  an 
individual. 

Second.  Irresponsibility  in  their  individual  capacity,  not  being  answerable 
beyond  their  joint  capital. 

Third.  Durability,  or  a  political  existence  for  a  certain  time,  not  to  be 
effected  by  the  natural  death  of  its  members. 

These  are  the  whole  of  the  powers  exercised  and  the  rights  conveyed.  It 
is  true  these  are  convenient  and  advantageous  to  the  company,  but  of  trifling 
importance  when  considered  as  a  right  or  power  exercised  by  a  national  legis- 
lature, for  the  benefit  of  the  government  Can  it  be  of  any  importance  to  the 
State,  whether  the  number  of  its  citizens  are  considered,  in  legal  contempla- 
tion, as  united  in  an  individual  capacity,  or  separately,  as  so  many  individuals, 
8 


58  BANK  OF  THE  UNITED  STATES. 

especially  if  the  public  weal  is  thereby  promoted?  By  their  irresponsibility 
being  known,  every  pei  son  dealing  with  them  gives  his  tacit  consent  to  the 
principle,  and  it  becomes  part  of  the  contract;  and,  by  political  duration,  their 
powers  and  abilities  are  limited,  and  their  rights  restricted,  so  as  to  prevent 
any  danger  that  might  arise  from  the  exercise  of  their  joint  natural  right,  not 
only  as  to  the  amount  of  their  capital,  but  as  to  the  by-laws  they  may  make 
for  their  government. 

A  private  bank  could  make  contracts  with  the  Government,  and  the  Govern- 
ment with  them,  to  all  intents  and  purposes  as  great  and  important  as  a  public 
bank,  would  their  capital  admit  of  it;  though  they  would  not  possess  such 
qualities  as  to  justify  the  confidence  of  Government, by  depending  on  them  in 
a  time  of  danger  and  necessity.  This  might  put  it.  in  the  power  of  any  indi- 
vidual to  injure  the  community  in  its  essential  interests,  by  withdrawing  the 
capital  when  most  needed.  To  prevent  this,  and  many  other  inconveniences, 
it  is  necessary  that  a  bank,  for  the  purposes  of  Government,  should  be  a  legally 
artificial  body,  possessing  the  three  qualities  above  mentioned. 

Mr.  Boudinot  then  took  up  the  constitution,  to  see  if  this  simple  power 
was  not  fairly  to  be  drawn,  by  necessary  implication,  from  those  vested  by 
this  instrument  in  the  legislative  authority  of  the  United  States.  It  sets  out,  said 
he,  in  the  preamble,  by  declaring  the  general  purposes  for  which  it  was  formed: 
4  The  cnsu ranee  of  domestic  tranquillity^  provision  for  the  common  de- 
fence, and  promotion  of  the  general  welfare."  These  are  the  prominent  fea 
tures  of  this  instrument,  and  are  confirmed  and  enlarged  by  the  specific  grants 
in  the  body  of  it,  where  the  principles  on  which  the  .Legislature  should  rest 
their  after  proceedings  are  more  fully  laid  down,  and  the  division  of  power 
to  be  exercised  by  the  general  and  particular  governments  distinctly  marked 
out.  By  the  eighth  section,  Congress  has  power  "  to  levy  taxes,  pay  debts, 
provide  for  the  common  defence  and  general  welfare,  declare  war,  raise  and 
support  armies,  provide  for  and  maintain  a  navy;"  and,  as  a  means  to  accom- 
plish these  important  ends,  ";  to  borrow  money;"  and,  finally,  "  to  make  all 
laws  necessary  and  proper  for  the  carrying  into  execution  the  foregoing 
powers."  Le't  us  then  inquire,  is  the  constituting  a  public  bank  necessary  to 
these  important  and  essential  ends  of  government r  It  so,  the  right  to  exercise 
the  power  must  be  in  the  supreme  Legislature. 

He  argued,  the  power  was  not  contained  in  express  words,  but  it  was  neces- 
sarily deduced,  by  the  strongest  and  most  decisive  implication,  because,  he 
contended,  it  was  a  necessary  means  to  attain  a  necessary  end.  Necessary 
implication  had  led  Congress,  under  the  power  to  lay  and  collect  imposts  and 
taxes,  to  establish  officers  for  the  collection,  to  inflict  penalties  against  those 
who  should  defraud  the  revenue,  to  oblige  vessels  to  enter  one  port  and  deli- 
ver at  another,  subjected  them  to  various  ceremonies  in  their  proceedings,  for 
which  the  owners  were  made  to  pay;  and  he  conceived  it  was  not  so  great  an 
exertion  of  power,  by  implication,  to  incorporate  a  company  for  the  purpose  of 
a  bank.  He  also  deduced  the  right  from  the  power  of  paying  debts,  raising 
armies,  providing  for  the  general  welfare  and  common  defence,  for  which  they 
were  to  borrow  money.  All  these  necessarily  include  the  right  of  using  every 
proper  and  necessary  means  to  accomplish  these  necessary  ends.  It  was  cer- 
tain, he  said,  that  money  must  be  raised  from  the  People.  This  could  not  be 
done  in  sums  sufficient  for  the  exigencies  of  Government  in  a  country  where 
the  precious  metals  were  so  scarce  as  in  this.  The  people,  in  general,  are  poor, 
when  compared  with  European  nations;  they  have  a  wilderness  to  subdue  and 
cultivate;  taxes  must  be  laid  with  prudence,  and  collected  with  discretion. 
The  anticipation  of  the  revenues,  therefore,  by  borrowing  money,  becomes 
absolutely  necessary.  If  so,  then,  as  the  constitution  had  not  specified  the 
manner  of  borrowing,  or  from  whom  the  loan  was  to  be  obtained,  the  Supreme 
Legislature  of  the  Union  were  at  liberty,  it  was  their  duty,  to  fix  upon  the 
best  mode  of  effecting  the  purposes  of  their  appointment.  For  it  was  a  sound 
principle,  that,  when  a  general  power  is  granted,  and  the  means  are  not  speci- 
fied, they  are  left  to  the  discretion  of  those  in  whom  the  trust  is  reposed,  pro  • 
vided  they  do  not  adopt  means  expressly  forbidden.  The  public  defence  or 


CHARTER  OF   1791.  59 

general  welfare,  rested  on  the  annual  supplies  from  uncertain  revenues,  would 
expose  the  very  existence  of  the.  community.  It  is  the  duty,  then,  of  those  to 
whom  the  people  have  committed  this  power,  to  prepare,  in  time  of  peace,  for 
the  necessary  defence  in  a  time  of  war.  The  United  States  are  now,  happily, 
in  a  state  of  peace;  but  it  was  impassible  for  anyone  to  say  how  long  it  would 
continue.  By  prudent  management,  it  might  long  be  preserved;  but  this  pru- 
dence consisted  in  being  always  in  a  state  ot  preparation  to  defend  our 
country. 

The  constitution  contemplates  this  very  duty,  by  authorizing  Congress  to 
provide  for  the  common  defence,  by  borrowing  money.  Why  borrow  money? 
Are  not  the  annual  revenues  sufficient?  It  might  be  so.  if  nothing  was  attend- 
ed to  but  internal  wants:  but  the  common  defence  and  general  welfare  loudly 
call  for  that  provision  which  will  produce  a  constant  guard  on  external  ene- 
mies and  internal  insurrections*  To  this  necessary  end,  it  becomes  Congress 
to  provide  that  the  necessary  means  may  be  always  at  hand,  by  being  able  to 
arm  their  citizens^  and  provide  for  their  support  while  engaged  in  the  defence 
r»f  their  common  country.  This  can  be  done  only  by  borrowing  money,  which 
is  usually  of  citizens  or  foreigners:  if  of  the  first,  it  must  be  from  individuals 
or  from  private  banks.  Will  it  be  prudent  to  trust  to  either?  Loans  from 
individuals  were  attempted  during  the  war,  when  patriotism  produced  a  will 
in  some  lenders,  and  others  were  glad  to  get  rid  of  a  depreciating  paper  cur- 
rency,  almost  on  any  terms  whatever. 

But,  even  these  loan?,  arising  from  this  paper  medium,  with  which  the  mar- 
ket was  glutted,  were  altogether  insufficient;  and.  by  one  change  of  circum- 
stances, every  hope  was  precluded  of  being  any  ways  successful  in  procuring 
money  from  that  source.  The  circumstances  of  individuals,  too.  in  this  coun- 
try, are  such,  when  compared  with  the  wants  of  a  nation,  as  render  the  source 
too  va§ue  and  uncertain  to  rely  upon,  and  it  would  be  a  most  improvident 
execution  of  the  powers  granted  for  the  express  purpose  of  the  common  de- 
fence and  general  welfare.  Private  banks  were  almost  as  inadequate  to  the 
object,  and,  for  reasons  already  given,  were  neither  to  be  depended  on,  for 
will  or  capital,  as  to  the  supply  for  the  principal  wants  of  Government. 
They  are  generally  established  for  commercial  purposes,  and  on  capitals  not 
always  sufficient  for  them.  If  they  should  be  prevailed  upon,  at  any  thne,  to 
attempt  to  supply  the  demands  of  a  nation  at  war,  it  must,  be  from  a  general 
combination  of  their  whole  stocks,  to  the  destruction  of  the  original  designs 
of  their  several  institutions.  This  ought  not  to  be  expected:  for,  as  far  as  it 
goes  to  the  depression  of  the  mercantile  interest,  so  far  it  is  injurious  to  the 
Government;  besides,  a  dependence  upon  such  a  combination  would  be  impo  • 
Utic,  both  from  its  slowness  and  an  certainty.  The  votes  of  a  few  individuals, 
affected  by  local,  selfish,  or  adverse  politics,  might  endanger  the  whole  people. 
Such  a  dependence  ought  not  to  be  attributed  to  the  wise  tram  era  of  the  con- 
stitution, neither  does  the  language  warrant  it.  But,  foreign  loans  have  been 
mentioned  as  a  proper  source  for  this  purpose.  The  imprudence  of  placing 
the  common  defence  of  a  nation  on  the  will  of  those  \yho  have  no  interest  in 
its  welfare,  is  a  good  answer  to  this  observation.  Would  it  be  prudent  to 
trust  a  foreigner,  perhaps  a  rival,  if  not  an  enemy,  with  your  supply  of  what 
has  emphatically  been  called  the  sinews  of  war?  Would  it  not  expose  us 
to  exorbitant  demands,  and  often  a  refusal?  Many  adventitious  circumstan- 
ces^of  a  '.var,  increasing  demands  from  other  quarters,  scarcity  of  coin,  and 
difficulty  of  communication,  as  well  as  the  intrigues  of  courts,  all  loudly  op- 
pose the  measure,  as  contrary  to  the  spirit  and  meaning  of  a  provision  for  the 
common  defence  and  general  welfare.  The  only  resort,  then,  he  conceived, 
was  a  timely  provision  to  secure  institutions  at  home,  from  which  loans  might 
be  obtained  at  all  times,  on  moderate  terms,  and  to  such  amount  as  the  neces- 
sity of  tie  State  might  require.  But,  gentlemen  say  that  the  constitution 
does  not  expressly  warrant  the  establishment  of  such  a  corporation.  If  by  cx- 
prccsly,  express  words  are  meant,  it  is  agreed  that  there  are  no  express  words; 
and  this  is  the  case  with  most  of  the  powers  exercised  by  Congress:  for,  if  the 
doctrine  of  necessary  implication  is  rejected,  he  did  not  sec  what  the  supreme 


50  BANK  OF  THE  UNITED  STATES. 

Legislature  of  the  Union  could  do  in  that  character.  If  this  power  is  not 
clearly  given  in  the  constitution,  by  necessary  implication,  there  is  a  necessary 
end  proposed  and  directed,  while  the  common  and  usual  necessary  means  to 
attain  that  end  are  refused,  or,  at  least,  not  granted. 

Mr.  Boudinot  was  firmly  of  opinion  that  a  National  Bank  was  necessary  j 
the  means,  without  which  the  end  could  not  be  obtained.  Theory  proved  it 
so  in  his  opinion*  and  the  experience  of  the  Union,  in  a  day  of  distress,  had 
fully  confirmed  the  theory.  The  struggles  of  the  friends  of  freedom,  during 
the  late  contest,  had  nearly  been  rendered  abortive,  for  want  of  this  aid.  That 
danger  which  was  then  so  hardly  avoided,  became  a  solemn  memento  to  this 
House,  to  provide  against  a  similar  case  of  necessity.  This  was  the  time  to 
do  it  with  advantage,  being  in  such  profound  peace.  He  had  not  heard  any 
argument  by  which  it  was  proved  that  either  individuals,  private  banks,  or 
foreigners,  could  with  safety  and  propriety  be  depended  on  as  the  efficient 
and  necessary  means  for  so  important  a  purpose-  Although  money  was  at 
present  plenty  in  Europe,  and  might  be  borrowed  on  easy  terms,  it  might  not 
be  so  to-morrow,  in  case  a  war  should  break  out  and  our  necessities  become 
pressing.  He  again  enumerated  the  harmless  qualities  with  which  it  was  pro- 
posed to  vest  the  bank  corporation,  by  the  bill  on  the  tabler  for  the  important 
purposes  of  the  common  defence  and  general  welfare.  Gentlemen  had  not 
yet  pointed  out  any  danger  arising  to  the  community,  neither  did  he  think  it 
was  possible  that  any  could  ever  be  mentioned,  equal  to  those  of  suffering  the- 
Government  to  depend  upon  individuals  or  private  banks  for  loans,  in  a  day 
of  distress. 

But  it  was  said  that  this  bill  gave  the  corporation  a  right  to  hold  real  pro- 
perty in  a  State,  which  Congress  had  no  po\yer  to  do.  The  terms  of  the  bill 
are  misapprehended 5  this  is  a  right  which,  it  has  been  shown,  attaches  to  the 
citizens  individually,  or  in  their  associated  capacity;  the  bill  therefore  does 
no  more  than  to  vest  a  number  witli  an  artificial  single  capacity,  under  a  ficti- 
tious name,  and  by  that  name  to  hold  lands,  make  by-laws,  &c.  &c.  all 
•which  they  might  have  done  before,  as  citizensr  in  a  collective  capacity.  So 
far  from  giving  a  new  power,  their  original  individual  rights  are  limited  for 
1he  public  safety,  as  to  the  amount  of  their  stock  and  the  duration  of  their 
existence. 

Mr.  Boudinot  then  proceeded  to  cite  numerous  instances  of  powers  exer- 
cised by  Congress  during  the  last  two  years,  deduced  under  the  constitution 
by  necessary  implication,  to  show  the  utter  impossibility  of  carrying  any  one 
provision  of  that  authority  into  execution,  for  the  benefit  of  the  people*  with- 
out this  reasonable  latitude  of  construction.  He  also*  adverted  to  some  instan- 
ces of  the  like  conduct,  under  the  former  confederation.  It  had  been  urged* 
that  the  new  Congress  had  no  rights  or  powers  but  what  had  been  vested  in, 
and  given  to  them  by,  the  individual  States,  and  therefore  they  could  not  ac- 
cept a  cession  from  Great  Britain,  by  the  treaty  of  peace,  of  the  lands  ex- 
tending to  the  Lake  of  the  Woods,  because  not  before  included  in  any  indi- 
vidual State.  Every  member  was  soon  convinced  of  the  absurdity  of  this 
argument,  and  by  a  necessary  implication  established  the  power  of  the  con- 
federated Legislature.  During  the  war,  the  eommander-in -chief  gave  a 
passport  to  a  British  officer,,  to  transmit  clothing  to  the  British  prisoners  at 
Lancaster.  He  accordingly  conveyed  a  very  large  quantity  of  British  goods 
into  Pennsylvania,  for  that  purpose,  which,  being  directly  against  an  express 
law  of  that  Siate,  they  were  seized  and  condemned  by  the  proper  magistrate*. 
On  a  complaint  to  the  Legislature  of  the  State,  they  referred  the  same  to  their 
judicial  officers,  upon  whose  report,  (that  Congress  being  vested  with  the 
power  of  declaring  war,  the  right  of  giving  safe  passports  to  an  enemy,  was 
necessarily  implied,  which  therefore  was  duly  exercised  by  their  commander- 
in-chief,  though  no  express  povyer  was  given  to  him  for  that  purpose,)  the 
Legislature  declared  their  law,  directing  the  condemnation  of  the  goods,  void,. 
ab-mitio,  and  the  judgment  of  condemnation  had  no  effect. 

This  was  also  the  rule  that  governed  this  House,  with  regard  to  the  re- 
movability of  officers  by  the  President,  and  the  authority  given  to  a  council 


CHARTER  OF   1791.  §1 

to  legislate  for  the  Western  territory.  In  fine,  he  concluded  that  it  waa 
universally  understood,  that,  whenever  a  general  power  was  given,  especially 
to  a  supreme  Legislature,  every  necessary  means  to  carry  it  into  execution 
were  necessarily  included.  This  was  the  common  sense  of  mankind,  without 
which  it  would  require  a  multitude  of  volumes  to  contain  the  original  powers 
of  an  increasing  Government,  that  must  necessarily  be  changing  its  relative 
situation  every  year  or  two. 

If  power  was  given  to  raise  an  army,  the  making  provision  for  all  the  neces- 
sary supplies  arid  incident  charges  were  included.  If  a  navy  was  to  be 
formed,  the  manning  and  supplying  the  war-like  stores  are  necessarily  under- 
stood. If  a  power  is  given  to  borrow  money,  a  right  to  mortgage  or  pledge 
the  public  property  to  secure  the  re-payment,  is  understood  to  be  vested  in 
the  borrower.  Take  up  the  present  statute  book,  and  every  page  will  afford 
evidence  of  this  doctrine.  Examine  the  law,  with  regard  to  crimes  and  pun- 
ishments: under  the  power  of  establishing  counts,  we  have  implied  the  power  of 
punishing  the  stealing  and  falsifying  the  records,  and  ascertained  the  punish- 
ment of  perjury,  bribery,  and  extortion.  Under  the  power  of  regulating  trade, 
we  have  accepted  cessions  of  real  estate,  and  built  light  houses,  piers,  &c. 
All  this  is  under  the  doctrine  of  necessary  implication  for  the  public  good,  and 
in  cases  not  so  strong  as  the  Present:  and  on  tne  exercise  of  which  no  gentle- 
man thought  proper  to  start  this  objection. 

This  construction  appears  so  natural  and  necessary,  that  the  good  sense  of 
every  gentleman  on  the  floor  has  hitherto  led  him  to  proceed  on  this  principle, 
ever  since  we  began  to  legislate.  What  principle  of  the  constitution  does  it 
destroy?  It  gives  nothing  lhat  can  affect  the  right  of  any  State  or  citizen. 
Indeed,  it  has  been  said,  that  it  is  exercising  a  high  act  of  power.  He  thought 
it  had  been  shown  to  be  rather  of  the  inferior  kind.  But  allow  the  position, 
and  who  so  proper,  as  the  Legislature  of  the  whole  Union,  to  exercise  such  a 
power,  for  tne  general  welfare?  It  has  also  been  said,  that  this  power  is  a 
mere  conveniency,  tor  the  purpose  of  fiscal  transactions,  but  not  necessary  to 
attain  the  ends  proposed  in  the  constitution.  This  is  denied,  and  at  best  is  a 
mere  matter  of  opinion,  and  must  be  left  to  the  discretion  of  the  Legislature  to 
determine. 

Mr.  Boudinot  said,  he  should  now  conclude  what  he  had  to  say,  had  not 
an  honorable  gentleman  (Mr.  Jackson)  brought  forward  the  observations  of 
ihe  author  of  the  federalist,  2d  volume,  pages  7-2,73,  and  74,  to  show  a  different 
contemporaneous  exposition  of  the  constitution,  and  charge  the  author,  who,  he 
alleged,  was  said  to  be  also  the  author  of  the  present  plan  before  the  House, 
with  a  change  of  sentiment.  As  this  gentleman  is  not  here  to  speak  for  him- 
self, he  ought  to  have  the  next  best  chance,  by  having  what  he  then  wrote 
candidly  attended  to,  especially  as  gentlemen  allow  him  to  be  good  authority. 
Mr.  Boudinot  read  only  part  of  the  73d  page  referred  to  by  Mr.  Jackson,  in  these 
words:  Had  the  convention  attempted  a  positive  enumeration  of  the  powers 
"  necessary  and  proper  for  carrying  their  other  powers  into  effect,  the  attempt 
44  would  have  involved  a  complete  digest  of  laws  on  every  subject  to  which 


that  object,  and  be  often  properly  varied,  whilst  the  object  remains  the 
'*  same."  How  these  sentiments  can  be  said  to  be  a  different  contemporaneous 
exposition,  must  be  left  to  the  House  to  determine.  Mr.  Boudinot  then  beg- 
ged the  indulgence  of  the  House  to  hear  the  same  gentleman,  when  arguing 
expressly  on  that  part  of  the  constitution  now  under  consideration;  and  then 
read  the  pages  144, 5,  and  6,  of  the  first  volume  of  the  Federalist,  which  were  too 
long  to  be  inserted.  He  declared  that,  in  his  opinion,  it  was  impracticable  to 
put  together  language  in  the  same  length,  that  could  more  forcibly  and  point- 
edly elucidate  and  prove  the  construction  contended  for,  in  support  of  the 
bill  on  the  table.  There  remained  yet  but  two  objections,  to  which  Mr.  Bou- 
dinut  would  detain  the  House  any  longer. 


52  BANK  OF  THE  UNITED  STATES. 

The  Gentleman  from  Georgia  (Mr.  Jackson)  had  charged  the  measure  with 
establishing  the  commercial  interest,  to  the  great  injury  of  the  agricultural. 
If  this  was  true,  he  never  would  agree  to  it,  for  he  considered  the  agricultural 
interest,  in  America,  as  its  great  and  sure  dependence.  Mr.  Boudinot  con- 
fessed that,  so  far  from  seeing  these  measures  in  this  paint  of  liglft,  he  could 
not  bring  his  mind  to  comprehend  how  the  commercial  interests  of  a  country 
could  be  promoted  without  greatly  advancing  the  interests  of  agriculture. 
Will  the  farmer  have  any  temptation  to  labor,  if  the  surplus  of  what  he  raises, 
beyond  his  domestic  consumption,  is  to  perish  in  his  barn,  for  want  of  a  mar- 
ket? Can  a  market  be.  obtained  without  the  merchants?  If  commerce  flour- 
ishes, the  merchants  increase,  and,  of  course,  the  demand  for  the  produce  of 
the  land;  but,  if  the  mercantile  interests  fail,  there  is  none  to  export  the  sur- 
plus produced  by  agriculture.  If  the  farmer  should  undertake  to  export  his 
own  produce,  he  could  not  give  his  whole  attention  to  his  affairs;  or,  if  the 
merchant  should  attempt  to  raise  the  grain  he  wanted,  he  could  not  carry  on 
his  merchandise;  the  one  interest  depends  on  the  other;  a  separation  destroys 
both. 

But  the  incapacity  of  the  bank  to  extend  its  influence  to  the  extremes  of 
the  Union,  has  been  argued,  from  the  gentleman  never  haying  seen  a  note  of 
the  present  Bank  of  North  America  in  Georgia;  he  therefore  concludes  that 
bank  has  never  been  of  any  service  to  her  agricultural  interests.  Mr.  Boudi- 
not said  that  he  drew  very  different  conclusions  from  this  fact;  he  supposed 
that,  by  means  of  the  bank,  the  traders  with  Georgia  had  been  enabled  to  send 
her  the  precious  metals,  while  the.  bank  paper  had  answered  their  purposes 
nearer  home,  where  they  circulated  with  undoubted  credit.  He  instanced  a 
case  of  a  Philadelphia  merchant,  who  was  possessed  of  £100  in  gold,  and 
.€100  in  credit,  at  the  bank;  the  merchant  wanted  £100  worth  of  rice,  of  a 
Georgia  planter,  and  the  like  value  of  flour,  of  a  Pennsylvania  farmer.  When 
he  purchased  the  one  of  the  Georgian,  he  could  safely  pay  him  the  whole  in 
gold,  while  he  found  the  Pennsylvania!!  would  as  readily  receive  the  bank 
paper  for  his  flour.  But  had  there  been  no  bank,  he  could  have  purchased  but 
£50  worth  of  each,  and  the  Georgian  and  Pennsylvanian  both  have  gone 
without  a  market  for  the  residue.  In  short,  the  whole  Union  might  be  liken- 
ed to  the  body  and  limbs;  you  cannot  aid  and  comfort  one,  but  the  other  must 
be  likewise  benefitted. 

He  said  it  was,  however,  difficult  and  impracticable  to  show,  that  every 
measure  adopted  by  the  Government  should  have  an  effect  perfectly  equal, 
over  so  extensive  a  territory  as  that  of  the  United  States;  it  was  sufficient, 
if,  upon  the  whole,  the  measures  of  Government,  taken  altogether,  produced 
the  desired  equality. 

The  last  objection  was,  that,  by  adopting  this  bill,  we  exposed  the  measure 
to  be  considered  and  defeated  by  the  judiciary  of  the  United  States,  who  might 
adjudge  it  to  be  contrary  to  the  constitution,  and  thereby  void,  and  not  lend 
their  aid  to  carry  it  into  execution.  This,  he  alleged,  gave  him  no  uneasiness. 
He  was  so  far  from  controverting  this  right  in  me  judiciary,  that  it  was  his 
boast  and  his  confidence.  It  led  him,  he  said,  to  greater  decision  on  all  sub- 
jects of  a  constitutional  nature,  when  he  reflected  that,  if  from  inattention, 
want  of  precision,  or  any  other  defect,  he  should  do  wrong,  there  was  a 
power  in  the  Government  which  could  constitutionally  prevent  the  operation 
of  such  wrong  measure  from  affecting  his  constituents.  He  was  legislating  for 
a  nation,  and  for  thousands  unborn,  and  it  was  the  glory  of  the  constitution 
that  there  was  a  remedy,  even  for  the  failures  of  the  supreme  legislature 
itself. 

Upon  the  whole,  then,  he  said,  that,  on  taking  the  power  in  question  in  any 
point  of  view,  and  giving  the,  constitution  the  fullest  consideration,  under  the 
advantages  of  having  the  objections  placed  in  the  strongest  point  of  light  by 
the  creat  abilities  of  the  gentlemen  in  the  opposition,  he  was  clearly  in  favor 
of  the  bill;  as  to  its  expediency,  there  could  be  little  doubt  on  the  minds  of 
any  gentleman,  and  unless  more  conclusive  arguments  could  be  adduced  to 
show  its  unconstitutionally,  he  should,  in  the  end,  vote  for  the  passing  of  the 
bill. 


CHARTER  OF   1791.  Q$ 

FEBRUARY  5. 

Mr.  SMITH,  of  South  Carolina,  observed,  that  he  considered  it  his  duty  to 
offer  the  reasons  which  should  influence  him  in  giving  his  vote  on  this  occa- 
sion. He  had  wished  amendments  to  the  bill,  as  some  parts  of  it,  he  confess- 
ed, did  not  perfectly  please  him,  but  his  wishes  having  been  overruled,  the 
question  now  is,  whether  the  bill  shall  pass  r  Though  he  came  from  the 
Southward  of  the  Potomac,  the  principle  of  the  bill  met  his  approbation.  It 
would  be  a  deplorable  thing,  said  he,  if  this  Government  should  enact  a  law 
subversive  of  the  constitution,  or  that  so  enlightened  a  body  as  the  Senate  of 
the  United  States  should,  by  so  great  a  majority  as  were  in  favor  of  this  bill, 
pass  a  law  so  hostile  to  the  liberties  of  this  country,  as  the  opposition  to  this 
measure  have  suggested  the  bank  system  to  be;  and  it  would  be  very  extraor 
dinary  if  an  officer  of  this  Government,  who  has  produced  a  performance 
explanatory  of  the  constitution,  of  such  celebrity  as  to  be  resorted  to  as  an 
authority,  should  be  so  inconsistent  with  himself,  as  to  propose  a  law  entirely 
subversive  of  the  principles  laid  down  in  his  able  defence  of  the  constitution. 

He  then  adverted  to  the  objections  drawn  from  that  article  of  the  constitu 
tion,  that  no  preference  shall  be  given  to  one  port  over  another;  he  showed 
that  the  clause  was  inferred  for  a  particular  purpose,  and  could  not  be  cited 
as  a  rule  not  to  be  deviated  from,  as  a  preference  was,  and  must  be,  necessa- 
rily, given  to  one  port  over  another.  He  produced  numerous  instances  in 
point:  in  consequence  of  various  clauses  in  the  revenue  laws,  general  regula- 
tions sometimes  operate  partially;  and  commercial  arrangements,  apparently 
unequal,  produce  the  good  of  the  community  at  large. 

In  reference  to  construing  the  constitution,  he  observed  that  the  present 
moment,  when  the  powers  of  the  Government  were  assailed  from  various 
quarters,  he  conceived  the  most  improper  to  contract  those  powers. 

The  right  to  construe  the  constitution,  he  argued  from  the  principles  ad- 
vanced by  Mi-.  Madison,  in  the  debate  on  the  power  of  removability,  and 
read  sundry  observations  from  Lloyd's  Register,  made  by  that  gentleman, 
corroborative  of  this  sentiment.  Those  arguments,  he  conceived,  applied 
very  aptly  to  the.  present  subjecr. 

Matters  of  a  fiscal  nature  necessarily  devolve  on  the  General  Government, 
and  he  urged,  that  every  power  resulting  from  the  acknowledged  right  of  Con- 
gress to  control  the  finances  of  this  country,  must  be  as  necessarily  implied, 
as  in  the  case  of  the  power  of  removability. 

He  then  alluded  to  the  expediency  of  a  national  bank.  The  Secretary  gave 
notice,  in  his  first  report,  that  this  plan  was  in  contemplation.  Nothing  was 
ever  read  with  greater  avidity,  and,  though  it  is  now  more  than  a  year  since 
this  intimation  was  given,  yet,  no  objections  have  been  ottered  against  it,  either 
by  the  States,  or  by  individuals;  even  the  State  of  North  Carolina  has  not 
mentioned  it.  [rferc.  Mr.  BLOODWORTH  (if  he  was  not  misunderstood) 
informed  Mr.  Smith  that  the  report  had  not  been  seen  by  the  LegisL 
ture  of  North  Carolina.]  Mr.  Smith  said  he  was  sorry  for  it;  and  then  pro- 
ceeded to  notice  some  partial  quotations  made  by  Mr.  Jackson,  from  Dr. 
Smith's  Wealth  of  Nations,  against  bank  systems.  He  said  he  could  have 
wished  the  gentleman  had  been  more  copious  in  his  quotations  from  that  au- 
thor; if  lie  had,  he.  would  have  found  that  that  author  has  fully  demonstrated 
their  utility. 

He  noticed  the  division  of  opinions  on  the  subject  of  a  national  bank,  in  the 
city  of  Philadelphia;  he  supposed  ideas  of  personal  advantage  induced  these 
opposing  sentiments;  he,  however,  thought  this  subject  should  be  taken  up 
utogether  on  general  principles,  and,  even  if  its  immediate  influence  should 


tate  the  management  of  the  finances?  This,  he  thought,  had  been  made  appa- 
rent. This  is  the  opinion  of  the  Secretary  of  the  Treasury,  after  due  and  ma- 
ture consideration  of  the  subject.  He  certainly  enjoya  the  best  mean*  for 


(34  BANK  OF  THE  UNITKD  STATES. 

forming  an  opinion;  he  is  at  the  head  of  the  fiscal  department,  and  deservedly 
enjoys  the  public  confidence;  very  little  has  been  offered  to  disprove  his  sen- 
timents on  this  part  of  the  question,  and  the  inexpediency  of  the  measure 
should  be  clearly  proved  before  the  plan  is  rejected:  for  an  officer  who  deser- 
vedly enjoys  the  public  confidence,  is  entitled  to  the  support  of  the  Legisla- 
ture, in  those  plans  which  are  expedient  and  constitutional. 

Mr.  Smith  mentioned  instances  in  which  Congress  exercised  power  by  im- 
plication, and  observed  that  this  was  necessary  to  the  execution  of  the  duties 
which  devolve  on  the  Government  by  the  constitution.  The  power  to  esta- 
blish a  national  bank  must  reside  in  Congress,  for  no  individual  State  can  ex- 
ercise any  such  power;  the  right  of  no  particular  State,  therefore,  is  infringed 
by  the  institution.  It  had  repeatedly  been  said  that  Philadelphia  would  de- 
rive peculiar  advantages  from  the  Bank  of  the  United  States;  but,  he  observ- 
ed, if  the  present  plan  should  fail,  it  is  a  question  whether  the  stockholders 
of  the  Bank  of  North  America  would  not  derive  greater  advantages  from  the 
necessity,  which,  in  that  case,  Government  would  be  under,  of  resorting  to 
them  for  loans.  The  institution,  as  before  observed,  is  founded  on  general 
principles,  and  will,  undoubtedly,  in  its  operation,  prove  of  general  utility. 

Mr.  STOXE  said,  if,  upon  questions  like  the  present,  he  had  given  pain  to 
members  he  regarded,  they  might  be  assured  the  pain  was  reciprocal.  Let 
us  cherish  mutual  toleration.  We  might  conceive  that  each  pursued  improper 
systems  from  the  purest  motives.  We  differ  in  our  ideas  of  Government,  and 
our  sense  of  the  sacredness  of  the  written  compact.  We  varied  widely  in  our 
opinions  of  the  direction  of  this  Government.  The  great  lesson  of  experi- 
ment would  show  who  was  right;  but  we  are  influenced  in  our  habits  of  think- 
ing by  our  local  situations,  and,  perhaps,  the  distinct  interests  of  the  States 
we  represent.  He  observed,  that,  upon  the  present  occasion,  the  opinions 
respecting  the  constitution  seem  to  be  divided  by  a  geographical  line,  dividing 
the  continent.  Hence,  it  might  be  inferred  that  other  considerations  mixed 
with  the  question;  and  it  had  been  insinuated  that  it  was  warped  by  the  future 
seat  of  Government.  But  other  causes  may  be  assigned  for  the  diversity  of 
sentiment:  the  people  to  the  Eastward  began  earliest  in  favor  of  liberty;  they 
pursued  freedom  into  anarchy;  starting  at  the  precipice  of  confusion,  they  are 
now  vibrating  far  the  other  way.  He  said  that  all  our  taxes  are  paid  by  the 
consumers  and  manufacturers;  those  taxes  are  all  bounties  upon  home  manu- 
factures. The  people  to  the  Eastward  are  the  manufacturers  of  this  country; 
it  was  no  wonder  that  they  should  endeavor  to  strengthen  the  hands  of  a  Go- 
vernment by  which  they  are  so  peculiarly  benefitted. 

It  is  a  fact,  that  the  greatest  part  of  the  continental  debt  has  travelled  east- 
ward of  the  Potomac.  This  law  is  to  raise  the  value  of  the  continental  paper. 
Here,  then,  said  he,  is  the  strong  impulse  of  immediate  interest  in  favor  of  the 
bank.  He  took  notice  of  the  distinction  made  by  the  plan  of  the  bill,  between 
continental  and  State  paper.  The  State  paper,  on  account  of  partial  payments 
of  interest,  still  remained  in  the  respective  States.  But  this  could  not,  by 
the  present  system,  be  subscribed;  so  that  the  Southern  States  were  deprived 
of  the  advantage  that  might  have  been  given  to  the  only  paper  they  have.  But, 
he  said,  if  gentlemen  charge  us  with  defending  the  seat  of  Government,  let 
them  remember  that  this  betrays  consciousness  of  an  attack.  If  they  believe 
that  this  scheme  tends  to  break  the  faith  of  the  Union,  pledged  to  the  Poto- 
mac, it  is  no  wonder  they  suppose  we  oppose  it  upon  that  ground.  He  would 
not  have  mentioned  this  subject,  had  it  not  been  hinted  at.  But  let  the  whole 
of  it  come  forth;  let  gentlemen  consult  their  own  bosoms;  let  the  public  de- 
cide the  truth  of  his  observations.  He  hoped  he  should  not  be  suspected  of 
any  bias;  that,  so  uniform  had  been  his  conduct  upon  all  questions  turning  upon 
principles  similar  to  the  present,  that  every  member  in  the  House,  he  believ- 
ed, had  conjectured  rightly  of  the  side  he  would  take,  before  he  had  uttered 
a  word  upon  the  subject.  When  implication  first  raised  its  head  in  this 
House,  he  started  from  it,  as  a  serpent  which  was  to  sting  and  poison  the 
constitution,  He  felt  in  unison  with  his  country.  The  fears,  the  opinions. 


CHARTER   OF    1/91.  ^5 

*he  jealousies  of  individuals  and  of  States,  had  been  explained  by  a  gentle- 
man from  Virginia;  [Mr.  Madison]  he  should  only  remark,  that  all  those 
who  opposed  the  Government  dreaded  this  doctrine;  those  who  advocated  it 
declared  that  it  could  not  be  resorted  to,  and  all  combined  in  opinion  that  it 
ought  not  to  be  tolerated.  Never  did  any  country  more  completely  unite  in 
any  sentiment,  than  America  in  this:  *4  That  Congress  ought  not  to  exercise, 
by  implication,  powers  not  granted  by  the  constitution."  And  it  is  not 
strange:  for  the  admission  of  this  doctrine  destroys  the  principle  of  your  Go- 
vernment at  a  blow;  it  at  once  breaks  down  every  barrier  which  the  federal 
constitution  had  raised  against  unlimited  legislation.  He  said  that  necessity 
was  the  most  plausible  pretext  for  breaking  the  spirit  of  the  social  compact; 
but  the  people  of  this  country  have  anticipated  that  pretext,-  they  have  said  to 
the  ministers  of  this  country,  "  we  have  given  you  what  we  think  competent 
powers,  but,  if  experience  proves  them  inadequate,  we  will  enlarge  them;  but, 
in  the  mean  time,  dare  not  usurp  those  which  we  have  reserved.  ' 

It  is  agreed,  on  all  hands,  that  the  power  to  incorporate  the  subscribers  to 
a  bank  is  not  expressly  granted;  and  although  gentlemen  have  agreed  that 
it  is  implied;  that  it  is  an  incident;  that  it  is  a  means  for  eft'ectuating  pow- 
ers expressly  granted,,  yet  they  are  not  agreed  as  to  the  particular  power 
to  which  this  is  an  incident.  They  admit  that  the  sweeping  clause  in  the 
constitution  confers  no  additional  power.  But,  if  he  understood  the  gen- 
tlemen, several  of  them  were  of  opinion  that  all  governments,  instituted  for 
certain  ends,  draw  to  them  the  means  of  execution  as  of  common  right.  The 
doctrine  would  make  ours  but  a  short  constitution.  [Here  he  read  the  pre- 
amble] and  then  said,  here  is  your  constitution!  Here  is  your  bill  of  rights! 
Do  these  gentlemen  require  any  thing  more  respecting  the  power  of  Congress, 
than  a  description  of  the  ends  of  Government:1  And  if,  of  right,  they  can 
carry  these  mto  effect,  will  they  regard  the  means,  though  they  be  expressly 
pointed  out?  But,  1  would  ask,  is  there  any  power  under  heaven  which 
could  not  be  exercised  within  the  extensive  limits  of  this  preamble? 

The  convention  might  have  stopped  here,  and  there  was  no  need,  accord- 
ing to  the  doctrine  of  the  gentlemen,  to  point  out  any  of  the  means  for  the 
ends  mentioned  in  the  preamble.  That  portion  of  the  constitution  wh'ch,  by 
all  America,  has  been  thought  so  important,  according  to  their  logic,  would, 
become  a  dead  letter;  but  the  preamble,  in  fair  construction,  is  a  solemn 
compact  that  the  powers  granted  shall  be  made  use  of  to  the  ends  thereby 
specified.  He  then  reprobated  in  pointed  terms  the  latitude  of  the  principles 
premised.  He  said,  that  the  end  of  all  government  is  the  public  good,  and 
if  the  means  were  left  to  legislation,  all  written  compacts  were  nugatory.  He 
observed,  that  die  sober  discretion  of  the  Legislature,  which  in  the  opinions 
of  gentlemen  ought  to  be  permanent,  was  the  very  thing  intended  to  be  curbed 
and  restrained  by  our  constitution. 

He  then  declared  that  our  form  of  government  not  only  pointed  out  the 
ends  of  government,  but  specified  the  means  of  execution.  He  said,  we  may 
make  war — this  would  draw  to  it  the  power  of  raising  an  army  and  navy, 
laying  taxes,  establishing  a  judiciary,  &c.  But  the  spirit  of  the  constitution, 
in  this  respect,  had  been  well  explained  by  Mr  Madison,  and  he  should  not 
recapitulate. 

He  said,  a  gentleman  from  South  Carolina,  [Mr.  SMITH]  had  remarked, 
that  all  our  laws  proceeded  upon  the  principle  of  expediency — that  we  were 
judges  of  that  expediency;  as  soon  as  we  gave  it  as  our  opinion  that  a  thing 
was  expedient,  it  became  constitutional.  What,  then,  said  he.  remains  of  your 
constitution,  except  its  mode  of  organization?  We  may  look  into  it  to  refresh 
our  memories,  respecting  the  times,  places,  and  manner,  of  composing  the  Go- 
vernment; that,  as  to  the  powers  of  Congress,  were  he  of  that  gentleman's 
opinion,  he  would  never  look  into  it  again.  Gentlemen  see  the  difficulties 
ot  their  theories,  and  are  obliged  to  confess  that  these  incidental  powers  ere 
not  easily  defined.  They  rest  in  the  sober  discretion  of  the  Legislature. 

One  gentleman  [Mr.  AMES]  has  said,  no  implication  ought  to  be  made 
n^ainstthe  law  of  nature,  against  rights  acquired,  or  against  powers  pre-occu- 

if 


BANK  or  THE  UNITED  STATES 


pied  by  the  States;  that  it  is  easier  to  restrain  than  to  give  competent  powers* 
of  execution.  Now,  these  notions  are  hostile  to  the  principle  ot  our  Govern- 
ment, which  is  only  a  grant  of  particular  portions  ot  power,  implying  a  nega- 
tive to  all  others.  It  has  been  showr*  that  the  ends  of  government  will  in- 
clude every  thing.  If  gentlemen  are  allowed  to  range,  in  their  sober  discre- 


is  made  to  imply  all  powers.  But,  strange  to  tell,  America  forgot  to  guard 
it,  by  express  negative  provisions.  Is  there  any  difference,  in  effect,,  between 
lodging  general  powers  in  a  government,  and  permitting  the  exercise  of  them 
by  subtle  constructions?  He  said  there  was  a  difference;  in  the  one  case  the 
the  people  fairly  gave  up  their  liberty  and  stood  prepared;  in  the  other,  they 
were  unexpectedly  tricked  out  of  their  constitution. 

The  preceding  remarks,  (he  observed)  showed  how  dangerous  is  the  doc 
trine  of  implication,  and  upon  what  small  data  ingenuity  can  raise  the  most 
dangerous  superstructure.    He  said  he  should  now  take  a  view  of  those  pre- 
cedents in  the  former  and  present  Congress,,  which  are  relied  on  to  justify  the 
present  measure. 

1st.  The  Bank  of  North  America.  Here  he  stated  the  distressful  and  criti- 
cal situation  of  America  at  that  period;  he  remarked  that  it  was  at  the  declen 
eion  of  the  continental  money.  He  showed  that  there  were  no  powers  in 
the  confederation,  to  which  even  (according  to  the  reasoning  of  the  other  side) 
this  povyer  could  be  incidental,  but  what  required  the  vote  ot  nine  States;  that 
the  ordinance  passed  by  a  vote  of  seven  States,  which  showed  that  necessity 
alone  gave  birth  to  that  measure.  He  showed  the  dissimilarity  of  the  situa- 
ation  of  the  former  and  this  Congress^  and  the  difference  in  their  powers,  and 
consequently  in  the  dangers  to  be  apprehended  from  the  encroachment  of 
either^ 

3d.  The  redemption  of  our  prisoners  at  Algiers.  This  comes  within  the 
power  to  regulate  trade.  If,  said  he,  we  are  not  capable  of  redeeming,  by 
the  best  means  in  our  power,  our  citizens,  our  trade  may  be  entirely  ruinedt 
and  hence  the  law  which  shall' be  made  for  their  redemption  would  be  necessary 
and  proper.  But,  by  the  constitution,  the  Executive  may  make  treaties,  these 
may  be  general,  or  for  a  particular  object;  and  the  Legislature  may  effectuate 
them  by  grants  of  money. 

3d.  We  have  bought  certificates  and  not  destroyed  them.  This  they  say 
is  implied  from  the  power  of  paying  the  debts, 

He  asked  if,  before  the  purchase,  the  certificates  were  debts  due  from  the 
United  States?  And  demanded,  if,  by  the  purchase,  they  were  divested  of 
that  quality?  Now  (said  he)  in  my  judgment,  when  a  debt  is  fairly  cancel- 
ed, it  is  as  much  like  a  payment  as  need  pe. 

4th.  We  had  no  rightr  except  by  implication,  to  give  a  salary  to  the  Vice 
President.  He  said  he  had  voted  against  the  salary,  and  had  been  for  a  per 
diem  allowance,  because  he  thought  the  Vice  President  was  viewed  by  the 
constitution  only  as  President  oF  the  Senate.  But  this  example  fails  most 
palpably,  as  Congress,  in  the  compensations,  are  not  confined,  by  the  constitu- 
tion, either  to  a  particular  sum  or  mode  of  payment. 

5th.  Congress  have  made  corporations,  and  exercise  complete  legislation 
in  the  Western  territory.  He  said,  to  answer  this  case  nothing  more  was 
necessary  than  to  read  the  clause  in  the  constitution  which  gave  to  Congress, 
expressly,  the  power  to  make  all  rules  and  regulations  tor  them.  It  seemed 
to  him  as  if  gentlemen  were  inverting  the  order  of  things,  by  making  powers 
where  there  were  none,  and  attempting  to  prove  express  grants  to  be  impli- 
cations. 

6th.  Our  regulations  respecting  freighters  and  owners,  and  between  cap- 
tains and  seamen.  He  had  not  those  regulations  correctly  in  his  memory,  but 
he  believed  them  proper  and  necessary  regulations  of  commerce. 

7th.  It  has  been  said,  we  have  exclusive  jurisdiction  in  places  belonging 
to  Congress  and  within  the  ten  miles  square.  We  could  erect  a  bank  in  either 


CHARTER   OF    1791.  ffi 

of  thes^  places;  its  influence  would  extend  over  the  continent;  the  principle 
tni  which  we  founded  this  power  could  not  be  confined  to  a  particular  time 
or  spot  of  land.  Gentlemen  ridicule  the  idea  that  the  exercise  of  a  pervading 
influence  and  a  general  principle  should  be  limited  by  any  particular  number 
of  years,  or  be  confined  within  a  fort  He  said  the  power  of  exclusive 
legislation  in  those  places  was  expressly  granted,  and,  under  its  influence, 
the  Congress  might  exercise  complete  and  exclusive  legislation,  within  those 
limits;  that  the  power  was  confined  to  places.  But,  if  the  general  powers  of 
this  constitution  are  to  be  governed  by  the  same  rules  of  construction,  and 
we  have  no  regard  to  place,  it  follows  tliat  Congress  can  exercise  exclusive 
legislation  over  this  continent.  He  wa-s  asUmsihed  at  the  doctrine.  It  would 
be  equally  reasonable  to  say  that  France,  because,  within  her  own  dominions, 
and  over  her  own  property,  she  exercised  exclusive  legislation,  that  hence  she 
had  a  right  to  legislate  for  the  world. 

8th.  The  power  of  removal  of  officers  by  the  President  alone.  He  said  it 
was  known  he  had  opposed  that  doctrine.  He  left  it  to  be  defended  by  those 
who  had  voted  for  it.  But  he  hoped  the  gentleman  from  South  Carolina, 
.[Mr.  SMITH]  and  some  other  gentlemen  who  had  opposed  it,  would  review 
the  arguments  they  had  used  upon  that  occasion. 

He  observed,  after  taking  a  view  of  those  precedents,  on  the  danger  of  lay- 
ing down  improper  principles  in  legislation.  How  eagerly  men  grasped  at 
the  slightest  pretexts  for  the  exercise  of  power.  He  shuddered  to  think  what 
a  broad  and  commanding  position  this  bank  will  form  for  farther  encroach- 
ments. 

A  gentleman  from  Massachusetts,  [Mr.  SEDGWICK]  has  said,  that,  when-  , 
ever  a  power  is  granted,  all  the  known  and  usual  means  of  execution  are 
always  implied;  the  idea  (he  said)  had  been    properly  examined  by  [Mr. 
GILES,]  but  he  would  ask  if  incorporating  the  subscribers  to  a  bank  was  the  | 
known  and  usual  means  of  borrowing  money,  especially  when  the  subscriber*  ( 
were  not  obliged  to  loan,  or  of  coliecting  taxes  when  no  taxes  were  levied  on  / 
the  bank? 

But  gentlemen  tell  us,  if  \ye  tie  up  the  constitution  too  tight,  it  will  break;  \ 
if  we  hamper  it,  we  cannot  stir;  if  we  do  not  admit  the  doctrine,  we  cannot  ) 
legislate  at  all.     And  with  a  kind  of  triumph,  they  sav,  that  implication  is  / 
recognised  by  the  constitution  itself,  in  the  clause  wherein  we  have  power  to  ) 
make  all  laws  to  carry,  &c.     He  said   he  was  ready  to  meet  the  gentlemen 
upon  this  ground.     This  clause,  he  said,  was  intended  to  defeat  those  loose 
and  proud  principles  of  legislation  which  had  been  contended  for.    It  was 
meant  to  reduce  legislation  to  some  rule.     In  fine,  it  confined  the  Legislature 
to  those  means  that  were  necessary  and  proper. 

He  said,  it  would  not  be  pretended  that  it  was  necessary  and  proper  for  the 
collection  of  taxes.  Indeed,  one  gentleman  [Mr.  AMES]  had  attempted  to 
show  that  the  payments  in  specie  could  not  be  made,  if,  by  chance,  a  great 
quantity  of  debt  suddenly  accumulated  in  a  particular  place.  But  it  might 
be  remembered  that  this  necessity,  if  it  arrived,  was  created  by  the  Legisla- 
ture, and  that  would  be  strange  reasoning  which  broke  a  good  constitution,  to 
mend  a  bad  law.  No  taxes  are  collected  by  this  bill. 

It  would  not  be  necessary  and  proper,  as  a  mean  of  borrowing  money, 
because,  first,  we  do  not  want  to  borrow  money;  and  if  we  did,  this  law, 
though  it  may  be  the  probable,  it  is  not  the  necessary  mean :  for,  if  it  was  the  in- 
terest of  the  stockholders,  they  might,  and  he  believed  would,  refuse  to  loan.  He 
said  that  the  institution  might  be  defended  upon  more  plausible  grounds,  if 
the  bank  had  been  taxed,  or  if  a  condition  to  loan  money  to  the  public  had 
been  made  part  of  the  plan.  Upon  what  ground,  then,  do  gentlemen  stand? 
They  can  only  say  that  they  have  implied  a  great  ana  substantive  power  in 
Congress,  which  gives  to  the  Government  or  to  individuals  the  influence  of 
15,000,000  dollars,  irrevocably,  for  twenty  years,  with  a  power  of  making  by- 
laws, &c.  because  there  is  a  probability  that  this  institution  may  be  convenient 
and  agreeable  to  the  operations  of  Government.  He  asked,  upon  parallel  prin- 
ciples, what  might  Congress  not  do?  He  said  that  the  gentleman  from  Vir- 
ginia, [Mr.  MADISON]  pursuing  the  doctrine  in  all  the  forms  in  which  it  might 
appear,  had  struck  upon  several  cases  which  were  verypointed;  an  incorpora- 


gg  BANK   OP  THE    UNITED    STATES. 

lion  of  manufacturers  with  exclusive  privileges;  merchants  with  the  same;  a 
national  religion.  This,  a  gentleman  [Mr.  AMES]  had  said  was  unfair  and 
extravagant  reasoning;  and  yef,  in  five  minutes,  the  gentleman's  own  reasoning 
led  him  to  ask,  with  warmth,  it'  Congress  could  not  join  stocks  with  a  company 
to  trade  to  Nootka!  and  he  condescended  to  doubt  it"  the  privileges  given  to 
such  a  company  might  not  be  exclusive.  He  saw  clearly,  himself,  that  his 
theory  led  to  the  latter  conclusion:  for,  if  expediency,  if  convenience,  facility, 
if  fears  of  war,  if  preparations  for  events  which  might  never  happen,  can  justi- 
fy an  incorporation  upon  the  present  plan,  the  same  suggestions,  the  same 
logic,  will  legalize  incorporations,  with  exclusive  privileges.  The  deductions 
of  the  gentleman  from  Virginia  are  sound  and  right,  and  cannot  be  fairly  con- 
troverted. Congress  may  then  do  any  thing.  Nay,  if  the  principles  now 
advocated  are  right,  it  is  the  duty  of  the  Legislature  of  the  Union  to  make  all 
laws,  not  only  those  that  are  necessary  and  proper  to  carry  the  powers  of  the 
Government  into  effect,  but  all  laws  that  are  convenient,  expedient,  and  bene- 
ficial to  the  United  States.  Then,  where  is  your  constitution?  Are  we  not 


is  it?  It  is  found  in  the  sober  discretion  of  the  Legislature;  it  is  registered  in 
the  brains  of  the  majority. 

He  proceeded :  I  say  there  is  no  necessity,  there  is  no  occasion,  for  this 
bank.  The  States  will  institute  banks,  which  will  answer  every  purpose.  But 
a  distrust  of  the  States  is  shown  in  every  movement  of  Congress.  Will  not  this 
plant  distrusts  in  the  States?  Will  you  gain  by  this  contest?  This  scheme 
may  give,  and  I  am  convinced  will  give,  partial  advantages  to  the  States.  In 
the  fair  administration  of  our  Government,  no  partial  advantages  can  be 
given!  But,  by  this  bill,  a  few  stockholders  may  institute  banks  in  particular 
States,  to  their  aggrandizement,  and  the  oppression  of  the  others.  It  will  swal- 
low up  the  State  banks;  it  will  raise  in  this  country  a  moneyed  interest,  at  the 
devotion  of  Government;  it  may  bribe  States  and  individuals.  He  said, 
gentlemen  asked,  who  would  be  offended  or  hurt  by  this  plan?  Have  we 
heard  any  complaint  against  it?  Have  the  newspapers  reprobated  it?  These 
questions  had  no  influence  on  his  mind.  He  said,  it  was  one  of  those  sly  and 
subtle  movements,  which  marched  silently  to  its  object;  the  vices  of  it  were 
at  first  not  palpable  or  obvious;  but,  when  the  people  saw  a  distinction  of 
banks  created;  when  they  viewed,  with  astonishment,  the  train  of  wealth 
which  followed  individuals,  whose  sudden  exaltation  surprised  even  the  pos- 
sessors, they  would  inquire  how  this  all  came  about  They  will  then  examine 
into  the  powers  by  which  these  phenomena  have  arisen,  and  they  will  find, 
they  will  reprobate  the  falsehood  of  the  theories  of  the  present  day. 

He  said  that  gentlemen  had  told  us  of  the  sudden  irruptions  of  enemies. 
When  those  necessities  arrive,  it  is  time  enough  to  make  use  of  them  to  break 
your  constitution.  But  gentlemen  say,  upon  emergencies,  the  bank  will  loan 
money.  We  differ  in  opinion.  I  think  when  we  want  it  most,  the  bank  will 
be  most  unable  and  unwilling  to  lend.  If  we  are  in  prosperity,  we  can  borrow 
money  almost  any  where;  but,  in  adversity,  stockholders  will  avoid  us  with  as 
much  caution  as  any  other  capitalists. 

But  a  gentleman  [Mr.  AMES]  tells  us  not  to  be  alarmed;  the  bank  will  not 
eat  up  liberty.  He  said  he  was  not  afraid;  he  was  not  under  any  apprehension 
that  all  the  little  influence  that  Congress  possessed,  would  destroy  the  great 
spirit  of  American  liberty.  The  body  of  the  People  would  laugh  and  ridi- 
cule any  attempt  to  enslave  them;  but  a  conduct  which  had  that  tendency 
might  arouse  alarming  passions.  He  said  there  existed  at  this  moment  ill 
blood  in  the  United  States,  which,  to  quiet,  he  would  readily  agree  to  enter 
into  a  foreign  war.  America  with  us,  we  might  defy  the  world.  There  was, 
he  said,  but  one  people  he  was  afraid  of  offending:  this  was  America.  He 
was  not  afraid  of  foreign  enemies;  but  the  resentment  of  our  own  country  is 
always  a  subject  of  serious  apprehension.  He  observed,  there  were  other 
parts  of  this  important  and  diffusive  subject  which  he  might  have  touched, 
but  he  had  fatigued  himself  and  the  House. 


CHARTER   OF    1791.  gC) 

Mr.  SMITH,  of  S.  C.  (in  explanation)  said,  as  he  had  been  greatly  misunder- 
stood by  the  gentleman  last  up,  he  wished  to  explain  the  position  he  had  laid 
down. 

He  had  never  been  so  absurd  as  to  contend,  as  the  gentleman  had  stated, 
that  whatever  the  Legislature  thought,  expedient,  was  therefore  constitutional: 
but  he  had  only  argued,  that,  in  cases  where  the  question  was,  whether  a  law 
was  necessary  and  proper  to  carry  a  given  power  into  effect,  the  members  of 
the  Legislature  had  no  other  guide  but  their  own  judgments,  from  which  alone 
they  were  to  determine  whether  the  measure  proposed  was  necessary  and 
proper  to  carry  the  powers  vested  in  Congress  into  full  effect.  If,  in  such 
cases,  it  appeared  to  them,  on  solemn  deliberation,  that  the  measure  was  not 
prohibited  by  any  part  of  the  constitution,  was  not  a  violation  of  the  rights  of 
any  State  or  individual,  and  was  peculiarly  necessary  and  proper  to  carry  into 
operation  certain  essential  powers  of  the  Government,  it  was,  then,  not  only 
justifiable,  on  the  part  of  Congress,  but  it  was  even  their  duty  to  adopt  such 
measure:  that,  nevertheless,  it  was  still  in  the  province  of  the  judiciary  to  annul 
the  law,  if  it  should  be  by  them  deemed  not  to  result  by  fair  construction  from 
the  potters  vested  by  the  Constitution. 

FEBRUARY  7. 

Mr.  GILES.  In  the  course  of  discussing  the  present  important  question,  it 
has  been  several  times  insinuated  that  local  motives,  ami  not  a  candid  and 
patriotic  investigation  of  the  subject,  upon  its  merits,  have  given  rise  to  the 
difference  of  opinion  which  has  been  heretofore  manifested  in  this  House.  I 
shall  not  examine  the  truth  of  this  observation,  but  merely  remark,  that  the 
causes  which  may  have  produced  the  arguments  against  the  proposed  measure, 
whatever  they  be,  can  neither  add  to,  or  take  from,  their  merit  and  influence; 
and,  of  course,  the  insinuations  might  have  been  spared,  without  injury  to  the 
subject;  but,  so  far  as  the  observation  may  have  been  intended  to  myself,  I  can 
truly  say,  that,  if  a  bias  were  to  influence  my  conduct,  it  would  rather  direct 
it  to  favor,  than  to  oppose  the  proposed  measure.  This  bias  would  arise  from 
two  causes:  the  one,  from  the  respect  which  I  entertain  for  the  judgments  of 
the  majority  who  advocated  the  measure;  the  other,  of  a  more  serious  nature- 
I  have  observed,  with  regret,  a  radical  difference  of  opinion  between  gentlemen 
from  the  Eastern  and  Southern  States,  upon  great  governmental  questions,  and 
have  been  led  to  conclude  that  the  operation  of  the  cause  alone  might  cast 
ominous  conjecture  on  the  promised  success  of  this  much  valued  Government. 
Mutual  concessions  appear  to  be  necessary  to  obviate  this  effect;  and  I  have 
always  been  pleased  in  manifesting  my  disposition  to  make  advances;  but,  from 
the  most  careful  view  of  the  arguments  in  favor  of  the  proposed  measure,  con- 
sidered under  this  impression,  they  do  not  seem  to  me  sufficient  to  establish 
the  propriety  of  its  adoption,  arid  I  am  therefore  impelled,  by  the  joint  in- 
fluence of  duty  and  opinion,  to  be  one  in  the  opposition. 

A  gentleman  from  Massachusetts  (Mr.  AMES)  prefaced  his  observations  with 
this  remark:  that  it  was  easier  to  point  out  defects,  and  raise  objections,  to  any 
proposed  system,  than  to  defend  it  from  objections,  and  prove  an  affirmative 
propriety;  and  warned  the  House  against  the  effects  of  arguments  of  this  na- 
ture, urged  in  opposition  to  the  measure  now  under  consideration.  I  agree 
with  the  gentleman  in  this  idea  generally,  but  we  should  reflect,  that,  in  the 
present  case,  the  address  of  the  arguments  in  favor  of  the  measure  is  made 
to  one  of  the  strongest  affections  in  the  human  mind— the  love  of  dominion; 
and  hence  we  may  justly  conclude  that  they  will  be  received  and  relished  with 
their  full  and  unabated  influence.  This  reflection  appears  to  me  to  be  at  least 
a  counterpoise  to  that  remark. 

The  advocates  of  this  bill  have  been  called  on.  and  I  conceive  with  propri- 
ety, to  show  its  constitutionality  and  expediency,  both  of  which  have  been 
doubted  by  those  of  the  opposition.  In  support  of  the  first  position  a  multitude 
of  arguments  have  been  adduced,  all  of  which  maybe  reducible  to  the  follow- 
ing heads,  such  as  are  drawn  from  the  constitution  itself:  From  the  incident- 
ality  of  this  authority  to  the  mere  creation  and  existence  of  Government; 


70  RANK   OF   THE   UNITED    STATES. 

from  the  expediency  of  (he  measure  itself;  and  from  the  precedents  of  Con- 
gress; to  which  may  be  added  a  similar  exercise  of  authority  by  Congress, 
under  the  former  confederation. 

Observations  arising  from  the  constitution  itself,  were  of  tvvo  kinds:  The 
right  of  exercising  this  authority  is  either  expressed  in  the  constitution,  or  de- 
ducible  from  it  by  necessary  implication.  One  gentleman  only,  from  Massa- 
chusetts,(Mr.  SEDGWICK>  has  ventured  to  assert,  that,  discarding  the  doctrine 
of  implication,  he  could  shew  that  the  right  to  exercise  the  authority  contend- 
ed for  was  expressly  contained  in  the  constitution.  This,  I  presume,  must 
have  been  a  mistake  in  language;  because  the  difference  between  an  express 
and  an  implied  authority  appears  to  consist  in  this:  in  the  one  case,  the  natu- 
ral import  of  the  words  used,  in  granting  the  authority,  would,  in  themselves, 
convey  a  complete  idea  to  the  mind,  of  the  authority  granted,  without  the  aid 
of  argument  or  deduction :  in  the  other,  to  convey  a  complete  idea  to  the  mind, 
the  aid  of  argument  and  deduction  is  found*  necessary  to  the  usual  import  of 
the  words  used;  and  that  gentleman  proceeded  with  a  labored  argument  to 
prove,  that  the  authority  was  expressly  granted,  which  would  have  been  totally 
useless  if  his  assertion  nad  been  just. 

[Mr.  SEDowicKrose  to  explain.  He  never  conceived  the  authority  granted 
by  the  express  words  of  the  constitution;  but  absolutely  by  necessary  implica- 
tion from  different  parts  of  it.  ] 

Mr.  GILES  resumed.  I  shall  not  contend  as  to  the  assertion,  but  shall  pro- 
ceed to  consider  the  arguments  in  favor  of  the  measure,  on  the  doctrine  of 
implication,  which,  indeed,  are  those  only  which  deserve  consideration. 

In  doing  this,  I  shall  consider  the  authority  contended  for,  to  apply  to  that 
of  granting  charters  of  incorporation  in  general:  for  I  do  not  recollect  any 
circumstance,  and  I  believe  none  has  been  pretended,  which  could  vary  this 
case  from  the  general  exercise  of  that  authority.  To  establish  the  affirmative 
of  this  proposition,  arguments  have  been  drawn  from  several  parts  of  the  con- 
stitution; the  context  has  been  resorted  to:  We,  the  people  of  the  United 
States,  in  order  to  form  a  more  perfect  union,  establish  justice,  ensure  domes- 
tic tranquillity,  provide  for  the  common  defence,  promote  the  general  welfare, 
and  secure  the  blessings  of  liberty  to  ourselves  and  our  posterity,  $c.  It 
has  been  remarked,  that  here  the  ends  for  which  the  Government  was  created 
are  clearly  pointed  out.  The  means  to  produce  the  ends  are  left  to  the  choice 
of  the  Legislature,  and  the  incorporation  of  a  bank  is  one  necessary  means  to 
produce  these  general  ends.  It  may  be  observed,  in  reply,  that  the  context 
contemplates  every  general  object  of  Government  whatever;  and,  if  this  rea- 
soning were  to  be  conclusive,  every  object  of  Government  would  be  within 
the  authority  of  Congress,  and  the  detail  of  the  constitution  would  have  been 
wholly  unnecessary,  farther  than  to  designate  the  several  branches  of  the  Go- 
vernment which  were  to  be  entrusted  with  this  unlimited,  discretionary 
choice  of  means,  to  produce  these  specified  ends.  The  same  reasoning  would 
apply  as  forcibly  to  every  clause  in  the  constitution,  restraining  the  authority 
of  Congress,  as  to  the  present  case,  or  to  any  other  one  in  which  the  constitu- 
tion is" silent.  The  only  candid  construction,  arising  from  the  context,  ap- 
pears to  me  to  be  this:  it  is  designed,  and  it  is  the  known  office  of  every  mem- 
ber to  point  out  the  great  objects  proposed  to  be  answered  by  the  subsequent 
regulations,  of  which  the  constitution  is  composed.  These  regulations  contain 
the  means  by  which  these  objects  are  presumed  to  be  best  answered.  These 
means  consist  in  a  proper  distribution  of  all  governmental  rights  between  the 
Government  of  the  United  States  and  the  several  State  Government!,  and  in 
fixing  limits  to  the  exercise  of  all  authorities  granted  to  the  Government  of  the 
United  States.  The  context,  therefore,  gives  no  authority  whatever,  but  only 
contemplates  the  ends  for  which  certain  authorities  are  subsequently  given. 
Arguments  drawn  from  this  source  appear  to  be  ineffectual  in  themselves,  and 
the  reliance  of  gentlemen  upon  them  indicates  a  suspicion  and  distrust  of  such 
as  may  be  drawn  from  other  parts  of  the  constitution.  The  advocates  of  the 
bill  have  turned  away  from  this  context,  and  have  applied  to  the  body  of  the 
constitution  in  search  of  arguments.  They  have  fixed  upon  the  following 


CHARTER    OF    1791.  7J 

clauses,  to  all  or  some  one  of  which,  they  assert,  the  authority  contended  for 
is  clearly  incidental:  The  right  to  lay  and  collect  taxes,  &c.  &c.;  to  provide 
for  the  common  defence  and  general  welfare,  &c.;  to  borrow  money,  &c:;  to 
regulate  commerce  with  foreign  nations,  &c.  The  bill  contemplates  neither 
the  laying  nor  collecting  taxes;  and,  of  course,  it  cannot  be  included  in  that 
clause.  Indeed,  it  is  not  pretended,  by  the  bill  itself,  to  be  at  all  necessary  to 
produce  either  of  those  ends;  the  farthest  the  ide:\  is  carried  in  the  bill,  is, 
that  it  will  tend  to  give  a  facility  to  the  collection.  The  terms  common  defence 
and  general  welfare  con  tarn  no  grant  of  any  specific  authority,  and  can  relate 
to  such  only  as  are  particularly  enumerated  and  specified.  7o  borrow  money. 
Gentlemen  have  relied  much  upon  this  clause.  Their  reasoning  is,  that  a  right 
to  incorporate  a  bank  is  incidental  to  that  of  borrowing  money,  because  it  cre- 
ates the  ability  to  lend,  which  is  necessary  to  effectuate  the  right  to  borrow. 
I  am  at  a  loss  to  discover  one  single  relation  between  the  right  to  borrow  and 
the  right  to  create  the  ability  to  lend,  which  is  necessary  to  exist  between 
principal  and  incident.  It  appears  to  me  that  the  incidental  authority  is  para- 
mount to  the  principal;  for  the  right  of  creating  the  ability  to  lend  is  greater 
than  that  of  borrowing  from  a  previously  existing  ability.  I  should  therefore 
rather  conclude,  that  the  right  to  borrow,  if  there  be  a  connexion  at  all,  would 
be  incidental  to  the  right  to  grant  charters  ot  incorporation,  than  the  reverse  of 
that  proposition,  which  is  the  doctrine  contended  for  by  the  advocates  of  this 
measure.  The  same  reasoning  which  would  establish  a  right  to  create  the 
ability  to  lend,  would  apply  more  strongly  to  enforce  the  will,  after  the  ability 
be  created:  because  the  creator  would  have  a  claim  of  gratitude,  at  least,  upon 
the  created  ability,  which,  if  withheld,  perhaps  with  justice,  might  be  insist- 
ed on. 

To  regulate  commerce  with  foreign  nations.  This  is,  by  no  means,  a  satis- 
factory ground  for  the  assumption  of  this  authority:  for,  if  it  be  deemed  a 
commercial  regulation,  there  is  a  clause  in  the  constitution  which  would  abso- 
lutely inhibit  its  exercise.  I  allude  to  that  clause  which  provides  that  no  pre- 
ference shall  be  given  by  any  regulation  of  commerce  or  revenue,  to  the  ports 
of  one  State  over  those  of  another;  and  it  seems  to  be  admitted  that  one  prin- 
cipal effect  to  be  produced  by  the  operation  of  this  measure  will  be,  to  give  a 
decided  commercial  preference  to  this  port  [Philadelphia]  over  every  other 
in  the  United  States. 

Gentlemen,  finding  it  difficult  to  show  that  necessary  relation  and  intimate 
connexion  between  the  authority  contended  for,  and  any  one  of  the  specified 
authorities  before  mentioned,  which  would  be  essential  to  the  establishment 
of  their  doctrine,  have  referred  to  what  has  been  generally  called  the  sweep- 
ing clause,  and  have  made  deductions  from  the  terms  necessary  and  proper. 
They  have  observed,  that  certain  specified  authorities  being  granted,  all  otfiers 
necessary  to  their^execution  follow,  without  any  particular  specification.  This 
observation  may,  in  general,  be  true;  but  its  fallacy  here  consists  in  its  appli- 
cation to  this  particular  case.  It  cannot  be  applied  until  the  exercise  ot  this 
authority  be  proved  to  be  necessarily  connected  with  some  one  of  the  pre- 
viously^ enume  rated  authorities:  and  here  the  argument,  as  well  as  the  tact, 
fails.  The  authority  contended  for  seems  to  me  to  be  a  distinct  substantive 
branch  of  legislation,  and  perhaps  paramount  to  any  one  of  the  previously 
enumerated  authorities,  and  should  therefore  not  be  usurped  as  an  incidental 
subaltern  authority. 

I  am  confirmed  in  this  opinion  from  the  indistinct,  confused  conceptions 
of  gentlemen  who  advocate  the  measure.  They  rely  upon  the  incidentally  of 
this  authority,  to  someone  of  those  particularly  specified,  and  yet  have  applied 
it  as  an  incident  to  several  distinct,  unconnected  subjects  of  legislation;  and 
thus,  distrusting  their  own  conclusions,  or  as  if  the  inquiry  would  be  too  trou- 
blesome or  minute,  they  leave  this  ground,  and  assert  that  it  is  incidental  to 
the  result  of  the  whole  combined  specified  authorities.  Gentlemen  must, 
therefore,  view  this  right  through  different  optics,  at  different  times:  or,  what 
I  ratherbelieye  to  be  the  fact,  they  have  no  distinct  view  of  it  at  all— the  right 
having  no  existence. 


72  BANK    OF   THE    UNITED    STATES. 

A  gentleman  from  Massachusetts.  (Mr.  SKDGWICK)  finding  the  usual  import 
of  the  terms  used  in  the  constitution  to  be  rather  unfavorable  to  the  doctrines 
advanced  by  him,  has  favored  us  with  a  new  exposition  of  the  word  necessary. 
He  says  that  necessary*  as  applicable  to  a  mean  to  produce  an  end,  should  be 
construed  so  as  to  produce  tiie  greatest  possible  quantum  of  public  utility.  I 
have  been  taught  to  conceive  that  the  true  exposition  of  a  necessary  mean  to 
produce  a  given  end,  was  that  mean  without  which  the  end  could  not  be  pro- 
duced. 

The  gentleman'sreasoning,  however,  if  pursued,  will  be  found  to  teem  with 
dangerous  effects,  and  would  justify  the  assumption  of  any  given  authority 
whatever.  Terms  are  to  be  so  construed  as  to  produce  the  greatest  degree  of 

public  utility^    " 

utility,  when 
measure  may 

These  deductions  would  suborn  the  constitution  itself,  ami  blot  out  the  great 
distinguishing  characteristic  of  the  free  constitution  of  America,  as  compared 
with  the  despotic  Governments  of  Europe,  which  consists  in  having  the  boun- 
daries of  Governmental  authority  clearly  marked  out  and  ascertained.  The 
exclusive  jurisdiction  over  ten  miles  square  has  been  adverted  to,  by  one  gen- 
tleman, (Mr.  AMES)  as  a  specified  authority,  to  which  the  one  contended  for 
is  suggested  to  be  incidental.  He  has  reasoned  in  this  manner:  Congress  pos- 
sesses jurisdiction  over  ten  miles  square,  &c.  Congress  may,  therefore,  estab- 
lish a  bank  within  the  ten  miles  square;  and,  as  principle  is  not  applicable  to 
place.  Congress  may  exercise  the  same  authority  any  where  else.  This  seems 
to  me  to  be  an  ingenious  improvement  upon  sophistical  deduction.  The  gen- 
tleman, however,  should  have  reflected,  that  me  ground  upon  which  he  built 
the  right  to  exercise  this  authority,  was  that  of  exclusive  jurisdiction,  and,  to 
extend  the  principle,  it  is  necessary  to  extend  the  right  of  exclusive  jurisdic- 
tion: without  this,  the  basis  of  his  argument  fails,  and  the  superstructure, 
however  beautified,  must  follow,  for  the  principle,  if  at  all  deducible  from 
that  source,  is  expresely  confined  to  place,  and  cannot  operate  beyond  it. 

1  shall  now  consider  the  second  resource  whence  the  constitutional  right 
of  exercising  the  proposed  authority  is  derived;  its  incidentally  to  the  mere 
creation  and  existence  of  Government.    It  has  been  observed  that,  in  all 
governments,  there  are  certain  rights  tacitly  granted,  and  certain  other  rights 
retained;  that  it  is  impossible,  in  framing  a  constitution,  to  enumerate  every  mi- 
nute governmental  right,  aw1,  that  sucn  an  attempt  would  be  chimerical  and 
vain:   and,  hence,  the  incidentality  of  this  authority  to  the  mere  existence  of 
government  is  inferred.  These  observations  seem  to  me  to  apply  to  a  govern- 
ment growing  out  of  a  state  of  society,  and  not  in  a  government  composed  of 
chartered  rights  from  previously  existing  governments,  or  the  people  of  those 
governments.     I  have  been  taught  to  consider  this  as  a  federal,  not  as  a  con- 
solidated government,  and  am  not  prepared  or  disposed,  ai  present,  to  relin- 
quish that  idea.    A  gentleman  from  New  York,  (Mr.  LAWRENCE)  has  re- 
marked that  the  government  is  consolidated  quo  ad  the  powers  granted,  and, 
of  course,  quoad  their  incidents;  but  he  should  first  have  shown  that  the  au- 
thority contended  for  is  one  of  those  granted,  or  incidental  to  some  of  them, 
before  the  application  can  be  made;  the  observation  can  have  no  tendency 
to  establish  either  of  those  positions.    What  effect  would  this  doctrine,  if  ad- 
mitted, have  upon  the  State  governments?    And  how  would  it  be  relished  by 
them?    Their  dignity  and  consequence  will  not  only  be  prostrated  by  it,  but 
their  very  existence  radically  subverted.    A  third  resource  of  deducing  this 
constitutional  authority  has  been  resorted  to — the  expediency  of  the  proposed 
measure  itself.     I  presume  the  great  object  of  the  constitution  was  to  distri- 
bute all  governmental  rights  between  the  several  State  governments  and  the 
Government  of  the  United  States;  the  expediency,  therefore,  of  the  exercise 
of  all  the  constitutional  rights,  as  they  relate  to  State  or  General  Government, 
is  properly  contemplated  and  decided  by  the  constitution,  and  not  by  the 
governments  amongst  which  the  distribution  is  made.      A  gentleman  from 
South  Carolina  (Mr.  SMITH)  has  said,  that  the  expediency  and  constitution- 


CHARTER   OF   1791.  73 

ality  of  the  proposed  measure  cannot  be  considered  separately,  because  the 
constitutionality  grows  out  of  the  expediency:  this  is  but  candidly  unveiling 
the  subject  of  that  sophistical  mask  which  has  been  ingeniously  thrown  over 
it  by  some  gentlemen:  for  all  the  arguments  adduced  in  favor  of  the  measure, 
from  whatever  source  they  arise,  if  pursued,  will  be  found  to  rush  into  the 
great  one  of  expediency,  to  bear  down  all  constitutional  provisions,  and  to 
end  themselves  in  the  unlimited  ocean  of  despotism. 

Several  gentlemen  have  said,  that  this  authority  may  be  safely  exercised, 
since  it  does  not  interfere  with  the  rights  of  States  or  individuals.  I  think 
this  assertion  not  very  correct;  if  the  States  be  constitutionally  entitled  to 
the  exercise  of  this  authority,  it  is  an  intrusion  on  their  rights  to  do  an  act 
which  would  eventually  destrov  or  impede  the  freest  exercise  of  that  autho- 
rity: for  it  is  totally  immaterial  whether  the  effect  be  produced  by  the  opera- 
tion of  this  or  by  an  inhibition  in  express  terms — the  States  may  not  only  in- 
corporate banks,  but  may,  of  right,  prohibit  the  circulation  of  bank  paper 
within  their  respective  limits;  the  act,  therefore,  if  it  be  intended  to  have  an 
effectual  operation,  will  certainly  infringe  this  right,  or  exist  at  the  mercy  of  the 
State  Governments.  This  reasoning,  however,  places  the  subject  in  another 
point  of  view,  a  little  singular;  it  contemplates  the  authority  contended  for  as 
vacant  ground,  and  justifies  the  tenure  by  the  mere  title  of  occupancy.  In 
almost  all  the  remarks  in  favor  of  the  measure,  gentlemen  seem  to  have  for- 
gotten the  peculiar  nature  of  this  Government:  it  being  composed  of  mere 
chartered  authorities,  all  authority  not  contained  within  the  charter,  would, 
from  the  nature  of  the  grant,  have  been  retained  to  the  granting  party,  and  I 
will  venture  to  assert  that  this  opinion  was  asine  quanon  of  the  adoption  and 
existence  of  this  Government;  but,  if  this  opinion  had  been  doubtful,  Congress 
themselves  have  made  an  express  declaration  in  favor  of  this  construction,  in  the 
proposed  amendments  to  the  constitution.  Gentlemen  have  inferred  a  consti- 
tutional right  to  exercise  the  authority  contended  for,  from  a  fourth  resource — 
the  former  usages  and  habits  of  Congress;  in  affirmance  of  this  argument, 
several  acts  of  Congress  have  been  referred  to,  the  power  of  removal  from 
office,  the  government  of  the  Western  territory,  the  cession  from  North  Caro- 
lina, the  purchase  of  West  Point,  &c.  &c.  I  shall  not  examine  into  the  pro- 
propriety  of  those  several  acts,  though  I  conceive  it  would  not  be  difficult  to 
show  that  they  differ  materially,  upon  constitutional  grounds,  from  the  one 
now  proposed;  I  slyill  only  remark,  that,  if  Congress  have  heretofore  been  in 
the  usage  and  habit  of  disregarding  and  violating  the  constitution,  it  is  high 
time  that  that  habit  and^sage  were  corrected:  I  hope  and  trust  that  the  People 
of  the  United  States  will  not  tamely  see  the  only  security  of  their  rights  and 
liberties  invaded  and  violated,  but  also  see  one  violation  of  it,  with  impunity, 
boldly  urged  as  an  argument  to  justify  another. 

An  instance  of  a  similar  exercise  of  authority  by  the  Congress  which  ex- 
isted under  the  former  confederation,  has  been  mentioned  in  favor  of  its  ex- 
ercise by  the  present  Congress.  The  argument  has  been,  that,  as  the  powers 
of  the  present  Congress  are  greater  than  those  of  the  former  Congress,  and 
the  former  were  competent  to  the  exercise  of  this  right,  the  present  must  be 
more  so.  It  is  to  be  remarked  that  that  act  was  the  child  of  necessity,  and 
Congress  doubted  its  legitimacy,  and  the  act  itself  was  never  confirmed  by  a 
judicial  decision;  and,  it  should  be  also  remarked,  that  the  same  Congress 
did  not  pretend  to  profess  the  right  to  punish  those  who  should  counterfeit  the 
paper  of  the  bank,  and  recommended  it  to  the  States  to  confirm  the  act  which 
they  had  done,  and  to  pass  laws  for  the  purpose  of  punishing  those  who  should 
counterfeit  the  paper;  and  it  is  a  little  remarkable  that  this  circumstance,  which 
is  one  of  the  most  essential  to  the  existence  and  operation  of  this  act,  is  with- 
held from  our  view.  But,  as  I  think  arguments  from  this  source  wholly  foreign 
to  the  subject,  I  shall  make  no  other  remark  upon  them.  I  shall  now  sug- 

fest  a  few  observations  respecting  the  expediency  of  the  proposed  measure, 
n  doing  this,  I  shall  not  say  any  thing  as  to  the  utility  of   banks  in  general, 
nor  as  to  the  effects  of  the  banks  of  England,'Scotland,  Holland,  &c.  &c.  I  pos- 
sess not  sufficient  practical  or  theoretical  knowledge  to  justify  the  inquiry.     I 
10 


74  BANK   OF    THE   UNITED    STATES. 

shall  only  paint  out  a  few  circumstances,  which  are  peculiarly  attached  to  the 
Government  we  are  now  administering,  which  might  vary  the  application  of 
general  rules  drawn  from  the  governments  of  a  different  nature,  and  which  pos- 
sess the  unquestioned  right  of  granting  charters  of  incorporation. 

In  the  first  place,  the  right  of  exercising  that  authority,  by  this  Government, 
is  at  least  problematical ;  it  is  no  where  granted  in  express  terms:  the  Legisla- 
ture, therefore,  can  have  no  competent  security  against  the  judicial  decision, 
but  a  dependent  or  a  corrupt  court.  I  presume  that  a  law  to  punish  with 
death  those  who  counterfeit  the  paper  emitted  by  the  bank,  will  be  consequent 
upon  the  existence  of  this  act;  hence  a  judicial  decision  will  probably  be  had 
of  the  most  serious  and  awful  nature.  The  life  of  an  individual  at  stake  on 
one  hand:  an  improvident  act  of  the  Government  on  the  other.  A  distrust, 
arising  from  this  cause,  will  forever  keep  the  bank  in  jeopardy;  and  the  very 
first  trial  of  this  nature  will  probably  subject  the  bank  to  a  run  which  it  will 
be  unable  to  stand;  for  all  stockholders  will  require  the  greatest  possible  secu- 
rity for  their  money,  and  distrust  of  such  an  institution  will  be  destruction. 
This  observation  seems  to  me  to  have  a  peculiar  force,  from  the  great  propor- 
tion of  paper  to  that  of  gold  and  silver,  upon  which  the  bank  is  proposed  to  be 
founded.  The  peculiar  relation  between  the  General  and  State  Governments 
will  naturally  produce  a  contest  for  governmental  rights,  until  long  experience 
shall  settle  the  present  boundaries  between  them.  The  present  measure  ap- 
pears to  me  to  be  an  unprovoked  advance  in  this  scramble  for  authority,  and 
a  mere  experiment  how  far  we  may  proceed  without  involving  the  opposition 
of  the  State  Governments.  It  should  be  remarked,  that  this  Government  is  in 
its  childhood;  it  is  therefore  unfitted  for  such  bold  and  manly  enterprises,  and 
policy  would  dictate  that  it  should  wait  at  least,  until  it  may  have  become 
more  matured  or  invigorated.  Two  modes  of  administering  this  Government 
present  themselves:  the  one,  with  mildness  and  moderation,  by  keeping  within 
the  known  boundaries  of  the  constitution:  the  other,  by  the  creation  and  opera- 
tion of  fiscal  mechanism.  The  first  will  ensure  us  the  affections  of  the  People, 
the  only  natural  and  substantial  basis  of  republican  government;  the  other 
will  arise  and  exist  in  oppression  and  injustice — will  increase  the  previously  ex- 
isting jealousies  of  the  People,  and  must  be  ultimately  discarded,  or  bring  about 
a  radical  change  in  the  nature  of  our  Government.  Having  suggested  these  ob- 
servations upon  the  measure  in  general,  I  shall  now  proceed  to  point  out  a 
few  objections  to  the  detail  of  the  bill.  I  think  the  authority  given  to  the  bank, 
to  purchase  and  hold  lands,  objectionable.  In  the  first  place,  I  doubted  the  con- 
stitutional right  of  Congress  to  invest  such  an  authority:  the  lands  within  the 
United  States  are  holden  of  the  individual  States,  and  not  of  the  United  States, 
and  that  tenure  appears  to  me  to  be  the  true  ground  upon  which  the  right  to 
exercise  that  authority  grows.  I  believe  it  is  admitted,  that,  although  Congress 
may  naturalize  a  foreigner,  that  they  cannot  authorize  him  to  purchase  lands. 
And  I  think  the  case  at  least  as  strong,  when  they  first  create  an  artificial 
person,  and  then  invest  the  authority;  besides,  if  we  have  reference  to  the  ex- 
perience of  other  countries,  we  shall  find  it  dangerous  to  allow  incorporated 
bodies  to  hold  lands  at  all.  The  exercise  of  that  right  produced  great  op- 
pression in  England;  and  nothing  but  the  masterly  activity  of  an  absolute 
frince  could  apply  a  competent  remedy.  A  gentleman  from  Massachusetts 
Mr.  SEDGWICK]  has  denied  that  the  bank  is  invested  with  this  right.  It  is 
true,  it  is  confined  to  the  mode  of  purchasing  by  mortgage,  but  that  is  the 
most  effectual  mode  of  purchasing,  and  the  most  ruinous  to  the  landholder. 

I  will  merely  mention  one  other  objection  without  a  comment.  The  au- 
thority given  to  make  laws  not  contrary  to  law  or  its  own  constitution;  but 
the  most  objectionable  clause,  is  that  which  limits  its  duration,  and  pledges 
the  faith  of  the  United  States  that  no  other  bank  shall  be  established  in  the 
meantime.  However  dangerous  and  offensive  the  present  measure  might 
prove  in  its  operation,  and  whatever  may  be  the  utility  and  advantage  in  any 
other  scheme  of  banking,  which  experience  may  suggest,  such  a  stipulation  can  • 
not  be  justified  but  from  the  most  pointed  necessity,  and  from  the  maturest 
deliberation,  When  I  search  for  the  necessity  of  this  measure,  it  escapes 


CHARTER   OF    17$  1.  75 

vne;  it  is  not  pretended  in  the  bill  itself:  the  chief  stimulus  which  I  can  dis- 
cover to  the  existence  of  this  measure,  is,  to  give  artificial  impulse  to  the  value 
of  stock.  This  is  not  a  sufficient  justification.  The  subject  has  not  been 
sufficiently  considered,  and  I  therefore  hope  it  may  be  postponed  to  some  fu- 
ture session  of  Congress.  Many  evils  may  be  avoided  by  such  a  conduct;  none 
can  result  from  it, 

Mr.  GERRY  said  he  should  principally  confine  himself  to  the  objections  of 
the  gentleman  first  up,  from  Virginia,  [Mr.  MADISON]  not  from  a  disrespect 
to  the  observations  of  other  gentlemen  in  the  opposition,  but  because  he  con- 
sidered their  arguments  as  grafts  on  the  original  stock  of  those  urged  by  the 
gentleman  alluded  to,-  and,  if  the  trunk  fall,  its  appendages  must  fall  also. 

The  objects  of  the  bill,  he  said,  were  to  render  the  fiscal  administration 
successful,;  to  give  facility  to  loans,  on  sudden  emergencies;  and  to  benefit 
trade  and  industry  generally;  and  that  these  were  objects  of  high  importance, 
had  not  been  denied,  neither  had  it  been  asserted  that  they  ought  not,  if  possi- 
ble, to  be  attained. 

It  is  objected,  however,  that  the  mode  proposed  by  the  bill  is  vnconslitu-  \ 
tiomil,  and  the  bill  itself  defective. 

The  mode  proposed  is  a  national  bank;  to  establish  which,  he  thought  Con- 
gress were  as  competent  as  either  House  were  to  adjourn  from  day  to  day. 

It  is  said  that  Congress  have  no  power  relating  to  this  subject,  except  what 
is  contained  in  the  clauses  for  laying  and  collecting  taxes,  imposts,  excises, 
&c.;  fur  borrowing  money,  and  for  making  all  laws  necessary  and  proper  for 
carrying  these  powers  into  effect;  and  that  these  do  not  authorize  the  esta- 
blishment of  a  national  bank. 

To  ascertain  thi*,  the  gentleman  from  Virginia  proposes  a  candid  interpre- 
tation of  the  constitution,  which  we  shall  agree  to,  and  he  offers  to  assist  us 
with  his  rules  of  interpretation:  for  his  good  intentions  in  doing  which,  we 
give  him  full  credit;  but,  as  he  acknowledges  that  he  has  been  long  decided 
against  the  authority  of  Congress  to  establish  a  bank,  and  is  therefore  prej?*- 
diced  against  the  measure;  as  his  rules,  being  made  for  the  occasion,  are  the 
result  of  his  interpretation,  and  not  his  interpretation  of  the  rules;  as  they 
are  not  sanctioned  by  law  exposition,  or  approved  by  experienced  judges  of 
the  law;  they  cannot  be  considered  as  a  criterion  for  regulating  the  judgment 
of  the  House,  but  may,  if  admitted,  prove  an  ignis  fatidis,  that  may  lead  to 
destruction. 

We  wish  not,  however,  by  establishing  our  own  rules  of  interpretation,  to 
enjoy  the  privilege  which  is  denied  to  the  gentleman,  but  will  meet  him  on 
fair  ground,  by  applying  rules,  which  have  the  sanction  mentioned;  and  as  the 
learned  Judge  Blackstone  has  laid  down  such,  it  is  presumed  the  gentleman 
from  Virginia  will  not  contend  for  a  preference,  or  refuse  to  be  tried  by  this 
standard. 

The  Judge  observes,  "  that  the  fairest  and  most  rational  method  to  inter • 
"  pret  the  will  of  the  legislator,  is^  by  exploring  his  intention  at  the  time  when 
'*  the  law  was  made,  by  signs  thiTmost  natural  and  probable;  and  these  signs 
44  are  either  the  words,  the  context,  the  subject  matter,  the  effect  and  conse- 
*fc  quences,  or  the  spirit  and  reason  of  the  law."  With  respect  to  words,  the 
Judge  observes,  that  "  they  are  generally  understood  in  their  usual  and  most 
44  ordinary  signification,  not  so  much  regarding  the  grammar,  as  their  general 
41  and  popw/aruse." 

The  gentlemen  on  different  sides  of  the  question  do  not  disagree  with  respect 
to  the  meaning  of  the  terms  taxes,  duties,  imposts,  excises,  &c.  or  of  borrow- 
ing money,  but  of  the  word  necessity.  And  the  question  is,  what  is  the  gen- 
eral and  popular  meaning  of  this  term?  Perhaps  the  answer  to  the  question 
will  be  truly  this,  that,  in  a  general  and  popular  one,  the  word  does  not  admit 
of  a  definite  meaning,  but  that  this  varies  according  to  the  subject  and  circum- 
stances. With  respect  to  the  subject:  for  instance,  if  the  people,  speaking  ot 
a  garrison  besieged  by  a  superior  force,  and  without  provisions,  or  a  prospect, 
of  relief,  should  say,  it  was  under  the  necessity  of  surrendering,  they  would 


76  6ANK   OF  THE    UNITED    STATES. 

mean  a  physical  necessity,  for  troops  cannot  subsist  long  without  provisions, 
But,  if  speaking  of  a  debtor,  the  people  should  say  he  was  frightened  by  his 
creditor,  and  thus  was  reduced  to  the  necessity  of  paying  his  debts,  they  would 
mean  a  legal,  which  is  very  different  from  a  physical  necessity:  for,  although 
the  debtor,  by  refusing  payment,  might  be  confined,  he  would  be  allowed  sub- 
sistence, and  the  necessity  he  was  under  to  pay  his  debts  would  not  extend 
beyond  his  confinement.  Again,  if  it  should  be  said  that  a  client  is  under 
the  necessity  of  giving  to  hislawyer  more  than  legal  fees,  the  general  popular 
meaning  of  necessity  would,  in  this  instance,  be  very  different  from  that  in  the 
other — the  necessity  would  neither  be  physical  nor  legal,  but  artificial;  or,  if 
I  may  be  allowed  the  expression,  a  long  robe  necessity. 

The  meaning  of  the  word  "  necessary"  varies  also,  according  to  circum- 
stances: for,  although  Congress  has  power  to  levy  and  collect  taxes,  dutiesy 
&c.  to  borrow  money,  and  to  determine  the  time,  quantum,  mode,  and  every 
other  regulation  "  necessary-7  and  proper  for  supplying  the  treasury,  yet  the 
people  would  apply  a  different  meaning  to  the  word  necessary,  under  differ- 
ent circumstances.  For  instance,  without  a  sufficiency  of  precious  metals 
for  a  medium,  laws  regulating  an  artificial  medium  would  be  generally  thought 
necessary  for  carrying  into  effect  the  power  to  levy  and  collect  taxes;  but  if 
there  was  a  sufficiency  of  such  metals,  those  laws  would  not,  generally,  be 
thought  necessary.  Again,  if  specie  was  scarce,,  and  the  credit  of  the  Go- 
vernment low?  collateral  measures  would  be,  by  the  People,  thought  neces- 
sary for  obtaining  public  loans;  but  not  so,  if  the  case  was  reversed.  Or,  if 
part  of  the  States  should  be  invaded  and  over-run  by  an  enemy,  it  would  be 
thought  necessary  to  levy  on  the  rest  heavy  taxes,  and  collect  them  in  a  short 
period,  and  to  take  stock,  grain,  and  other  articles,  from  the  citizens,  without 
their  consent,  for  common  defence;  but  in  a  time  of  peace  and  safety,  such 
measures  would  be  supposed  unnecessary.  Instances  may  be  multiplied  in 
other  respects,  but  it  is  conceived  that  these  are  sufficient  to  show  that  the 
popular  and  general  meaning  of  the  word  *'  necessary,"  varies  according  to 
the  subject  and  circumstances. 

The  second  rule  of  interpretation  relates  to  the  context,  and  the  Judge  con- 
ceives, that,  "  if  words  are  still  dubious,  we  may  establish  their  meaning  by 
*'  the  context:  thus,  the  preamble  is  often  called  in  to  help  the  construction  of 
4  *  an  act  of  Parliament."  The  constitution,  in  the  present  case,  is  the  great  law 
of  the  People,  who  are  themselves  the  sovereign  legislature;  and  the  preamble 
is  in  these  words:  "  We,  the  People  of  the  United  States,  in  order  to  form 
"  a  more  perfect  union,  establish  justice,  ensure  domestic  tranquillity,  pro- 
"  vide  for  the  common  defence,  promote  the  general  welfare,  and  secure  the 
"  blessings  of  liberty  to  ourselves  and  our  posterity,  do  ordain  and  establish 
"  this  constitution  for  the  United  States  of  America*" 

These  are  the  great  objects  for  which  the  constitution  was  established,  and, 
in  administering  it,  we  should  always  keep  them  in  view.  And  here  it  is  re- 
markable, that,  although  "common  defence  and  general  welfare"  are  held  up 
in  the  preamble,  amongst  the  primary  objects  of  attention,  they  are  again 
mentioned  in  the  eighth  section  of  the  first  article,  whereby  we  are  enjoined, 
in  levying  taxes,  duties,  &c.  particularly  to  regard  "  the  common  defence  and 
general  welfare."  Indeed,  common  sense  dictates  the  measure:  for,  the  se- 
curity of  our  property,  families,  and  liberty,  of  every  thing  dear  to  us,  depends 
on  our  ability  to  defend  them.  The  means,  therefore,  for  attaining  this  ob- 
ject, we  ought  not  to  omit,  a  year,  a  month,  or  even  a  day.  if  we  could  avoid 
it;  and  we  are  never  provided  for  defence,  unless  prepared  for  sudden  emer- 
gencies. Should  Government  be  surprised  in  this  case,  it  would  be  as  dis- 
honorable as  for  a  general  to  be  surprised  in  a  state  of  warfare,  and  the  event 
to  the  community  may  be  much  more  fatal.  If  provision,  then,  for  sudden 
emergencies,  is  indispensable,  it  must  be  evident  that  it  will  depend,  in  a 
great  measure,  on  the  ability  of  Government  to  command,  at  all  times,  for 
this  purpose,  a  sufficient  sum  of  money,  which  is  justly  denominated  the 
sinews  of  war;  and  how  is  this  to  be  effected?  JBy  emissions  of  bills  of  credit? 
During  the  Revolution,  bills  of  credit,  it  must  be  acknowledged,  have  done 


CHARTER   OF    1791. 

Wonders.    They  have,  in  conflict  with  the  banks,  treasury,  anil  public  credit     * 
of  Great  Britain,  risen  superior  to  them  all,  and  have  died  a  natural  deatK 
We  have  honored  them  with  a  funeral  pile;  we  now  bid  peace  to  their  manes, 
and  devoutly  hope  that  bills  of  credit  will  for  ever  be  extinct  in  the  United 
States.    Are  we  to  depend,  then,  on  taxes*  for  commanding  money  in  cases 
of  urgent  necessity?    These,  as  has  been  shown  by  other  gentlemen,  will  be 
too  slow  in  their  operation;  unless,  indeed,  we  should  levy  a  tax  for  drawing 
into,  or  locking  up,  in  the  treasury,  three  or  four  millions  of  dollars — a  law 
which  would  be  universally  considered  as  unnecessary  and  improper. 

By  loans,  and  loans  only,  can  provision  be  made  for  sudden  emergencies. 
But  if  loans  should  be  made  previously  to  an  emergency,  the  People  would  be 
unnecessarily  burdened  by  the  interest  thereof,  and  most  of  the  other  evils 
would  ensue,  that  would  arise  from  previous  taxes;  and  if  they  were  to  be 
made  as  an  emergency,  without  previous  arrangements,  of  whom  are  we  to 
borrow:  Of  individual*?  These  cannot  be  depended  on,  as  has  been  fully 
proved  by  our  own  experience  at  the  commencement  of  the  Revolution.  Are 
we  to  apply  to  the  banks  already  established  in  the  States,  for  loans?  These 
can  no  more  be  depended  on  than  individuals:  for  stockholders,  having  no 
more  attachment  to  Government  than  other  citizens,  would,  in  cases  of  pub- 
lic danger,  attend  to  the  preservation  of  their  property,  by  other  means  than 
loaning  it  to  Government.  And,  moreover,  the  united  capitals  of  all  the 
banks  existing  in  the  Union,  would  be  insufficient  for  Government:  for  they 
do  not  amount  to  a  million  and  a  half  of  dollars;  and  only  a  part  of  this  could, 
in  any  case,  be  reasonably  expected  on  loan. 

Are  we  to  apply  to  foreign  banks  or  individuals?  These,  as  has  been  shown, 
are  too  remote;  and,  if  not,  we  have  not  been  able,  without  the  assistance  of 
an  ally,  to  obtain  foreign  loans  during  the  war;  and,  perhaps,  the  Power,  on 
whose  assistance  we  may  rely,  would  be  hostile  to  us.  Such  dependence, 
then,  as  has  been  stated,  would  necessarily  leave  us  in  a  deplorable  state. 
And  it  must  be  evident,  that  a  previous  arrangement  to  aid  loans,  in  cases 
of  sudden  emergency,  is  necessary  and  proper,  in  the  general  and  popular  use 
of  the  term,  inasmuch  as  any  other  measure,  that  Congress  can  adopt,  would 
be  inadequate  to  the  purpose  of  common  defence;  and  what  previous  arrange- 
ment can  we  make  so  proper  as  that  of  a  national  bank?  If  gentlemen  in  the 
opposition  know  of  any,  let  them  produce  it,  and  let  the  merits  of  it  be  inves- 
tigated, for  it  is  unreasonable  to  propose  a  rejection  of  this  plan,  without  pro- 
ducing a  better.  The  plan  proposed  by  the  Secretary  of  the  Treasury,  wnich 
is  now  the  subject  of  discussion,  does  honor,  like  all  his  other  measures,  both 
to  his  head  and  heart.  It  will  be  mutually  beneficial  to  the  stockholders  and 
to  the  Government,  and,  consequently,  to  the  People.  The  stockholders,  by 
this  plan,  will  be  deeply  interested  in  supporting  Government,  because  three- 
quarters  of  their  capital,  consisting  of  funded  certificates,  depend  on  the  ex- 
istence of  the  Government,  which,  therefore,  is  the  prop  of  their  capital — the 
main  pillar  that  supports  the  bank.  Again,  the  credit  of  Government,  which 
is  immaterial  to  other  banks,  is  essential  to  the  national  bank:  for  the  annual 
interest  of  three  quarters  of  its  capital,  which  must  form  a  great  share  of  its 
profits,  will  depend  altogether  on  the  credit  of  Government,  and  produce,  on 
the  oart  of  the  stockholders,  the  strongest  attachment  to  it.  On  the  other 
hand,  it  will  be  for  the  interest  of  Government  to  support  the  bank,  as  well 
on  account  of  the  benefits  \vh\ch  the  public  will  generally  derive  from  the  in- 
stitution, and  the  profits  arising  from  the  shares  of  Government  in  the  stock, 
which  will  be  hereafter  noticed,  as  of  the  supplies  of  money,  which  it  will  be 
for  the  interest  of  the  bank  to  furnish,  in  cases  of  urgent  necessity.  When- 
ever these  exist,  Congress  may  lay  a  tax  for  supplying  the  treasury,  and  anti- 
cipate it  with  certainty,  by  means  of  the  national  bank.  It  being  then  our 
duty  to  provide  for  the  common  defence,  in  cases  of  emergency,  the  provision 
must  evidently  be  by  taxes,  loans,  or  by  arrangements  for  obtaining  the  latter 
on  the  earliest  notice;  and  previous  taxes  and  loans  being  oppressive,  impro- 
per and  unnecessary,  the  arrangement  for  aiding  loans  becomes  indispensable, 
and  a  bank,  of  consequence,  necessary  and  constitutional. 


78  BANK    OF   THE    UNITED    STATES. 

—  The  third  rule  of  the  Judge,  relative  to  the'4  subject  matter"  of  a  law,  it  is 
unnecessary  to  apply,  because  the  members  agree  in  their  ideas  relative  to  the 
meaning  of  the  terms  taxes,  duties,  loans,  &c. 

The  fourth  rule,  which  relates  to  "  effects  and  consequences,"  is  important, 
and  here  the  learned  Judge  observes,  that,  "  as  to  effects  and  consequences, 
k*  the  rule  is,  where  the  words  bear  none,  or  a  very  absurd  signification,  if 
4 '  literally  understood,  we  must  a  little  deviate  from  the  received  sense  of 
"  them."  In  the  present  case,  the  gentleman  first  up,  from  Virginia,  gave  the 
whole  clause,  by  which  Congress  are  authorized  to  "make  all  laws  neces- 
"  sary  and  proper,"  &c.  no  meaning  whatever;  for,  they  say,  the  former  Con- 
gress had  the  same  power,  under  the  confederation,  without  this  clause,  as  the 
present  Congress  have  with  it.  The  Federalist  is  quoted  on  this  occasion,  but 
although  the  author  of  it  discovers  great  ingenuity,  this  part  of  his  performance 
I  consider  as  a  political  heresy.  His  doctrine,  indeed,  was  calculated  to  lull 
the  consciences  of  those  who  differed  in  opinion  with  him  at  that  time,  and 
having  accomplished  his  object,  he  is  probably  desirous  that  it  may  die  with 
the  opposition  itself.  The  rule  in  this  case,  says,  that  where  the  words  bear 
no  signification,  we  must  deviate  a  little;  and  as  this  deviation  cannot  be  made 
by  giving  the  words  less  than  no  meaning,  it  must  be  made  by  a  more  liberal 
construction  than  is  given  by  gentlemen  in  the  opposition.  Thus,  their  ar- 
tillery is  turned  on  themselves:  for  their  own  interpretation  is  an  argument 
against  itself. 

The  last  rule  mentioned  relates  to  the  spirit  and  reason  of  the  law,  and  the 
Judge  is  of  opinion,  "  that  the  most  universal  and  effectual  way  of  discover- 
"  ing  the  true  meaning  of  a  law,  where  the  words  are  dubious,  is,  by  consider- 
**  in  g  he  reason  and  spirit  of  it,  or  the  cause  which  moved  the  Legislature  to 
"  enact  it."  The  causes  which  produced  the  constitution,  were,  an  imper- 
fect union,  want  of  public  and  private  justice,  internal  commotions,  a  defence- 
less community,  neglect  of  the  public  welfare,  and  danger  to  our  liberties. 
These  are  known  to  be  the  causes,  not  only  by  the  preamble  of  the  constitu- 
tion, but  also  from  our  own  knowledge  of  the  history  of  the  times  that  preced- 
ed the  establishment  of  it.  If  these  weighty  causes  produced  the  constitution, 
and  it  not  only  gives  power  for  removing  them,  but  also  authorizes  Congress 
to  make  all  laws  necessary  and  proper  for  carrying  these  powers  into  effect, 
shall  we  listen  to  assertions,  that  these  words  have  no  meaning,  and  that  this 
constitution  has  not  mure  energy  than  the  old!  Shall  we  thus  unnerve  the 
Government,  leave  the  Union  as  it  was  under  the  confederation,  defenceless 
against  a  banditti  of  Creek  Indians,  and  thus  relinquish  the  protection  of  its 
citizens?  Or  shall  we,  by  a  candid  and  liberal  construction  ot  the  powers  ex- 
pressed in  the  constitution,  promote  the  great  and  important  objects  thereof? 
Each  member  must  determine  for  himself.  I  shall,  without  hesitation,  choose 
the  latter,  and  leave  the  People  and  States  to  determine  whether  or  not  I  am 
pursuing  their  true  interest.  If  it  is  inquired  where  we  are  to  draw  the  line 
of  a  liberal  construction,  I  would  also  inquire  where  the  line  of  restriction  is 
to  be  drawn?  The  interpretation  of  the  constitution,  like  the  prerogative  of  a 
sovereign,  may  be  abused,  but  from  hence  the  disuse  of  either  cannot  be  in- 
ferred. In  the  exercise  of  prerogative,  the  minister  is  responsible  for  his  ad- 
vice to  his  sovereign,  and  the  members  of  either  House  are  responsible  to  their 
constituents  for  their  conduct  in  construing  the  constitution.  We  act  at  our 
peril:  if  our  conduct  is  directed  to  the  attainment  of  the  great  objects  of  Go- 
vernment, it  will  Le  approved,  and  not  otherwise;  but  this  cannot  operate  as 
a  reason  to  prevent  our  discharging  the  trust  reposed  in  us. 

Let  us  now  compare  the  different  modes  of  reasoning  on  this  subject,  and 
determine  which  is  right,  for  both  cannot  be. 

The  gentleman  from  Virginia,  [Mr.  MADISON]  has  urged  the  dangerous 
tendency  of  a  liberal  construction.  But  which  is  most  dangerous,  a  liberal  or  a 
destructive  interpretation?  The  liberty  we  have  taken  in  interpreting  the 
constitution,  \ve  conceive  to  be  necessary,  and,  it  cannot  be  denied  to  be 
useful  in  attaining  the  objects  of  it;  but,  whilst  he  denies  us  this  liberty,  he 
grants  to  himself  a  right  to  annul  part,  and  a  very  important  part,  of  the  con- 


CHARTER    OF    1791.  -g 

slitution.  The  same  principle  that  will  authorize  a  destruction  of  part,  will 
authorize  ths  destruction  of  the  whole  of  the  constitution;  and  if  gentlemen 
have  a  right  to  make  such  rules,  they  have  an  equal  right  to  make  others  for 
enlarging  the  powers  of  the  constitution,  and,  indeed,  of  forming  a  despotism. 
Thus,  if  we  take  the  gentlemaiffor  our  pilot,  we  shall  be  wrecked  on  the  reef 
which  he  cautions  us  to  avoid. 

The  gentleman  has  referred  us  to  the  last  article  of  the  amendment,  pro- 
posed to  the  constitution  by  Congress,  which  provides  that  the  powers  not 
delegated  to  Congress,  or  prohibited  to  the  States,  shall  rest  in  them  or  the 
People.  And  the  question  is,  what  powrers  are  delegated?  Does  the  gentle- 
man conceive  that  such  only  are  delegated  as  are  expressed?  If  so,  he  must 
admit  that  our  whole  code  of  laws  is  unconstitutional.  This  he  disavows, 
and  yields  to  the  necessity  of  interpretation,  which,  by  a  fair  and  candid  ap- 
plication of  established  rules  of  construction  to  tne  constitution,  authorizes,  as 
has  been  shown,  the  measure  under  consideration. 

The  usage  of  Congress  has  also  been  referred  to;  and  if  we  look  at  their 
acts,  under  the  existing  constitution,  \vc»  *hall  find  that  they  are,  generally, 
the  result  of  a  liberal  construction.  I  will  mention  but  two.  The  first 
relates  to  the  establishment  of  the  Executive  department,  and  §ives  to  the 
President  the  power  of  removing  officers.  As  the  constitution  is  silent  on 
this  subject,  the  power  mentioned,  by  the  gentleman's  own  reasoning,  is  vested 
in  the  States  or  the  People:  he,  however,  contended  for  an  assumption  of 
the  power,  and  when  assumed,  urged  that  it  should  be  vested  in  the  President, 
although,  like  the  power  of  appointment,  it  was,  by  a  respectable  minority  in 
both  Houses,  conceived  that  it  should  have  been  vested  in  the  President  and 
Senate.  His  rule  of  interpretation,  then*  was,  therefore,  more  liberal  than  it 
isnow.  In  the  other  case.  Congress  determined  by  law,  with  the  sanction  of 
the  President,  \\hen  and  where  they  should  hold  their  next  session,  although 
the  constitution  provide,-;  that  thi?:  power  shall  rest  solely  in  the  two  Houses. 
The  gentleman  also  advocated  this  measure,  and  yet  appears  to  be  apprehen- 
sive of  the  consequences  that  may  result  from  a  construction  of  the  constitu- 
tion which  admits  of  a  national  bank.  But,  from  which  of  these  measures  is 
danger  to  be  apprehended?  The  only  danger,  from  our  interpretation,  would 
be  the  exercise  by  Congress  of  a  general  power  to  form  corporations.  But 
the  dangers  resulting  from  the  gentleman's  interpretations,  in  the  cases  alluded 
to,  are  very  different:  for  what  may  we  not  apprehend  from  the  precedent  of 
having  assumed  a  power  on  which  the  constitution  was  silent,  and  from  hav- 
ing annexed  it  to  the  supreme  Executive?  If  we  have  this  right  in  one  in- 
stance, we  may  extend  it  to  others,  and  make  him  a  despot.  And  here  I  think 
it  necessary  to  declare,  that  such  is  my  confidence  in  the  wisdom,  integrity, 
and  justice  of  the  Chief  Magistrate,  as  that  I  should  be  at  ease,  if  my  life, 
liberty,  and  property,  were  at  his  disposal;  but  this  is  a  trust  which  I  am  not 
authorized  to  make  for  my  constituents,  and  as  his  successor  in  office  will 
possess  equal  powers,  but  may  not  possess  equal  virtues,  caution  with  respect 
to  them  is  necessary.  Again,  what  may  be  the  result  of  the  precedent  relating 
to  the  session  of  Congress?  If  we  had  a  right,  by  law,  to  determine  where 
the  next  Congress  should  hold  their  sessions,  one  Congress  may  oblige  another 
to  sit  at  Kentucky,  or  in  the  intended  Yazoo  State,  under  the  protection  of  a 
Choctaw  chief,  or  his  excellency  Governor  Tallan.  It  must,  therefore,  be 
evident  that  the  usage  of  Congress,  in  both  instances,  is  against  the  gentle- 
man, and  that  the  dangers,  from  the  precedent  of  establishing  a  bank,  are, 
comparatively,  small,  to  those  resulting  from  the  other  measures  referred  to. 

The  gentleman  from  Virginia  has  endeavored  to  support  his  interpretation 
of  the  constitution  by  the  sense  of  the  federal  convention.  But  how  is  this  to 
be  obtained?  By  applying  proper  rules  of  interpretation.  If  so,  the  sense  of 
the  convention  is  in  favor  of  the  bill;  or,  are  we  to  depend  on  the  memorv  of 
the  gentleman  for  an  history  of  their  debates,  and  from  thence  to  collect  their 
sense?  This  would  be  improper,  because  the  memories  of  different  gentle- 
men would  probably  vary,  as  they  haye  already  done,  with  respect  to  those 
factsj  and,  if  not,  the  opinions  of  th?  individual  members,  who  debated,  are 
not  to  be  considered  as  the  opinions  of  the  convention.  Indeed,  if  they  were, 


80  BANK  OF  THE  UNITED  STATES. 

no  motion  was  made  in  that  convention,  and,  therefore,  none  could  be  reject- 
ed for  establishing  a  national  bank.  And  the  measure  which  the  gentleman 
has  referred  to  was  a  proposition  merely  to  enable  Congress  to  erect  commer- 
cial corporations,  which  was,  and  always  ought  to  be,  negatived. 

The  gentleman's  arguments,  respecting  the  .sense  of  the  State  conventions, 
have  as  little  force  as  those  relating  to  the  federal  convention.  The  debates 
of  the  State  conventions,  as  published  by  short  hand  writers,  were,  generally, 
partial  and  mutilated;  in  this,  if  the  publications  are  to  be  relied  on,  the  argu- 
ments were  all  on  one  side  of  the  question:  for  there  is  not  in  the  record, 
which  is  said  to  contain  the  Pennsylvania  debates,  a  word  against  the  ratifi- 
cation of  the  constitution;  although  we  all  know  that  arguments  were  warmly 
urged  on  both  sides.  The  gentleman  has  quoted  the  opinions  as  recorded  in 
the  debates  of  this  State  and  North  Carolina  of  two  of  our  learned  judges. 
But  the  speech  of  one  member  is  not  to  be  considered  as  expressing  the  sense 
of  a  convention;  and,  if  it  was,  we  have  no  record,  which  can  be  depended  on, 
of  such  speeches.  Indeed,  had  even  this  been  the  case,  the  Union  was,  at  that 
time,  divided  into  two  great  parties,  one  of  which  feared  the  loss  of  the  Union 
if  the  constitutipn  was  not  ratified  unconditionally,  arid  the  other,  the  loss  of 
our  liberties,  if  it  was.  The  object,  on  either  side,  was  so  important,  as,  per- 
haps, to  induce  the  parties  to  depart  from  candor,  and  to  call  in  the  aid  of 
art,  flattery,  professions  of  friendship;  promises  of  office,  and  even  of  good 
cheer,  were  recurred  to;  and  when  these  failed,  the  federal  bull  was  published, 
denouncing  political  death  and  destruction  to  anti- federal  infidel*.  Under 
such  circumstances,  the  opinions  of  great  men  ought  not  to  be  considered  as 
authorities,  and,  in  many  instances,  could  not  be  recognised  by  themselves. 

Mr.  Gerry  then  observing  that  the  sense  of  the  States,  respecting  a  bank, 
would  be  best  ascertained  by  their  legislative  acts,  showed,  from  the  journals 
of  Congress,  that,  when  restrained  by  the  confederation  from  exercising  any 
powers  but  what  were  expressly  delegated,  Congress  had,  without  any  au- 
thority, established  a  bank,  whose  capital  might  extend  to  ten  millions  of 
dollars,  and  had  not  only  pledged  the  faith  of  the  Union  not  to  erect  any 
other,  but  had  recommended  it  to  the  States  to  prohibit  any  State  establish- 
ment of  the  kind,  and  had,  also,  determined  that  the  bank  bills  should  be 
receivable  in  the  taxes  and  duties  of  every  State.  That  the  States  did  not 
remonstrate  against,  kor  tacitly  acquiesce  in,  but  actually  supported  the  mea- 
sures of  Congress  relative  to  the  bank,  whilst  the  war  continued,  and  after  the 
peace.  That  this  was  the  strongest  evidence  the  States  could  give,  that  they 
thought  the  measure  salutary,  and  had  no  objection  to  it  on  the  ground  of  its 
being  constitutional.  He  then  argued  that,  if  the  States,  and  the  People  at 
large,  had  no  objections  to  a  bank,  in  that  case,  they  certainly  could  not  in 
this;  and  inquired  whether  there  was  any  evidence  ot  their  disapprobation  of 
such  an  institution  in  the  debates  of  their  conventions  or  propositions  for 
amendments?  To  this  he  answered  in  the  negative,  and  urged  that,  whilst 
the  conventions  were  silent  on  this  subject,  and  had  no  objections  to  such  a 
measure,  several  of  them  had  proposed  amendments  to  the  constitution,  for 
restraining  Congress  from  establishing  commercial  corporations,  which  evinc- 
ed their  approbation  of  such  institutions,  and  admitted,  at  the  same  time,  in 
some  degree,  the  power  of  Congress,  under  the  existing  constitution,  to  form 
them. 

Mr.  Gerry  then  showed  that,  as  a  monopoly  has  been  urged  as  an  objection 
to  the  bill,  no  such  consequence  could  result  from  it:  for  the  bill  does  not 
restrain  State  or  private  banks,  or  even  individuals,  from  negotiations  of  a 
similar  nature  with  those  permitted  to  the  stockholders;  nor  does  it  restrain 
the  States  from  forming  similar  corporations.  This  plan  has  not  a  feature  of 
monopoly,  and  the  gentlemen  who  oppose  it  contend  for  a  bank,  which,  ac- 
cording to  its  original  institution,  was  founded  in  monopoly. 

He  then  answered  the  arguments,  urged  against  the  authority  of  Congress, 
to  enable  corporations  to  hold  lands,  when  they  had  no  power  themselves  01 
purchasing  and  holding  land ;  and  showed  that,  although  Congress  are  restrain- 
e(J  from  purchasing  lands,  (except  in  certain  cases)  and  from  exercising  over 


CHARTER   OF  1791.  81 

the  same  exclusive  legislation;  yet,  that  they  may  hold  lands  obtained  by 
execution,  conquest,  and  by  other  means,  as  well  as  by  those  clauses  of  the 
constitution  which  relate  to  lands  now  belonging  to  the  Union;  and  that 
Congress  had  often  invested  others  with  powers  which  they,  themselves,  could 
not  exercise. 

He  then  noticed  the  argument,  that,  by  a  law  of  Virginia,  notes  payable  to 
the  bearer,  or  order,  could  not  circulate  in  that  State;  and  observed  that  this 
law  could  not  be  supposed  to  extend  to  bank  notes;  and,  if  it  did,  it  W9uld  be 
null  and  void,  because  the  constitution  of  the  Union,  and  laws  made  in  pur- 
suance thereof,  were  paramount  to  the  laws  and  constitutions  of  the  several  | 
States.    Having  considered  the  arguments  against  the  constitutionality  of  the  1 
bill,  he  entered  into  the  policy  and  utility  of  the  measure,  in  his  remarks  on  I 
which  head,  the  reporter  did  not  follow  him. 

Mr.  VINIXG  apologized  for  rising  to  offer  his  sentiments  on  this  subject, 
which  had  already  been  so  ably  discussed;  but,  considering  the  nature  01  the 
objections,  as  arising  from  constitutional  principles,  it  had  acquired  air  impor- 
tance which  would  justify  his  troubling  the  House  with  some  remarks. 

He  began  by  noticing  the  leading  argument  of  Mr.  Madison  respecting  the 
sense  of  the  continental  convention,  on  the  power  proposed  to  be  exercised  by 
Congress  in  this  bill.  He  showed  that  the  opinion  of  the  gentleman,  in  tins 
instance,  was,  if  not  singular,  different  from  that  of  his  contemporaries;  at 
least,  a  similar  objection  had  not  been  started  by  those  gentlemen  of  the  Se- 
nate who  had  been  members  of  the  convention;  but,  granting  that  the  opinion 
of  the  gentleman  from  Virginia  had  been  the  full  sense  of  the  members  of 
convention,  their  opinions,  at  that  day,  he  observed,  are  not  a  sufficient  autho- 
rity for  Congress,  at  the  present  time,  to  construe  the  constitution  by. 

Mr.  V.,  in  explaining  the  powers  proposed  by  the  bill  to  be  given  to  the 
corporation  of  the  bank,  adverted  to  the  particular  power  of  "  making  rules 
and  regulations  not  contrary  to  law." 

He  snowed  that  this  term  law  means  the  common  law,  and,  alluding  to  the 
inquiry  of  Mr.  Madison,  what  law  was  intended  by  this  clause?  who,  in  an- 
swering his  own  question,  had  said,  that,  if  the  laws  of  the  United  States  were 
intended,  the  power  contemplated  was  dangerous  and  unconstitutional,  as 
those  lawsyuere  very  few  in  number,  Mr.  VININO  observed,  that  the  restric- 
tion contended  for  by  the  gentleman,  as  the  result  of  his  objection,  would 
annihilate  the  most  essential  rights  and  privileges  of  the  citizens  of  the  Unit- 
ed States.  He  then  observed,  a  corporation  is  nothing  more  than  constituting 
a  b9dy  with  posvers  to  effect  certain  objects  in  a  combined  capacity,  which 
an  individual  may  do  in  his  individual  capacity,  agreeably  to  the  usage  and 
custom  of  common  law. 

Adverting  to  the  act  by  which  the  United  States  became  a  free  and  inde- 
pendent nation,  he  said,  from  that  declaration,  solemnly  recognised  at  home 
and  abroad,  they  derive  all  the  powers  appertaining  to  a  nation  thus  circum- 
stanced, and  consequently  the  power  under  consideration.  He  traced  the 
origin  of  corporations  to  the  time  ofNuraa;  the  first  of  which  was  for  agricul- 
tural purposes;  they  were  afterwards  extended  to  other  objects;  and,  from 
that  day  to  this,  said  he,  all  civilized  and  independent  nations  have  been  in 
the  practice  of  creating  them;  and  what  do  they  amount  to  but  this,  enabling 
a  number  of  persons,  in  a  combined  capacity,  to  do  that  to  a  more  certain 
effect  than  an  individual  may  dot  but  subject  to  the  control  of  common  law 
«i;  ill  its  regulations  and  transactions. 

On  the  doctrine  of  constructions,  as  applied  to  the  constitution,  he  observed, 
that,  on  some  occasions,  the  constitution  is  like  the  sensitive  plant,  which 
shrinks  from  the  smallest  touch;  on  others,  it  is  like  the  sturdy  oak,  which 
braves  the  force  of  thunder.  He  referred  to  the  act  containing  the  power  of 
removability,  in  which  the  utmost  latitude  of  construing  the  constitution 
was  contended  for  and  adopted;  and,  said  he,  the  funding  system  cannot  be 
defended  on  any  other  principle  than  that  of  implication. 
11 


82  BANK  OF  THE  UNITED  STATES. 

He  then  inquired,  of  what  right  does  this  incorporation  deprive  a  single  citi- 
zen? And  can  an  act  possibly  meet  the  disapprobation  of  a  single  person 
which  does  not  infringe  his  rights,  and  which  puts  money  into  his  pocket?  I 
think  not.  He  insisted  that  the  power  of  Congress  alone,  was  equal  to  esta- 
blishing a  bank,  competent  of  creating  a  currency  which  shall  pervade  all  parts 
of  the  Union;  the  paper  of  the  State  banks  cannot  circulate  beyond  the  bounds 
of  the  particular  States. 

From  the  restrictions  to  the  Government,  contended  for  by  the  opposers  of 
the  bill,  he  similized  the  constitution  to  a  horse,  finely  proportioned  in  every 
respect  to  the  eye,  and  elegantly  caparisoned,  but  deficient  in  one,  and  the 
most  essential  requisite,  that  of  ability  to  carry  the  owner  to  his  journey's 
end;  he  had  rather,  he  said,  mount  the  old  confederation,  and  drag  on  in  the 
old  way,  than  be  amused  with  the  appearance  of  a  Government  so  essentially 
defective. 

Mr.  MADISON  observed,  that  the  present  is  a  question  which  ought  to  be 
conducted  with  moderation  and  candor,  and,  therefore,  there  is  no  occasion  to- 
have  recourse  to  those  tragic  representations  which  have  been  adduced — 
warmth  and  passion  should  be  excluded  from  the  discussion  of  a  subject 
which  ought  to  depend  on  the  cool  dictates  of  reason  for  its  decision. 

Adverting  to  me  observations  of  Mr.  Smith,  of  South  Carolina, 6  fc  that  it 
would  be  a  deplorable  thing  for  the  Senate  of  the  United  States  to  have 
fallen  on  a  decision  which  violates  the  constitution,"  he  inquired,  what  does 
the  reasoning  of  the  gentleman  tend  to  show,  but  this,  that,  from  respect  to  the 
Senate,  this  House  ought  to  sanction  their  decision?  And  from  hence  it  will 
follow,  that  the  President  of  the  United  States  ought,  out  of  respect  to  both,, 
to  sanction  their  joint  proceedings;  but  he  could,  he  said,  remind  the  gentle- 
man of  his  holding  different  sentiments  on  another  occasion. 

Mr.  M.  then  enlarged  on  the  exact  balance  of  equipoise,  contemplat- 
ed by  the  constitution,  to  be  observed  and  maintained  between  the  several 
branches  of  Government;  and  showed  that,  except  this  idea  was  preserved,  the 
advantages  of  different  independent  branches  would  be  lost,  and  their  separate 
deliberations  and  determinations  were  entirely  useless. 

In  describing  a  corporation,  he  observed,  that  the  powers  proposed  to  be 
given,  are  such  as  do  not  exist  antecedent  to  the  existence  of  the  corporation; 
these  powers  are  very  extensive  in  their  nature,  and  to  which  a  principle  of 
perpetuity  may  be  annexed, 

He  waived  a  reply  to  Mr.  Vining's  observations  on  the  common  law,  (m 
which  that  gentleman  had  been  lengthy  and  minute,  in  order  to  invalidate 
Mr.  Madison's  objection  to  the  power  proposed  to  be  given  to  the  bank,  to 
make  rules  and  regulations*  not  contrary  to  law.)  Mr.  Madison  said  the  ques- 
tion would  involve  a  very  lengthy  discussion;  and  other  objects,  more  inti- 
mately connected  with  the  subject,  remained  to  be  considered. 

The  power  of  granting  charters,  he  observed,  is  a  great  and  important  power, 
and  ought  not  to  be  exercised  without  we  find  ourselves  expressly  authorized 
to  grant  them.  Here  he  dilated  on  the  great  and  extensive  influence  that 
incorporated  societies  had  on  public  affairs  in  Europe.  They  are  a  powerful 
machine,  which  have  always  been  found  competent  to  effect  objects  on  princi- 
ples in  a  great  measure  independent  of  the  People. 

He  argued  against  the  influence  of  the  precedent  to  be  established  by  the 
bill;  for,  though  it  has  been  said  that  the  charter  is  to  be  granted  only  for  a 
term  of  years,  yet,  he  contended  that  granting  the  powers,  on  any  principle,  is 
granting  them  inperpetuum — and  assuming  this  right  on  the  part  ot  the  Go- 
vernment, involves  the  assumption  of  every  power  whatever. 

Noticing  the  arguments  in  favor  of  the  bill,  he  said,  it  had  been  observed 
that  the  "Government  necessarily  possesses  every  power."  However  tree  this 
idea  may  be  in  theory,  he  denied  that  it  applied  to  the  Government  of  the 

Here  he  read  the  restrictive  clause  in  the  constitution,  and  then  observed 
that  he  saw  no  pass  over  this  limit. 


CHARTER  OF  1791.  33 

The  preamble  to  the  constitution,  said  he,  has  produced  a  new  mine  ot 
power;  but  this  is  the  first  instance  he  had  heard  of,  in  which  the  preamble  has 
been  adduced,  for  such  a  purpose.  In  his  opinion,  the  preamble  only  states 
the  objects  of  the  confederation;  and  the  subsequent  clauses  designate  the  ex- 
press powers  by  which  those  objects  are  to  be  obtained;  and  a  mean  is  pro- 
posed through  which  to  acquire  those  that  may  be  found  still  requisite,  more 
Fully  to  effect  the  purposes  of  the  confederation. 

It  is  said,  "  there  is  a  field  of  legislation  yet  unexplored."  He  had  often 
heard  this  language,  but,  he  confessed,  he  tlid  not  understand  it  Is  there, 
said  he,  a  single  blade  of  grass — is  there  any  property  in  existence  in  the 
United  States,  which  is  not  subject  to  legislation,  either  of  the  particular 
States  or  of  the  United  States?  He  contended  that  the  exercise  of  this  power, 
on  the  part  of  the  United  States,. involves,  to  all  intents  and  purposes,  every 
power  which  an  individual  State  may  exercise.  On  this  principle,  he  denied 
the  right  of  Congress  to  make  use  of  a  bank  to  facilitate  the  collection  of  taxes. 
He  did  not,  however,  admit  the  idea,  that  the  institution  would  conduce  to 
that  object.  The  bank  notes  are  to  be  equal  to  gold  and  silver,  and  conse- 
quently will  be  as  difficult  to  obtain  as  the  specie.  By  means  of  the  objects 
of  trade  on  which  gold  and  silver  are  employed,  there  will  be  an  influx  of 
those  articles;  but  paper  being  substituted,  will  fill  those  channels,  which 
would  otherwise  be  occupied  by  the  precious  metals.  This,  experience  shows, 
is  the  uniform  effect  of  such  a  substitution. 

The  right  of  Congress  to  regulate  trade,  is  adduced  as  an  argument  in  favor 
of  this  of  creating  a  corporation;  but  what  has  this  bill  to  do  with  trade? 
Would  any  plain  man  suppose  that  this  bill  had  any  thing  to  do  with  trade? 
He  noticed  the  observation  respecting  the  utility  of  banks  to  aid  the  Govern- 
ment with  loans.  He  denied  the  necessity  of  the  institution  to  aid  the  Go- 
vernment in  this  respect.  Great  Britain,  he  observed,  did  not  depend  on  such 
institutions—she  borrows  from  various  sources. 

44  Banks,  it  is  said,  are  necessary  to  pay  the  interest  of  the  public  debt;" 
then  they  ought  to  be  established  in  the  places  where  that  interest  is  paid;  but 
can  any  man  say,  that  the  bank  notes  will  circulate  at  par  in  Georgia?  From 
the  example  of  Scotland,  we  know  that  they  cannot  be  made  equal  to  specie 
remote  from  the  place  where  they  can  be  immediately  C9n verted  into  coin: 
they  must  depreciate  in  case  of  a  demand  for  specie;  and  if  there  is  no  moral 
certainty  that  the  interest  can  be  paid  by  these  bank  bills,  will  the  Govern- 
ment be  justified  in  depriving  itself  of  the  power  of  establishing  banks  in  dif- 
ferent parts  of  the  Union? 

We  reason,  said  he,  and  often  with  advantage,  from  British  models;  but  in 
the  present  instance,  there  is  a  great  dissimilarity  of  circumstances.  The 
bank  notes  of  Great  Britain  do  not  circulate  universally;  to  make  the  circum- 
stances parallel,  it  ought  to  have  been  assumed,  as  a  fact,  that  banks  are  es- 
tablished in  various  parts  of  Great  Britain,  at  which  the  interest  of  the  national 
debt  is  paid;  but  the  fact  is,  it  is  only  paid  in  one  place. 

The  clause  of  the  constitution,  which  has  been  so  often  recurred  to.  and 
which  empowers  Congress  to  dispose  of  its  property,  he  supposed,  referred 
only  to  property  left  at  the  conclusion  of  the  war,  and  has  no  reference  to  the 
moneyed  property  of  the  United  States. 

The  clause  which  empowers  Congress  to  pass  all  laws  necessary,  &c.  has 
been  brought  forward  repeatedly  by  the  advocates  of  the  bill;  he  noticed  the 
several  constructions  of  this  clause  which  had  been  offered.  The  conclusion 
which  he  drew  from  the  commentary  of  the  gentleman  from  Massachusetts, 
[Mr.  GERRY]  was,  that  Congress  may  do  what  they  please;  and  recurring  to 
the  opinion  of  that  gentleman,  in  1787,  he  said,  the  powers  of  the  constitution 
were  then  dark,  inexplicable,  and  dangerous;  but  now,  perhaps,  as  the  result 
ot  experience,  they  are  clear  and  luminous. 

The  constructions  of  the  constitution,  he  asserted,  which  have  been  main- 
tained on  this  occasion,  go  to  the  subversion  of  every  power  whatever  in  the 
several  States;  but  we  are  told,  for  our  comfort,  that  the  judges  will  rectify  our 


84  BANK  OF  THE  UNITED  STATES. 

mistakes.  How  are  the  judges  to  determine  in  the  case?  Are  they  to  be  guided 
in  their  decisions  by  the  rules  of  expediency? 

It  has  been  asked,  if  those  minute  powers  of  the  constitution  were 
thought  to  be  necessary,  is  it  supposable  that  the  great  and  important  power 
on  the  table  was  not  intended  to  be  given?  Mr.  Madison  interpreted  this  cir- 
cumstance in  a  quite  different  way,  viz: — If  it  was  thought  necessary  to  spe- 
cify, in  the  constitution,  those  minute  powers,  it  would  follow  that  more  im- 
portant powers  would  have  been  explicitly  granted,  had  they  been  contem- 
plated. 

The  Western  territory  business^  he  observed,  was  a  ease  sui  generis,  and 
therefore  cannot  be  cited  with  propriety.  West  Point,  so  often  mentioned,  he 
said,  was  purchased  by  the  United  States  pursuant  to  law,  and  the  consent  of 
the  State  of  New  York  is  supposed,  if  it  has  not  been  expressly  granted;  but,  on 
any  occasion,  does  it  follow  that  one  violation  of  the  constitution  is  to  be  justi- 
fied by  another? 

The  permanent  residence  bill,  he  conceived,,  was  entirely  irrevalent  to  the 
subject;  but  he  conceived  it  mignt  be  justified  on  truly  constitutional  princi- 
ples. The  act  vesting  in  the  President  of  the  United  States  the  power  of  re- 
movability has  been  quoted;  he  recapitulated,  in  a  few  words,  his  reasons  for 
being  in  favor  of  that  bil  1 . 

The  Bank  of  North  America,  he  said,  he  had  opposed,  as  he  considered  the 
institution  as  a  violation  of  the  confederation.  The  State  of  Massachusetts, 
he  recollected,  voted  with  him  on  that  occasion.  The  Bank  of  North  America 
was,  however,  the  child  of  necessity;  as  soon  as  the  war  was  over,  it  ceased  to 
operate  as  to  continental  purposes.  But,  asked  he,  are  precedents  in  war  to 
justify  violations  of  private  and  State  rights,  in  a  time  of  peace?  And  did  the 
United  States  pass  laws  to  punish  the  counterfeiting  the  notes  of  that  bank? 
They  did  not,  being  convinced  of  the  invalidity  of  such  a  law;  the  bank  there- 
fore took  shelter  under  the  authority  of  the  State. 

The  energetic  administration  of  this  Government  is  said  to  be  connected 
with  this  institution.  Mr.  Madison  here  stated  the  principles  on  which  he 
conceived  this  Government  ought  to  be  administered,  and  added,  other  gen- 
tlemen may  have  had  other  ideas  on  the  subject,  and  may  have  consented  to 
the  ratification  of  the  constitution,  on  different  principles  and  expectations; 
but  he  considered  the  enlightened  opinion  and  affections  of  the  People,  the 
only  solid  basis  for  the  support  of  this  Government. 

Mr.  Madison  then  stated  his  objections  to  the  several  parts  of  the  bill.  The 
first  article  he  objected  to,  was  the  duration.  A  period  of  twenty  years,  he 
observed,  was,  to  this  country,  as  a  period  of  a  century  in  the  history  of  other 
countries — there  was  no  calculating  for  the  events  which  might  take  place. 
He  urged  the  ill  policy  of  granting  so  long  a  term,  from  the  experience  of  the 
Government  in  respect  to  some  treaties,  which,  though  found  inconvenient, 
could  not  now  be  altered. 

The  different  classes  of  the  public  creditors,  he  observed,  were  not  all  put 
on  an  equal  footing  by  this  bill;  but,  in  the  bill  for  the  disposal  of  the  Western 
territory,  this  had  been  thought  essential.  The  holders  of  six  per  cent,  securi- 
ties will  derive  undue  advantages.  Creditors  at  a  distance,  and  the  holders  of 
three  per  cent,  securities,  ought  to  be  considered;  as  the  public  good  is  most 
essentially  promoted  by  an  equal  attention  to  the  interest  ot  all. 

I  admit,  said  he?  that  the  Government  ought  to  consider  itself  as  the  trustee 
of  the  public  on  this  occasion;  and,  therefore,  should  avail  itself  of  the  best  dis- 
position of  the  public  property. 

In  this  view  of  the  subject,  he  objected  to  the  bill,  as  the  public,  he  thought, 
ought  to  derive  greater  advantages  from  the  institution  than  those  proposed. 
In  case  of  a  universal  circulation  of  the  notes  of  the  proposed  bank,  the  profits 
will  be  so  great,  that  the  Government  ought  to  receive  a  very  considerable 
sum  for  granting  the  charter. 

There  are  other  defects  in  the  bill,  which  render  it  proper  and  necessary,  in 
my  opinion,  that  it  should  undergo  a  revision  and  amendment  before  it  passes 
into  a  law.  The  power  vested  by  the  bill  in  the  Executive,  to  borrow  of  the 


CHARTER  OF  1791.  35 

bank,  he  thought  was  objectionable;  and  the  right  to  establish  subordinate 
banks,  he  said,  ought  not  to  be  delegated  to  any  set  of  men  under  heaven. 

The  public  opinion  has  been  mentioned;  if  the  appeal  to  the  public  opinion 
is  suggested  with  sincerity,  we  ought  to  let  our  constituents  have  an  opportu- 
nity to  form  an  opinion  pi  the  subject. 

He  concluded  by  saying,  he  should  move  for  the  previous  question. 

Mr.  GERRY  rose  to  reply  to  Mr.  Madison;  but  the  House  discovering  an 
impatience  to  have  the  mam  question  put,  after  a  few  remarks,  he  waived  any 
further  observations. 

FEBRUARY  8,  179Jf. 

Mr.  MADISON  having,  in  the  conclusion  of  his  speech,  moved  the  previous 
question,  to  wit:  "  Shall  the  main  question  noiv  be  put?"  it  was  resolved  in 
the  affirmative  by  a  vote  of  38  to  20. 

And  the  main  question  being  put,  to  wit:  "  Shall  the  bill  pass?"  it  was  re- 
solved in  the  affirmative.  Ayes  39,  noes  20. 

Those  who  voted  in  the  affirmative,  are, 

Messrs.  Fisher  Ames,  of  Mass.  Messrs.  George  Partridge,  Mass. 

Egbert  Benson,  N.  Y.  Jeremiah  Van  Rensselaer,  N.  Y. 

Elias  Boudinot,  N.  J.  James  Schureman,  N.  J. 

Benjamin  Bourn,  R.  /.  Thomas  Scott,  Pa. 

Lambert  Cadwallader,  N.  J.  Theodore  Sedgwick,  Mats. 

George  Clymer,  Pa.  Joshua  Seney,  Md. 

Thomas  Fitzsimmons,  Pa.  John  Sevier,  N.  C. 

William  Floyd,  N.  Y.  Roger  Sherman,  Conn. 

Abiel  Foster,  N.  Hf  Peter  Sylvester,  N.   Y. 

— Elbridge  Gerry,  Mass.  Thomas  Sinnickson,  N.  J. 

Nicholas  Gilman,  N.  H.  William  Smith,  Md. 

Benjamin  Goodhue,  Most.  William  Smith,  S.  C. 

Thomas  Hartley,  Pa.  John  Steele,  N.  C. 

John  Hathorn,  If.  Y.  Jonathan  Sturges,  Conn. 

Daniel  Heister,  Pa.  George  Thatcher,  Mass. 

Benjamin  Huntington,  Conn.  Jonathan  Trumbull,  Conn. 

John  Lawrence,  N.  Y.  John  Vining,  Del. 

George  Leonard,  Mass.  Jeremiah  Wadsworth,  Conn. 

Samuel  Livermore,  N.  H.  Henry  Wyncoop,  Pa. 

Peter  Muhlenburg,  Pa. 

Those  who  voted  in  the  negative,  are, 

Messrs.  John  Baptist  Ashe,  N.  C.  Messrs.  Richard  Bland  Lee,  Va. 

Abraham  Baldwin,  Geo.  —James  Madison,  Jun.  Fa. 

Timothy  Bloodgood,  Nt  C.  George  Matthews,  Geo. 

John  Brown,  Va.  Andrew  Moore,  Va. 

Edanus  Burke,  S.  C:  Josiah  Parker,  Vu. 

Daniel  Carroll,  Md.  — s  Michael  Jenifer  Stone,  Md} 

Benjamin  Contee,  Md.  Thomas  Tudor  Tucker,  S.  C. 

Jonathan  Grout,  Mass.''  Alexander  White,  Va. 

N-  William  B.  Giles,  Va.  Hugh  Williamson,  N.  C- 
James  Jackson,  Geo. 

So  the  bill  was  passed,  and  it  was 

Ordered,  That  the  Clerk  of  the  House  do  acquaint  the  Senate  therewith. 

On  the  14th  of  February,  1791,  the  bill  was  presented  to  the  President  for 
his  approbation;  on  the  25th,  it  received  his  signature,  and  became  a  law.  The 
interval  between  these  two  dates  was  occupied  by  him  in  anxious  and  dili- 
gent inquiries  into  the  constitutionality  of  the  bill,  and  in  the  consideration 
of  his  duty  in  relation  to  it.  In  these  investigations,  he  called  to  his  aid  his 
cabinet  advisers,  and  received  from  some  of  them  their  written  opinions  on 
the  subject.  These  have  been  obtained,  and  are  here  inserted,  as  well  on  ac- 
count of  their  own  intrinsic  importance,  as  of  the  illustration  they  afford  of 


35  BANK  OF  THE  UNITED  STATES. 

the  caution  and  circumspection  in  the  discharge  of  official  duties  of  the  truly 
great  man  to  whom  they  were  addressed. 

The  opinions  ot  Edmund  Randolph,  Attorney  General,  and  of  Mr.  Jeffer- 
son, Secretary  of  State,  were,  that  tne  bill  was  unconstitutional,  while  that  of 
Alexander  Hamilton,  Secretary  of  the  Treasury,  was  given  on  the  opposite 
side,  and  in  support  of  the  bill. 


OPINION  OF  EDMUND  RANDOLPH, 

• 

Attorney  General  of  the  United  States,  to  President  Washington. 

The  Attorney  General  of  the  United  States,  in  obedience  to  the  order  of 
the  President  of  the  United  States,  has  had  under  consideration  the  bill,  en- 
titled "  An  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States,"  and  reports  on  it,  in  point  of  constitutionality,  as  follows: 
\i  It  must  be  acknowledged,  that,  if  any  part  of  the  bill  does  either  encounter 
the  constitution,  or  is  not  warranted  by  it,  the  clause  of  incorporation  is  the 
only  one. 

The  legal  properties  of  this  corporation  would  be, 

1st.  To  have  succession  until  the  4th  ot  March,  1811; 

2d.  To  purchase,  receive,  and  retain,  real  and  personal  property,  to  an 
amount  not  exceeding  fifteen  millions  of  dollars,  including  the  capital  stock; 

3d.  To  sell  and  dispose  of  the  property; 

4th.  To  sue,  and  be  sued; 

5th.  To  have  a  common  seal;  and 

6th.  To  make  by-laws,  and  do  all  acts  appertaining  to  the  corporation,  un- 
der certain  restrictions  prescribed  in  the  act. 

These  properties,  with  different  modifications  in  some  instances,  belong  to 
all  corporations.  Their  importance  strikes  the  eye. 

That  the  power  of  creating  corporations  is  not  expressly  given  to  Congress, 
is  obvious. 

If  it  can  be  exercised  by  them,  it  must  be, 

1st.  Because  the  nature  of  the  Federal  Government  implies  it;  or, 

2d.  Because  it  is  involved  in  some  of  the  specified  powers  of  legislation;  or, 

3d.  Because  it  is  necessary  and  proper  to  carry  into  execution  some  of  the 
specified  powers: 

1st.  To  be  implied  in  the  nature  of  the  Federal  Government,  would  beget 
a  doctrine  so  indefinite  as  to  grasp  every  power. 

Governments  having  no  written  constitution  may,  perhaps,  claim  a  lati- 
tude of  power  not  always  easy  to  be  determined.  Those  which  have  written 
constitutions  are  circumscribed  by  a  just  interpretation  of  the  words  contain- 
ed in  them.  Nay,  farther;  a  legislature,  instituted  even  by  a  written  consti- 
tution, but  without  a  special  demarcation  of  powers.,  may,  perhaps,  be  pre- 
sumed to  be  left  at  large,  as  to  all  authority  which  is  communicable  by  the 
people,  and  does  not  affect  any  of  those  paramount  rights,  which  a  free  people 
cannot  be  supposed  to  confide  even  to  their  representatives.  Essentially 
otherwise  is  the  condition  of  a  legislature  whose  powers  are  described.  An 
example  of  the  former,  is  in  the  State  Legislatures;  of  the  latter,  in  the  Legis- 
lature of  the  Federal  Government,  the  characteristic  of  which  has  been  con- 
fessed by  Congress,  in  the  twelfth  amendment,  to  be,  that  it  claims  no  pow- 
ers which  are  not  delegated  to  it. 

This  last  observation  straitens  the  federal  powers,  and  opposes  an  opin- 
ion, not  unpatrpnised,  that  Congress  may  exercise  all  authority  to  which  the 
States  are  individually  incompetent. 

If  any  subject  of  government,  from  which  the  States  are  not  excluded  by 
the  constitution,  be  beyond  their  jurisdiction  within  their  own  limits,  let  it  be 
shown:  it  cannot  be  easily  conceived. 

But  what  if  a  subject  should  really  exist?  Is  the  argument  less  conclusive 
to  say,  that  the  States  must  retain  it,  because  it  is  not  given  to  the  Federal 


CHARTER  OF  1791.  87 

Government,  than  that  the  latter,  although  limited  in  itself,  possesses  it,  be- 
cause it  is  not  within  the  verge  of  a  State  constitution?  While,  on  the  other 
hand,  it  ought  not  to  be  denied  that  the  Federal  Government  superintendsthe 
general  welfare  of  the  States,  it  ought  not  to  be  forgotten,  on  the  other,  that 
it  superintends  it  according  to  the  dictates  of  the  constitution. 

The  opinion  above  alluded  to  can  have  only  one  other  object,  namely,  that 
every  institution  to  which  a  single  State  can  give  efficacy  only  within  its  own 
boundaries,  devolves  on  Congress.  But  the  extravagance  of  such  a  position,  is 
manifested  by  a  single  circumstance,  that  the  cutting  of  canals  through  two 
or  more  States,  at  the  will  of  Congress,  is  one  of  its  least  consequences. 

2d.  We  ask,  then,  in  the  second  place,  whether,  upon  any  principle  of  fair 
construction,  the  specified  powers  of  legislation  involve  the  power  of  grant- 
ing charters  of  incorporation:1  We  say  charters  of  incorporation,  without  con- 
fining the  question  to  the  bank;  because  the  admission  of  it  in  that  instance, 
is  an  admission  of  it  in  every  other,  in  which  Congress  may  think  the  useof  it 
equally  expedient. 

There  is  a  real  difference  between  the  rule  of  interpretation,  applied  to  a 
law  and  a  constitution.  The  one  comprises  a  summary  of  matter,  for  the 
detail  of  which  numberless  laws  will  be  necessary;  the  other  is  the  very  de- 
tail. The  one  is,  therefore,  to  be  construed  with  a  discreet  liberality,  the 
other,  with  a  closer  adherence  to  the  literal  meaning. 

But,  when  we  compare  the  modes  of  construing  a  State  and  the  Federal 
constitution,  we  are  admonished  to  be  stricter  with  regard  to  the  latter,  be- 
cause there  is  a  greater  danger  of  error  in  defining  partial,  than  general 
powers. 

The  rule,  therefore,  for  interpreting  the  specified  powers,  seems  to  be,  that, 
as  each  of  them  includes  those  details,  winch  properly  constitute  the  whole 
of  the  subject  to  which  the  power  relates,  the  details  themselves  must  be 
fixed  by  reasoning.  And  the  appeal  may,  on  this  occasion,  be  made  to  com- 
mon sense  and  common  language. 

Those  powers,  then,  ^vhich  bear  any  analogy  to  that  of  incorporation,  shall 
be  examined  separately  in  their  constituent  parts:  and  afterwards,  in  those 
traits  which  are  urged  to  have  the  strongest  resemblance  to  the  favorite  power. 

First.  Congress  have  power  to  lay  and  collect  taxes,  &c.  The  heads  of  this 
power  are, 

1st.  To  ascertain  the  subjects  of  taxation,  &c. 

2d.  To  declare  the  quantum  of  taxation,  &c. 

3d.  To  prescribe  the  mode  of  collection;  and 

4th.  To  ordain  the  manner  of  accounting  for  the  taxes,  &c. 

Second.  Congress  have  also  power  to  borrow  money  on  the  credit  of  the 
United  States. 

The  heads  of  this  power,  are, 

1st.  To  stipulate  a  sum  to  be  lent; 

2d.  To  stipulate  an  interest,  or  no  interest,  to  be  paid;  and 

3d.  To  stipulate  the  time  and  manner  of  repayment,  unless  the  loan  be 
placed  on  an  irredeemable  fund. 

Third.  Congress  have  also  power  to  regulate  commerce  with  foreign  nations, 
among  the  several  States,  and  with  the  Indian  tribes. 

The  heads  of  this  power,  with  respect  to  foreign  nations,  are, 

1st.  To  prohibit  them  or  their  commodities  from  our  ports; 

2d.  To  impose  duties  on  them,  where  none  existed  before,  or  to  increase 
existing  duties  on  them; 

3d.  To  subject  them  to  any  species  of  custom  house  regulations;  or, 

4th.  To  grant  them  any  exemptions  or  privileges  which  policy  may  suggest. 

The  heads  of  this  power,  with  respect  to  the  several  States,  are  little  more 
than  to  establish  the  forms  of  commercial  intercourse  between  them,  and  to 
keep  the  prohibitions  which  the  constitution  imposes  on  that  intercourse,  un- 
diminished  in  their  operation;  that  is,  to  prevent  taxes  on  imports  or  exports; 
preferences  to  one  port  over  another,  by  any  regulation  of  commerce  or  reve- 


88  BANK  OF  THE  UNITED  STATES. 

nue;  and  duties  upon  the  entering  or  clearing  of  the  vessels  of  one  State  in 
the  ports  of  another. 

The  heads  of  this  power,  with  respect  to  Indian  tribes,  are, 

1st.  To  prohibit  the  Indians  from  coming  into,  or  trading  within,  the  United 
States; 

2d.  To  admit  them  with,  or  without,  restrictions; 

3d.  To  prohibit  citizens  of  the  United  States  from  trading  with  them;  or, 

4th.  To  permit  with,  or  without,  restrictions, 

Fourth.  Congress  have  also  power  to  dispose  of,  and  make  all  needful  rules 
and  regulations  respecting,  the  territory,  or  other  property  belonging  to  the 
United  States. 

The  heads  of  this  power,  are, 

1st.  To  exert  an  ownership  over  the  territory  of  the  United  States,  which 
may  be  properly  called  the  property  of  the  United  States,  as  is  the  Western 
territory,  and  to  institute  a  Government  therein;  or, 

2d.  To  exert  an  ownership  over  the  other  property  of  the  United  States. 

This  property  may  signify, 

1st.  rersonal  property  of  the  United  States,  howsoever  acquired;  or, 

2d.  Real  property,  not  aptly  denominated  territory,  acquired  by  cession  or 
otherwise. 

It  cannot  signify, 

1st.  Debts  due  from  the  United  States; 

2d.  Nor  money  arising  from  the  sources  of  revenue  pointed  out  in  the  con- 
stitution. The  disposal  and  regulation  of  money,  is  the  final  cause  for  raising 
it  by  taxes,  &c. 

Fifth.  The  preamble  to  the  constitution  has  also  been  relied  on  as  a  source 
of  power. 

To  this,  it  will  be  here  remarked,  once  for  all,  that  the  preamble,  if  it  be 
operative,  is  a  full  constitution  of  itself,  and  the  body  of  the  constitution  is 
useless;  but  that  it  is  declarative  only  01  the  views  of  the  convention,  which 
they  supposed  would  be  best  fulfilled  by  the  powers  delineated;  and  that  such 
is  the  legitimate  nature  of  preambles. 

With  this  analysis  of  the  foregoing  specified  powers,  compare  each  of  the 
corporate  powers,  and  where  is  the  similitude?  It  lies,  say  the  advocates  of 
the  bill,  in  the  power  to  lay  and  collect  taxes,  &c.;  because  it  facilitates  the 
payment  of  them:  in  that  of  borrowing  money,  because  it  creates  an  ability  to 
lend;  in  that  of  regulating  commerce,  because  it  increases  the  medium  of  cir- 
culation, and  thus  encourages  activity  and  industry.  In  that  of  disposing  and 
regulating  property,  because  the  contributions  and  the  interest  of  the  United 
States  in  the  bank,  are  property  of  the  United  States.  Of  each  of  these  rea- 
sons, something  will  be  said  in  their  order. 

The  incorporation  of  a  bank  can  facilitate  the  payment  of  taxes,  only  by 
creating  a  faculty  to  pay,  or  by  supplying  a  deficient  medium,  or  by  rendering 
the  transportation  of  money  to  the  seat  of  government  more  convenient.  But, 
to  lay  and  collect  taxes,  is,  in  fact,  to  demand  and  receive  a  public  debt* 
resting  the  mode  of  procuring  the  money  on  the  resources  of  the  debtors;  and, 
as  to  its  transportation,  surely  there  are  many  other  vehicles  besides  bank 
bills. 

To  borrow  money,  presupposes  the  accumulation  of  a  fund  to  be  lent;  and 
is  secondary  to  the  creation  of  an  ability  to  lend. 

By  regulating  commerce,  in  order  to  increase  the  medium  of  circulation, 
cannot  be  intended  any  of  the  commercial  powers  designated  above;  these 
being  very  remote  from  the  incorporation  of  a  bank.  Nor  can  it  be  imagined, 
that  it  is  intended  to  reach  the  emission  of  paper  money.  What  construction 
remains,  by  which  to  regulate  commerce,  can  increase  the  medium?  Only  the 
emission  of  coin,  which  is  licensed  in  terms  by  another  clause. 

To  dispose  of,  or  to  regulate,  property,  even  bank  stock  itself,  is  utterly 
distinct  from  the  incorporation  of  a  bank:  for  the  contributions  on  which  the 
bank  stock  arises,  go  upon  the  principle,  that  a  bank  already  exists;  how  else 
can  contributions  be  made  to  itr 


CHARTER  OF  1791.  gg 

But,  in  truth,  the  serious  alarm  is  in  the  concentered  force  of  these  senti- 
ments. If  the  laying  and  collecting  of  taxes  brings  with  it  every  thing  which, 
in  the  opinion  of  Congress,  may  facilitate  the  payment  of  taxes;  if  to  borrow 
money  sets  political  speculation  loose,  to  conceive  what  may  create  an  ability 
to  lends  if  to  regulate  commerce  is  to  range  in  the  boundless  mazes  of  pro- 
jects for  the  apparently  best  scheme  to  invite  from  abroad,  or  to  diffuse  at 
home,  the  precious  metals;  if  to  dispose  of,  or  to  regulate,  property  of  the 
United  States,  is  to  incorporate  a  bank,  that  stock  may  be  subscribed  to  it  by 
them,  it  may,  without  exaggeration,  be  affirmed,  that  a  similar  construction  on 
every  specified  federal  power,  will  stretch  the  arm  of  Congress  into  the  whole 
circle  of  State  legislation. 

The  general  qualities  of  the  Federal  Government,  independent  of  the  con- 
stitution and  the  specified  powers,  being  thus  insufficient  to  uphold  the  incor- 
poration of  a  bank,  we  come  to  the  last  inquiry,  which  has  been  already  anti- 
cipated, whether  it  be  sanctified  by  the  power  to  make  all  laws,  which  snail  be 
necessary  and  proper  for  carrying  into  execution  the  powers  vested  by  the 
constitution.  To  be  necessary  is  to  be  incidental,  or,  in  other  words,  may  be 
denominated  the  natural  means  of  executing  a  power. 

The  phrase  "and  proper,"  if  it  has  any  meaaing,  does  not  enlarge  the  powers 
of  Congress,  but  rather  restricts  them.  For  no  power  is  to  be  assumed  under 
the  general  clause,  but  such  as  is  not  only  necessary,  but  proper,  or  perhaps 
expedient  also.  But  as  the  friends  to  the  bill  ought  not  to  claim  any  advantage 
from  this  clause,  so  ought  not  the  enemies  to  it,  to  quote  the  clause  as  having 
a  restrictive  effect.  Both  ought  to  consider  it  as  among  the  surplusage  which  as 
often  proceeds  from  inattention  as  caution. 

However,  let  it  be  propounded  as  an  eternal  question  to  those  who  build  new 
powers  on  this  clause,  whether  the  latitude  of  construction,  which  they  arrogate 
will  not  terminate  in  an  unlimited  power  in  Congress. 

In  every  respect,  therefore,  tinder  which  the  Attorney  General  can  yiew 
the  act,  so  far  as  it  incorporates  the  bank,  he  is  bound  to  declare  his  opinion 
to  be  against  its  constitutionality. 

EDMUND  RANDOLPH. 

February  12M,  1791, 


ATTORNEY  GENERAL'S  OPINION- 

No.  2. 

The  Attorney  General  holding  it  to  be  his  duty  to  address  to  the  President 
of  the  United  States,  as  the  grounds  of  an  official  opinion,  no  arguments,  the 
truth  of  which  he  does  not  acknowledge,  has  reserved  for  this  purpose  several 
topics,  which  have  more  or  less  influenced  the  friends  and  enemies  of  the  bank 
bill;  and  which  ought,  therefore,  to  be  communicated  to  the  President. 

1st.  The  enemies  of  Jhe  bill  have  contended  that  a  rule  of  construction, 
adverse  to  the  power  of  incorporation,  springs  out  of  the  constitution  itself; 
that,  after  the  grant  of  certain  powers  to  Congress,  the  constitution,  as  if  cau- 
tious against  usurpation,  specially  grants  several  other  powers,  more  akin  to 
those  before  given,  than  the  incorporation  of  a  bank  is  to  any  of  those  from 
which  it  is  deduced.  This  position,  they  say,  has  been  exemplified  in  four 
instances: 

1 .  A  power  is  given  to  regulate  commerce;  and  yet  is  added  a  power  to  es- 
tablish uniform  laws  on  the  subject  of  bankruptcies  throughout  the  United 
States;  to  fix  the  standard  of  weights  and  measures;  and  to  establish  post 
offices  and  post  roads. 

2.  A  power  is  given  to  coin  money;  and  yet  is  added  a  power  to  regulate 
the  value  thereof,  and  of  foreign  coin;  and  to  provide  for  the  punishment  of 
counterfeiting  the  current  coin  of  the  United  States. 

3.  A  power  is  given  to  declare  war;  and  yet  is  added  a  power  to  grant  let- 
ters of  marque  and  reprisal;  to  make  rules  concerning  captures  on  land  and 

12 


90  BANK  OF  THE  UNITED  STATES. 

water ;  to  raise  and  support  armies;  to  provide  and  maintain  a  navy;  audio 
make  rules  for  the  government  and  regulation  of  the  land  and  naval  forces. 

4.  A  power  is  given  to  provide  for  calling  forth  the  militia,  to  execute  the 
laws  of  the  Union;  and  yet  is  added  a  power  to  call  them  forth  to  suppress 
insurrections. 

Whosoever  will  attentively  inspect  the  constitution  will  readily  preceive 
the  force  of  what  is  expressed  in  the  letter  of  the  convention,  "That  the  con- 
stitution was  the  result  of  a  spirit  of  amity  and  mutual  deference  and  conces- 
sion." To  argue,  then,  from  its  style  or  arrangement,  as  being  logically  exact, 
is,  perhaps,  a  scheme  of  reasoning  not  absolutely  precise. 

But,  if  the  constitution  were  ever  so  perfect,  considered  even  as  a  composi- 
tion, the  difficulties  which  the  abave  doctrine  has  stated  maybe  solved  by  the 
following  remarks: 

These  similar  powers,  on  which  stress  is  laid,  are  either  incidental,  or  sub- 
stantive, that  is,  independent  powers. 

If  they  be  incidental  powers,  and  the  conclusion  be,  that,  because  some  in- 
cidental powers  are  expressed,  no  others  are  admissible-  it  would  not  only  be 
contrary  to  the  common  forms  of  construction,  but  would  reduce  the  present 
Congress  to  the  feebleness  of  the  old  one,  which  could  exercise  no  powers  not 
expressly  delegated.  So  that  the  advocates  for  the  power  of  incorporation,  on 
the  principle  oi  incidentally  to  some  specified  power,  would,  notwithstanding 
this  supposed  rule  of  interpretation,  be  as  much  at  liberty  to  insist  on  its  being 
an  incidental  power  as  ever. 

If  these  similar  powers  be  substantive  and  independent,  (as  on  many  occa- 
sions they  are,  that  is,  as  they  can  be  conceived  to  be  capable  of  being  used, 
independently  of  what  is  called  the  principal  power,)  it  ought  not  to  be  inferred 
that  they  were  inserted  for  any  other  purpose,  than  to  bestow  an  independent 
power,  where  it  would  not  otherwise  have  existed. 

The  only  remaining  signifi cation,  which  the  doctrine  now  controverted  can 
have,  is,  that  the  incorporation  of  a  bank,,  being  more  wide  from  a  connexion 
with  the  specified  powers  of  legislation  than  the  additional  ones  were  from 
the  principal  powers,,  to  which  they  were  supposed  to  belong,  the  power  of  in- 
corporation being  omitted,  or  rather  not  specially  mentioned,  cannot  be  assum- 
ed. Even  this  answer  is  not  adequate  to  those,  who  derive  the  power  of  incor- 
poration from  the  nature  of  the  Federal  Government. 

Hence  the  rule  contended  for  by  the  enemies  of  the  bill  is  defective  every 
way.  It  would  be  still  more  so  with  respect  to  those  (if  any  such  there  be) 
who  construe  the  words,  "necessary  and  proper  "  so  as  to  embrace  every  ex- 
pedient power. 

2d.  An  appeal  Iras  been  also  made  by  the  enemies  of  the  bill  to  what  passed 
in  the  federal  convention  on  the  subject.  But  ought  not  the  constitution  to  be 
decided  on  by  the  import  of  its  own  expressions?  What  may  not  be  the  conse- 
quence if  an  almost  unknown  history  should  govern  the  construction? 

3d.  The  opinions  too  of  several  respectable  characters  have  been  cited,  as  de- 
livered in  the  state  conventions-  As  these  have  no  authoritative  influence,  so 
ought  it  to  be  remembered,  that  observations  were  uttered  by  the  advocates 
of  the  constitution,  before  its  adoption,  to  which  they  will  not,  and,  in  many 
cases,  ought  not  to  adhere. 

4th.  On  the  other  hand  ,.  the  friends  to  the  bill  have  relied  on  the  congressional 
actsas  to  West  Point,  the  government  of  the  Western  Territory,  and  the 
power  of  removal  from  office  given  to  the  President- 

The  two  first  are  within  express  powers,  as  will  occur,  by  adverting  to  the 
power  to  exercise  authority  over  places  purchased  for  forts,  &c.  and  to  the 
power  to  dispose  of,  and  make  needful  rules  and  regulations  respecting  the 
property  of  the  United  States.  The  last  is  a  point  with  a  great  weight  ot  rea- 
son on  each  side.  If  it  be  founded  on  the  general  nature  of  executive  authoitv,. 
the  power  is  probably  not  tenable,  without  resorting  to  the  doctrines  of  the 
friends  to  the  bill.  But  it  appears  to  be  a  power  not  specifically  given  to  any 
person,  (except  on  an  impeachment,)  and  may,  therefore,  incidentally  belong 
to  Congress  to  confer  on  the  President.  However,  if  this  step  be  an  error,  it 
is  never  too  late  to  correct  it 


CHARTER  OF   1791.  91 

5th.  It  has  been  also  pretended,  that  even  the  infirm  old  Congress  incorpo- 
rated a  bank;  and  can  a  less  power  be  presumed  to  be  vested  in  the  Federal 
Government,  which  has  been  formed  to  remedy  their  weakness?  This  argu- 
ment is  so  indefinite,  the  time  of  the  incorporation  was  so  pressing,  and  the 
States  had  such  an  unlimited  command  over  Congress  and  their  acts,  that 
the  public  acquiescence  ought  not  to  be  the  basis  of  such  a  power  under  the 
present  circumstances. 

f»th.  Congress,  it  is  further  said ,  may  provide  for  the  general  welfare,  and  this 
includes  the  power  of  incorporation:  but  they  are  to  provide  for  the  general 
welfare  in  laying  and  collecting  taxes.  Is  the  incorporation  of  a  bank  a  tax 
bill?  The  meaning  of  the  power,  taken  together,  seems  to  be,  that  Congress 
may  lay  taxes  for  the  purpose  of  expending  money  for  the  public  weKire,  even 
to  subscribe  it  to  a  bank.  But  is  this  like  the  creation  of  a  bank?  It  implies 
that  a  bank  has  been  already  created. 

7th.  It  has  been  also  asserted,  that  Congress  have  an  exclusive  legislation  at 
the  Seat  of  Government  This  will  not  be  true,  until  they  go  to  the  place  of  the 
permanent  residence. 

The  Attorney  General  has  not  collected  any  other  informatioun  pon  this  sub- 
ject, although  more  may,  perhaps,  have  been  said  by  the  partisans  for  and 
against  the  bank,  than  is  here  noticed. 

EDMUND  RANDOLPH. 

February  12//i,  1791. 


OPINION    OF    THOMAS    JEFFERSON,    SECRETARY  OF   STATE,  ON  THE 

SAME  SUBJECT. 

The  bill  for  establishing  a  national  bank  undertakes,  among  other  things, 

1.  To  form  the  subscribers  into  a  corporation. 

2.  To  enable  them,  in  their  corporate  capacities,  to  receive  grants  of  land; 
and  so  far  is  against  the  laws  of  mortmain.* 

3.  To  make  alien  subscribers   capable   of  holding  lands;   and  so  far  is 
against  the  laws  of  alienage. 

4.  To  transmit  these  lands,  on  the  death  of  a  proprietor,  to  a  certain  line 
of  successors;  and  so  far  changes  the  course  of  descents. 

5.  To  put  the  lands  out  of  the  reach  of  forfeiture  or  escheat;  and  so  far  is 
against  the  laws  of  forfeiture  and  escheat. 

6.  To  transmit  personal  chattels  to  successors,  in  a  certain  line;  and  so  far 
is  against  the  laws  of  distribution. 

7.  To  give  them  the  sole  and  exclusive  right  of  banking  under  the  national 
authority;  and  so  far  is  against  the  laws  of  monopoly. 

8.  To  communicate  to  them  a  power  to  make  laws  paramount  to  the  laws 
of  the  States;  for  so  they  must  be  construed,  to  protect  the  institution  from 
the  control  of  the  State  Legislatures;  and  so,  probably?  they  will  be  con- 
strued. 

I  consider  the  foundation  of  the  constitution  as  laid  on  this  ground,  that, 
"  ail  powers  not  delegated  to  the  United  States  by  the  constitution,  nor 
prohibited  bv  it  to  the  States,  are  reserved  to  the  States,  or  to  the  people."  /> 

(12th  amendment.)    To  take  a  single  step  beyond   the    boundaries    thus 
specially  drawn  around  the  powers  of  Congress,  is  to  take  possession  of  a  / 

boundless  field  of  power,  no  longer  susceptible  of  any  definition. 

The  incorporation  of  a  bank,  and  other  powers  assumed  by  this  bill,  have 
not,  in  my  opinion,  been  delegated  to  the  United  States  by  the  constitution: 

'Though  the  constitution  controls  the  laws  of  mortmain,  so  far  as  to  permit  Congress 
itself  to  hold  lands  for  certain  purposes,  yet  not  so  far  as  to  permit  them  to  communi- 
cate a  iimilar  right  to  other  corporate  bodies. 


92  BANK  OF  THE  UNITED  STATES. 

I.  They  are  not  among  the  powers  specially  enumerated;  for  these  are, 

1 .  A  power  to  lay  tuxes  for  the  purpose  of  paying  the  debts  of  the  United 
State*;  but  no  debt  is  paid  by  this  bill,  nor  any  tax  laid.     Were  it  a  bill  to 
raise  money,  its  origination  in  the  Senate  would  condemn  it  by  the  constitution. 

2.  "  To  borrow  money."    But  this  bill  neither  borrows  money,  nor  insure* 
the  borrowing  it.    The  proprietors  of  the  bank  will  be  just  as  free,  as  any  other 
money  holders,  to  lend,  or  not  to  lend,  their  money  to  the  public:  the  operation 
proposed  in  the  bill,  first  to  lend  them  two  millions,  and  then  borrow  them 
back  again,  cannot  change  the  nature  of  the  latter  act,  which  will  still  be  a 
payment^  and  not  a  loan,  call  it  by  whatever  name  you  please. 

3.  "To  regulate  commerce  with  foreign  nations,  ami  among  the  States, 
and  with  the  Indian  tribes."    To  erect  a  bank,  and  to  regulate  commerce, 
are  very  different  acts.     He  who  erects  a  bank,  creates  a  subject  of  commerce 
in  its  bills;  so  does  he,  who  makes  a  bushel  of  wheat,  or  digs  a  dollar  out  of 
the  mines;   yet  neither  of  these  persons  regulates  commerce  thereby.    To 
make  a  thing  which  may  be  bought  and  sold,  is  not  to  prescribe  regulations  for 
buying  and  selling.    Besides,  if  this  was  an  exercise  of  the  power  of  regulating 
commerce,  it  would  be  void,  as  extending  as  much  to  the  internal  commerce  of 
every  State,  as  to  its  external;  for  the  power  given  to  Congress  by  the  constitu- 
tion doesnot  extend  to  the  internal  regulation  of  the  commerce  ot  a  State,  (that 
is  to  say,  of  the  commerce  between  citizen  and  citizen,)  which  remains  exclu- 
sively with  its  own  legislature;  but  to  its  external  commerce  only.     That  is  to 
say,  its  commerce  with  another  State,  or  with  foreign  nations,  or  with  the  Indian, 
tribes:  accordingly  the  bill  does  not  propose  this  measure  as  a  "regulation  of 
trade,"  but,  as  "productive  of  considerable  advantage  to  trade;"  still  less  are 
these  powers  covered  by  any  other  of  the  special  enumerations. 

II.  Nor  are  they  within  either  of  the  general  phrases,  which  are  the  two 
following: 

1.  "To  lay  taxes  to  provide  for  the  general  welfare  of  the  United  States;'* 
that  is  to  say,  to  lay  taxes/or  the  purpose  of  providing  for  the  general  welfare: 
for  the  laying  of  taxes  is  the  p&wer*  and  the  general  welfare  the  purpose  for 
which  the  power  is  to  be  exercised.    They  are  not  to  lay  taxes  ad  libitum,, 
for  any  purpose  they  please,  but  only  to  pay  the  debts,  or  provide  for  the 
welfare  of  the  Union.    In  like  manner,  they  are  not  to  do  any  thing  they 
please  to  provide  for  the  general  welfare,  but  only  to  lay  taxes  for  that  pur- 
pose.    To  consider  the  latter  phrase,  not  as  describing  the  purpose  of  the  first, 
but  as  giving  a  distinct  arid  independent  power  to  do  any  act  they  please, 
which  might  be  for  the  good  of  the  Union,  would  render  all  the  preceding 
and  subsequent  enumerations  of  power  completely  useless:  it  would  reduce 
the  whole  instrument  to  a  single  phrase,  that  of  instituting  a  Congress  with 
power  to  do  whatever  would  be  for  the  good  of  the  United  States;  and,  as- 
they  would  be  the  sole  judges  of  the  good  or  evil,  it  would  be  also  a  power  to 
do  whatever  evil  they  pleased.    It  is  an  established  rule  of  construction* 
where  a  phrase  \yillbear  either  of  two  meanings,  to  give  it  that  which  will 
allow  some  meaning  to  the  other  parts  of  the  instrument,  and  not  that  which 
would  render  all  the  others  useless.    Certainly  no  such  universal  power  was 
meant  to  be  given  to  them.    It  was  intended  to  lace  them  up  straitly  within 
the  enumerated  powers;  and  those,  without  which,  as  means,  those  powers 
could  not  be  carried  into  effect.    It  is  known  that  the  very  power  now  propos- 
ed as  a  means*  was  rejected  as  an  end  by  the  convention  which  formed  the 
constitution  :  a  proposition  was  made  to  them  to  authorize  Congress  to  open 
canals,  and  an    amendatory  one  to  empower  them  to  incorporate ;  but  the 
•whole  was  rejected,  and  one  of  the  reasons  of  rejection  urged  in  the  debate 
was,  that  then  they  would  have  power «Jto i  erect  a  bank,  which  would  render 
the  great  cities,  where  there  were  prejudices  or  jealousies  on  this  subject,  ad- 
verse to  the  reception  of  the  constitution. 

2.  The  second  general  phrase  is,  "  to  make  all  laws  necessary  and  proper 
for  carrying  into  execution  the  enumerated  powers."    But  they  can  all  be 
carried  into  execution  without  a  bank.     A  bank,  therefore,  is  not  necessary, 
and*  consequently,  not  authorised  by  this  phrase. 


s 


CHARTER  OF  1791. 


It  has  been  much  urged,  that  a  bank  will  give  great  facility,  or  convenience, 
in  the  collection  of  taxes.  Suppose  this  were  true,  yet  the  constitution  allows 
only  the  means  which  are  "  necessary,"  not  those  which  are  merely  con- 
venient for  effecting  the  enumerated  powers.  If  such  a  latitude  of  construc- 
tion be  allowed  to  this  phrase,  as  to  give  any  non  enumerated  power,  it  will 
go  to  every  one;  for  there  is  no  one,  which  ingenuity  may  not  torture  into  a 
convenience,  in  some  ivay  or  other,  to  some  one  of  so  long  a  list  of  enumerated 
powers:  it  would  swallow  up  all  the  delegated  powers,  and  reduce  the  whole 
to  one  phrase,  as  before  observed.  Therefore  it  was  that  the  constitution  re- 
strained them  to  the  necessary  means;  that  is  to  say,  to  those  means,  without 
which  the  grant  of  the  power  would  be  nugatory. 

But  let  us  examine  tnis  convenience,  and  see  what  it  is.  The  report  on  the 
subject  (page  3)  states  the  only  general  convenience  to  be  the  preventing  the 
transportation  and  re-transportation  of  money  between  the  States  and  the 
treasury,  (for  I  pass  over  the  increase  of  circulating  medium,  ascribed  to  it  as 
a  merit,  and  which,  according  to  my  ideas  of  paper  money,  is  clearly  a  de- 
merit.) Every  State  will  have  to  pay  a  sum  of  tax  money  into  the  treasury; 
and  the  treasury  will  have  to  pay,  in  every  State,  a  part  of  the  interest  on  the 
public  debt,  and  salaries  to  the  officers  of  Government  resident  in  that  State. 
In  most  of  the  States  there  will  still  be  a  surplus  of  tax-money  to  come  up  to 
the  Seat  of  Government  for  the  officers  residing  there.  The  payment  ot  in- 
terest and  salary  in  each  State,  may  be  made  by  treasury  orders  on  the  State 
collector.  This  will  take  up  the  greater  part  of  the  money  he  has  collected 
for  his  State,  and,  consequently,  prevent  the  great  mass  of  it  from  being 
drawn  out  of  the  State.  If  there  be  a  balance  of  commerce  in  favor  of  that 
State  against  the  one  in  which  the  Government  resides,  the  surplus  of  taxes 
will  be  remitted  by  the  bills  of  exchange  drawn  for  that  commercial  balance; 
and  so  it  must  be  if  there  was  a  bank.  But  if  there  be  no  balance  of  com- 
merce, either  direct  or  circuitous,  all  the  banks  in  the  world  could  not  bring 
up  the  surplus  of  taxes,  but  in  the  form  of  money.  Treasury  orders,  then,  and 
bills  of  exchange,  may  prevent  the  displacement  of  the  main  mass  of  the  money 
collected,  without  the  aid  of  any  bank;  and  where  these  fail,  it  cannot  be 
prevented,  even  with  that  aid. 

/  Perhaps,  indeed,  bank  bills  may  be  a  more  convenient  vehicle  than  trea-  ^ 
sury  orders;  but  a  little  difference  in  the  degree  of  convenience  cannot  consti- 
tute the  necessity,  which  the  constitution  makes  the  ground  for  assuming  any 
non  enumerated  power.  / 

Besides,  the  existing  banks  will,  without  a  doubt,  enter  into  arrangements 
for  lending  their  agency;  and  the  more  favorably,  as  there  will  be  a  competi- 
tion among  them  for  it;  whereas  the  bill  delivers  us  up  bound  to  the  national 
bank,  who  are  free  to  refuse  all  arrangement,  but  on  their  own  terms,  and  , 
the  public  not  free,  on  such  refusal,  to  employ  any  other  bank.  That  of 
Philadelphia,  I  believe,  now  does  this  business  by  their  post  notes,  which  by 
an  arrangement  with  the  treasury  are  paid  by  any  State  collector  to  whom 
they  are  presented.  This  expedient  alone  suffices  to  prevent  the  existence  of 
that  necessity,  which  may  justify  the  assumption  of  a  non  enumerated  power 
as  a  means  for  carrying  into  effect  an  enumerated  one.  The  thing  may  be 
done,  and  has  been  done,  and  well  done,  without  this  assumption:  therefore, 
it  does  not  stand  in  that  degree  of  necessity,  which  can  honestly  justify  it. 

It  may  be  said  that  a  bank,  whose  bills  would  have  currency  all  over  the 
States,  would  be  more  convenient,  than  one,  whose  currency  i»  limited  to  a 
single  State.  So  it  would  be  still  more  convenient  that  there  should  be  a 
bank,  whose  bills  .should  have  a  currency  all  over  the  world;  but  it  does  not 
folio iv,  from  this  superior  conveniency,  that  there  exists  any  where  a  power 
to  establish  such  a  bank,  or  that  the  \yorld  may  not  »o  on  very  well  without  it. 
/  Can  it  be  thought  that  the  constitution  intended,  that,  for  a  shade  or  two  of 
convenience,  more  or  less,  Congress  should  be  authorized  to  break  down  the 
most  ancient  and  fundamental  laws  of  the  several  States,  such  as  those  against 
mortmain,  the  laws  of  alienage,  the  rules  of  descent,  the  acts  of  distribution, 
the  laws  of  escheat  and  forfeiture,  the  laws  of  monopoly?  Nothing,  but  a  ne- 


94  BANK  OF  THE  UNITED  STATES. 

cessity  invincible  by  any  other  means,  can  justify  such  a  prostration  of  laws, 
which  constitute  the  pillars  of  our  whole  system  of  jurisprudence.  Will 
Congress  be  too  strait-laced  to  carry  the  constitution  into  honest  effect,  unless 
they  may  pass  over  the  foundation  laws  of  the  State  Governments,  for  the 
slightest  convenience  to  theirs?/ 

The  negative  of  the  President  is  the  shield  provided  by  the  constitution, 
to  protect  against  the  invasions  of  the  Legislature:  1st.  The  rights  of  the  Ex- 
ecutive. 2d.  Of  the  Judiciary.  3d.  Of  the  States  and  State  Legislatures. 
The  present  is  the  case  of  a  right  remaining  exclusively  with  the  States,  and 
is  consequently,  one  of  those  intended  by  the  constitution  to  be  placed  under 
his  protection. 

It  must  be  added,  however,  that,  unless  the  President's  mind,  on  a  view  of 
every  thing,  which  is  urged  for  and  against  this  bill,  is  tolerably  clear  that  it 
is  unauthorized  by  the  constitution;  if  the  pro  and  the  con  hang  so  even  as  to 
balance  his  judgment,  a  just  respect  for  the  wisdom  of  the  Legislature,  would 
naturally  decide  the  balance  in  favor  of  their  opinion:  it  is  chiefly  for  cases, 
where  they  are  clearly  misled  by  error,  ambition,  or  interest,  that  the  consti- 
tution has  placed  a  check  in  the  negative  of  the  President. 

t  THOMAS  JEFFERSON. 

February  15,  1791. 


From  President  Washington  to  Alexander  Hamilton,  Secretary  of  Hit  Treasury. 

PHILADELPHIA,  February  16,  1791. 

SIR:  "An  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States"  is  now  before  me  for  consideration. 

The  constitutionality  of  it  is  objected  to.  It,  therefore,  becomes  more  par- 
ticularly my  duty  to  examine  the  ground  on  which  the  objection  is  built.  As 
a  mean  of  investigation,  I  have  called  upon  the  Attorney  General  of  the  United 
States,  in  whose  Tine  it  seemed  more  particularly  to  be,  for  his  official  exami- 
nation and  opinion.  His  report  is,  that  the  constitution  does  not  warrant  the 
act.  I  then  applied  to  the  Secretary  of  State  for  his  sentiments  on  this  sub- 
ject. These  coincide  with  the  Attorney  General's;  and  the  reasons  for  their 
opinions  having  been  submitted  in  writing,  I  now  require,  in  like  manner, 
yours,  on  the  validity  and  propriety  of  the  above  recited  act:  and  that  you 
may  know  the  points,  on  which  the  Secretary  of  State  and  the  Attorney 
General  dispute  the  constitutionality  of  the  act,  and  that  I  may  be  fully 
possessed  of  the  arguments  for  and  against  the  measure,  before  I  express 
any  opinion  of  my  own,  I  give  you  an  opportunity  of  examining  and  answer- 
ing the  objections  contained  in  the  enclosed  papers.  I  require  the  return  of 
them,  when  your  own  sentiments  are  handed  to  me,  (which  I  wish  may  be  as 
soon  as  is  convenient;)  and,  further,  that  no  copies  of  them  be  taken,  as  it  is 
for  my  own  satisfaction  they  have  been  called  for. 

G.  WASHINGTON. 

To  the  Secretary  of  the  Treasury. 


MONDAY. 

The  Secretary  of  the  Treasury  presents  his  respects  to  the  President  of  the 
United  States,  to  request  his  indulgence  for  not  having  yet  furnished  his  rea- 
sons on  a  certain  point.  He  has  been  ever  since  sedulously  engaged  in  it,  but 
finds  it  will  be  impossible  to  complete  before  Tuesday  evening,  or  Wednes- 
day morning  early.  He  is  anxious  to  give  the  point  a  thorough  examination. 


r  HARTER  OF    1791.  95 

. 
PHILADELPHIA,  23<f  February,  1794.  <£ 

>  | 

The  Secretary  of  the  Treasury  presents  his  respects  to  the  President,  ami 
sends  him  the  opinion  required,  which  occupied  him  the  greatest  part  of  last 
night. 

The  bill  for  extending  the  time  of  opening  subscriptions  passed  yesterday, 
unanimously,  to  an  order  for  engrossing. 


OPINION    OF  ALEXANDER  HAMILTON,   ON    THE  CONSTITUTIONALITY 
OF  A  NATIONAL  BANK. 

The  Secretary  of  the  Treasury  having  perused,  with  attention,  the  papers 
containing  the  opinions  of  the  Secretary  of  State  and  Attorney  General,  con- 
cerning the  constitutionality  of  the  bill  for  establishing  a  national  bank,  pro- 
ceeds, according  to  the  order  of  the  President,  to  submit  the  reasons  which 
have  induced  him  to  entertain  a  different  opinion. 

It  will  naturally  have  been  anticipated  that,  in  performing  this  task,  lie 
would  feel  uncommon  solicitude.  Personal  considerations  alone,  arising 
from  the  reflection  that  the  measure  originated  with  him,  would  be  sufficient 
to  produce  it;  the  sense  which  he  has  manifested  of  the  great  importance  of 
such  an  institution,  to  the  successful  administration  of  the  department  tinder 
his  particular  care,  and  an  expectation  of  serious  ill  consequences  to  result 
from  a  failure  of  the  measure,  do  not  permit  him  to  be  without  anxiety  on 
public  accounts.  But  the  chief  solicitude  arises  from  a  firm  persuasion,  that 
principles  of  construction,  like  those  espoused  by  the  Secretary  of  State  and 
Attorney  General,  would  be  fatal  to  the  just  and  indispensable  authority  of 
the  United  States. 

In  entering  upon  the  argument,  it  ought  to  be  premised,  that  the  objections 
of  the  Secretary  of  State  and  Attorney  General,  are  founded  on  a  general  de- 
nial of  the  authority  of  the  United  States  to  erect  corporations.  The  latter, 
indeed,  expressly  admits,  that,  if  there  be  any  thing  in  the  bill  which  is  not 
warranted  by  the  constitution,  it  is  the  clause  of  incorporation. 

Now,  it  appears  to  the  Secretary  of  the  Treasury,  that  this  general  princi- 
ple is  inherent  in  the  very  definition  of  government,  and  essential  to  every 
step  of  the  progress  to  be  made  by  that  ot  the  United  States;  namely,  that 
every  power  vested  in  a  government,  is,  in  its  nature,  SOVEREIGN,  and  in- 
cludes, by  force  of  the  term,  a  right  to  employ  all  the  means  requisite,  and 
fairly  applicable,  to  the  attainment  of  the  ends  of  such  povvec,  and  which  are. 
not  precluded  by  restrictions  and  exceptions  specified  in  the  constitution,  or 
not  immoral,  or  not  contrary  to  the  essential  ends  of  political  society. 

This  principle,  in  its  application  to  government  in  general,  would  be  ad- 
mitted as  an  axiom:  and  it  will  be  incumbent  upon  those  who  may  incline  to 
deny  it,  to  prove  a  distinction,  and  to  show,  that  a  rule  which,  in  the  general 
system  of  things,  is  essential  to  the  preservation  of  the  social  order,  is  inap- 
plicable to  the  United  States. 

The  circumstance,  that  the  powers  of  sovereignty  are,  in  this  country,  di- 
vided between  the  National  and  State  Governments,  does  not  aftbrd  the  dis- 
tinction required.  It  does  not  follow  from  this,  that  each  of  the  portions  of 
power  delegated  to  the  one  or  to  the  other,  is  not  sovereign  with  regard  to  its 
proper  objects.  It  will  only  follow  from  it,  that  each  has  sovereign  power  as 
to  certain  things,  and  not  as  to  other  things.  To  deny  that  the  Government 
of  the  United  States  has  sovereign  power  as  to  its  declared  purposes  and  trusts, 
because  its  power  does  not  extend  to  all  laws,  would  be  equally  to  deny  that 
the  State  Governments  have  sovereign  power  in  any  case,  because  their  power 
does  not  extend  to  every  case.  The  tenth  section  of  the  first  article  of  the 
constitution,  exhibits  a  long  list  ot  very  important  things  which  they  may 
not  do;  and  thus  the  United  States  would  furnish  the  singular  spectacle  of 


96  BANK  OF  THE  UNITED  STATES. 

a  political  society  without  sovereignty;  or  of  a  people   governed  without 
government. 

If  it  would  be  necessary  to  bring  proof  to  a  proposition  so  clear,  as  that 
which  affirms  that  the  powers  01  the  Federal  Government,  as  to  its  ob- 
jects, are  sovereign,  there  is  a  clause  of  its  constitution  which  would  be  deci" 
sive:  it  is  that  which  declares,  that  the  constitution,  and  the  laws  of  the  Unit- 
ed States  made  in  pursuance  of  it,  and  all  treaties  made,  or  which  shall  be 
made,  under  their  authority,  shall  be  the  supreme  law  of  the  land.  The  power 
which  can  create  the  supreme  law  of  the  land,  in  any  case,  is  doubtless  sove- 
reign as  to  such  case. 

This  general  and  indisputable  principle  puts  at  once  an  end  to  the  abstract 
question,  whether  the  United  States  have  power  to  erect  a  corporation;  that 
is  to  say,  to  give  a  legal  or  artificial  capacity  to  one  or  more  persons,  distinct 
from  the  natural?  For  it  is  unquestionably  incident  to  sovereign  power,  to 
erect  corporations;  and,  consequently,  to  that  of  the  United  States,  in  rela- 
tion to  the  objects  intrusted  to  the  management  of  the  Government. 

The  difference  is  this:  where  the  authority  of  the  Government  is  general,  it 
can  create  corporations  in  all  cases;  where  it  is  confined  to  certain  branches 
of  legislature,  it  can  create  corporations  only  in  those  cases. 

Here,  then,  as  far  as  concerns  the  reasonings  of  the  Secretary  of  State  and 
the  Attorney  General,  the  affirmative  of  the  constitutionality  ot  the  bill  might 
be  permitted  to  rest.  It  will  occur  to  the  President,  that  the  principle  here 
advanced  has  been  untouched  by  either  of  them. 

Nevertheless,  for  a  more  complete  elucidation  of  the  point,  the  arguments 
which  they  had  used  against  the  power  of  the  Government  to  erect  corpora- 
tions, however  foreign  they  are  to  the  great  fundamental  rule  which  has  been 
stated,  shall  be  particularly  examined.  And  after  showing  that  they  do  not 
tend  to  impair  its  force,  it  shall  also  be  shown,  that  the  power  of  incorpora- 
tion, incident  to  the  Government  in  certain  cases,  does  fairly  extend  to  the 
particular  case  which  is  the  object  of  the  bill. 

The  first  of  these  arguments  is,  that  the  foundation  of  the  constitution  is 
laid  on  this  ground,  "  that  all  powers,  not  delegated  to  the  United  States  by 
the  constitution,  nor  prohibited  to  it  by  the  States,  are  reserved  for  the  States 
or  to  the  People;"  whence,  it  is  nieant  to  be  inferred,  that  Congress  can,  in 
no  case,  exercise  any  power  not  included  in  those,  nor  not  enumerated  in  the 
constitution.  And  it  is  affirmed,  that  the  power  of  erecting  a  corporation  is 
not  included  in  any  of  the  enumerated  powers. 

The  main  proposition  here  laid  down,  in  its  true  signification,  is]  not  to  be 
questioned.  It  is  nothing  more  than  a  consequence  of  this  republican  maxim, 
that  all  government  is  a  delegation  of  power;  but  how  much  is  delegated  in 
each  case,  is  a  question  of  fact,  to  be  made  out  by  fair  reasoning  and  con- 
struction, upon  the  particular  provisions  of  the  constitution — taking  as  guides, 
the  general  principles  and  general  ends  of  government. 

It  is  not  denied  that  there  are  implied,  as  well  as  express  powers;  and  that 
the  former  are  as  effectually  delegated  as  the  latter:  and,  for  the  sake  of  ac- 
curacy, it  shall  be  mentioned,  that  there  is  another  class  of  powers,  which 
may  be  properly  denominated  resulting  powers.  It  will  not  be  doubted,  that, 
if  the  United  States  should  make  a  conquest  of  any  of  the  territories  of  its 
neighbors,  they  would  possess  sovereign  jurisdiction  over  the  conquered  ter- 
ritory. This  would  rather  be  a  result  from  the  whole  mass  of  the  powers  of 
the  Government,  and  from  the  nature  of  political  society,  than  a  consequence 
of  either  of  the  powers  specially  enumerated. 

But,  be  this  as  it  may,  it  furnishes  a  striking  illustration  of  the  general  doc- 
trine contended  for.  It  shows  an  extensive  case,  in  which  a  power  of  erect- 
ing corporations  is  either  implied  in,  or  would  result  from,  some,  or  all  of  the 
powers,  vested  in  the  National  Government.  The  jurisdiction  acquired  over 
such  conquered  territory,  would  certainly  be  competent  to  every  species  of 
legislation. 

To  return:  It  is  conceded,  that  implied  powers  are  to  be  considered  as  de- 
legated equally  with  express  ones. 


CHARTER   OF    179L  97 

Then  it  follows,  that,  as  a  power  of  erecting  a  corporation  may  as  well  be 
implied  as  any _  other  thing,  it  may  as  well  be  employed  as  an  instrument  or 
mean  of  carrying  into  execution  any  of  the  specified  powers,  as  any  other  in- 
strument or  mean  whatever.  The  only  question  must  be,  in  this,  as  in  every 
other  case,  whether  the  mean  to  be  employed,  or,  in  this  instance,  the  corpo- 
ration to  be  erected,  has  a  natural  relation  toanyof  the  acknowledged  objects 
or  lawful  ends  of  the  Government?  Thus,  a  corporation  may  not  be  erected 
by  Congress  for  superintending  the  police  of  the  city  of  Philadelphia,  because 
they  are  not  authorized  to  regulate  the  police  of  that  city.  But  one  may  be 
erected  in  relation  to  the  collection  of  taxes,  or  to  the  trade  with  foreign  coun- 
tries, or  to  the  trade  between  the  States,  or  with  the  Indian  tribes;  because  it 
is  the  province  of  the  Federal  Government  to  regulate  those  objects;  and  be- 
cause it  is  incident  to  a  general  sovereign  or  legislative  power  to  regulate  a 
thing,  to  employ  all  the  means  which  relate  to  its  regulation,  to  the  best  and 
greatest  advantage. 

A  strange  fallacy  seems  to  have  crept  into  the  manner  of  thinking  and  rea- 
soning upon  the  subject.  Imagination  appears  to  have  been  unusually  busy 
concerning  it.  An  incorporation  seems  to  have  been  regarded  as  some  great 
independent  substantive  thing;  as  a  political  engine,  and  of  peculiar  magni- 
tude and  moment:  whereas  it  is  truly  to  be  considered  as  a  Quality,  capacity, 
or  mean  to  an  end.  Thus,  a  mercantile  company  is  formed  with  a  certain 
capital,  for  the  purpose  of  carrying  on  a  particular  branch  of  business.  Here 
the  business  to  be  prosecuted  is  the  end.  The  association,  in  9ixler  to  form 
the  requisite  capital,  is  the  primary  mean.  Suppose  that  an  incorporation 
were  added  to  this;  it  would  only  be  to  add  a  new  quality  to  that  association; 
to  give  it  an  artificial  capacity,  by  which  it  would  be  enabled  to  prosecute  the 
business  with  more  safety  and  convenience. 

That  the  importance  of  the  power  of  incorporation  has  been  exaggerated, 
leading  to^erroneous  conclusions,  will  further  appear,  from  tracing  it  to  its 
origin.  The  Roman  law  is  the  source  of  it:  according  to  which,  a  voluntary 
association  of  individuals,  at  any  time,  or  for  any  purpose,  was  capable  of 
producing  it.  In  England,  whence  our  notions  of  it  are  immediately  borrow- 
ed, it  seems  part  of  the  executive  authority:  and  the  exercise  of  it  has  been 
often  delegated  by  that  authority:  whence,  therefore,  the  ground  of  the  sup- 
position, that  it  lies  beyond  the  reach  of  all  those  very  important  portions  of 
sovereign  power,  legislative  as  well  as  executive,  which  belong  to  the  Govern- 
ment of  the  United  States. 

To  this  mode  of  reasoning,  respecting  the  right  of  employing  all  the  means 
requisite  to  the  execution  of  the  specified  powers  of  the  Government,  it  is  ob- 
jected, that  none  but  necessary  and  proper  means  are  to  be  employed;  and  the 
Secretary  of  State  maintains,  that  no  means  are  to  be  considered  as  neces- 
sary but  those  without  which  the  grant  of  the  power  would  be  nugatory. 
Nay,  so  far  does  he  go  in  his  restrictive  interpretation  of  the  word,  as  even  to 
make  the  case  of  necessity,  which  shall  warrant  the  constitutional  exercise  of 
the  power,  to  depend  on  casual  and  temporary  circumstances;  an  idea  which 
alone  refutes  the  construction.  The  expediency  of  exercising  a  particular 
power,  at  a  particular  time,  must,  indeed,  depend  on  circumstances;  but  the 
constitutional  right  of  exercising  it  must  be  uniform  and  invariable,  the  same 
to-day  as  to-morrow. 

All  the  arguments,  therefore,  against  the  constitutionality  of  the  bill,  derived 
from  the  accidental  existence  of  certain  State  banks,  institutions  which  hap- 
pen to  exist  to-day,  and,  for  aught  that  concerns  the  Government  of  the  Unit- 
ed States,  may  disappear  to-morrow,  must  not  only  be  rejected  as  fallacious, 
but  must  be  viewed  as  demonstrative  that  there  is  a  radical  source  of  error  in 
the  reasoning. 

It  is  essential  to  the  being  of  the  National  Government,  that  so  erroneous  a 
conception  of  the  meaning  of  the  word  necessary  should  be  exploded. 

It  is  certain,  that  neither  the  grammatical,  nor  popular  sense  of  the  term, 
requires  that  construction.     According  to  both,  necessary  often  means  no 
more  than  needful,  requisite,  incidental,  useful,  or  conducive  to.    It  is  a  com- 
13 


08  BANK    OF  THE   UNITED    STATES. 

mon  mode  of  expression  to  say,  that  it  is  necessary  for  a  government  or  a 
person  to  do  this  or  that  thing,  when  nothing  more  is  intended  or  under- 
stood than  that  the  interest  ot  the  Government  or  person  require,  or  will 
be  promoted  by,  the  doing  of  this  or  that  thing.  The  imagination  can  be  at  no 
loss  for  exemplification  of  the  use  of  the  word  in  this  sense. 

And  it  is  the  true  one  in  which  it  is  to  be  understood,  as  used  in  the  con- 
stitution. The  whole  turn  of  the  clause  containing  it,  indicates  that  it  was 
the  intent  of  the  convention,  by  that  clause,  to  give  a  liberal  latitude  to  the 
exercise  of  the  specified  powers.  The  expressions  have  a  peculiar  compre- 
hensiveness. They  are,  to  make  all  laws  necessary  and  proper  for  carrying 
into  execution  the  foregoing  powers,  and  all  other  powers  vested  by  the  con- 
stitution in  the  Government  of  the  United  States,  or  in  any  department  or 
office  thereof.  To  understand  the  word  as  the  Secretary  of  State  does,  would 
be  to  depart  from  its  obvious  and  popular  sense,  and  to  give  it  a  restrictive 
opera tion;  an  idea  never  before  entertained.  It  would  be  to  give  it  the  same 
force  as  if  the  word  absolutely,  or  indispensably,  had  been  prefixed  to  it. 

Such  a  construction  would  beget  endless  uncertainty  and  embarrassment. 
The  cases  must  be  palpable  and  extreme,  in  which  it  could  be  pronounced 
with  certainty,  that  a  measure  was  absolutely  necessary;  or  one,  without 
which  the  exercise  of  a  given  power  would  be  nugatory.  There  are  few  mea- 
sures of  any  government  which  would  stand  so  severe  a  test.  To  insist  upon 
it,  would  be  to  make  the  criterion  of  the  exercise  of  any  implied  power,  a  case 
of  extreme  necessity;  which  is  rather  a  rule  to  justify  the  overleaping  of  the 
bounds  of  constitutional  authority,  than  to  govern  the  ordinary  exercise  of  it. 

It  may  be  truly  said  of  every  Government,  as  well  as  that  of  the  United 
States,  that  it  has  only  a  right  to  pass  such  laws  as  are  necessary  and  proper  to 
accomplish  the  objects  intrusted  to  it:  for  no  government  has  a  right  to  do 
merely  what  it  pleases.  Hence,  by  a  process  ot  reasoning  similar  to  that  of 
the  Secretary  of  State,  it  might  be  proved  that  neither  of  the  State  Govern- 
ments has  a  right  to  incorporate  a  bank.  It  might  be  shown,  that  all  the  pub- 
lic business  of  the  State  could  be  performed  without  a  bank;  and,  inferring 
thence  that  it  was  unnecessary,  it  might  be  argued,  that  it  could  not  be  done, 
because  it  is  against  the  rule  which  has  been  just  mentioned. 

A  like  mode  of  reasoning  would  prove,  that  there  was  no  power  to  incorpo- 
rate the  inhabitants  of  a  town  with  a  view  to  a  more  perfect  police:  for  it  is 
certain,  that  an  incorporation  may  be  dispensed  with,  though  it  is  better  to 
have  one.  It  is  to  be  remembered,  that  there  is  no  express  power  in  any 
State  constitution  to  erect  corporations. 

The  degree  in  which  a  measure  is  necessary,  can  never  be  a  test  of  the  legal 
right  to  adopt  it.  That  must  be  a  matter  of  opinion,  and  can  only  be  a  test 
of  expediency.  The  relation  between  the  measure  and  the  end;  between  the 
nature  of  the  mean  employed  towards  the  execution  of  a  power,  and  the  ob- 
ject of  that  power;  must  be  the  criterion  of  constitutionality;  not  the  more  or 
less  of  necessity  or  utility. 

The  practice  of  the  Government  is  against  the  rule  of  construction  advocat- 
ed by  the  Secretary  of  State.  Of  this,  the  act  concerning  light  houses,  bea- 
cons, buoys,  and  public  piers,  is  a  decisive  example.  This,  doubtless,  must 
lie  referred  to  the  power  of  regulating  trade,  and  is  fairly  relative  to  it.  But 
it  cannot  be  affirmed,  that  the  exercise  of  that  power,  in  this  instance,  was 
strictly  necessary;  or,  that  the  power  itself  would  be  nugatory  without  that 
of  regulating  establishments  of  this  nature. 

This  restrictive  interpretation  of  the  word  necessary,  is  also  contrary  to  this 
sound  maxim  of  construction;  namely,  that  the  powers  contained  in  a  consti- 
tution of  government,  especially  those  which  concern  the  general  administra- 
tion of  the  affairs  of  a  country,  its  finances,  trade,  defence,  &c.  ought  to  be 
construed  liberally  in  advancement  of  the  public  good.  This  rule  does  not 
depend  on  the  particular  form  of  a  government,  or  on  the  particular  demarca- 
tion of  the  boundaries  of  its  powers,  but  on  the  nature  and  objects  of  govern- 
ment itself.  The  means  by  which  national  exigencies  are  to  be  provided  for ; 
national  inconveniencies  obviated;  national  prosperity  promoted;  are  of  such 


CHARTER    OF    1791.  <£§ 

infinite  variety,  extent,  and  complexity,  that  there  must,  of  necessity,  be  great 
latitude  of  discretion  in  the  selection  and  application  of  those  means.  Hence, 
consequently,  the  necessity  and  propriety  of  exercising  the  authorities  intrust- 
ed to  a  government,  on  principles  of  liberal  construction. 

The  Attorney  General  admits  the  rule,  but  takes  a  distinction  between  a 
State  and  the  Federal  constitution.  The  latter,  he  thinks,  ought  to  be  con- 
strued with  greater  strictness,  because  there  is  more  danger  of  error  in  defin- 
ing partial  than  general  powers. 

IJut  the  reason  of  the  rule  forbids  such  a  distinction.  This  reason  is,  the 
variety  and  extent  of  public  exigencies,  a  far  greater  proportion  of  which,  and 
of  a  far  more  critical  kind,  are  objects  of  national,  than  of  State  administra- 
tion. The  greater  danger  of  «rror,  as  far  as  it  is  supposeable,  may  be  a  pru- 
dential reason  for  caution  iu  practice,  but  it  cannot  be  a  rule  of  restrictive  in- 
terpretation. 

In  regard  to  the  clause  of  the  constitution  immediately  under  consideration, 
it  is  admitted  by  the  Attorney  General,  that  no  restrictive  effect  can  be  as- 
cribed to  it.  He  defines  the  word  necessary,  thus:  fci  To  be  necessary,  is  to 
*4  be  incidental^  and  may  be  denominated  the  natural  means  of  executing  a 
power. " 

But  while,  on  the  one  hand,  the  construction  of  the  Secretaiy  of  State 
is  deemed  admissible,  it  will  not  be  contended,  on  the  other,  that  the  clause 
in  question  gives  any  new  or  independent  power.  But  it  gives  an  explicit 
sanction  to  the  doctrine  of  implied  powers,  and  is  equivalent  to  an  admission 
of  the  proposition,  that  the  Government,  as  to  Us  specified  powers  and  06- 
jec.ts,  has  plenary  and  sovereign  authority;  in  some  cases,  paramount  to  that 
of  the  States;  in  others,  co-ordinate  with  it.  For  such  is  the  plain  import 
of  the  declaration,  that  it  may  pass  all  LAWS  necessary  and  proper  to  carry 
into  execution  thoso  powers. 

It  is  no  valid  objection  to  the  doctrine,  to  say,  that  it  is  calculated  to  ex- 
tend the  powers  of  the  General  Government  throughout  the  entire  sphere  of 
State  legislation.  The  same  thing  has  been  said,  and  may  be  said,  with  re- 
gard to  every  exercise  of  power,  by  implication  or  construction.  The  mo- 
ment the  literal  meaning  is  departed  from,  there  is  a  chance  of  error  and 
abuse:  and  yet  an  adherence  to  the  letter  of  its  powers  would  at  once  arrest  the 
motion  of  Government.  It  is  not  only  agreed,  on  all  hands,  that  the  exercise 
of  constructive  powers  is  indispensable,  but  evety  act  which  has  been  passed, 
is  more  or  less  an  exemplification  of  it.  One  has  already  been  mentioned; 
that  relating  to  light  houses,  &c.  That  which  declares  the  power  of  the  Pre 
sident  to  remove  officers  at  pleasure,  acknowledges  the  same  truth  in  another, 
and  a  signal  instance. 

•  The  truth  is,  that  difficulties  on  this  point  are  inherent  in  the  nature  of  the 
federal  constitution.  They  result  inevitably  from  a  division  of  legislative 
power.  The  consequence  of  this  division  is,  that  there  will  be  cases  clearly 
within  the  power  ot  the  National  Government,  others,  clearly  without  its 
power;  and  a  third  class,  which  will  leave  room  for  controversy  and  difference 
of  opinion,  and  concerning  which  a  reasonable  latitude  of  judgment  must  be 
allowed. 

But  the  doctrine  \yhich  is  contended  for,  is  not  chargeable  with  the  conse 
quences  imputed  to  it.    It  does  not  affirm  that  the  National  Government  is 
sovereign  in  all  respects,  but  that  it  is  sovereign  to  a  certain  extent;  that  is,  to 
the  extent  of  the  objects  of  its  specified  powers. 

It  leaves,  therefore,  a  criterion  of  what  is  constitutional,  and  of  what  is  not 
so.  This  criterion  is  the  end  to  which  the  measure  relates  as  a  mean.  If  the 
end  be  clearly  comprehended  within  any  of  the  specified  powers,  and  if  the 
measure  have  an  obvious  relation  to  that  end,  and  is  not  forbidden  by  any  par* 
ticular  provision  of  the  constitution,  it  may  safely  be  deemed  to  come  within 
the  compass  of  the  national  authority.  There  is,  also,  this  further  criterion, 
which  may  materially  assist  the  decision.  Does  the  proposed  measure  abridge 
a  pre-existing  right  of  any  State,  or  of  any  individual?  If  it  does  not,  there 
is  a  strong  presumption  in  favor  of  its  constitutionality;  and  slighter  re- 


100  BANK   OF  THE   UNITED    STATES. 

lations  to  any  declared  object  of  the  constitution,  may  be  permitted  to 
the  scale. 

The  general  objections  which  are  to  be  inferred  from  the  reasonings  of  the 
Secretary  of  State  and  Attorney  General,  to  the  doctrine  which  has  peen  ad- 
vanced, have  been  stated;  and,  it  is  hoped f  satisfactorily  answered.  Those  of 
a  more  particular  nature  shall  now  be  examined. 

The  Secretary  of  State  introduces  Iris  opinion  witlv  an  observation,  that 
the  proposed  incorporation  undertakes  to  create  certain  capacities,  properties, 
or  attributes,  which  are  against  the  laws  of  alienage,  descents,  escheat  and 
forfeiture^  distribution  and  monopoly;  and  to  confer  a  power  to  make  laws 
paramount  to  those  of  the  States.  And  nothing,  says  he,  in  another  place,  but 
a  necessity,  invincible  bv  other  means,  can  justify  such  a  prostration  of  laws, 
which  constitute  the  pillars  of  our  whole  system  of  jurisprudence,  and  are  the 
foundation  laws  of  the  State  Governments. 

If  these  are  truly  the  foundation  laws  of  the  several  State?,  then  have  most 
of  them  subverted  their  own  foundations:  for  there  is  scarcely  one  of  them 
which  has  not,  since  the  establishment  of  its  particular  constitution,  made  ma- 
terial alterations  in  some  of  those  branches  of  its  jurisprudence,  especially  the 
law  of  descents.  But  it  is  not  conceived  how  any  thing  can  be  called  the 
fundamental  law  of  a  State  government,  which  is  not  established  in  its  con- 
stitution, unalterable  by  the  ordinary  legislature.  And,  with  regard  to  the 
question  of  necessity,  it  has  been  shown,  that  this  can  only  constitute  a  ques- 
tion of  expediency,  not  of  right. 

To  erect  a  corporation,  is  to  substitute  a  legal  or  artificial,  for  a  natural 
person;  and,  where  a  number  are  concerned,  to  give  them  individuality.  To 
that  legal  or  artificial  person,  onee  created,  the  common  law  of  every  State, 
of  itself,  annexes  all  those  incidents  and  attributes  which  are  represented  as 
a  prostration  of  the  main  pillars  of  their  jurisprudence.  It  is  certainly  not  ac- 
curate to  say,  that  the  erection  of  a  corporation  is  against  those  different  heads 
of  the  State  laws;  because,  it  is  rather  to  create  a  kind  of  person,  or  entity, 
to  which  they  are  inapplicable,  and  to  which  the  general  rule  of  those  laws 
assigns  a  different  regimen.  The  laws  of  alienage  cannot  apply  to  an  artificial 
person,  because  it  can  have  no  country.  Those  of  descent  cannot  apply  to 
it,  because  it  can  have  no  heirs.  Those  of  escheat  are  foreign  from  it,  tor  the 
same  reason.  Those  of  forfeiture,  because  it  cannot  commit  a  crime.  Those 
of  distribution,  because,  though  it  may  be  dissolved,  it  cannot  die.  As  truly 
might  it  be  said,  that  the  exercise  ot  the  power  of  prescribing  the  rule  bv 
which  foreigners  shall  be  naturalized,  is  against  the  law  of  alienage,  while  it 
is,  in  fact,  only  to  put  them  into  a  situation  to  cease  to  be  the  subjects  of  that 
law.  To  do  a  thing  which  is  against  the  law,  is  to  do  something  which  it  for- 
bids, and  which  is  a  violation  of  it. 

But,  if  it  were  even  to  be  admitted  that  the  erection  of  a  corporation  is  a 
direct  alteration  of  the  State  laws,  in  the  enumerated  particulars,  it  would  do 
nothing  towards  proving  that  the  measure  was  unconstitutional.  If  the  Go- 
vernment of  the  United  State  can  do  no  act  which  amounts  to  an  alteration  of 
a  State  law,  all  its  powers  are  nugatory:  for  almost  every  new  law  is  an  alter- 
ation, in  some  way  or  other,  of  an  old  law,  either  common  or  statute. 

There  are  laws  concerning  bankruptcy  in  some  States.  Some  States  have 
laws  regulating  the  value  of  foreign  coins.  Congress  are  empowered  to  esta- 
blish uniform  Taws  concerning  bankruptcy  throughout  the  United  States,  and 
to  regulate  the  value  of  foreign  coins.  The  exercise  of  either  of  these  powers 
by  Congress,  necessarily  involves  an  alteration  of  the  laws  of  those  States. 

Again:  every  person,  by  the  common  law  of  each  State,  may  export  his 
property  to  foreign  countries  at  pleasure;  but  Congress,  in  pursuance  of  the 
power  of  regulating  trade,  may  prohibit  the  exportation  of  commodities;  in 
doing  which,  they  would  alter  the  common  law  of  each  State,  in  abridgment 
of  individual  right. 

It  can,  therefore,  never  be  good  reasoning  to  say,  this  or  that  act  is  uncon- 
stitutional, because  it  alters  this  or  that  law  of  a  State;  it  must  be  shown  that 
the  act,  which  makes  the  alteration,  is  unconstitutional  on  other  accounts;  not 
because  it  makes  the  alteration. 


CHARTER   OF    H91. 

There  arc  two  points  in  the  suggestions  of  the  Secretary  of  State,  which 
have  been  noted,  that  are  peculiarly  incorrect.  One  is,  that  the  proposed  in- 
corporation is  against  the  laws  of  monopoly,  because  it  stipulates  an  exclusive 
right  of  banking  under  the  national  authority:  the  other,  that  it  gives  power  to 
the  institution  to'make  laws  paramount  to  those  of  the  States. 

But  with  regard  to  the  first  point,  the  bill  neither  prohibits  any  State  from 
erecting  as  many  banks  as  it  pleases,  nor  any  number  of  individuals  from  as- 
sociating; to  carry  on  the  business;  and,  consequently,  is  free  from  the  charge 
of  establishing  a  monopoly:  for  monopoly  implies  a  legal  impediment  to  the 
carrying  on  the  trade  by  others  than  those  to  whom  it  is  granted. 

And,  with  regard  to  the  second  point,  there  is  still  less  foundation.  The 
by-laws  of  such  an  institution  as  a  bank,  can  operate  only  upon  its  own  mem- 
bers; can  only  concern  the  disposition  of  its  own  property;  and  must  essen- 
tially resemble  the  rules  of  a  private  mercantile  partnership.  They  are,  ex- 
pressly, not  to  be  contrary  to  law;  and  law  must  here  mean  the  law  of  a  State, 
as  well  as  of  the  United  States.  There  can  never  be  a  doubt,  that  a  law  of  a 
corporation,  if  contrary  to  a  law  of  a  State,  must  be  overruled  as  void,  unless 
the  law  of  the  State  is  contrary  to  that  of  the  United  States:  and  then  the 
question  will  not  be  between  the  law  of  the  State  and  that  ot  the  corporation, 
but  between  the  law  of  the  State  and  that  of  the  United  States. 

Another  argument  made  use-of  by  the  Secretary  of  State  is,  the  rejection,  by 
the  convention,  of  a  proposition  to  empower  Congress  to  make  corporations, 
either  generally,  or  for  some  special  purpose.  What  was  the  precise  nature 
or  extent  of  this  proposition,  or  what  the  reasons  for  refusing  it,  is  not  ascer- 
tained by  any  authentic  document,  or  even  by  accurate  recollection.  As  far 
as  any  such  document  exists,  it  specifies  only  canals.  If  this  was  the  amount 
of  it,  it  would,  at  most,  only  prove,  that  it  was  thought  inexpedient  to  give  a 
power  to  incorporate  for  the  purpose  of  opening  canals;  for  which  purpose  a 
special  power  would  have  been  necessary,  except  with  regard  to  the  \VesU»rn 
territory;  there  being  nothing  in  any  part  of  the  constitution  respecting  the 
regulation  of  canals.  It  must  be  confessed,  however,  that  very  different  ac- 
counts are  given  of  the  import  of  the  proposition,  and  of  the  motives  tor  re- 
jecting it.  Some  affirm  that  it  w;ts  confined  to  the  opening  of  canals  and  ob- 
structions in  rivers;  others,  that  it  embraced  banks;  and  others,  that  it  ex- 
tended to  the  power  of  incorporating  generally.  Some  again  allege,  that  it 
was  disagreed  to,  because  it  was  thought  improper  to  vest  in  Congress  a  power 
of  erecting  corporations;  others,  because  it  was  thought  unnecessary  to  spe- 
cify the  power,  and  inexpedient  to  furnish  an  additional  topic  of  objection  to 
the  constitution.  In  this  state  of  the  matter,  no  inference  whatever  can  be 
drawn  from  it. 

But,  whatever  may  have  been  the  nature  of  the  proposition,  or  the  reasons 
for  rejecting  it,  nothing  is  included  by  it;  that  is,  the  proposition,  in  respect 
to  the  real  merits  of  the  question.  The  Secretary  of  State  will  not  deny,  that, 
whatever  may  have  been  the  intentions  of  the  (ramers  of  a  constitution,  or  of 
a  law,  that  intention  is  to  be  sought  for  in  the  instrument  itself,  according  to 
the  usual  and  established  rules  of  construction.  Nothing  is  more  common 
than  for  laws  to  express  and  effect  more  or  less  than  was  intended.  If,  then, 
a  power  to  erect  a  corporation,  in  any  case,  be  deducible  by  fair  inference 
from  the  whole,  or  any  part,  of  the  numerous  provisions  of  the  constitution  of 
the  United  States,  arguments,  drawn  from  extrinsic  circumstances  regarding 
the  intention  of  the  convention,  must  be  rejected. 

Most  of  the  arguments  of  the  Secretary  of  State,  which  have  not  been  con- 
sidered in  the  foregoing  remarks,  are  of  a  nature  rather  to  apply  to  the  expe- 
diency, than  to  the  constitutionality  of  the  bill.  They  will,  however,  be  no- 
ticed in  the  discussion  which  will  be  necessary  in  reference  to  the  particular 
heads  of  the  powers  of  the  Government,  which  are  involved  in  the  question. 

Those  of  the  Attorney  General  will  now  properly  come  under  view. 

His  first  observation  is,  that  the  power  of  incorporation  is  not  expressly 
given  to  Congress.  This  shall  be  conceded,  but  in  this  sense  only — that  it  is 
not  declared  in  express  terms  that  Congress  may  erect  a  corporation.  But 


102  BANK  OF  THE  UNITED  STATES. 

this  cannot  mean  that  there  are  not  certain  express  powers,  which  necessarily 
include  it. 

For  instance,  Congress  have  express  power  to  exercise  exclusive  legislation 
in  all  cases  whatsoever,  over  surh  district  (not  exceeding  ten  miles  square) 
as  may,  by  cession  of  particular  States,  and  the  acceptance  of  Congress,  be- 
come the  seat  of  the  Government  of  the  United  States;  and  to  exercise  like 
authority  over  all  places  purchased  by  consent  of  the  legislature  of  the  State 
in  which  the  same  shall  be,  for  the  erection  efforts,  arsenals,  dock  yards,  and 
other  needful  buildings. 

Here,  then,  is  express  power  to  exercise  exclusive  legislation,  in  all  cases 
whatsoever,  over  certain  places;  that  is,  to  do,  in  respect  to  those  places,  all 
that  any  government  whatever  may  do:  for  language  does  not  afford  a  more 
complete  designation  of  sovereign  power,  than  in  those  comprehensive  terms. 
It  is,  in  other  words,  a  power  to  pass  all  laws  whatsoever,  and,  consequently, 
to  pass  all  laws  for  erecting  corporations,  as  well  as  for  any  other  purpose, 
which  is  the  proper  object  of  law  in  a  free  government.  Surely,  it  can  never 
be  believed,  that  Congress,  with  exclusive  power  of  legislation,  in  all  cases 
whatsoever,  cannot  erect  a  corporation  within  the  district  which  shall  become 
the  seat  of  Government,  for  the  better  regulation  of  its  police;  and  yet  there 
is  an  unqualified  denial  of  the  power  to  erect  corporations,  in  every  case,  on 
the  part  both  of  the  Secretary  of  State  and  of  the  Attorney  General,  The 
former,  indeed,  speaks  of  that  power  in  these  emphatical  terms:  that  it  is  a 
right  remaining  exclusively  with  the  Stales. 

As  far,  then,  as  there  is  an  express  power  to  do  any  particular  act  tf  legisla- 
tion, there  is  an  express  one  to  erect  corporations  in  the  case  above  described. 
But,  accurately  speaking,  no  particular  power,  is  more  than  implied  in  a  gen- 
eral one.  Thus,  the  power  to  lay  a  duty  on  a  gallon  of  rum,  is  only  a  particu- 
lar, implied  in  the  general  power  to  lay  and  collect  taxes,  duties,  imposts,  and 
excises.  This  serves  to  explain  in  what  sense  it  may  be  said,  that  Congress 
have  not  an  express  power  to  make  corporations. 

This  may  not  be  an  improper  place  to  take  notice  of  an  argument  which  was 
used  in  debate  in  the  House  of  Representatives.  It  was  there  urged,  that  if 
the  constitution  intended  to  confer  so  important  a  power  as  that  of  erecting 
corporations,  it  would  have  been  expressly  mentioned.  But  the  case  which 
has  been  noticed,  is  clearly  one  in  which  such  power  exists,  and  yet  without 
any  specification  or  express  grant  of  it,  further  than  as  every  particular,  im- 
plied in  a  general  power,  can  be  said  to  be  so  granted. 

But  the  argument  itself  is  founded  upon  an  exaggerated  and  erroneous  con- 
ception of  the  nature  of  the  power.  It  has  been  shown,  that  it  is  not  of  so 
transcendent  a  kind  as  the  reasoning  supposes,  and  that,  vjewed  in  a  just 
light,  it  is  a  mean  which  ought  to  have  been  left  to  implication,  rather  than 
an  end  which  ought  to  have  been  expressly  granted. 

Having  observed,  that  the  power  of  erecting  corporations  is  not  expressly 
granted  to  Congress,  the  Attorney  General  proceeds  thus: 

If  it  can  be  exercised  by  them,  it  must  be, 

1.  Because  the  nature  of  Federal  Government  implies  it. 

2.  Because  it  is  involved  in  some  of  the  specified  powers  of  legislation. 

3.  Because  it  is  necessary  and  proper,  to  carry  into  execution  some  of  the 
specified  powers. 

To  be  implied  in  the  nature  of  the  Federal  Government,  says  he,  would 
beget  a  doctrine  so  indefinite  as  to  grasp  at  every  power. 

This  proposition,  it  ought  to  be  remarked,  is  not  precisely  9r  even  substan- 
tially, that  which  has  been  relied  upon.  The  proposition  relied  upon  is,  that 
the  specified  powers  of  Congress  are,  in  their  nature,  sovereign;  that  itis  inci- 
dent to  sovereign  power  to  erect  corporations;  and  that,  therefore,  Congress 
have  a  right,  within  the  sphere,  and  in  relation  to  the  objects  of  their  power, 
io  ereti  corporations. 

It  shall,  however,  be  supposed,  that  the  Attorney  General  would  consider 
the  two  propositions  in  the  same  light,  and  that  the  objection  made  to  the  one 
would  be  made  to  the  other. 


CHARTER    OF    1791.  JQ3 

To  this  objection  an  answer  has  been  already  given.  It  is  this:  that  the 
doctrine  is  stated  with  this  express  qualification,  that  the  right  to  erect  cor- 
porations does  only  extend  to  cases  and  objects  within  the  sphere  of  the  speci- 
fied powers  of  the  Government.  A  general  legislative  authority,  implies  a 
power  to  erect  corporations  in  all  cases;  a  particular  legislative  power,  im- 
plies authority  to  erect  corporations  in  relation  to  cases  arising  under  that 
power  only.  Hence  the  affirming,  that,  as  incident  to  sovereign  power,  Con- 
gress may  erect  a  corporation  in  relation  to  the  collection  of  their  taxes,  is  no 
more  to  affirm  that  they  may  do  whatever  else  they  please,  than  the  saying 
they  have  a  power  to  regulate,  trade,  would  be  to  affirm,  that  they  have  a 
power  to  regulate  religion;  or  than  the  maintaining,  that  they  have  sovereign 
power  as  to  taxation,  would  be  to  maintain,  that  they  have  sovereign  power  as 
to  every  thing  else. 

The  Attorney  General  undertakes,  in  the  next  place,  to  show,  that  the 
power  of  erecting  corporations  is  not  involved  in  any  of  the  specified  powers 
of  legislation  confided  to  the  National  Government. 

In  order  to  do  this,  he  has  attempted  an  enumeration  of  the  particulars  which 
he  supposes  to  be  comprehended  under  the  several  heads  of  the  POWERS  to  lay 
and  collect  taxes,  &c.  to  borrow  money  on  the  credit  of  the  United  States;  to 
regulate  commerce  with  foreign  nations,  between  the  States,  and  with  the  In- 
dian tribes;  to  dispose  of,  and  make  all  needful  rules  and  regulations  respect- 
ing the  territory,  or  other  property  belonging  to  the  United  States:  the  de- 
sign of  which  enumeration  is  to  show,  what  is  included  under  those  different 
heads  of  power;  and  negatively,  that  the  power  of  erecting  corporations  is 
not  included. 

The  truth  of  this  inference,  or  conclusion,  must  depend  on  the  accuracy  of 
the  enumeration.  If  it  can  be  shown  that  the  enumeration  is  defective,  the 
inference  is  destroyed.  To  do  this,  will  be  attended  with  no  difficulty. 

The  heads  of  the  power  to  lay  and  collect  taxes,  he  states  to  be — 

1.  To  ascertain  the  subject  of  taxation,  &.c. 

2.  To  declare  the  quantum  of  taxation,  &LC. 

3.  To  prescribe  the  mode  of  collection. 

4.  To  ordain  the  manner  of  accounting  for  the  taxes,  &c. 

The  defectiveness  of  this  enumeration  consists  in  the  generality  of  the  third 
division,  "to  prescribe  the  mode  of  collection^  which  is  in  itself' an  immense 
chapter.  It  will  be  shown  hereafter,  that,  among  a  vast  variety  of  particulars, 
it  comprises  the  very  power  in  question,  namely,  to  erect  corporations. 

The  heads  of  the  power  to  borrow  money,  are  stated  to  be — 

I.  To  stipulate  the  sum  to  be  lent. 
[.  An  interest  or  -no  interest  to  be  paid. 

III.  The  time  and  manner  of  repaying,  unless  the  loan  be  placed  on  an 
irredeemable  fund. 

This  enumeration  is  liable  to  a  variety  of  objections.    It  omits,  in  the  first 

Klace,  the  pledging  or  mortgaging  of  a  fund  for  the  security  of  the  money 
?nt;  an  usual,  and,  in  most  cases,  an  essential  ingredient. 

The  idea  of  a  stipulation  of  an  interest  or  no  interest.,  is  too  confined.  It 
should  rather  have  been  said,  to  stipulate  the  consideration  of  the  loan.  Indi- 
viduals often  borrow  upon  considerations  other  than  the  payment  of  interest. 
So  may  Government;  and  so  they  often  find  it  necessary  to  do.  Every  one 
recollects  the  lottery  tickets  and  other  douceurs,  often  given  in  Great  Britain 
as  collateral  inducements  to  the  lending  of  money  to  the  Government. 

There  are,  also,  frequently  collateral  conditions,  which  the  enumeration 
does  not  contemplate.  Every  contract  which  has  been  made  for  moneys  bor- 
rowed in  Holland,  includes  stipulations,  that  the  sum  due,  shall  be  free  from 
taxes,  and  from  sequestration  in  time  of  war;  and  mortgages  all  the  land  and 
property  of  the  United  States  for  the  reimbursement. 

It  is  also  known,  that  a  lottery  is  a  common  expedient  for  borrowing  money, 
which  certainly  does  not  fall  under  either  of  the  enumerated  heads. 

The  heads  of  the  power  to  regulate  commerce  with  foreign  nations,  are 
stated  to  be — 


104  BANK  OF  THE  UNITED  STATES. 

1 .  To  prohibit  them  or  their  commodities  from  our  ports. 

2.  To  impose  duties  on  them  where  none  existed  before,  or  to  increase  exist- 
ing duties  on  them. 

3.  To  subject  them  to  any  species  of  custom  house  regulation. 

4.  To  grant  them  any  exemptions  or  privileges  which  policy  may  suggest. 
This  enumeration  is  far  more  exceptionable  than  either  of  the  former:  it 

omits  every  thing  that  relates  to  the  citizens,  vessels,  or  commodities,  of  the 
United  States. 

The  following  palpable  omissions  occur  at  once: 

I.  Of  the  power  to  prohibit  the  exportation  of  commodities,  which  not  only 
exists  at  all  times,  but  which,  in  time  of  war,  it  would  be  necessary  to  exer- 
cise, particularly  with  relation  to  naval  and  warlike  stores. 

II.  Of  the  power  to  prescribe  rules  concerning  the  charactistics  and  privi- 
leges of  an  American  bottom;  how  she  shall  be  navigated ;  as,  whether  by 
citizens  or  foreigners,  or  by  a  proportion  of  each. 

III.  Of  the  power  of  regulating  the  manner  of  contracting  with  seamen,  the 
policies  of  ships  on  their  voyages,   &c.  of  which  the  act  for  the  government 
and  regulation  of  seamen  in  the  merchant  service  is  a  specimen. 

That  the  three  preceding  articles  are  omissions,  will  not  be  doubted.  There 
is  a  long  list  of  items  in  addition,  which  admit  of  little,  if  any,  question,  of 
which  a  few  samples  shall  be  given. 

I.  The  granting  of  bounties  to  certain  kinds  of  vessels  and  certain  species 
of  merchandise;  of  this  nature  is  the  allowance  on  dried  and  pickled  fish  and 
salted  provisions. 

II.  The  prescribing  of  rules  concerning  the  inspection  of  commodities  to  be 
exported.     Though  me  States,  individually,  are  competent  to  this  regulation, 
yet  there  is  no  reason,  in  point  of  authority  at  least,  why  a  general  system 
might  not  be  adopted  by  the  United  States. 

III.  The  regulation  of  policies  of  insurance;  of  salvage  upon  goods  found 
at  sea;  and  the  disposition  of  such  goods. 

IV.  The  regulation  of  pilots. 

V.  The  regulation  of  bills  of  exchange,  drawn  by  a  merchant  of  one  State 
upon  a  merchant  of  another  State.     This  last  rather  belongs  to  the  regulation 
of  trade  between  the  States,  but  is  equally  omitted  in  the  specification  under 
that  head. 

The  last  enumeration  relates  to  the  power  to  dispose  of,  and  make  all  need- 
ful rules  and  regulations  respecting  the  territory  or  other  property  belonging 
to  the  United  States. 

The  heads  of  this  power  are  said  to  be, 

I.  To  exert  an  ownership  over  the  territory  of  the  United  States  which  may 
be  properly  called  the  property  of  the  United  States,  as  in  the  Western  ter- 
ritory, and  to  institute  a  government  therein;  or, 

II.  To  exert  an  ownership  over  the  other  property  of  the  United  States. 
This  idea  of  exerting  an  ownership  over  the  territory  or  other  property  of 

the  United  States,  is  particularly  indefinite  and  vague.  It  does  not  at  all  sa- 
tisfy the  conception  of  what  must  have  been  intended  by  a  power  to  make  all 
needful  rules  and  regulations;  nor  would  there  have  been  any  use  for  a  spe- 
cial clause,  which  authorized  nothing  more:  for  the  right  of  exerting  an  own- 
ership, is  implied  in  the  very  definition  of  property. 

It  is  admitted,  that,  in  regard  to  the  Western  territory,  something  more  is 
intended:  even  the  institution  of  a  government,  that  is,  the  creation  of  a  body 
politic,  or  corporation  of  the  highest  nature;  one  which,  in  its  maturity,  will 
DC  able  itself  to  create  other  corporations.  Why,  then,  does  not  the  same 
clause  authorize  the  erection  of  a  corporation  in  respect  to  the  regulation  or 
disposal  of  any  other  of  the  property  of  the  United  States? 

This  idea  will  be  enlarged  upon  in  another  place. 


CHARTER  OF   1791.  1Q5 

Hence,  it  appears  that  the  enumerations  which  have  been  attempted  by  the 
Attorney  General,  are  so  imperfect  as  to  authorize  no  conclusion  whatever. 
They,  therefore,  have  no  tendency  to  disprove,  that  each  and  every  ot  the 
powers  to  which  they  relate,  includes  that  of  erecting  corporations,  which 
they  certainly  do,  as  the  subsequent  illustrations  will  more  arid  more  evince. 

It  is  presumed  to  have  been  satisfactorily  shown,  in  the  course  of  the  preced- 
ing observations: 

I.  That  the  power  of  the  Government,  as  to  the  objects  intrusted  to  its  man- 
agement, is,  in  its  nature,  sovereign. 

II.  That  the  right  of  erecting  corporations,  is  one  inherent  in,  and  insepa- 
rable from,  the  idea  of  sovereign  power- 

III.  That  the  position,  that  the  Government  of  the  United  States  can  exer- 
cise is)  power  but  such  as  is  delegated  to  it  by  its  constitution,  does  not 
militate  against  this  principle. 

IV.  That  the  word  ?iecessan/,  in  the  general  clause,  can  have  no  restrictive 
operation,  derogating  from  the  force  of  this  principle;  indeed,  that  the  degree 
in  which  a  measure  is,  or  is  not,  necessary,  cannot  be  a  test  of  constitutional 
right,  but  of  expediency  only. 

V.  That  the  power  to  erect  corporations,  is  not  to  be  considered  as  an 
independent  and  substantive  power,  but  as  an  incidental  and  auxiliary  one; 
and  was,  therefore,  more  properly  left  to  implication,  than  expressly  granted. 

VI.  That  the  principle  in  question  does  not  extend  the  power  of  the  Govern- 
ment beyond  the  prescribed  limits,  because  it  only  affirms  a  power  to  incor- 
porate for  purposes  within  the  sphere  of  the  specified  powers. 

And,  lastly,  that  the  right  to  exercise  such  a  power,  in  certain  cases,  is  une- 
quivocally granted  in  the  most  positive  and  comprehensive  terms. 

To  all  which  it  only  renaaina  to  be  added,  that  such  a  power  has  actually 
been  exercised  in  two  very  eminent  instances,  namely,  in  the  erection  of  two 
governments;  one  northwest  of  the  river  Ohio,  and  the  other  southwest;  the 
last  independent  of  any  antecedent  compact. 

And  there  results  a  full  and  complete  demonstration,  that  the  Secretary  of 
State  and  Attorney  General  are  mistaken,  when  they  deny,  generally,  the 
power  of  the  National  Government  to  erect  corporations, 

It  shall  now  be  endeavored  to  be  shown,  that  there  is  a  power  to  erect  one 
of  the  kind  proposed  by  the  bill.  This  will  be  done  by  tracing  a  natural  and 
obvious  relation  between  the  institution  of  a  bank,  and  the  objects  of  several 
of  the  enumerated  powers  of  the  Government;  and  by  showing,  that,  political- 
ly speaking,  it  is  necessary  to  the  effectual  execution  of  one  or  more  of  those 
powers.  In  the  course  of  this  investigation,  var'wus  instances  will  be  stated, 
by  way  of  illustration,  of  a  right  to  erect  corporations  under  those  powers. 

Some  preliminary  observations  may  be  proper. 

The  proposed  bank  is  to  consist  of  an  association  of  persons,  for  the  purpose 
of  creating  a  joint  capital,  to  be  employed,  chiefly  and  essentially,  in  loans. 
So  far,  the  object  js  not  only  lawful,  but  it  is  the  mere  exercise  of  a  right 
which  the  law  allows  to  every  individual.  The  Bank  of  New  York,  which  is 
not  incorporated,  is  an  example  of  such  an  association.  The  bill  proposes,  in 
addition,  that  the  Government  shall  become  a  joint  proprietor  in  this  under- 
taking; and  that  it  shall  permit  the  bills  of  the  company,  payable  on  demand, 
to  be  receivable  in  its  revenues;  and  stipulates  that  it  shall  not  grant  privileges, 
similar  to  those  which  are  to  be  allowed  to  this  company,  to  any  others.  All 
this  is  incontrovertibly  within  the  compass  of  the  discretion  ot  the  Govern- 
ment. The  only  question  is,  whether  it  has  a  right  to  incorporate  this  com- 
pany, in  order  to  enable  it  the  more  effectually  to  accomplish  ends  which  are 
in  ^themselves  lawful. 

To  establish  such  a  right,  it  remains  to  show  the  relation  of  such  an  institu- 
tion, to  one  or  more  of  the  specified  powers  of  the  Government. 

Accordingly,  it  is  affirmed,  that  it  has  a  relation,  more  or  less  direct,  to  the 
power  of  collecting  taxes;  to  that  of  borrowing  money;  to  that  of  regulatin" 
14 


106  BANK  OP  THK  UNITED  STATES. 

trade  between  the  States:  and  to  those  of  raising  and  maintaining  fleets  and 
armies.    To  the  two  former,  the  relation  may  be  said  to  be  immediate. 

And,  in  the  last  place,  it  will  be  argued,  that  it  is  clearly  within  the  provi- 
sion which  authorizes  the  making  of  all  needful  rules  and  regulations  con- 
cerning the  property  of  the  United  States,  as  the  same  has  been  practised 
upon  by  the  Government. 

A  bank  relates  to  the  collection  of  taxes  in  two  ways.  Indirectly,  by 
increasing  the  quantity  of  circulating  medium  and  quickening  circulation, 
which  facilitates  the  means  of  paying;  directly,  by  creating  a  convenient 
species  of  medium  in  which  they  are  to  be  paid. 

To  designate  or  appoint  the  money  or  thins  in  which  taxes  are  to  be  paid,  is 
not  only  a  proper,  but  a  necessary  exercise  of  the  power  of  collecting  them. 
Accordingly,  Congress,  in  the  law  concerning  the  collection  of  the  duties  on 
imposts  and  tonnage,  have  provided  that  they  shall  be  payable  in  gpid  and 
silver.  But,  while  it  was  an  indispensable  part  of  the  work  to  say  in  what 
they  should  be  paid,  the  choice  of  the  specific  thing  was  mere  matter  of  dis- 
cretion. The  payment  might  have  been  required  in  the  commodities  them- 
selves. Taxes,  in  kind  however  ill  judged,  are  not  without  precedents  even 
in  the  United  States;  or  it  might  have  been  in  the  paper  money  of  the  several 
States,  or  in  the  bills  of  the  Bank  of  North  America,  New  York,  and  Massa- 
chusetts, all  or  either  of  them;  or  it  might  have  been  in  bills  issued  under  the 
authority  of  the  United  States, 

No  part  of  this  can,  it  is  presumed,  be  disputed.  The  appointment,  then, 
of  the  monev  or  thing  in  which  the  taxes  are  to  be  paid,  is  an  incident  to  the 
power  of  collection.  And  among  the  expedients  which  may  be  adopted,  is 
that  of  bills  issued  under  the  authority  of  the  United  States. 

Now,  the  manner  of  issuing  these  bills,  is  again  matter  of  discretion.  The 
Government  might,  doubtless,  proceed  in  the  following  manner:  it  might  pro- 
vide that  they  should  be  issued  under  the  direction  of  certain  officers,  paya- 
ble on  demand;  and  in  order  to  support  their  credit,  and  give  them  a  ready 
circulation,  it  might,  besides  giving  them  a  currency  in  its  taxes,  set  apart, 
out  of  any  moneys  in  its  treasury,  a  given  sum,  and  appropriate  it,  under  the 
direction  of  those  officers,  as  a  fund  for  answering  the  bills,  as  presented  for 
payment. 

The  constitutionality  of  all  this  would  not  admit  of  a  question,  and  yet  it 
would  amount  to  the  institution  of  a  bank,  with  a  view  to  the  more  conve- 
nient collection  of  taxes.  For  the  simplest  and  most  precise  idea  of  a  bank, 
is,  a  deposite  of  coin  or  other  property,  as  a  fund  for  circulating  a  credit  upon 
it,  which  is  to  answer  the  purpose  of  money.  That  such  an  arrangement 
would  be  equivalent  to  the  establishment  of  a  bank,  would  become  obvious,  if 
the  place  where  the  fund  to  be  set  apart  was  kept,  should  be  made  a  recepta- 
cle of  the  moneys  of  all  other  persons  who  should  incline  to  deposite  them 
there  for  safe  keeping;  and  would  become  still  more  so,  if  the  officers,  charg- 
ed with  the  direction  of  the  fund,  were  authorized  to  make  discounts  at  the 
usual  rate  of  interest,  upon  good  security.  To  deny  the  power  of  the  Govern- 
ment to  add  this  ingredient  to  the  plan,  would  be  to  renne  away  all  govern- 
ment. 

A  further  process  will  still  more  clearly  illustrate  the  point.  Suppose,  when 
the  species  of  bank  which  has  been  described,  was  about  to  be  instituted,  it 
were  to  be]urged,  that,  in  order  to  secure  to  it  a  due  degree  of  confidence,  the 
fund  ougjit  not  only  to  be  set  apart  and  appropriated  generally,  but  ought  to 
be  specifically  vested  in  the  officers  who  were  to  have  the  direction  of  it,  and 
in  their  successors  in  office,  to  the  end  that  it  might  acquire  the  character  of 
private  property,  incapable  of  being  resumed  without  a  violation  of  the  sanc- 
tion by  which  the  rights  of  property  are  protected,  and  occasioning  more  se- 
rious and  general  alarm,  the  apprehension  of  which  might  operate  as  a  check 
upon  the  Government.  Such  a  proposition  might  be  opposed  by  arguments 
against  the  expediency  of  it,  or  the  solidity  of  the  reason  assigned  for  it;  but  it 
is  not  conceivable  what  could  be  urged  against  its  constitutionality. 


CHARTER  OF   1791.  107 

And  yet  such  a  disposition  of  the  thing  would  amount  to  the  erection  of  a 
corporation;  for  the  true  definition  of  a  corporation  seems  to  be  this:  it  is  a 
legal  person,  or  a  person  created  by  act  of  law;  consisting  of  one  or  more  na- 
tural persons,  authorized  to  hold  property,  or  a  franchise  in  succession,  m  a 
legal,  as  contradistinguished  from  a  natural,  capacity. 

Let  the  illustration  proceed  a  step  further.  Suppose  a  bank,  of  the  nature 
which  has  been  described,  without  or  with  incorporation,  had  been  instituted, 
and  that  experience  had  evinced,  as  it  probably  would,  that,  being  wholly 
under  a  public  direction,  it  possessed  ndt  the  consequence  requisite  to  the 
credit  of  its  bills.  Suppose,  a|so,  that,  by  some  of  those  adverse  conjunctures 
which  occasionally  attend  nations,  there  had  been  a  very  great  drain  of  the 
specie  of  the  country,  so  as  not  only  to  cause  general  distress,  for  want  of  an 
adequate  medium  of  circulation,  but  to  produce,  in  consequence  of  that  cir- 
cumstance, considerable  defalcations  in  the  public  revenues.  Suppose,  also, 
that  there  was  no  bank  instituted  in  any  State.  In  such  a  posture  of  things 
would  it  not  be  most  manifest,  that  the  incorporation  of  a  bank  like  that  pro- 
posed by  the  bill,  would  be  a  measure  immediately  relative  to  the  effectual 
collection  of  the  taxe.-,  and  completely  within  the  province  of  a  sovereign 
power  of  providing,  by  all  laws  necessary  and  proper,  for  that  collection? 

It  it  be  said,  that  such  a  state  of  things  would  render  that  necessary,  and, 
therefore,  constitutional,  which  is  not  so  now;  the  answer  to  this  (and  a  solid 
one  it  doubtless  is)  must  still  be,  that  which  has  been  already  stated.  Circum- 
stances may  affect  the  expediency  of  the  measure,  but  can  neither  add  to  nor 
diminish  its  constitutionality. 

A  bank  has  a  direct  relation  to  the  power  of  borrowing  money,  because  it  is 
an  usual,  and,  in  sudden  emergencies,  an  essential  instrument,  in  the  obtaining 
of  loans  to  Government. 

A  nation  is  threatened  with  a  war;  large  sums  are  wanted  on  a  sudden  to 
make  the  requisite  preparations:  tixes  are  laid  for  the  purpose;  but  it  requires 
time  to  obtain  the  benefit  of  them;  anticipation  is  indispensable.  If  there  be 
a  bank,  the  supply  can  at  once  be  had;  if  there  be  none,  loans  from  individu- 
als must  be  sought.  The  progress  of  these  is  often  too  slow  for  the  exigency: 
in  some  situations  they  are  not  practicable  at  all.  Frequently  when  they  are, 
it  is  of  great  consequence  to  be  able  to  anticipate  the  product  of  them  by 
advances  from  a  bank. 

The  essentiality  of  such  an  institution,  as  an  instrument  of  loans,  is  exem- 
plified at  this  very  moment.  An  Indian  expedition  is  to  be  prosecuted.  The 
only  fund  out  of  which  the  money  can  arise  consistently  with  the  public 
engagements,  is  a  tax,  which  only  begins  to  be  collected  in  July  next.  The 
preparations,  however,  are  instantly  to  be  made.  Ti.e  money  must,  therefore, 
be  borrowed;  and  of  whom  could  it  be  borrowed,  if  there  were  no  public 
banks? 

It  happens  that  there  are  institutions  of  this  kind;  but  if  there  were  none, 
it  would  be  indispensable  to  create  one. 

Let  it  then  be  supposed,  that  the  necessity  existed,  (as  but  for  a  casualty 
would  be  the  case,)  that  proposals  were  made  for  obtaining  a  loan;  that  a 
number  of  individuals  came  forward  and  said,  we  are  willing  to  accommodate 
the  Government  with  this  money;  with  what  we  have  in  hand,  and  the  credit 
we  can  raise  upon  it,  vye  doubt  not  of  being  able  to  furnish  the  sum  required. 
But,  in  order  to  do  this,  it  is  indispensable  that  we  should  be  incoporated  as  a 
bank.  This  is  essential  towards  putting  it  in  our  power  to  do  what  is  desired, 
and  we  are  obliged  on  that  account  to  make  it  the  consideration  or  condition 
of  the  loan. 

Can  it  be  believed  that  a  compliance  with  this  proposition  would  be  uncon- 


, 

fined  to  the  mere  stipulation  of  a  franchise.  If  it  may,  (and  it  is  not  perceiv- 
ed why  it  may  not,)  then  the  grant  of  a  corporate  capacity  may  be  stipulated 
as  a  consideration  of  the  loan.  There  seems  to  be  nothing  unfit,  or  foreign 
troin  the  nature  of  the  thing,  in  giving  individuality^uc-ft^ewgoraie  capacity, 

' 


108  BANK  OF  THE  UNITED  STATES. 

to  a  number  of  persons  who  are  willing  to  lend  a  sum  of  money  to  the  Govern- 
ment, the  better  to  enable  them  to  do  it,  and  make  them  an  ordinary  instru- 
ment of  loans  in  future  emergencies  of  state. 

But  the  more  general  view  of  the  subject  is  still  more  satisfactory.  The 
legislative  power  of  borrowing  money,  and  of  making  all  laws  necessary  and 
proper  for  carrying  into  execution  that  power,  seems  obviously  competent  to 
the  appointment  ot  the  organ  through  which  the  abilities  and  wills  of  individ- 
uals may  be  most  efficaciously  exerted,  for  the  accommodation  of  the  Govern- 
ment, by  loans. 

The  Attorney  General  opposes  to  this  reasoning  the  following  observation: 
Borrowing  money  presupposes  the  accumulation  of  a  fund  to  be  lent,  and  is 
secondary  to  the  creation  of  an  ability  to  lend.  This  is  plausible  in  theory,  but 
it  is  not  true  in  fact.  In  a  great  number  of  cases,  a  previous  accumulation  of 
a  fund  eciual  to  the  whole  sum  required,  does  not  exist,  and  nothing  more  can 
be  actually  presupposed,  than  that  there  exist  resources,  which,  put  into  ac- 
tivity to  the  greatest  advantage,  by  the  nature  of  the  operation  with  the  Go- 
vernment, will  be  equal  to  the  effect  desired  to  be  produced.  All  the  provi- 
sions and  operations  of  Government,  must  be  presumed  to  contemplate  things 
as^they  really  are. 

The  institution  of  a  bank  has,  also,  a  natural  relation  to  the  regulation  of 
trade  between  the  States,  in  so  far  as  it  is  conducive  to  the  creation  of  a  con- 
venient medium  of  exchange  between  them,  and  to  the  keeping  up  a  full  cir- 
culation, by  preventing  the  frequent  displacement  of  the  metals  in  reciprocal 
remittances.  Money  is  the  very  hinge  on  which  commerce  turns.  And.  this 
does  not  mean,  merely  gold  and  silver;  many  other  things  have  served  the  pur- 
pose, with  different  degrees  of  utility.  Paper  has  been  extensively  employed. 

It  cannot,  therefore,  be  admitted,  with  the  Attorney  General,  that  the  re- 
gulation of  trade  between  the  States,  as  it  concerns  the  medium  of  circula- 
tion and  exchange,  ought  to  be  considered  as  confined  to  coin.  It  is  even 
supposeable  that  the  whole,  or  the  greatest  part  of  the  coin  of  the  country, 
might  be  carried  out  of  it. 

The  Secretary  of  State  objects  to  the  relation  here  insisted  upon,  by  the  fol- 
lowing mode  of  reasoning:  To  erect  a  bank,  says  he,  and  to  regulate  com- 
merce, are  very  different  acts.  He  who  erects  a  bank,  creates  a  subject  of 
commerce.  So  does  he  who  raises  a  bushel  of  wheat,  or  digs  a  dollar  out  of 
the  mines;  yet,  neither  of  these  persons  regulates  commerce  thereby.  To 
make  a  thing  which  may  be  bought  and  sold,  is  not  to  prescribe  regulations 
for  buying  and  selling.  This  is  making  the  regulation  of  commerce  to  con- 
sist in  prescribing  rules  for  buying  and  selling. 

This,  indeed,  is  a  species  of  regulation  of  trade;  but  it  is  one  which  falls  more 
aptly  within  the  province  of  the  local  jurisdictions,  than  within  that  of  the 
General  Government,  whose  care  they  must  have  presumed  to  have  been  in- 
tended to  be  directed  to  those  general  political  arrangements  concerning  trade, 
on  which  its  aggregate  interests  depend,  rather  than  to  the  details  ot  buying 
and  selling. 

Accordingly,  such  only  are  the  regulations  to  be  found  in  the  laws  of  the 
United  States,  whose  objects  are  to  give  encouragement  to  the  enterprise  of 
our  own  merchants,  and  to  advance  our  navigation  and  manufactures. 

And  it  is  in  reference  to  these  general  relations  of  commerce,  that  an  esta- 
blishment which  furnishes  facilities  to  circulation,  and  a  convenient  medium 
of  exchange  and  alienation,  is  to  be  regarded  as  a  regulation  of  trade- 

The  Secretary  of  State  further  urges,  that,  if  this  was  a  regulation  of  com- 
merce, it  would  be  void,  as  extending  as  much  to  the  internal  part  of  every 
State,  as  to  its  external.  But  what  regulation  of  commerce  does  not  extend 
to  the  internal  commerce  of  every  State  ?  What  are  all  the  duties  upon  im- 
ported articles,  amounting,  in  some  cases,  to  prohibitions,  but  so  many  boun- 
ties upon  domestic  manufactures,  affecting  the  interest  of  different  classes  of 
citizens,  in  different  ways  ?  What  are  all  the  provisions  in  the  coasting  act, 
which  relate  to  the  trade  between  district  and  district,  of  the  same  State  ?  In 
short,  what  regulation  of  trade  between  the  States,  but  must  affect  the  inter- 


CHARTER    OF   1791. 

nal  trade  of  each  State  ?    What  can  operate  upon  the  whole,  but  must  extend 
to  every  part  ? 

The  relation  of  a  bank  to  the  execution  of  the  powers  that  concern  the  com- 
mon defence,  has  been  anticipated.  It  has  been  noted,  that,  at  this  very  mo- 
ment, the  aid  of  such  an  institution  is  essential  to  the  measure  to  be  pursued 
for  the  protection  of  our  frontiers. 

It  now  remains  to  show,  that  the  incorporation  of  a  bank,  is  within  the  ope- 
ration of  the  provision  \yhich  authorizes  Congress  to  make  all  needful  rules 
and  regulations  concerning  the  property  of  the  United  States.  But,  it  is  pre- 
viously necessary  to  advert  to  a  distinction  which  has  been  taken  up  by  the 
Attorney  General. 

He  admits,  that  the  word  property,  may  signify  personal  property,  however 
acquired,  and  yet  asserts  that  it  cannot  signify  money  arising  from  the  sources 
of  revenue  pointed  out  in  the  constitution,  "  because,"  says  he,  "  the  dis- 
posal and  regulation  of  money,  is  the  final  cause  for  raising  it  by  taxes." 

But  it  would  be  more  accurate  to  say,  that  the  object  to  which  money  is  in- 
tended to  be  applied,  is  the  final  cause  for  raising  it,  than  that  the  disposal 
and  regulation  of  it,  is  such.  The  support  of  a  government;  the  support  of 
troops  for  the  common  defence;  the  payment  of  the  public  debt,  are  the  true 
final  causes  for  raising  money.  The  disposition  and  regulation  of  it,  when 
raised,  are  the  steps  by  which  it  is  applied  to  the  ends  for  which  it  was  raised, 
not  the  ends  themselves.  Hence,  therefore,  the  money  to  be  raised  by  taxes, 
as  well  as  any  other  personal  property,  must  be  supposed  to  come  within  the 
meaning,  as  they  certainly  do  within  the  letter,  of  authority  to  make  all  need- 
ful rules  and  regulations  concerning  the  property  of  the  United  States. 

A  case  will  make  this  plainer.  Suppose  the  public  debt  discharged,  and 
the  funds,  now  pledged  for  it,  liberatea;  in  some  instances  it  would  oe  found 
expedient  to  repeal  the  taxes;  in  others,  the  repeal  might  injure  our  own  in- 
dustry, our  agriculture,  and  manufactures.  In  these  cases,  they  would,  of 
course,  be  retained.  Here  then,  would  be  moneys  arising  from  the  authorized 
sources  of  revenue,  which  would  not  fall  within  the  rule  by  which  the  Attor- 
ney General  endeavors  to  except  them  from  other  personal  property,  and 
from  the  operation  of  the  clause  in  question. 

The  moneys  being  in  the  coffers  of  Government,  what  is  to  hinder  such  a 
disposition  to  be  made  of  them  as  is  contemplated  in  the  bill;  or  what  an  in- 
corporation of  the  parties  concerned,  under  the  clause  which  has  been  cited? 

It  is  admitted,  that,  with  regard  to  the  \Vestern  territory,  they  give  a  pow- 
er to  erect  a  corporation;  that  is?  to  constitute  a  government.  And  by  what 
rule  of  construction  can  it  be  maintained,  that  the  same  words,  in  a  constitu- 
tion of  government,  will  not  have  the  same  effect,  when  applied  to  one  spe- 
cies of  property,  as  to  another,  as  far  as  the  subject  is  capable  of  it  r  Or,  that 
a  legislative  power,  to  make  all  needful  rules  and  regulations;  or  to  pass  all 
laws  necessary  and  proper,  concerning  the  public  property,  which  is  admitted 
to  authorize  an  incorporation  in  one  case,  will  not  authorize  it  in  another  ? 
Will  justify  the  institution  of  a  government  over  the  Western  territory,  and 
will  not  justify  the  incorporation  of  a  bank  for  the  more  useful  management 
of  the  m9ney  of  the  nation  ?  If  it  will  do  the  last,  as  well  as  the  first,  then, 
under  this  provision  alone,  the  bill  is  constitutional,  because  it  contemplates 
that  the  United  States  shall  be  joint  proprietors  of  the.  stock  of  the  bank. 

There  is  an  observation  of  the  Secretary  of  State,  to  this  effect,  which  may 
require  notice  in  this  place:  Congress,  says  he,  are  not  to  lay  taxes,  ad  libi- 
tum, for  any  purpose  they  please,  but  only  to  pay  the  debts,  or  provide  for  (he 
welfare  of  the  Union.  Certainly  no  inference  can  be  drawn  from  this,  against 
the  power  of  applying  their  money  for  the  institution  of  a  bank.  It  is  true,  that 
they  cannot,  without  breach  of  trust,  lay  taxes  for  any  other  purpose  tha^n  the 
general  welfare;  but,  so  neither  can  any  other  government.  The  welfare  of 
the  community  is  the  only  legitimate  end  for  which  money  can  be  raised  on  the 
community.  Congress  can  be  considered  as  only  under  one  restriction,  which 
does  not  apply  to  other  governments.  They  cannot  rightfully  apply  the  mo- 
ney they  raise  to  any  purpose  merely  or  purely  local-  But,  with  this  excep- 


BANK   OF  THE  UNITED  STATES. 

tion,  they  have  as  large  a  discretion,  in  relation  to  the  application  of  money, 
as  any  legislature  whatever. 

The  constitutional  test  of  a  right  application,  must  always  be — whether  it 
be  for  a  purpose  of  general,  or  local  nature.  If  the  former,  there  can  be  no 
want  of  constitutional  power.  The  quality  of  Ihe  object,  as  how  far  it  will 
really  promote,  or  not,  the  welfare  of  the  Union,  must  be  matter  of  conscien- 
tious discretion;  and  the  arguments  for  or  against  a  measure,  in  this  light, 
must  be  arguments  concerning  expediency  or  inexpediency,  not  constitutional 
right.  Whatever  relates  to  the  general  order  of  the  finances,  to  the  general  in- 
terests of  trade,  &c.  being  general  objects,  are  constitutional  ones  for  the  ap- 
plication of  money. 

A  bank,  then,  whose  bills  are  to  circulate  in  all  the  revenues  of  the  coun- 
try, is  evidently  a  general  object,  arid,  for  that  very  reason,  a  constitutional 
one,  as  far  as  regards  the  appropriation  of  money  to  it.  Whether  it  will  really 
be  a  beneficial  one  or  not,  is  worthy  of  careful  examination,  but  is  no  more  a 
constitutional  point,  in  the  particular  referred  to,  than  the  question  whether 
the  Western  lands  shall  be  sold  for  twenty  or  thirty  cents  per  acre. 

A  hope  is  entertained,  that,  by  this  time,  it  has  been  made  to  appear  to  the 
satisfaction  of  the  President,  that  the  bank  has  a  natural  relation  to  the  power 
of  collecting  taxes;  to  that  of  regulating  trade;  to  that  of  providing  for  the  com- 
mon defence;  and,  that,  as  the  bill  under  consideration  contemplates  the  Go- 
vernment in  the  light  of  a  joint  proprietor  of  the  stock  of  the  bank,  it  brings 
the  case  within  the  provision  of  the  clause  of  the  constitution  which  immedi- 
ately respects  the  property  of  the  United  States. 

Under  a  conviction  that  such  a  relation  subsists,  the  Secretary  of  the  Trea- 
sury, with  all  deference,  conceives  that  it  will  result,  as  a  necessary  conse- 
quence, from  the  position,  that  all  the  specified  powers  of  Government  are 
sovereign,  as  to  the  proper  objects,  that  the  incorporation  of  a  bank  is  a  con- 
stitutional measure,  and  that  the  objections  taken  to  the  bill,  in  this  respect, 
are  ill  founded. 

But,  from  an  earnest  desire  to  give  the  utmost  possible  satisfaction  to  the 
mind  of  the  President,  on  so  delicate  and  important  a  subject,  the  Secretary 
of  the  Treasury  will  ask  his  indulgence,  while  he  gives  some  additional  illus- 
trations of  cases  in  which  a  power  of  erecting  corporations  may  be  exercised, 
under  some  of  those  heads  of  the  specified  powers  of  the  Government,  which 
are  alleged  to  include  the  right  of  incorporating  a  bank. 

I.  It  does  not  appear  susceptible  of  a  doubt,  that  if  Congress  had  thought 
proper  to  provide,  in  the  collection  law,  that  the  bonds  to  be  given  for  the  du- 
ties, should  be  given  to  the  collector  of  the  district  A,  or  B,  as  the  case  might 
require,  to  inure  to  him  and  his  successors  in  office,  in  trust  for  the  United 
States,  that  it  would  have  been  consistent  with  the  constitution  to  make  such 
an  arrangement;  and  yet,  this,  it  is  conceived,  would  amount  to  an  incorpo- 
ration. 

II.  It  is  not  an  unusual  expedient  of  taxation  to  farm  particular  branches  of 
revenue,  that  is,  to  sell  or  mortgage  the  product  of  them  for  certain  definite 
sums,  leaving  the  collection  to  the  parties  to  whom  they  are  mortgaged  or  sold. 
There  are  even  examples  of  this  in  the  United  States.  Suppose  that  there  was 
any  particular  branch  of  revenue  which  it  was  manifestly  expedient  to  place 
on  this  footing,  and  there  were  a  number  of  persons  willing  to  engage  with  the 
Government,  upon  condition  that  they  should  be  incorporated,  and  the  funds 
vested  in  them,  as  well  for  their  greater  safety,  as  for  the  more  convenient  re- 
covery and  management  of  the  taxes,  is  it  supposeable  that  there  could  be  any 
constitutional  obstacle  to  the  measure  ?    It.  is  presumed  that  there  could  be 
none;  it  is  certainly  a  mode  of  collection  which  it  would  be  in  the  discretion 
of  the  Government  to  adopt,  though  the  circumstances  must  be  very  extraor- 
dinary that  would  induce  the  Secretary  to  think  it  expedient. 

III.  Suppose  a  new  and  unexplored   branch  of  trade  should  present  itself 
with  some  foreign  country;  suppose  it  was  manifest  that,  to  undertake  it  with 
advantage,  required  a  union  of  the  capitals  of  a  number  of  individuals,  and  that 
those  individuals  would  not  be  disposed  to  embark  without  an  incorporation, 


CHARTER   OF    1791. 

as  well  to  obviate  the  consequences  of  a  private  partnership,  which  makes 
every  individual  liable,  in  his  whole  estate,  for  the  debts  of  the  company,  to 
their  utmost  extent,  as  for  the  more  convenient  management  of  the  business; 
what  reason  can  there  be  to  doubt,  that  the  national  Government  would  have 
a  constitutional  right  to  institute  and  incorporate  such  a  company  ?  None. 

They  possess  a  general  authority  to  regulate  trade  with  foreign  countries. 
This  is  a  mean  which  has  been  practised,  to  that  end,  by  all  the  principal  com- 
mercial nations,  who  have  trading  companies,  to  this  day,  which  have  subsist- 
ed for  centuries.  Why  may  not  the  United  States  constitutionally  employ 
the  means  usual  in  other  countries,  for  attaining  the  ends  intrusted  to  them  ? 

A  power  to  make  all  needful  rules  and  regulations  concerning  territory,  has 
been  construed  to  mean  a  power  to  erect  a  government.  A  power  to  regulate 
trade,  is  a  power  to  make  all  needful  rules  ami  regulations  concerning  trade. 
Why  may  it  not,  then,  include  that  of  erecting  a  trading  company,  as  well  as, 
in  other  cases,  to  erect  a  government  ? 

It  is  remarkable  that  the  State  conventions  who  had  proposed  amendments 
in  relation  to  this  point,  have,  most,  if  not  all  of  them,  expressed  themselves 
nearly  thus:  Congress  shall  not  grant  monopolies,  nor  erect  any  company  with 
exclusive  advantages  of  commerce  I  Thus,  at  the  same  time  expressing  their 
sense,  that  the  power  to  erect  trading  companies,  or  corporations,  was  inhe- 
rent in  Congress,  and  objecting  to  it  no  further  than  as  to  the  grant  of  exclusive 
privileges. 

The  Secretary  entertains  all  the  doubts  which  prevail  concerning  the  utility 
of  such  companies:  but  he  cannot  fashion  to  his  own  mind  a  reason  to  induce 
a  doubt  that  there  is  a  constitutional  authority  in  the  United  States  to  establish 
them.  If  such  a  reason  were  demanded,  none  could  be  given,  unless  it  were 
this,  that  Congress  cannot  erect  a  corporation;  which  would  be  no  better  than 
to  say  they  cannot  do  it,  because  they  cannot  do  it;  first  presuming  an  ina- 
bility without  reason,  and  then  assigning  that  inability  a.s  the  cause  of  itself. 

Illustrations  of  this  kind  might  be  multiplied  without  end.  They  shall,  how- 
ever, be  pursued  no  further. 

There  is  a  sort  of  evidence  on  this  point,  arising  from  an  aggregate  view  of 
the  constitution,  which  is  of  no  inconsiderable  weight.  The  very  general 
power  of  laying  and  collecting  taxes,  and  appropriating  their  proceeds;  that 
of  borrowing  money  indefinitely:  that  of  coin  ing  money,  and  regulating  foreign 
coins;  that  of  making  all  needful  rules  and  regulations  respecting  the  property 
of  the  United  States.  These  powers  combined,  as  well  as  the  reason  and  na- 
ture of  the  thing,  speak  strongly  this  language:  that  it  is  the  manifest  design 
and  scope  of  the  constitution,  to  vest  in  Congress  all  the  powers  requisite  to 
the  effectual  administration  of  the  finances  of  the  United  States.  As  far  a» 
concerns  this  object,  there  appears  to  be  no  parsimony  of  power. 

To  suppose,  then,  that  the  Government  is  precluded  from  the  employment 
of  so  usual  and  so  important  an  instrument  for  the  administration  of  its  finan- 
ces, as  that  of  a  bank,  is  to  suppose  what  does  not  coincide  with  the  general 
tenor  and  complexion  of  the  constitution,  and  what  is  not  agreeable  to  impres- 
sions that  any  mere  spectator  would  entertain  concerning  it.  Little  less  than 
a  prohibiting  clause  can  destroy  the  strong  presumptions  which  result  from  the 
general  aspect  of  the  Government.  Nothing  but  demonstration  should  exclude 
the  idea  that  the  power  exists. 

To  all  questions  of  this  nature,  the  practice  of  mankind  ought  to  have  great 
weight  against  the  theories  of  individuals. 

The  fact,  for  instance,  that  all  the  principal  commercial  nations  have  made 
use  of  trading  corporations  or  companies,  for  the  purpose  of  external  com- 
merce^ is  a  satisfactory  proof  that  the  establishment  of  them,  is  an  incident  to 
the  regulation  of  commerce. 

This  other  fact,  that  banks  are  an  usual  engine  in  the  administration  of  na- 
tional finances,  and  an  ordinary,  and  the  most  effectual,  instrument  of  loans, 
and  one  which,  in  this  country,  has  been  found  essential,  pleads  strongly 
against  the  supposition,  that  a  government  clothed  with  most  of  the  important 
prerogatives  of  sovereignty,  in  relation  to  its  revenues,  its  debt,  its  credit,  its 


BANK  OF  THE  UNITED  STATES. 

defence,   its  trade,  its  intercourse  with  foreign  nations,  is  forbidden  to  make 
use  of  that  instrument  as  an  appendage  to  its  own  authority. 

It  has  been  stated,  as  an  auxiliary  test  of  constitutional  authority,  to  try 
whether  it  abridges  anv  pre-existing  right  of  any  State  or  any  individual.  The 
proposed  measure  will  stand  the  most  severe  examination  on  this  point.  Each 
State  may  still  erect  as  many  banks  as  it  pleases;  every  individual  may  still 
carry  on  the  banking  business  to  any  extent  he  pleases. 

Another  criterion  may  be  this;  whether  the  institution  or  thing  has  a  more 
direct  relation,  as  to  its  uses,  to  the  objects  of  the  reserved  powers  of  the  State 
Government,  than  to  those  of  the  powers  delegated  by  the  United  States? 
This  rule,  indeed,  is  less  precise  than  the  former;  but  it  may  still  serve  as 
some  guide.  Surely,  a  bank  has  more  reference  to  the  objects  intrusted  to  the 
national  Government  than  to  those  left  to  the  care  of  the  State  Government. 
The  common  defence  is  decisive  in  this  comparison. 

It  is  presumed,  that  nothing  of  consequence  in  the  observations  of  the  Se- 
cretary of  State  and  Attorney  General,  has  been  left  unnoticed. 

There  are,  indeed,  a  variety  of  observations  of  the  Secretary  of  State,  de- 
signed to  show,  that  the  utilities  ascribed  to  a  bank,  in  relation  to  the  collec- 
tion of  taxes  and  to  trade,  could  be  obtained  without  it.  To  analyze  which, 
would  prolong  the  discussion  beyond  all  bounds.  It  shall  be  forborne  for  two 
reasons:  first,  because  the  report  concerning  the  bank,  may  speak  for  itself  in 
this  respect;  and,  secondly,  because  all  those  observations  are  grounded  on 
the  erroneous  idea,  that  the  quantum  of  necessity  or  utility  is  the  test  of  a 
constitutional  exercise  of  power. 

One  or  two  remarks  only  shall  be  made;  one  is,  that  he  has  taken  no  notice 
of  a  very  essential  advantage  to  trade  in  general,  which  is  mentioned  in  the 
report  as  peculiar  to  the  existence  of  a  bank  circulation,  equal,  in  the  public 
estimation,  to  gold  and  silver.  It  is  this  that  renders  it  unnecessary  to  lock 
up  the  money  of  the  country  to  accumulate  for  months  successively,  in  order 
to  the  periodical  payment  of  interest.  The  oilier  is  this:  that  his  arguments 
to  show  that  treasury  orders  and  bills  of  exchange,  from  the  course  of  trade, 
will  prevent  any  considerable  displacement  of  the  metals,  are  founded  on  a 
particular  view  of  the  subject.  A  case  will  prove  this.  The  sums  collected 
in  a  State,  may  be  small  in  comparison  with  the  debt  due  to  it.  The  balance 
of  its  trade,  direct  and  circuitous  with  the  Seat  of  Government,  may  be  even, 
or  nearly  so.  Here,  then,  without  bank  bills, which,  in  that  State,  answer  the  pur- 
pose of  coin,  there  must  be  a  displacement  of  the  coin,  in  proportion  to  the  dif- 
ference between  the  sum  collected  in  the  State,  and  that  to  be  paid  in  it.  With 
bank  bills  no  such  displacement  would  take  place;  or,  as  far  as  it  did,  it  would 
be  gradual  and  insensible.  In  many  other  ways,  also,  would  there  be  at  least 
a  temporary  and  inconvenient  displacement  of  the  coin,  even  where  the  course 
of  trade  would  eventually  return  it  to  its  proper  channels. 

The  difference  of  the  two  situations,  in  point  of  convenience  to  the  treasury, 
can  only  be  appreciated  by  one  who  experiences  the  embarrassments  of  mak- 
ing provision  for  the  payment  of  the  interest  on  a  stock,  continually  changing 
place  in  thirteen  different  places. 

One  thing  which  has  been  omitted,  just  occurs,  although  it  is  not  very  ma- 
terial to  the  main  argument.  The  Secretary  of  State  affirms,  that  the  bill 
only  contemplates  repayment,  not  a  loan  to  the  Government.  But  here  he  is 
certainly  mistaken.  It  is  true,  the  Government  invests  in  the  stock  of  the 
bank,  a  sum  equal  to  that  which  it  receives  on  loans.  But  let  it  be  remem- 
bered, that  it  does  not,  therefore,  cease  to  be  a  proprietor  of  the  stock,  which 
would  be  the  case,  if  the  money  received  back  were  in  the  nature  of  a  pay - 
nient.  It  remains  a  proprietor  still,  and  will  share  in  the  profit  or  loss  ot  the 
institution,  according  as  the  dividend  is  more  or  less  than  the  interest  it  is  to 
pay  on  the  sum  borrowed.  Hence  that  sum  is  manifestly,  and  in  the  strict- 
est s^nse,  a  loan. 

ALEXANDER  HAMILTON. 

Philadelphia,  February  23,  1791. 


CHARTER  OF   1791. 

WEDNESDAY  NOON,  23d  February,  1791. 

SIR:  I  have  this  moment  received  your  sentiments  with  respect  to  the  con- 
stitutionality of  the  bill  "  to  incorporate  the  subscribers  to  the  Bank  of  the 
United  States," 

This  bill  was  presented  to  me  by  the  the  joint  committee  of  Congress, 
at  12  o'clock  on  Monday,  the  14th  instant.  To  what  precise  period,  by  legal 
interpretation  of  the  constitution,  can  the  President  retain  it  in  his  possession, 
before  it  becomes  a  law  by  the  lapse  of  ten  days? 

GEO.  WASHINGTON. 

To  the  Secretary  of  (he  Treasury. 


FEBRUARY,  23,  1791. 

SIR:  In  answer  to  your  note  of  this  morning  just  delivered  to  me,  1  give  it 
;is  my  opinion,  that  you  have  ten  days,  exclusive  of  that  on  which  the  bill  was 
delivered  to  you,  and  Sundays;  hence,  in  the  present  case,  if  it  is  returned 
on  Friday,  at  any  time  while  Congress  are  sitting,  it  will  be  in  time. 
It  might  be  a  question,  if  returned  after  their  adjournment  on  Friday. 
I  have  the  honor  to  be,  with  perfect  respect,  sir, 

Your  most  obedient  servant, 

A.  HAMILTON. 
To  the  President  (if  the  United  Stales. 


PHILADELPHIA,  February  24,  1791. 

MR:  1  have  just  heard  from  the  Senate,  that  the  bill  supplementary  to  that 
for  incorporating  the  bank  went  through  a  second  reading,  and  a  question 
was  taken  upon  it,  and  only  three  or  four  dissentients;  among  these  were  Mr. 
Car  rot  I  and  Mr.  Monroe. 

It  would  have  been  passed  this  day  without  doubt,  but  the  opponents  in- 
sisted on  the  rule  of  the  House,  which  made  it  impossible.  It  will  be  passed 
the  first  thing  to-morrow. 

The  yeas  and  nays  were  taken,  in  order  to  please  the  members. 
I  have  the  honor  to  be, 

Most  respectfully  and  affectionately,  sir,  &c. 

™  „    0     ..  A.  HAMILTON. 

Fo  the  President  of  the  United  States. 


THURSDAY,  February  25,  1791. 

SIR:  The  bill  supplementary  to  the  Bank  bill,  passed  the  House  of  Repre- 
sentatives yesterday.  General  Schuyler  informs  me,  that  the  friends  of  the 
bank  proposed  that  it  should  pass  to  a  second  reading  immediately,  and  that 
rlt^^ST011  °f?P°sed  ^  and  moved  that  it  should  be  printed— that,  by  a  rule 
ot  the  House,  it  was  of  necessity  to  comply  with  Mr.  Carroll's  objection,  a 
departure  requiring  unanimous  consent.  That,  accordingly,  the  bill  was 
deterred  till  to-day,  and  in  the  mean  time,  ordered  to  be  printed. 

It  will,  doubtless,  pass,  if  there  are  not  studied  delays  on  the  part  of  the 
opposers  of  the  bank. 

I  have  the  honor  to  be,  with  perfect  respect,  &c. 

~,    D     . .  A.  HAMILTON. 

The  President  of  the  United  States. 

15 


BANK  OF  THE   UNITED  STATES. 

SUPPLEMENTARY  BILL. 
HOUSE  OF  REPRESENTATIVES,  February  9,  1791. 

Ordered,  That  a  committee  be  appointed  to  prepare  and  bring  in  a  bill  or 
bills  supplementary  to  the  foregoing  act,  and  that  Mr.  Smith,  of  S.  C.  Miv 
Williamson,  and  Mr.  Vining,  be  the  said  committee. 

On  the  10th,  Mr.  SMITH,  from  the  said  committee,  presented  a  bill,  which, 
on  the  23d  of  February,  passed  the  House,  and  afterwards  the  Senate,  and 
was  approved  by  the  President  on  the  2d  of  March,  1791. 

It  regulated  the  time  of  subscription  to  the  stock  of  the  bank,  the  amount 
of  specie  to  be  paid,  &c. 

[See  the  act  m  1st  vol.  U.  S.  Laws,  p.  177,  Story's  edition.] 


SUPPLEMENTS  TO  THE  ACT  OF  1791,  INCORPORATING  THE  UNITED 

STATES  BANK. 

The  first  supplementary  act  upon  this  subject  which  was  passed,  was  that 
of  the  2d  of  March,  1791,  heretofore  referred  to,  varying  the  time  of  sub- 
scriptions, and  the  amount  of  specie  payments,  &c. 

On  the  27th  of  June,  1798,  an  act  was  passed  "to  punish  frauds  committed 
on  the  Bank  of  the  United  States,"  by  which  the  forging  or  uttering  of  coun- 
terfeit bills,  notes,  orders,  or  checks,  by  or  upon  the  bank,  subjected  the 
offender  to  imprisonment  at  hard  labor,  for  a  period  not  less  than  three,  nor 
more  than  ten  years.  [See  Laws  of  U.  S.  of  1798,  chap.  78.] 

By  an  act  passed  the  23d  of  March,  1804,  power  was  given  to  the  Presi- 
sident  and  Directors  of  the  Bank,  to  establish  offices  of  discount  and  deposite 
44  in  any  part  of  the  territories  or  dependencies  of  the  United  States,"  in  the 
manner  and  on  the  terms  prescribed  by  the  original  act.  [See  U.  S.  laws,, 
1804,  chap.  32.] 

An  additional  act,  "  to  punish  frauds  committed  on  the  bank,"  was  passed 
on  the  24th  of  February,  1807.  [See  chap.  75,  in  Story 'sedition  of  U.  S.  laws* 
vol.  2drp.  1048.] 


CHAPTER  III. 


PROCEEDINGS  ON  THE  MEMORIAL  OF  THE  STOCKHOLDERS  OF  THE  BANK  FOR  A 
RENEWAL  OF  THK  CHARTER  OF  1791. 

BY  the  limit  fixed  in  the  original  act  of  incorporation,  the  legal  existence 
of  the  bank,  as  a  corporate  body,  was  to  cease  on  the  4th  of  March,  1811. 
In  anticipation  of  that  event,  its  directors  thought  it  advisable,  at  an  early 
period,  to  apply  to  Congress  for  a  renewal  of  their  powers.  The  circum- 
stances connected  with  its  origin,  and  its  relation  to  the  political  parties,  by 
whom  the  Government,  at  different  periods  of  its  existence,  had  been  admin- 
istered, might  have  suggested  a  doubt  whether  an  extension  of  the  charter 
would  be  granted.  In  its  enactment,  a  large  majority  of  Congress  had,  in- 
deed, concurred,  and  it  had  enjoyed,  in  the  outset?  the  entire  confidence  of 
the  Executive  Government  of  the  Union;  but  a  political  revolution  had  been 
effected,  and  those  who  had  given  it  being,  were  themselves,  by  the  will  of 
the  People,  divested  of  a  controlling  power.  Two,  among  the  early  opposers 
of  the  bank,  had  successively  filled  the  Executive  chair.  How  far  these 
changes  in  the  aspect  and  relative  condition  of  parties,  affected  the  destinies 
of  this  institution,  it  is  not  for  the  editors  to  determine;  but,  doubtless,  they 
were  not  without  their  influence. 

The  following  proceedings  and  debates,  which  took  place,  both  in  the 
House  and  the  Senate,  on  the  bill  to  renew  the  charter,  are  of  a  highly  inter- 
esting and  instructive  character,  and  may  enable  the  reader  to  decide  ques- 
tions upon  which  the  editors  will  not  presume  to  speculate. 

CSarimiM'  }  HOUSE  OF  REPRESENTATIVES,  March  26,  1808. 

A  memorial  of  the  stockholders  of  the  Bank  of  the  United  States,  praying 
a  renewal  of  their  charter,  was  presented  and  read:  whereupon, 

A  motion  was  made,  by  Mr.  JOSEPH  CLAY,  "  that  it  be  referred  to  the  Se- 
cretary of  the  Treasury,  with  instruction  to  him  to  examine  the  matter  thereof, 
and  report  his  opinion  thereupon  to  the  House." 

Mr.  RANDOLPH  moved  to  postpone  the  consideration  of  the  reference  of  the 
memorial,  till  Monday  following,  which  motion  the  SPEAKER  decided,  was 
not  in  order. 

A  motion  was  then  made  by  Mr.  DAVID  R.  WILLIAMS,  that  the  memorial 
be  referred  to  a  Committee  of  the  Whole  House,  which,  superseding  the  mo- 
tion for  a  reference  to  the  Secretary  of  the  Treasury,  the  question  was  taken 
thereon,  and  decided  in  the  affirmative. 

Resolved,  That  the  said  memorial  be  the  order  of  the  day  for  Monday  next. 

The  subject,  however,  was  not  further  acted  on  in  this  House  during  the 
session. 

IN  SENATE,  April  20,  1808. 

Mr.  GREGG  presented  the  memorial  of  the  stockholders  of  the  Bank  of  the 
United  States,  praying  a  renewal  of  their  charter,  for  reasons  stated  at  large 
in  their  memorial,  which  was  read. 

Ordered*  That  it  be  referred  to  the  Secretary  of  the  Treasury,  to  consider 
and  report  thereon  at  the  next  session  of  Congress. 

MAHCH  8,1800. 

The  President  of  the  Senate  communicated  the  report  of  the  Secretary  of 
the  Treasury,  on  the  memorial  of  the  stockholders  of  the  Bank  of  the  United 
States,  referred  to  him  on  the  20th  of  April  last,  which  is  as  follows: 


116  BANK  OF  THE  UNITED  STATES. 

Report  of  the  Secretary  of  the  Treasury  on  the  subject  of  a  National  Bank, 
made  to  the  Senate,  March  2,  1809. 

The  Secretary  of  the  Treasury,  to  whom  was  referred  the  memorial  of  the 
stockholders  of  the  Bank  of  the  United  States,  praying  for  a  renewal  of 
their  charter,  which  will  expire  on  the  4th  day  of  March,  1811,  respectfully 
submits  the  following  report: — 

The  Bank  of  the  United  States  was  incorporated  by  act  of  March  2d, 
1791,  with  a  capital  of  ten  millions  of  dollars,  divided  into  25,000  shares,  of  400 
dollars  each.  Two  millions  of  dollars  were  subscribed  by  the  United  States, 
and  paid  in  ten  equal  annual  instalments.  Of  the  eight  millions  of  dollars 
subscribed  by  individuals,  two  millions  werepaid  in  specie,  and  six  millions 
in  six  per  cent,  stock  of  the  United  States.  Two  thousand  four  hundred  and 
ninety-three  of  the  shares  belonging  to  Government,  were  sold  in  the  years 
1796  and  1797,  at  an  advance  of  25  per  cent.;  two  hundred  and  eighty-seven 
were  sold  in  the  year  1797,  at  an  advance  of  20  per  cent.;  and  the  other  two 
thousand  two  hundred  and  twenty  shares,  in  the  year  1802,  at  an  advance  of 
45  per  cent.;  making,  together,  exclusively  of  the  dividends,  a  profit  of 
671,860  dollars  to  the  United  States.  The  greater  part  of  the  six  per  cent, 
stock  originally  paid  by  the  stockholders,  has  since  been  sold  by  the  bank: 
a  portion  has  been  redeemed  by  Government,  by  the  operation  of  the  annual 
reimbursement,  and  the  bank  retains  at  present  only  a  sum  of  $2,231,598  in 
six  per  cent,  stock. 

About  eighteen  thousand  shares  of  the  bank  stock,  are  held  by  persons 
residing  abroad,  who  are,  by  the  charter,  excluded  from  the  right  of  voting. 
The  stockholders  resident  within  the  United  States,  and  who  have  the  exclu- 
sive control  over  the  institution,  hold  only  seven  thousand  shares,  or  little 
more  than  one-fourth  part  of  its  capital.  They  appoint,  annually,  twenty-five 
directors  of  the  bank  itself,  which  is  established  at  Philadelphia;  and  those 
directors  have  the  entire  management  of  the  discounts  and  other  transactions 
of  the  institution  in  that  city,  and  the  general  superintendence  and  appoint- 
ment of  the  directors  and  cashiers  of  the  offices  of  discount  and  deposite,  esta- 
blished in  other  places.  There  are  at  present  eight  of  those  offices,  viz:  at 
Boston,  New  York,  Baltimore,  Norfolk,  Charleston,  Savannah,  the  City  of 
Washington,  and  New  Orleans.  The  two  last  were  established  at  the  request 
of  the  Secretary  of  the  Treasury. 

The  profits  of  a  bank  arise  from  the  interest  received  on  the  loans  made 
either  to  Government  or  to  individuals;  and  they  exceed  six  per  cent,  or  the 
rate  of  interest  at  which  the  loans  are  made,  because  every  bank  lends  not 
only  the  whole  of  its  capital,  but  also  a  portion  of  the  moneys  deposited  for 
safe  keeping  in  its  vaults,  either  by  Government  or  by  individuals.  For  every 
sum  of  money  thus  deposited,  the  party  making  that  deposite,  either  receives 
the  amount  in  bank  notes,  or  obtains  a  credit  on  the  books  of  the  bank.  In 
either  case,  he  has  the  same  right  at  any  time  to  withdraw  his  deposite;  in  the 
first  case,  on  presentation  and  surrender  of  the  bank  notes;  in  the  other  case, 
by  drawing  on  the  bank  for  the  amount.  Bank  notes  and  credits  on  the 
books  of  the  bank,  arise,  therefore,  equally  from  deposites,  although  the  credits 
alone  are,  in  common  parlance,  called  deposites;  and  the  aggregate  of  those 
credits,  and  of  the  bank  notes  issued,  constitutes  the  circulating  medium 
substituted  by  the  banking  operations  to  money;  for  payments  from  one  indi- 
vidual to  another  are  equally  made  by  drafts  on  the  bank,  or  by  the  delivery 
of  bank  notes.  Experience  has  taught  the  directors  what  portion  of  the  mo- 
ney thus  deposited,  they  may  lend;  or,  in  other  words,  how  far  they  may,  with 
safety,  extend  their  discounts  beyond  the  capital  of  the  bank,  and  what  amount 
of  specie  it  is  necessary  they  should  keep  in  their  vaults.  The  profits,  and, 
therefore,  the  dividends  of  a  bank,  will  increase  in  proportion  as  the  directors 
will  increase  loans  of  the  moneys  deposited,  and  suffer  the  amount  of  specie 
on  hand  to  diminish.  Moderate  dividends,  when  not  produced  by  some  par- 
ticular cause,  which  checks  the  circulation  of  bank  paper,  are  the  best  evi- 
dence of  the  safety  ol  the  institution,  and  of  the  wisdom  of  its  direction. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 
The  annexed  table  of  all  the  dividends  made  by  the  Bank  of  the  United 


extending  its  discounts. 

From  what  has  been  premised,  it  appears  that  the  property  of  a  bank  in  full 
operation,  consists  of  three  general  items,  viz:  1st,  outstanding  debts,  con- 
sisting principally  of  the  notes  payable  at  sixty  days,  which  have  been  dis- 
counted at  the  bank:  2dly,  specie  in  the  vaults:  3dly,  buildings  necessary  for 
the  institution.  On  the  other  hand,  the  bank  owes,  1st,  to  the  stockholders, 
the  amount  of  the  capital  stock  originally  subscribed,  payable  only  in  case  of 
the  dissolution  of  the  institution:  2dly,  to  Government  or  individuals,  the 
whole  amount  of  moneys  deposited,  payable  on  demand,  and  including  both 
the  credits  on  the  bankbooks,  commonly  called  deposites,  and  the  bank  notes 
in  circulation.  The  account  is  balanced  by  the  amount  of  undivided  profits 
and  accruing  discounts,  which  constitute  the  fund  for  defraying  current  ex- 
penses, for  paying  subsequent  dividends,  and  for  covering  contingent  losses. 

The  following  statement  of  the  situation  of  the  Bank  of  the  United  States, 
including  its  branches,  exhibits  the  true  amount  of  public  stock  which  is  still 
held  by  the  institution,  of  the  cost  of  its  buildings  and  lots  of  ground,  and  of 
the  undivided  surplus  or  contingent  fund  subsequent  to  the  dividend  made  in 
January  last.  But  the  amount  of  loans  to  individuals  or  discounts,  of  specie 
in  the  vaults,  and  of  moneys  deposited,  including  both  the  credits  on  the  bank 
books,  commonly  called  deposites, and  the  bank  notes  in  circulation,  is  taken 
on  a  medium;  and,  so  far  as  relates,  on  the  credit  side  of  the  account,  to  specie 
on  hand,  and,  on  the  debit  >ide,  to  deposites,  is  several  millions  of  dollars  less 
than  it  happens  to  be  at  this  moment;  both  having  been  swelled  much  beyond 
the  average  by  the  embargo,  and  by  the  unusually  large  balance  in  the  trea- 
sury, which  is  principally  deposited  in  the  bank.  Some  minor  items,  arising 
from  accidental  circumstances,  are  omitted  for  the  sake  of  perspicuity. 

CR. 

I.  Debts  due  to  the  bank,  viz: 

1 .  Six  per  cent,  stock  of  the  United  States,  being  the 
residue  of  that  part  of  the  original  subscription 
paid  in  public  stocks,  which  is  still  held  by  the 

bank,  -  $2,230,000 

2.  Loans  to  individuals,  consisting  chiefly  of  dis- 
counted notes,  payable  at  sixty  days,  and,  in  some 
instances,  of  bonds  and  mortgages" taken,  in  order 

to  secure  doubtful  debts,  -  15,000,000 

3.  Due  by  banks  incorporated  by  the  States,  -       800,000 

18,030,000 

II.  Specie  in  the  vaults,  5,000,000 
III    Cost  of  lots  of  ground,  and  buildings  erected,     -  480,000 

Total  Cr.         -  _$23,5l(),000 

DR. 

I.  Capital  stock  of  the  bank,  payable  to  the  stockhold- 

ers whenever  the  institution  may  be  dissolved,     $10,000,000 

II.  Moneys  deposited,  viz: 

1.  Credits  on  the  bank  books,  commonly 
called  deposites,  including  the  deposites 
both  by    Government    and  by  indivi- 
duals,     -  -  8,500,000 

2.  Bank  notes  in  circulation,        -  -  4,500,000 

13,000,000 


Total  Dr.  -  $23,000,000 


BANK  OF  THE  UNITED  STATES. 

Balance,  being  the  amount  of  undivided  profits,  commonly  called 
the  "contingent  fund,"  and  applicable  to  cover  losses  which 
may  arise  from  bad  debts  or  other  contingencies,  and  to  extra 
dividends,  -  $510,000 

It  sufficiently  appears  from  that  general  view,  that  the  affairs  of  the  Bank 
of  the  United  States,  considered  as  a  moneyed  institution,  have  been  wisely 
and  skilfully  managed. 

The  advantages  derived  by  Government  from  the  bank,  are  nearly  of  the 
same  nature  with  those  obtained  by  individuals,  who  transact  business  witli 
similar  institutions,  and  may  be  reduced  to  the  following  heads: 

1.  Safe  keeping  of  the  public  moneys.     This  applies  not  only  to  moneys  al- 
ready in  the  treasury,  but  also  to  those  in  the  hands  of  theprincipal  collectors,  of 
the  commissioners  of  the  loans,  and  of  several  other  officers,  and  affords  one 
of  the  best  securities  against  delinquencies. 

2.  Transmission  of  public  moneys.     As  the   collections  will  always,  in 
various  quarters  of  the  extensive  territory  of  the  Union,  either  exceed  or  fall 
short  of  the  expenditures  in  the  same  places,  a  perpetual  transmission  of  mo- 
ney, or  purchase  of  remittances  at  the  risk  and  expense  of  the  United  States, 
would  become  necessary,  in  order  to  meet  those  demands;  but  this  is  done  by 
the  bank  at  its  own  risk  and  expense,  for  every  place  where  one  of  its  branches 
is  established,  which  embraces  all  payments  of  any  importance. 

3.  Collection  of  the  revenue.    The  punctuality  of  payments  introduced  by 
the  banking  system,  and  the  facilities  afforded  by  the  bank  to  the  importers 
indebted  for  revenue  bonds,  are  amongst  the  causes  which  have  enabled  the 
United  States  to  collect  with  so  great  facility,  and  with  so  few  losses,  the 
large  revenue  derived  from  the  impost. 

4.  Loans.    Although  the  prosperity  of  past  years  has'enabled  Government, 
during  the  present  administration,  to  meet  all  the  public  demands,  without 
recurring  to  loans,  the  bank  had,  heretofore,  been  eminently  useful  in  making 
the  advances,  which,  under  different  circumstances,  were  necessary.    There 
was  a  time  when,  exclusively  of  the  six  per  cent,  stock  held  by  the  institution 
as  part  of  the  original  subscription,  the  loans  obtained  by  Government  from 
the  bank,  amounted  to  6,200,000  dollars.    And  a  similar  disposition  has  been 
repeatedly  evinced,  whenever  the  aspect  of  public  affairs  has  rendered  it  proper 
to  ascertain  whether  new  loans  mignt,  if  wanted,  be  obtained. 

The  numerous  banks  now  established,  under  the  authority  of  the  several 
States,  might,  it  is  true,  afford  considerable  assistance  to  Government  in  its 
fiscal  operations.  There  is  none,  however,  which  could  effect  the  transmis- 
sion of  public  moneys  with  the  same  facility,  and  to  the  same  extent,  as  the 
Bank  of  the  United  States  is  enabled  to  do,  through  its  several  branches. 
The  superior  capital  of  that  institution  offers,  also,  a  greater  security  against 
any  possible  losses,  and  greater  resources  in  relation  to  loans.  Nor  is  it  eligi- 
ble, that  the  General  Government  should,  in  respect  to  its  own  operations, 
be  entirely  dependent  on  institutions  over  which  it  has  no  control  whatever. 
A  national  bank,  deriving  its  charter  from  the  National  Legislature,  will, 
at  all  times,  and  under  every  emergency,  feel  stronger  inducements,  both  from 
interest  and  from  a  sense  ot  duty,  to  afford  to  the  Union  every  assistance 
within  its  power. 

The  strongest  objection  against  the  renewal  ot  the  charter  seems  to  arise 
from  the  great  portion  of  the'bank  stock  held  by  foreigners — not  on  account  of 
any  influence  it  gives  them  over  the  institution,  since  they  have  no  vote — but 
of  the  high  rate  of  interest  payable  by  America  to  foreign  countries,  on  the 


a  year,  must  be  annually  remitted  in  the  same  manner.  The  renewal  of  the 
charter  will,  in  that  respect,  operate,  in  a  national  point  of  view,  as  a  foreign 
loan,  bearing  an  interest  of  8»  per  cent,  a  year. 


ON  THE  BILL  TO   RENEW  THE  CHARTER  OF   1791. 

That  inconvenience  might,  perhaps,  be  removed,  by  a.  modification  in  the 
charter,  providing  tor  the  repayment  of  that  p9rtion  of  the  principal  by  a  new 
subscription  to  the  same  amount,  in  favor  of  citizens,-  but  it  does  not,  at  all 
events,  appear  sufficient  to  outweigh  the  manifest  public  advantages  derived 
from  the  renewal  of  a  charter. 

The  conditions  in  favor  of  the  public,  on  which  this  should  be  granted,  are 
the  next  subject  of  consideration. 

The  nett  profit  annually  derived  by  the  stockholders,  from  a  renewal  of  the 
charter,  is  equal  to  the  difference  between  the  annual  dividends  and  the  mar- 
ket rate  of  interest.  Supposing  this  to  continue  at  six  per  cent,  during  the 
period  granted  by  the  extension  of  the  charter,  and  the  dividends  to  be  on  an 
average  at  the  rate  of  85  per  cent.,  that  profit  will  be  2£  per  cent,  a  year. 
If  the  charter  be  extended  twenty  years,  the  value  of  the  privilege  will  be 
equal  to  an  annuity  of  2.1  per  cent,  on  the  capital,  that  is  to  say,  of  250,000  dol- 
lars, for  twenty  years;  and  such  annuity  being  payable  semi-annually,  is 
worth  almost  2,890,000  dollars.  This,  however,  would  be  much  more  than 
any  bank  would  give  for  a  charter,  as  it  would  leave  it  nothing  but  the  right 
of  dividing  at  the  rate  of  six  per  cent,  a  year,  which  the  stockholders  have 
without  a  charter.  It  is  believed,  that  they  would  not  be  willing  to  give  even  ' 
half  that  sum  for  the  extension:  and  that  about  1,250,000  dollars  may  be  con- 
sidered as  the  maximum,  which  could  be  obtained,  if  it  was  thought  eligible 
to  sell  the  renewal  of  the  charter  for  a  fixed  sum  of  money. 

It  is,  however,  presumed,  that  the  decision  on  the  conditions,  which  may 
be  annexed  to  an  extension  of  the  charter,  will  be  directed  by  considerations 
of  a  much  greater  importance  than  the  payment  of  such  sum  into  ihe  treasury. 

The  object  will,  undoubtedly,  be  to  give  to  the  institution  all  the  public 
utility  of  which  it  is  susceptible,  and  to  derive  from  it  permanent  and  solid 
advantages,  rather  than  mere  temporary  aid.  Under  these  impressions,  the 
following  suggestions  are  respectfully  submitted: 

I.  That  the  bank  should  pay  interest  to  the  United  States,  on  the  public 
deposites,  whenever  they  shall  exceed  a  certain  sum,  which'might  perhaps 
be  fixed  at  about  three  millions  of  dollars. 

II.  That  the  bank  should  be  bound,  whenever  required,  to  lend  to  the  United 
States  a  sum  not  exceeding  three-fifths  of  its  capital,  at  a  rate  of  interest 
not  exceeding  six  per  cent.;  the  amount  of  such  loan  or  loans  to  be  paid 
by  the  bank  in  instalments,  not  exceeding  a  certain  sum,  monthly,  and 
to  be  reimbursed  at  the  pleasure  of  Government. 

III.  That  the  capital  stock  of  the  bank  should  be  increased  to  thirty  millions 
of  dollars,  in  the  following  manner,  viz: 

1.  Five  millions  of  dollars  to  be  subscribed  by  citizens  of  the  United  States, 
under  such  regulations  as  would  make  an  equitable  apportionment  amongst 
the  several  States  and  Territories. 

2.  Fifteen  millions  to  be  subscribed  by  such  States  as  may  desire  it,  and 
under  such  equitable  apportionment  amongst  the  several  States  as  may  be 
provided  by  law;  and  a  branch  to  be  established  in  each  subscribing  State,  if 
applied  for  by  the  State. 

3.  The  payments,  either  by  individuals  or  States,  to  be  either  in  specie  or 
in  public  stock  9f  the  United  States,  at  such  rates  as  may  be  provided  by  law. 

4.  The  subscribing  States  to  pay  their  subscription  in  ten  annual  instalments, 
or  sooner  it  it  suits  their  convenience,  but  to  receive  dividends  in  proportion 
only  to  the  amount  of  subscription  actually  paid:  and  their  shares  of  bank 
stock  not  to  be  transferable. 

IV.  That  some  share  should  be  given  in  the  direction  to  the  General  and 
State  Governments,  the  General  Government  appointing  a  few  directors 
in  the  general  direction,  and  the  Government  of  each  subscribing  State 
appointing  a  few  directors  in  the  direction  of  the  branch  established  in 
such  State. 


BANK  OF  THE  UNITED  STATES. 

The  result  of  that  plan  would  be,  1st.,  that  the  United  States,  receiving  an 
interest  on  the  public  deposites,  might,  without  inconvenience,  accumulate 
during  years  of  peace  and  prosperity,  a  treasure  sufficient  to  meet  periods  of 
war  and  calamity,  and  thereby  avoid  the  necessity  of  adding,  by  increased 
taxes,  to  the  distresses  of  such  periods.  Secondly,  that  they  might  rely  on  a 
loan  of  eighteen  millions  of  dollars,  on  any  sudden  emergency.  Thirdly, 
that  the  payment  of  the  greater  part  of  the  proposed  increase  of  capital,  being 
made  in  ten  annual  instalments,  that  increase  would  be  gradual,  and  not  more 
rapid  than  may  be  required  by  the  progressive  state  of  the  country.  Fourth- 
ly, that  the  bank  itself  would  form  an  additional  bond  of  common  interest  and 
union  amongst  the  several  States. 

All  which  is  respectfully  submitted. 

ALBERT  GALLAT1N. 
TREASURY  DEPARTMENT,  March  2rf,    1809. 


Dividends  on  United  States'  Bank  Stock. 


No. 

Rate  per 

No. 

Rate  per 

cent. 

cent. 

1 

July,         1792 

4 

18 

January,  1801 

6 

2 

January,  1793 

4 

19 

July, 

4 

3 

July, 

3| 

20 

January,  1802 

4£ 

4 

January,  1794 

378 

21 

July, 

4$ 

5 

July, 

4 

22 

January,  1803 

4£ 

6 

January,  1795 

4 

23 

July, 

4 

7 

July, 

4 

24 

January,  1804 

4.1 

8 

January,  1796 

4 

25 

July, 

4 

9 

July, 

4 

26 

January,  1805 

4 

10 

January,  1797 

4 

27 

July, 

4 

11 

July, 

4 

28 

January,  1806 

4 

12 

January,  1798 

5 

29 

July, 

4 

13 

July, 

4 

30 

January,  1807 

6 

14 

January,  1799 

4 

31 

July, 

4 

15 

July, 

4 

32 

January,  1808 

4 

16 

January,  1800 

4 

33 

July, 

4 

17 

July,    *       " 

4 

34 

January,  1809 

4 

1st  Session 


HOUSE  OF  REPRESENTATIVES,  December  4,  1809. 


Mr.  NICHOLAS  moved  the  following  resolution: 

Resolved^  That  provision  be  made  by  law  for  a  general  national  establish- 
ment of  banks  throughout  the  United  States,  and  that  the  profits  arising  from 
the  sam6,  together  with  such  surplusses  of  revenue  as  may  accrue,  be  appro- 
priated for  the  "  general  welfare,"  in  the  construction  of  public  roads  and 
canals,  and  .the  establishment  of  seminaries  for  education,  throughout  the 
United  States. 

The  resolution  was  read,  and  ordered  to  lie  on  the  the  table. 

JANUARY  29,  1810. 
On  motion  of  Mr.  SEYBERT, 

Ordered^  That  the  memorial  of  the  stockholders  of  the  Bank  of  the  United 
States,  presented  on  the  26th  March,  1808,  be  referred  to  Mr.  Montgomery, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

Mr.  Dana,  Mr.  Bassett,  Mr.  Seaver,  Mr.  Seybert,  Mr,  Gold,  and  Mr.  Tay- 
lor, to  consider  and  report  thereon  to  the  House. 

FEBRUARY  6,  1810. 

The  House  proceeded  to  consider  the  resolution  of  Mr.  NICHOLSON,*  of  the 
4th  December  last,  for  the  establishment  of  banks,  arid  the  application  ot  their 
profits;  whereupon,  a  division  of  the  question  on  the  said  resolution  was  call- 
ed for  by  Mr.  SAWYER,  to  the  word  4fc  States,"  inclusive,  in  the  second  line 
of  the  resolution. 

A  motion  was  made  by  Mr.  Ross,  that  the  first  member  contained  within 
the  same,  to  the  word  "  States,"  inclusive,  in  the  second  line,  be  referred  to 
a  Committee  of  the  Whole  House; 

Which  was  determined  in  the  negative. 

A  motion  was  then  made  by  Mr.  SAWYER,  that  the  said  first  member  be  re- 
ferred to  a  select  committee; 

Which  was  also  determined  in  the  negative. 

FEBRUARY  19,  1810. 

Mr.  MONTGOMERY,  from  the  committee  appointed  on  the  29th  ultimo,  oi\ 
the  memorial  of  the  stockholders  of  the  Bank  of  the  United  States,  made  the 
following  report  thereon;  which  was  read  and  referred  to  a  Committee  of  the 
Whole  House  to -morrow. 

REPORT  OF  THE  COMMITTEE, 

The  committee  to  whom  was  referred  the  petition  of  the  stockholders  of  the 
Bank  of  the  United  States,  beg  leave  to  submit  the  following  report: 

That,  in  proceeding  to  the  consideration  of  the  said  petition,  your  com- 
inittee  instructed  their  chairman  to  address  a  letter  to  the  Secretary  of  the 
Treasury,  requesting  him  to  furnish  such  information  or  observations  as  he 
might  think  proper,  in  relation  to  the  subject  matter  thereof,  as  connected 
with  the  financial  and  commercial  interests  of  the  United  States.  In  reply 
to  which,  the  Secretary,  by  his  letter  to  the  chairman,  referred  your  commit- 
tee to  his  former  report  on  the  said  subject,  made  to  the  Senate  of  the  United 
States,  in  obedience  to  the  order  of  that  House. 

Your  committee  have  been  attended  by  agents  of  the  petitioners,  who,  in 
addition  to  the  matters  contained  in  the  petition,  have  suggested  to  your  com- 
mittee, that  the  object  of  the  petitioners  was  to  obtain  the  renewal  of  the  char- 
ter in  its  present  torm;  that,  for  this  renewal,  the  bank  was  willing  to  make 
compensation,  either  by  loans,  at  a  rate  of  interest,  or  by  a  sum  of  money  to 
be  agreed  upon,  or  by  an  increase  of  the  capital  stock,  by  a  number  of  shares 
to  be  taken  and  subscribed  for  by  the  United  States,  to  an  amount  adequate 
to  the  compensation  to  be  agreed  upon  for  such  renewal. 

These  agents  also  suggested  that  they  were  fully  authorized  and  empow- 
ered to  offer  and  concluoe  the  terms  specifically  connected  with  these  propo- 
sitions. 

Your  committee,  not  feeling  themselves  authorized  to  enter  into  such  terms, 
and  judging  that  the  extent  of  those  propositions  would  better  apply  to  the 
details  of  a  bill,  than  to  the  adoption  of  a  principle  to  be  first  settled  by  the 
House,  have,  therefore,  forborne  to  inquire  into  the  extent  of  the  propositions, 
and,  without  expressing  an  approbation  or  rejection  of  those  offers,  or  giving 
an  opinion  as  to  the  plan  and  reasoning  of  the  Secretary  of  the  Treasury,  your 
committee,  in  order  that  the  opinion  of  the  House  on  this  great  national  ques- 
tion, may  be  declared,  previous  to  entering  into  the  details  connected  with 
the  subject,  recommend  the  following  resolution: 

*  In  the  Journal  of  the  House  for  the  day  on  which  this  resolution  was  first  offered, 
it  is  attributed  to  Mr.  Nicholas,  who  was  a  member  from  Virginia;  it  is  here  imputed 
to  Mr.  Nicholson,  who  was  from  New  York, 
16 


122  BANK  OF  THE  UNITED  STATES. 

Resolved^  That  it  is  proper  to  make  provision  for  continuing  the  establish- 
ment of  the  Bank  of  the  United  States,  with  offices  of  discount  and  deposite, 
under  the  regulations  necessary  for  the  beneficial  administration  of  the  na- 
tional finances,  during  such  time  and  an  such  conditions,  as  may  be  defined 
by  law, 

FEBRUARY  22,  1810. 
Mr.  LOVE  moved  the  following  resolution: 

Resolved,  That  it  is  expedient  to  inquire  into  the  propriety  of  establishing 
a  national  bank. 

The  said  resolution  being  read,  was  referred  to  the  Committee  of  the  Whole 
House,  to  whom  is  committed  the  report  of  a  select  committee  on  the  memo- 
rial of  the  stockholders  of  the  Bank  of  the  United  States. 

MARCH  22,  1810. 
On  motion  of  Mr.  LOVE, 

Ordered,  That  the  Committee  of  the  Whole  House  to  which  is  committed 
a  resolution  submitted  by  him,  on  the  22d  ultimo,  for  the  establishment  of  a 
national  bank,  be  discharged  from  the  further  consideration  thereof,  and  that 
the  same  be  referred  to  Mr.  Love,  Mr.  Montgomery,  Mr.  Smilie,  Mr.  Quin- 
ey,  Mr.  Desha,  Mr.  Root,  and  Mr.  Marion. 

MARCH  29,  1810. 

On  motion  of  Mr.  TAYLOR, 

Ordered,  That  the  Committee  of  the  Whole  House  to  which  is  committed 
the  report  of  a  select  committee,  on  the  memorial  of  the  stockholders  of  the 
Bank  of  the  United  States,  be  discharged  from  the  consideration  thereof,  and 
that  the  said  report  be  referred  to  Mr.  Taylor,  Mr.  Mumford,Mr.  Pitkin,Mr> 
J.  Porter,  Mr.  Gray,  Mr.  Howard,  and  Mr.  Cook,  with  instruction  to  re- 
port by  bill. 

APRIL  2,  1810. 

Mr.  LOVE,  from  the  committee  appointed  OK  the  22d  ultimo,  presented  a 
bill  to  establish  a  national  bank,  which  was  read  the  first  time. 

On  motion,  the  said  bill  was  read  the  second  time,  and  committed  to  Ccom- 
mittee  of  the  Whole  House  on  Thursday  next. 

Mr.  LOVE  also  made  a  written  report  in  relation  to  the  principles  of  the  said 
bill,  which  was  read,  as  follows: 

The  committee  to  whom  was  referred  on  the  22d  of  March  last,  a  resolution  re- 
lative to  the  establishment  of  a  national  bank,  beg  leave  further  to  report: 

That  they  have  had  the  subject  thereof  under  consideration,  and  in  every 
view  they  have  been  able  to  take  of  it,  perceive  great  difficulties  to  occur: 
nor  is  a  majority  of  them  by  any  means  satisfied,  that  the  bill  they  have  agreed 
should  be  reported  to  the  House,  presents  the  best  mode  for  the  establish- 
ment of  a  national  bank.  They  have  been  induced,  however,  to  direct  their 
chairman  to  report  the  same  for  the  consideration  of  the  House,  without  there- 
by intending  to  pledge  their  opinions  in  support  of  it,  in  preference  to  any 
other  system  or  project  which  may  be  devised,  on  this  very  important  subject. 

The  said  bill  is  as  follows: 

A  BILL  TO  ESTABLISH  A  NATIONAL  BANK. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  a  bank  shall  be  established 
in  the  city  of  Washington,  in  the  District  of  Columbia,  with  branches  thereof 
in  the  territories  of  the  United  States,  and  in  the  States,  respectively,  on 
application  of  the  Legislatures  thereof,  in  manner  hereinafter  mentioned,  the 
capital  of  which  shall  not  exceed  fifteen  millions  of  dollars,  to  be  divided  into 


ON   THE    BILL    TO    RENEW   THE   CHARTER   OF    1791. 

shares  of  four  hundred  dollars  each;  and  that,  for  the  purpose  of  constituting 
three  millions  of  the  capital  stock  of  said  bank,  the  Secretary  of  the  Treasury 

i  II          i  •          •  ,  i          •          i.,  ,        i    _  » I     i.:  H _  .1*    _  j. l_ 


any  less  sum,  to  bear  an  interest  of  six  per  centum  per  annum,  from  the  time 
of  delivery  to  the  purchasers;  which  debt  shall  be  reimbursable  at  the  plea- 
sure of  the  United  States,  at  any  time  after  ten  years,  and  not  sooner;  no 
certificate  for  which  shall  be  issued  for  a  less  sum  than  four  hundred  dollars, 
and  when  for  a  larger  sum,  shall  be  to  an  amount,  the  principal  of  which  shall 
be  capable  of  simple  divisions  into  sums  of  four  hundred  dollars;  the  same 
shall  be  receivable  in  subscriptions  to  the  capital  stock  of  the  national  bank 
aforesaid;  and,  for  every  four  hundred  dollars  of  the  principal  thereof,  the 
subscriber,  being  a  citizen  of  the  United  States  or  territories,  shall  be  entitled 
to  one  share  of  the  capital  stock  of  the  said  bank,  and  may  subscribe  accord- 
ingly, in  books  to  be  opened  for  that  purpose  in  the  city  of  Washington, 
aforesaid,  on  the  first  day  of  January,  in  the  year  one  thousand  eight  hundred 
and  eleven,  under  the  superintendence  of  three  persons,  who  snail  be  ap- 
pointed, by  the  President  of  the  United  States,  commissioners  for  receiving 
subscriptions  to  the  said  bank,  any  two  of  whom  may  act,  and  receive  subcrip- 
tions  as  aforesaid,  until  the  fourth  day  of  March,  in  the  year  one  thousand 
eight  hundred  and  eleven.  The  sale  of  the  stock  aforesaid,  shall  be  made  by 
the  Secretary  of  the  Treasury,  in  such  portions,  and  at  such  times,  as  he  shall 
find  necessary  or  expedient,  for  the  best  price  he  can  obtain,  either  for  money 
or  the  six  per  cent,  funded  debt  of  the  United  States,  as  the  exigencies  of  the 
Government  may  render  proper;  and  a  credit  or  credit-,  for  such  newly 
created  stock,  shall  be  given  to  the  purchaser  thereof,  on  the  books  of  the 
treasury,  in  like  manner  as  for  the  present  domestic  funded  debt,  which  said 
credits  or  stock  shall  thereafter  be  transferable,  except  as  herein  before 
mentioned,  only  on  the  books  of  the  treasury  of  the  United  States,  by  the 
proprietor  or  proprietors  of  such  stock,  his,  her,  or  their  attorney,  and  may 
be  so  disposed  or  by  the  national  bank  company,  their  agent  or  attorney,  to 
any  person,  or  persons,  whatsoever,  or  his,  her,  or  their  assigns,  in  manner 
aforesaid;  and,  for  the  reimbursement  of  the  principal  of  the  said  stock  and 
payment  of  the  interest  thereon  quarter  yearly  at  the  treasury,  the  faith  of  the 
Government  of  the  United  States  is  hereby  pledged.  So  much  of  the  pro- 
ceeds of  the  sales  of  the  said  stock  as  shall  be  received  in  money,  shall  be, 
and  hereby  is,  appropriated  towards  the  discharge  of  any  of  the  current  ex- 
penses of  the  Government,  which  the  Secretary  of  the  Treasury  may  deem 
most  proper. 

SEC.  2.  And  be  it  further  enacted,  That  if  the  whole  of  the  said  sum  of 
three  millons  of  dollars  shall  not  have  been  issued  in  stock,  in  manner  afore- 
said, on  or  before  the  first  day  of  January,  in  the  year  one  thousand  eight 
hundred  and  eleven,  and,  also,  in  case  none  of  the  same  shall  have  been  then 
issued,  then,  for  the  whole,  or  any  part  thereof,  (as  the  case  may  be,)  sub- 
scriptions shall  be  opened,  within  sixty  days  thereafter,  in  such  of  the  princi- 
pal towns  in  the  United  States  as  the  President  of  the  United  States  shall 
direct,  under  the  superintendence  of  such  persons  as  he  shall  appoint,  not  less 
than  three;  and  a  majority  of  the  said  persons  at  the  said  places,  respectively, 
shall  be  sufficient  to  perform  the  duties  of  their  appointment.  It  shall  be  the 
duty  of  the  said  commissioners  to  advertise  the  time  and  place  for  receiving 
such  subscriptions  within  the  said  towns,  respectively,  in  some  newspaper 
printed  therein,  for  the  space  of  twenty  days,  at  least,  before  they  shall  open 
books  to  receive  subscriptions  as  aforesaid;  they  shall  keep  the  subscription 
open  for  the  term  of  three  days,  and  no  longer,  if  the  subscriptions  for  the 
amount  of  stock,  directed  by  the  President  of  the  United  States  to  be  taken 
at  such  places,  respectively,  are  completed  in  that  time,  but  if  they  shall  not 
be  completed  at  the  expiration  of  that  time,  they  shall  keep  them  open  for  the 
term  of  sixty  days,  unless  the  subscription  is  sooner  completed;  but  if  the 
subscription  is  completed  before  the  expiration  of  three  days  from  the  time  it 


124  BANK   OF  THE    UNITED    STATES. 

is  opened,  then,  and  immediately  after  the  same  shall  be  so  filled,  no  person, 
copartnership,  or  body  politic,  shall,  during  the  remainder  of  the  term  afore- 
said, be  permitted  to  subscribe  for  more  than  five  shares;  and  it  shall  be  law- 
ful for  any  citizen  of  the  United  States,  copartnership,  or  body  politic,  within 
the  United  States,  in  person,  or  by  attorney,  to  subscribe  for  any  number  of 
shares,  not  exceeding  one  hundred  in  one  day,  and  all  the  subscriptions  made, 
and  shares  obtained  in  consequence  thereof,  shall  be  deemed  and  held  to  be 
for  the  sole  use  and  benefit  of  the  person  or  persons,  copartnership,  or  body 
politic,  subscribing,  or  in  whose  behalf  the  subscriptions,  respectively,  shall 
be  declared  to  be  made  at  the  time  of  making  the  same,  any  bargain,  con- 
tract, promise,  or  agreement,  to  the  contrary  notwithstanding.  And  in  case 
the  amount  of  subscriptions,  at  any  of  the  said  places,  shall  exceed  the  num- 
ber of  shares  appointed  to  be  taken  at  such  place,  in  the  first  three  days,  the 
excess,  thus  created,  shall  be  reduced  within  the  number  of  shares  authorised 
to  be  subscribed  at  such  place,  or  places,  respectively,  in  manner  following, 
that  is  to  say:  from  the  subscription,  and  subscriptions  highest  in  amount,  the 
commissioners  shall  subtract  a  share,  or  shares,  until  the  same  shall  be  made 
equal  to  the  subscription,  or  subscriptions,  next  highest  in  amount;  and,  as 
often  as  the  case  shall  require,  they  shall  proceed  to  subtract  a  share,  or 
shares,  from  the  subscription,  or  subscriptions,  remaining,  from  time  to  time, 
highest  in  amount,  until  the  aggregate  01  all  the  subscriptions  be  reduced  to 
the  number  of  shares  authorised  to  be  subscribed  at  the  places  which  shall  be 
appointed  respectively;  and  if  by  and  after  the  operation  of  the  said  subtrac- 
tion, as  often  as  the  same  shall  be  necessarily  made,  a  greater  number  of 
shares  may  be  allowed  to  one  or  more  of  the  subscribers  than  to  the  rest,  or  if 
the  number  of  shares  shall  eventually  be  greater  than  the  number  of  shares 
authorised  at  such  places,  respectively,  so  that,  at  least  one  share  cannot  be 
allowed  to  each  subscriber,  then,  and  in  either  of  the  before  mentioned  cases,, 
the  commissioners  for  such  place  shall  ascertain  by  lot,  in  whom  the  greater 
number  of  shares,  or  the  right  of  subscribing  for  and  retaining  one  share,  (as 
the  case  may  be)  shall  be  vested,  and  the  subscriber,  in  whose  favor  the  lot 
may  thereupon  fall,  shall  be  deemed,  to  all  intents  and  purposes,  the  lawful 
subscriber,  and  subscribers,  for  such  share,  or  shares,  respectively;  and  the 
amount  of  the  share,  or  shares,  subscribed  for,  in  manner  aforesaid,  shall  be 
paid  by  the  several  and  respective  subscribers,  in  gold  or  silver  coin,  at  its 
lawful  value,  one-fourth  thereof  at  the  time  of  subscribing,  one-fourth  in  sixty 
days  thereafter,  one-fourth  in  one  hundred  and  twenty  days  thereafter,  and 
one-fourth  in  one  hundred  and  eighty  days  from  the  time  of  the  first  election 
of  directors,  or  at  any  time  sooner,  that  such  subscriber,  or  subscribers,  may 
choose;  the  sums  so  received,  respectively,  shall  be  paid  over  by  the  said 
commissioners  to  the  order  of  the  Secretary  of  the  Treasury.  And  in  case 
any  subscriber,  as  aforesaid,  shall  fail  to  pay  any  of  the  sums  due  from  him. 
her,  or  them,  according  to  the  terms  of  subscription,  he,  she,  or  they,  shall 
not  be  entitled  to  any  dividend  or  dividends,  or  to  vote  on  any  such  share, 
until  the  payment  of  the  sum  due  thereon,  with  interest  from  the  time  such 
payment  became  due,  shall  be  fully  paid  up  and  satisfied;  and  in  case  such 
failure  shall  continue  for  the  space  of  six  months,  such  share,  or  shares,  and 
the  sums  which  shall  have  been  paid  thereon,  shall  be  wholly  forfeited  to  the 
use  of  the  said  bank,  and  the  same  shall  be  sold  under  such  regulations  as  the 
directors  may  establish.  And  the  commissioners,  aforesaid,  shall,  at  the  ex- 
piration of  the  three  first  days,  and  once  in  every  ten  days  thereafter,  as  long 
as  the  subscription  continues  open,  transmit  to  the  Secretary  of  the  Treasury 
a  fair  list  of  all  the  subscriptions,  and  the  names  of  the  subscribers  making 
them. 

SEC.  3.  And  be  it  further  enacted.  That,  for  the  purpose  of  constituting 
five  millions  more  of  the  capital  stock  of  the  said  bank,  the  President  of  the 
United  States  shall,  immediately  after  the  passage  of  this  act,  notify  the  Gov- 
ernors of  each  State  thereof,  and  the  Legislatures  of  the  States  which  shall 
enact  laws  authorising  a  subscription,  in  conformity  to  the  provisions  of  this 
act,  may  at  a  time  to  be  appointed  by  the  President  of  the  United  States,  (not 


ON  THE  BILL  TO   RENEW  THE  CHARTER  OF    1791. 

exceeding  six,  or  less  than  three  months,  from  the  time  of  such  legislative  act 
being  notified  to  him,)  cause  to  be  subscribed  at  such  place  as  such  legislature 
shall  direct  within  such  State,  and  on  behalf  of  such  State,  or  any  citizen  of  the 
United  States  or  the  territories  thereof,  to  whom  such  State  may  assign  or  dis- 
pose of  the  right  of  subscribing,  the  following  number  of  shares,  to  consist  of 
four  hundred  dollars  each,  to  wit:  the  State  ot  New  Hampshire,  four  hun- 
dred shares;  the  State  of  Massachusetts,  fifteen  hundred  shares;  the 
State  of  Connecticut,  six  hundred  shares;  Rhode  Island,  one  hundred  and  fifty 
shares  ;  Vermont,  two  hundred  and  fifty  shares;  the  State  of  New  York,  fit- 
teen  hundred  shares  ;  New  Jersey,  six  hundred  shares  ;  Pennsylvania,  sixteen 
hundred  shares ;  Delaware,  one  hundred  and  fifty  shares  ;  Maryland,  eight 
hundred  shares;  Virginia,  eighteen  hundred  shares;  North  Carolina,  one 
thousand  shares;  South  Carolina,  six  hundred  shares;  Georgia,  five  hundred 
shares;  Kentucky,  six  hundred  shares;  Tennessee,  three  hundred  shares;  and 
Ohio,  one  hundred  and  fifty  shares — and  the  amount  payable  on  the  shares  so 
respectively  subscribed  by  the  States,  or  any  of  them,  or  any  of  their  assignees, 
being  citizens  of  the  United  States,  shall  be  paid  in  gold  or  silver  coin,  at  their 
current  value  ;  the  first  payment  on  each  of  which  shares,  shall  be  made  at 
the  time  of  subscribing,  to  the  amount  of  forty  dollars,  into  the  hands  of  such 
persons,  not  less  than  three  at  each  place  of  subscription,  whom  the  States 
shall  respectively  authorize  to  recieve  the  subscription,  to  the  said  capital  stock, 
of  the  appointment  of  which  commissioners,  as  soon  as  made,  the  proper  au- 
thority of  the  States  shall  notify  the  Secretary  of  the  Treasury,  who  shall  im- 
mediately direct  the  said  commissioners  to  place  the  same  to  the  credit  of  the 
national  bank  company,  in  such  bank  or  place  of  safe  deposite  as  the  Secretary 
of  the  Treasury  shall  appoint,  which  deposite  shall  be  subject  to  his  order  for 
the  use  of  said  bank  company,  until  the  first  election  of  directors  of  the  said 
bank  to  be  thereafter  made  at  the  Seat  of  Government  of  the  United  States, 
and  the  balance  of  the  sum  due  on  each  share  as  aforesaid,  shall  be  paid  into 
the  national  bank  at  Washington,  or  any  of  the  branches  thereof,  in  gold  or 
silver  coin,  at  their  value,  at  such  times,  and  in  such  portions  as  the  stockhold- 
ers so  subscribing  shall  choose  :  Provided,  That  the  subscribers  or  stock- 
holders aforesaid,  shall  not  be  permitted  to  pay  at  any  one  time  less  than  forty 
dollars  on  each  share,  and  shall  not  be  entitled  to  any  greater  portion  of  the 
dividends  made  by  the  said  bank,  than  according,  and  in  proportion  to  the 
sum  actually  paid  on  the  shares  upon  which  such  dividend  is  claimed,  but 
shall  be  entitled  to  such  dividend,  according  to  the  portion  paid  on  such  share, 
when  any  dividend  shall  be  declared  after  the  expiration  of  six  months  from 
the  time  of  any  payment  made,  and  not  sooner.  The  mode  of  opening  such 
subscriptions  in  the  States,  respectively,  and  carrying  them  into  effect,  except 
as  is  by  this  act  otherwise  directed,  shall  be  according  to  the  rules  and  pro- 
visions which  such  State  so  subscribing  shall  direct  and  establish  :  Provided, 
That  any  forfeitures  which  accrue  of  the  rights  of  subscribers  to  such  stock, 
shall  be  and  enure  to  the  use  of  the  national  bank  company  only. 

SEC.  4.  And  be  it  further  enacted,  That  such  States  as  shall  assent  to  the 
provisions  of  this  act,  and  choose  to  avail  themselves  thereof,  shall,  on  or  be- 
fore the  first  day  of  January,  in  the  year  one  thousand  eight  hundred  and 
twelve,  notify  by  the  proper  authority,  the  President  of  the  United  States 
thereof,  and  shall  also  by  any  law  passed  authorising  the  subscriptions  afore- 
said, express  the  assent  of  the  legislature  thereof  to  the  establishment  of  a 
branch  of  the  national  bank  within  such  State,  and  at  such  place  as  the  direc- 
tors of  the  said  bank  at  the  Seat  of  the  Government  of  the  United  States  shall 
appoint :  Provided,  The  capital  assigned  to  such  branch  by  the  directors 
aforesaid,  shall  not  exceed  the  amount  of  capital  subscribed  for  within  such 
State  respectively  :  And  provided,  also,  That,  incase  any  of  the  States  of  ihe 
Union  shall  fail  to  comply  with  the  terms  of  this  act,  or  to  notify  the  President 
of  the  United  States,  on  or  before  the  first  day  of  January,  one  thousand  eight 
hundred  and  twelve,  of  their  assent  to  them,  it  shall  be  lawful  for  Congress  to 
extend  the  time  for  such  assent  to  be  given,  until  the  first  day  of  January,  in 
the  year  one  thousand  eight  hundred  and  thirteen,  and  no  longer;  and  in  case 


BANK   OF   THE   UNITED    STATES. 

the  States  of  the  Union,  or  any  of  them,  do  not  assent  to  the  terms  of  this  act, 
at  or  before  the  last  mentioned  period,  for  the  whole  amount  of  the  sum  here  - 
by  proposed  to  be  subscribed  by  the  States,  or  for  any  part  thereof,  then  sub- 
scriptions may  be  opened  for  a  part,  or  the  whole,  (as  the  case  may  be,)  by 
order  of  a  general  meeting  of  the  stockholders  of  the  said  bank,  in  such  man- 
ner, at  such  place,  and  at  such  time  thereafter,  as  shall  by  the  company  of  the 
said  bank,  or  the  president  and  directors  thereof,  at  the  Seat  of  Government, 
be  appointed. 

SEC.  5.  And  be  it  further  enacted,  That,  for  the  purpose  of  constituting 
four  millions  more  of  the  capital  stock  of  the  said  bank,  it  shall  be  lawful  for 
the  President  of  the  United  States,  and  he  is  hereby  authorised,  at  any  time 
within  two  years  after  the  passing  of  this  act,  to  cause  a  subscription  to  be 
made  on  behalf  of  the  United  States,  to  an  amount  not  exceeding  four  millions 
of  dollars,  to  be  borrowed  from  the  bank  aforesaid,  at  any  time  after  it  goes 
into  operation,  or  sooner,  from  any  person  or  body  coporate,  at  a  rate  of  in- 
terest not  exceeding percent,  and  reimbursable  in  ten  years,  by  equal  an- 
nual instalments,  or  at  any  time  sooner,  or  in  any  greater  proportions  that  the 
Government  may  think  fit ;  the  first  instalment  to  become  due  in  one  year 
from  the  time  the  said  bank  goes  into  operation,  at  which  time  the  first  pay- 
ment borrowed  as  aforesaid,  shall  be  made  to  the  said  bank,  or  such  other  per- 
son or  body  corporate  from  \vhom  the  same  may  be  borrowed  by  the  United 
States ;  and  the  sum  so  borrowed,  with  the  interest  quarter  yearly  thereon, 
shall  be  reimbursable  and  paid  out  of  any  moneys  in  the  treasury,  not  other- 
wise appropriated. 

SEC.  6.  Jind  be  it  further  enacted.  That,  for  the  purpose  of  constituting 
three  millions  more  of  the  capital  stock  of  the  national  bank,  it  shall  be  law- 
ful for  the  bank  companies,  or  associations,  which  have  been  organized  within 
the  District  of  Colombia,  or  such  of  them  as  may  choose,  on  or  before  the 
fourth  day  of  March,  in  the  year  one  thousand  eight  hundred  and  eleven,  in 
pursuance  of  an  order  of  the  stockholders  of  the  said  banks,  or  either  of  said 
banks,  at  a  general  meeting,  to  notify  the  Secretary  of  the  Treasury  of  their 
intention  to  subscribe  their  capital  stock  to  the  national  bank,  and  if  such 
company  or  their  agent  or  agents  shall,  in  sixty  days  thereafter,  pay  into  the 
national  bank,  if  it  shall  have  commenced  its  operations,  and  if  not,  shall,  in 
sixty  days  after  the  first  election  of  directors  at  Washington,  pay  one-third  of 
the  amount  of  the  stock  subscribed,  in  specie,  and  the  remaining  two- thirds  in 
good  notes  due  in  ninety  days,  or  a  shorter  period,  which  notes  shall  be  endorsed 
and  guaranteed  by  the  president  of  such  bank  on  behalf  of  the  company,  then 
such  sums  so  paid  in,  shall  entitle  those  for  whose  use  the  same  may  be  paid,  to  a 
share  in  the  said  bank  for  every  four  hundred  dollars  so  paid;  and  it  shall  be 
lawful  for  the  Secretary  of  the  Treasury  to  make  any  further  arrangement  with 
the  said  companies,  or  associations,  which,  to  him,  shall  seem  right,  and  shall  be 
agreed  on  between  them,  in  order  effectually  to  incorporate  the  funds  of  such 
bank  company,  or  association,  into  the  capital  of  the  national  bank,  in  the  man- 
ner most  convenient  and  profitable  to  the  said  companies  and  the  national 
bank;  and,  in  case  the  said  sum  of  three  millions  of  dollars,  or  any  part  there- 
of, shall  not  be  subscribed  by  the  said  bank  companies,  or  associations,  in  man- 
lier herein  provided,  and  at  the  times  herein  mentioned,  or,  if  no  notice  of  an 
intention  to  do  so  is  given  by  the  time  aforesaid,  it  shall  be  lawful  for  the 
President  of  the  United  States,  at  any  time  after  the  fourth  of  March,  in  the 
year  one  thousand  eight  hundred  and  twelve,  with  the  assent  of  the  stockhold- 
ers of  the  national  bank,  previously  expressed  at  a  general  meeting,  to  cause 
to  be  constituted  the  said  three  millions  of  dollars  of  the  said  stock,  or  so 
much  thereof  as  shall  not  have  been  so  subscribed  by  the  said  banks,  or  asso- 
ciations, on  the  same  terms  and  conditions,  (with  such  alterations  only  as 
may  be  necessary  in  point  of  form")  as  by  the  first  and  second  sections  of 
this  act,  subscriptions  ot  stock  to  the  national  bank  are  provided  and  direct- 
ed to  be  received. 

SEC-  7.  Jind  be  it  further  enacted,  That  the  subscribers,  their  successors 
and  assigns,  being  bodies  corporate  and  politic,  within  the  United  States,  or 


ON   THE    BILL   TO   RENEW    THE    CHARTER   OF    1791. 

the  territories  thereof,  or  being  citizens  of  the  United  States,  or  the  territories 
thereof,  shall  be,  and  are  hereby,  erected  and  made  a  corporation  and  body  po- 
litic, by  the  name  and  style  of  the  president,  directors  and  company  of  the  na- 
tional bank,  and  by  that  name  shall  be,  and  are  hereby,  made  able  and  capable 
in  law,  to  have,  purchase,  receive,  possess,  enjoy,  and  retain,  to  them  and  their 
successors,  land,  rents,  tenements,  hereditaments,  goods,  chattels,  and  effects 
of  what  kind  soever,  to  an  amount  not  exceeding,  in  the  whole,  ten  millions  of 
dollars,  exclusive  of  the  amount  of  the  capital  stock  aforesaid,  and  the  same  to 
sell,  grant,  alien,  demise,  or  dispose  of;  to  sue  and  be  sued,  im  plead  and  be  im- 
pleacTed,  answer  and  be  answered,  defend  and  be  defended,  in  courts  of  re- 
cord, or  any  other  place  whatsoever;  and  also  to  make,  have,  and  use  a  com- 
mon seal,  and  the  same  to  break,  alter,  and  renew  at  their  pleasure,  and  also  to 
ordain,  establish,  and  put  in  execution  such  by-laws  and  ordinances,  as  shall 
seem  necessary  and  convenient  (or  the  government  of  the  said  corporation, 
not  being  contrary  to  law  or  to  this  charter:  and  for  ihe  making  whereof, 
general  meetings  may  be  called  by  the  directors,  in  the  manner  hereinafter 
specified;  and  generally  to  do  and  execute  all  and  singular  the  acts,  matters, 
and  things  which  to  them  it  shall  or  may  appertain  to  do,  subject,  nevertheless, 
to  the  rules,  regulations,  restrictions,  limitations,  and  provisions  in  this  act 
prescribed  and  declared. 

SEC.  8.  And  be  it  further  enacted,  That,  for  the  well  ordering  the  affairs  of 
the  said  bank,  there  shall  be  elected,  annually,  on  the  first  Monday  in  January, 
at  the  Seat  of  Government,  directors,  who  shall  be  citizens  of  the  United 
States  at  the  time  of  election,  and  shall  be  stockholders  in  the  said  bank,  all 
of  whom  shall  be  elected  by  the  stockholders  of  said  bank;  and,  at  the  same 

time,  the  President  of  the  United  States  shall  appoint other  persons, 

on  behalf  of  the  Government,  as  directors  of  said  bank  at  Washington;  and 
the  Secretary  of  the  Treasury,  for  the  time  being,  shall  be  a  director  of  said 
bank,  ex-officio.  At  the  same  time,  there  shall  be  chosen,  annually,  in  the 
different  States,  or  such  of  them  in  which  branches  of  me  national  bank 
shall  be  established,  at  the  places  where  such  branches  are  respectively  es- 
tablished, by  the  stockholders, directors;  and  there  shall  be  appointed, 

under  the  authority  of  such  State, other  directors,  and  by  the  Secretary 

of  the  Treasury,  on  behalf  of  the  United  States, other  directors,  and 

the  said  directors,  so  chosen  and  appointed,  for  the  said  bank  and  branches, 
respectively,  shall,  at  the  first  meeting  held  by  them,  respectively,  choose 
one  of  their  number  as  a  president  of  such  bank,  or  branch  bank;  and  the 
president  and  directors  so  chosen  and  appointed,  shall  serve  by  virtue  thereof, 
irom  the  time  they  shall  be  notified  of  their  election,  till  the  expiiation  of  the 
succeeding  first  Monday  in  January,  and  from  thence,  until  they  shall  be  no- 
tified of  a  subsequent  election  having  been  made,  and  no  longer.  The  first 
elections  shall  be  held  at  the  time  and  in  the  manner  herein  after  directed: 
Provided.  That  in  case  it  .should  at  any  time  happen  that  an  election  of  di- 
rectors shall  not  be  made,  on  any  day  when,  pursuant  to  this  act,  it  ought  to 
have  been  made,  the  said  corporation  shall  not,  therefore,  be  deemed  to  be 
dissolved,  but  it  shall  be  lawful  on  any  other  day,  within  one  hundred  days 
thereafter,  to  hold  and  make  an  election  of  directors,  by  order  of  the  Secre- 
tary ot  the  Treasury,  who  shall  advertise  the  same  in  a  public  manner,  at  the 
place  where  such  election  is  to  take  place,  at  least  ten  days  before  such  elec- 
tion, at  which  election  the  same  rules  shall  be  observed  as  at  other  elections, 
and  such  further  rules  as  the  said  corporation  shall  direct.  And  in  case  of 
the  death,  resignation,  or  absence  from  the  United  States,  of  a  director  in 
the  bank  aforesaid,  or  any  of  the  branches  thereof,  his  place  shall  be  filled  by 
a  new  choice,  for  the  remainder  of  the  term  for  which  he  was  elected,  by  the 
vote  of  a  majority  of  the  directors  at  the  place  Ayhere  such  vacancy  shall  hap- 
pen. Every  person  voting  at  any  election  of  directors,  shall,  previous  to 
giving  his  or  her  vote,  make  oath,  or  solemnly  affirm,  that  he,  or  she,  is  a  citi- 
zen of  the  United  States;  that  the  share  or  shares  on  which  he  or  she  offers 
to  vote,  is,  or  are,  really  and  bona  fide  his  or  her  own  property,  and  not  held 
in  trust,  or  for  the  use,  benefit,  or  emolument,  of  any  other  person  or  persons 


128  BANK    OF  THE    UNITED    STATES. 

whatsoever;  and  when  any  person  offers  to  vote  as  a  proxy,  an  affidavit  to 
the  same  effect,  of  the  person  whom  he  represents,  shall  be  sufficient,  if  made 
before  a  proper  authority 5  and  to  take  any  such  oath  falsely,  shall  be  perjury, 
and  punishable  as  such  on  prosecution,  by  indictment  or  information. 

SEC.  9.  Jind  be  it  further  enacted^  That,  in  case  the  certificates  of  stock 
authorized  by  the  first  section  of  this  act  to  be  created,  shall  have  been  sold, 
either  in  whole,  or  in  part,  at  the  time  herein  limited  for  the  sale  thereof,  im- 
mediately thereafter,  or  as  soon  as  the  whole  of  said  stock  is  sold  (as  the  case 
may  be)  books  shall  be  opened,  under  the  direction  of  the  Secretary  of  the 
Treasury,  for  the  purpose  of  receiving  subscriptions  to  the  capital  of  the  said 
bank,  in  the  stock  so  sold,  if  any,  and  certificates  of  a  share  in  the  national 
bank,  for  each  four  hundred  dollars  of  the  principal  of  said  public  stock, 
shall  be  granted  to  the  holder  or  holders  thereof,  who  shall  present  the  same 
for  subscription,  on  or  before  the  fourth  day  of  March,  in  the  year  one  thou- 
sand eight  hundred  and  eleven;  which  public  stock,  so  paid  in,  and  constitut- 
ing a  part  of  the  funds  of  the  said  bank,  may,  to  the  amount  of  one  million 
of  dollars  thereof,  if  the  Secretary  of  the  Treasury  shall  deem  it  necessary, 
in  order  to  expedite  the  commencement  of  the  operations  of  the  said  bank, 
be  sold  for  specie  for  the  use  of  the  said  bank;  and,  as  soon  as  the  sum  of  one 
million  of  dollars  shall  be  received  by  the  Secretary  of  the  Treasury,  for  the 
use  of  the  said  bank,  in  that,  or  in  any  of  the  ways  directed  by  this  act,  for 
obtaining  subscriptions  thereto,  notice  thereof  shall  be  given  by  the  Secretary 
of  the  Treasury,  in  some  newspaper  printed  in  the  city  of  Washington,  and 
also  in  some  newspaper  printed  at  the  Seat  of  Government  of  each  State,  that 
such  sum  has  been  received,  and  shall  also  notify  a  time,  not  less  than  fifty 
days  from  the  time  of  such  publication,  for  making  the  first  election  and  ap- 
pointment of  directors  for  the  said  bank  at  Washington:  Provided,  That  it 
shall  not  be  at  an  earlier  period  than  the  fourth  day  of  March,  in  the  year  one 
thousand  eight  hundred  and  eleven,  and  an  election  for  the  directors  for  the  said 
Bank  of  Washington  shall  accordingly  be  made.  And  the  directors  so  appoint- 
ed and  elected  at  Washington,  in  pursuance  of  the  directions  of  this  act,  shall  be 
capable  of  serving  as  such,  until  the  next  election  shall  be  made  under  the 
provisions  of  this  act;  and  the  said  directors  shall  forthwith  commence  the 
operations  of  the  said  bank,  and  provide  for  the  establishment  of  such  branches 
thereof,  as  shall  be  authorized  by  any  of  the  States  of  the  Union,  in  pursuance 
of  the  provisions  of  this  act;  and  incase  the  bank  companies,  or  associations, 
in  the  District  of  Columbia,  shall  subscribe  according  to  the  terms  of  this  act, 
shall  establish  a  branch  of  the  national  bank  in  the  town  of  Alexandria,  and 
another  in  Georgetown,  and  shall  appoint,  within  twenty  days  from  the  time 
of  the  terms  of  subscription  being  complied  with  by  the  said  bank  companies, 
or  either  of  them,  the  time  and  place  when  an  election  shall  be  held  by  the 

stockholders  for directors  of  such  branch  banks,  respectively,  within 

the  District  of  Columbia,  as  shall  be  established  by  them, in  addition, 

to  whom  shall  be  appointed  by  the  Secretary  of  the  Treasury,  who,  imme- 
diately after  the  first  election,  and  at  every  election  and  appointment  there- 
after, shall  choose  one  of  their  own  body  as  president;  and  successive  elec- 
tions and  appointments  shall  be  held  and  made  in  the  same  manner,  and  under 
the  same  regulations,  as  near  as  may  be,  for  the  said  branches,  as  in  the  State 
branches  they  are  directed  to  be  held,  the  Secretary  of  the  Treasury  perform- 
ing all  the  duties,  which  the  States  respectively  may  perform  in  such  elections, 
and  regulating  all  other  matters  and  things  respecting  the  said  branches,  as 
may  be  agreed  on  by  him  with  the  said  companies  or  associations:  Provided, 
That  the  bank  company,  or  association,  organized  in  the  city  of  Washington, 
if  they  shall  choose  to  incorporate  themselves  with  the  national  bank,  shall 
be  incorporated  into  the  principal  bank  to  be  established  there;  and  the  Se- 
cretary of  the  treasury  may,  moreover,  provide  for  the  continuance  of  the 
operation  of  the  said  banks,  according  to  their  present  establishments,  until 
their  funds  shall,  under  the  provisions  of  this  act,  be  actually  transferred  to 
the  national  bank,  after  which  time,  such  associations  and  companies  shall 
be  considered  as  dissolved.. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      129 

SEC.  10.  And  be  it  further  enacted,  That  the  directors  of  the  bank  at  Washing- 
ion,  shall  allot  to  the  said  bank  and  the  branches  thereof,  the  portion  of  capital 
which  each  shall,  from  time  to  time,  be  justly  entitled  to,  subject  to  the  re- 
strictions in  this  act  provided,  and  may  establish  offices  of  discount  and  deposite, 
as  branches  of  the  national  bank,  in  any  of  the  territories  of  the  United  States, 
(except  the  District  of  Columbia,  in  which  branches  shall  only  be  established  in 
manner  aforesaid,)  and  shall  regulate  the  amount  of  capital  to  be  placed  in  any 
of  the  said  branches;  and  in  the  said  territories,  (except  that  of  Columbia,) 
where  branches  are  by  them  established,  shall  appoint  nine  directors  for  each 
annually,  and  regulate  the  time  and  other  things  relative  to  their  service,  and 
shall  appoint  a  cashier  and  principal  clerk  of  said  territorial  branches,  when 
by  them  established;  but  the  directors  of  the  said  branch,  or  branches,  of  dis- 
count and  deposite,  respectively,  shall  appoint  all  other  officers  and  servants, 
of  such  branch  bank,  or  banks.  The  directors  of  the  said  bank,  at  Washing- 
ton, shall  appoint  such  officers,  clerks,  and  servants,  as  shall  be  necessary  to 
execute  the  business  of  the  said  bank,  and  the  branches  of  the  said  bank,  in  the 
several  States,  and  in  the  District  of  Columbia,  shall  appoint  their  officers, 
clerks,  and  servants,  under  them,  for  the  purposes  of  executing  the  necessary 
business  of  their  banks  respectively;  but  the  salaries  of  such  officers,  clerks, 
and  servants,  and  of  the  compensation  to  be  allowed  to  the  presidents  of  the 
different  banks,  shall  be  fixed  on,  and  increased,  or  diminished,  by  the  presi- 
sident  and  directors  of  the  principal  bank:  Provided,  Such  salaries  and 
compensations,  shall  not  be  determined  on,  except  when  the  Secretary  of  the 
Treasury  shall  be  present,  and  shall  give  his  vote  on  the  subject;  and  the  di- 
rectors of  the  bank  at  Washington,  shall  do  every  other  matter  and  thing, 
not  contrary  to  law,  or  the  provisions  of  this  act,  which  may  be  necessary  for 
the  establishment  and  regulation  of  the  said  banks  of  discount  and  deposite, 
in  the  said  Territories,  or  States. 

SEC.  11.  ^nd  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form,  and  be  fundamental  articles  of  the 
constitution  ot  said  corporation,  viz: 

1.  The  number  of  votes  to  which  each  stockholder  shall  be  entitled,  except 
the  United  States,  and   the  States  respectively,  shall  be  according  to  the 
number  of  shares  he  shall  hold,  in  the  proportions  following,  that  is  to  say: 
For  one  share,  and  not  more  than  two  shares,  one  vote:  for  every  two  shares 
above  two,  and  not  exceeding  ten,  one  vote:  for  every  four  share  above  ten, 
and  not  exceeding  thirty,  one  vote:  for  every  six  shares  above  thirty,  and  not 
exceeding  sixty,  one  vote:  for  every  eight  shares  above  sixty,  and  not  exceed- 
ing one  hundred,  one  vote:  and  for  every  ten  shares  above  one  hundred,  one 
vote.  But  no  person,   co-partnership,  or  body  politic,  shall  be  entitled  to  a 
greater  number  than  thirty  votes.    And  after  the  first  election,  no  share,  or 
shares,  shall  confer  a  right  of  suffrage,  which  shall  not  have  been  holden  three 
calendar  months  previous  to  the  day  of  election.    None  but  citizens  of  the 
United  States,  shall  vote  at  any  election,  by  proxy,  or  in  person,  nor  shall  be 
a  director  of  the  national  bank,  or  any  of  its  branches, 

2.  Not  more  than  three-fourths  of  the  directors  in  office,  chosen  by  the 
stockholders,  the  president  excepted,  shall  be  eligible,  or  capable  of  appoint- 
ment for  the  next  succeeding  year.    But,  the  director  who  shall  be  president 
at  the  time  of  an  election,  may  always  be  re-elected,  or  re. -appointed,  as  the 
case  may  be. 

3.  None  but  a  stockholder,  being  the  owner  of  two  shares,  and  being  a  citi- 
zen of  the  United  States,  and  resident  therein,  shall  be  capable  of  being  chosen 
or  appointed  as  a  director. 

4.  No  director  shall  be  entitled  to  any  emolument,  unless  the  same  shall 
have  been  allowed  by  the  stockholders,  at  a  general  meeting.    The  stockhold- 
ers shall  make  such  compensation  to  the  president  of  the  principal  bank  at 
Washington,  for  his  extraordinary  attendance  at  the  bank,  as  shall  appear  to 
them  reasonable. 

5.  Not  less  than  a  majority  of  directors  shall  constitute  a  board  for  the 
transaction  of  business,  of  whom  the  president  shall  always  be  one.  except  in 

17 


130  BANK  OF  THE  UNITED  STATES. 

case  of  sickness,  or  necessary  absence;  in  which  case,  his  place  may  be  supplied 
by  any  other  director,  whom  he,  by  writing,  under  his  hand,  shall  nominate- 
forth  e  purpose. 

6.  A  number  of  stockholders,  not  less  than  fifty,  who,  together,  shall  be 
proprietors  of  two  hundred  shares,  or  upwards,  shall  have  power,,  at  any  timey 
to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  insti- 
tution, giving  at  least,  ten  weeks'  notice,  in  two  public  gazettes,  of  the  place 
where  the  bank  is  kept,  and  specifying,  in  such  notice,  the  object,  or  objects, 
of  such  meeting. 

.  Every  cashier,  or  treasurer,  before  he  enters  upon  the  duties  of  his  office,, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfaction: 
of  the  directors,  in  a  sum  not  less  than  fifty  thousand  dollars,  with  condition 
for  his  good  behavior. 

8.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for  its  im- 
mediate accommodation,  in  relation  to  the  convenient  transaction  of  its  busi- 
ness, and  such  as  shall  have  been  bona  fide  mortgaged  to  it  by  way  of  securi- 
ty, or  conveyed  to  it  in  satisfaction  of  debts  previously  contracted,  in  the 
course  of  its  dealings,  or  purchased,  at  sales  upon   judgments,    which  shall 
have  been  obtained  tor  sucn  debts. 

9.  The  total  amount  of  the  debts,  which  the  said  corporation  shall  at  any  time 
owe,  whether  by  bond,  bill,  note,  or  other  contract,  shall  not  exceed  the  sum 
of  fifteen  million  of  doll  are,  over  and  above  the  moneys  then  actually  deposited 
in  the  bank,  for  safe  keeping,  unless  the  contracting  of  any  greater  debt,  shall 
have  been  previously  authorised  by  a  law  of  the  United  States.     And  it  is 
hereby  enacted,  that  it  shall  not  be  lawful  for  the  said  bank  to  contract  any 
debt  with  the  United  States,  to  a  greater  amount  than  thirty  millions  of  dol- 
lars, or  with  any  State,  than  twice  the  amount  of  capital  subscribed,  in  such 
State:  and,  in  case  of  excess,  the  directors,  under  whose  administration  it 
shall  happen,  shall  be  liable  for  the  same,  in  their  natural  and  private  capaci- 
ties, and  an  action  of  debt  may,  in  such  case,  be  brought  against  the>:n,  or  any 
of  them,  their,  or  any  of  their  heirs,  executors,  or  administrators,  in  any  court 
of  record  of  the  United  States,  or  either  of  them,  by  any  creditor,  or  creditors,, 
of  the  said  corporation,  and  may  be  prosecuted  to  judgment,  and  execution,, 
any  condition,  covenant,  or  agreement,  to  the  contrary  notwithstanding.  But, 
this  shall  not  be  construed  to  exempt  the  said  corporation,  or  the  lands,  tene- 
ments, goods  or  chattels  of  the  same,  from  being  also  liable  for,  and  chargea- 
ble with,  the  said  excess.    Such  of  the  said  directors,  who  may  have  been  ab- 
sent, whenthesaid  excess  was  contracted,  or  created,  or  who  may  have  dissented 
from  the  resolution,  or  act,  whereby  the  same  was  so  contracted,  or  created, 
may  respectively  exonerate  themselves  from  being  so  liable,  by  forthwith  giv- 
ing notice  of  the  fact,  and  of  their  absence  or  dissent,  to  the  President  of  the 
United  States,  and  to  the  stockholders,  at  a  general  meeting,  which  they  shall 
have  power  to  call  for  that  purpose. 

10.  The  said  corporation,  shall  not,  directly  or  indirectly,  deal,  or  trade,  in 
any  thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of 
goods,  really  and  truly  pledged  for  money  lent,  and  not  redeemed  indue  time, 
or  of  goods  which  shall  be  the  produce  of  its  lands    Neither  shall  the  said  cor- 
poration take  more  than  at  the  rate  of  six  per  centum  per  annum,  for,  or  upon 
its  loans,  or  discounts. 

11.  No  loan  shall  be  made  by  the  said  corporation,  for  the  use  or  on  account 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  one  hun- 
dred thousand  dollars,  or  of  any  particular  State,  to  an  amount  exceeding 
fifty  thousand  dollars,  or  of  any  foreign  prince  or  State,  unless  previously  au- 
thorized by  a  law  of  the  United  States. 

12.  The  stock  of  the  said  ^corporation  shall  be  assignable  and  transferable 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same.;  except  that  no  stock  shall  be  assignable  or  transfer- 
able either  in  law  or  equity,  to  any  person  or  persons^who  are  not  citizens  of 
the  United  States,  or  a  body  politic  or  corporate  within  the  same, 


ON  THE    BILL  TO  RENEW  THE  CHARTER  OF  1791. 

13.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corpora- 
tion, which  shall  be  made  to  any  person  or  persons,  shall  be  assignable  by  en- 
dorsement thereupon,  under  the  hand  or  hands  of  such  person  or  persons,  and 
of  his,  her,  or  their  assignee  or  assignees,  and  so  as  absolutely  to  transfer  and 
vest  the  property  thereof  in  each  and  every  assignee  or  assignees  successively, 
and  to  enable  such  assignee  or  assignees  to  bring  and  maintain  an  action  there- 
upon, in  his,  her,  or  their  own  name  or  names.    And  bills  or  notes,  which 
may  be  issued  by  order  of  the  said  corporation,  signed  by  the  president  and 
countersigned  by  the  principal  cashier  or  treasurer  thereof,  promising  the  pay- 
ment of  money  to  any  person  or  persons,  his,  her,  or  their  order,  or  to  bearer, 
though  not  under  the  seal  of  the  said  corporation,  shall  be  binding  and  obliga- 
tory  upon  the  same,  in  the  like  manner,  and  with  the  like  force  and  effect,  as 
upon  any  private  person  or  persons,  if  issued  by  him  or  them,  in  his,  her,  or 
their  private  or  natural  capacity  or  capacities;  and  shall  be  assignable  and  ne- 
gotiable, in  like  manner,  as  if  thej  were  so  issued  by  such  private  person  or 
persons:  That  is  to  say,  those  which  shall  be  payable  to  any  person  or  per- 
sons, his,  her,  or  their  order,  shall  be  assignable  by  endorsement,  in  like  man- 
ner, and  with  the  like  effect,  as  foreign  bills  of  exchange  now  are;  and  those 
which  are  payable  to  bearer  shall  be  negotiable  and  assignable  by  delivery 
only. 

14.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank,  as  shall  appear  to  the  directors  advisable;  and  once  in  every  three 
years,  the  directors  shall  lay  before^the  stockholders,  at  a  general  meeting, 
for  their  information,  an  exact  and -particular  statement  of  the  debts  which 
Shall  have  remained  unpaid  after  the  expiration  of  the  original  credit,  for  a 
period  of  treble  the  term  of  that  credit,  and  of  the  surplus  of  profit,  if  any, 
after  deducting  losses  and  dividends. 

The  directors  of  the  bank,  and  its  several  branches,  shall  keep  fair  and 
regular  entries  of  all  their  proceedings,  in  a  book  to  be  provided  for  that  pur- 
pose, and  on  any  question,  where  two  directors  «hall  require  it,  the  yeas  and  nays 
of  the  directors  voting,  shall  be  duly  inserted  on  their  minutes,  and  be  sub- 
ject to  inspection  at  a  general  meeting  of  the  stockholders.  No  cashier  of 
any  of  the  said  banks  shall  be  allowed  to  carry  on  any  other  business,  or  to 
deal  in  any  manner,  in  any  of  the  public  stock  or  funds,  under  the  penalty  of 
ten  thousand  dollars  for  every  sucn  offence,  to  be  recovered  in  any  court  of 
the  United  States,  within  whose  jurisdiction  it  shall  happen,  by  indictment  or 
information,  one  half  to  the  use  of  the  informer,  and  the  other  half  to  the  use 
of  the  United  States,  and  shall,  on  proof?  to  the  satisfaction  of  the  directors, 
of  any  such  offence,  be  immediately  dismissed  from  office. 

Sec.  12.  And  be  it  farther  enacted,  .That  there  shall  be  appointed,  as  soon 
as  the  said  bank  commences  its  9Derations,  by  the  President  of  the  United 
States,  a  superintendent  of  the  saia  bank  and  its  branches,  whose  duty  it  shall 
be,  to  require  and  receive  from  the  directors  of  the  said  bank,  a  statement,  at 
least  once  a  month,  of  the  amount  and  nature  of  the  capital  stock  of  said  cor- 
poration; a  list  of  all  the  stockholders  of  the  said  bank;  a  statement  of  the 
debts  due  to  the  same,  and  of  the  moneys  deposited  therein;  of  the  notes  in 
circulation  and  of  the  cash  on  hand,  and  shall  have  a  right  to  inspect  such 
general  accounts,  or  require  copies  thereof  from  the  books  of  the  said  corpo- 
ration, as  shall  relate  to  such  statements,  but  shall  not  have  the  right  to  in- 
spect the  account  of  any  private  person  with  the  bank.  And  the  said  super- 
intendent shall^at  all  times,  when  required,  furnish  to  Congress  or  to  the  Se- 
cretary of  the  Treasury,  any  information  in  his  power  or  possession,  relative 
to  the  said  bank  or  its  brandies.  He  shall,  moreover,  when  he  deems  it  pro- 
per, furnish  any  information  to  the  Secretary  of  the  Treasury  on  the  subject 
of  said  banks,  and  shall  give  his  opinion  in  writing  or  in  person,  at  a  meeting  of 
the  directors  of  any  of  the  said  banks,  on  any  subject  touching  the  affairs  thereof, 
which  he  may  deem  proper,  but  shall  not,  in  any  case  whatever,  have  a  right  to 
vote.  He  shall  keep  an  office  and  reside  at  the  Seat  of  Government,  and  be 
entitled  to  such  compensation  for  his  services  as  the  president  and  directors 


152  BANK  OF  THE  UNITED  STATES. 

of  the  bank  at  Washington  shall  think  proper  to  allow,  and  shall  hold  his 
office  during  the  pleasure  of  the  President  of  the  United  States. 

SEC.  13.  And  oe  it  further  enacted.  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable  on  de- 
mand, shall  be  demandable  during  the  continuance  of  this  act,  in  gold  or  silver 
coin,  at  their  current  value,  ana  shall  be  receivable  in  all  payments  to  the 
United  States. 

SEC.  14.  And  be  it  further  enacted,  That  this  charter,  and  the  corporation 
hereby  created,  shall  continue  until  the  year  one  thousand  eight  hundred  and 
forty,  unless  by  the  consent  of  the  stockholders,  at  a  general  meeting,  and  a 
future  law  of  Congress,  the  capital  stock  of  the  said  bank  should  be  increased 
to  thirty  millions  of  dollars,  giving  to  the  States  respectively,  and  to  the  Unit- 
ed States,  the  same  proportions*  and  providing,  in  every  respect,  similar  re- 
gulations, so  far  as  circumstances  may  admit,  for  the  increase  aforesaid,  as 
are  provided  by  this  act  for  the  ""establishment  of  the  national  bank;  and,  in 
like  manner,  it  the  capital  should  be  so  increased,  the  term  of  continuance  of 
the  charter  of  the  said  corporation  may  be  extended  to  the  year  one  thousand 
eight  hundred  and  fifty. 

APRIL  4.  1810. 

A  motion  was  made  by  Mr.  LOVE,  that  the  House  do  come  to  the  following 
resolutions: 


"  Resolved,  That  the  Secretary  of  theTTreasury  be  requested  to  furnish  this 
House  with  the  names  and  titles  of  the  sockholders  of  the  Bank  of  the  United 
States,  if  any  document  in  his  office  will  afford  that  information,  and  if  not, 
to  endeavor  to  obtain  that  information  from  the  bank  aforesaid,  and  lay  it  be- 
fore this  House  as  soon  as  possible. 

i4  That  the  Secretary  of  the  Treasury  be  requested  to  furnish  this  House,, 
with  the  number  of  shares  voted  on  at  the  last  election  of  directors,  and  the 
names  of  those  voting,  if  to  be  Obtained. 

rt  That  he  be  requested  to  state  to  this  House,  by  what  information  he  wa* 
enabled,  in  his  report  of  March,  1809,  made  to  the  Senate  of  the  United 
States,  tx>  fix  the  average  of  dividends  of  said  bank,  at  eight  three  -eighths,  pre- 
cisely eight  thirteen-thirty-fourths  per  cent,  per  annum,  and  also  state  the 
amount  of  public  stock  or  other  public  debt,  held  by  the  said  bank  company 
on  each  first  day  of  January,  since  its  operations  commenced. 

"  Resolved^  That  the  Secretary  of  the  Treasury  be  reqested  to  inform  this 
House  what  is  the  amount  of  capital  retained  in  Philadelphia  by  the  Bank  of 
the  United  States,  and  what  amount  thereof,  distributed  to  the  branches  of 
that  bank,  respectively  f  what  have  been  the  average  amounts  of  deposites  of 
public  money,  in  each  of  those  banks,  in  any  preceding  year,  or  for  the  year 
1808,  if  as  practicable  to  obtain  it  as  any  other;  and  whether  the  sum  of  800?000 
dollars,  stated  in  his  said  report,  to  be  due  from  the  State  banks  to  the  United 
States  Bank  Company,  was  due  on  account  of  deposites  of  public  money,  or 
not." 

A  motion  was  made  by  Mr.  QUINCY,  to  amend  the  first  resolution  thereof* 
by  inserting  the  word  "  foreign"  before  the  word  "  stockholders.  ." 

The  said  resolutions  were  read  and  ordered  to  lie  on  the  table. 

APRIL  7,  1810. 

Mr.  TAYLOR,  from  the  committee  to  whom  was  referred  on  the  29th  ultimo,. 
the  report  of  a  select  committee  on  the  memorial  of  the  stockholders  of  the 
Bank 
twent 
Bank" 
which  was  received  and  read  the  first  time. 

On  motion,  the  said  bill  was  read  the  second  time,  and  committed  to  a  Com- 
mittee of  the  Whole  House  on  Monday  next- 

The  said  bill  is  as  follows: 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

A  bill  continuing"  in  force,  for  a  term  of  twenty  years,  the  act,  entitled  "  An 
act  to  incoi-porate  the  subscribers  to  the  Sank  of  the  United  Stales,"  on  the 
terms  and  conditions  therein  mentioned. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America,  in  Congress  assembled.  That  the  act,  entitled  "  An  act 
to  incorporate  the  subscribers  to  the  Bank  of  the  United  States,"  passed. the 
twenty -fifth  day  of  Febniary,  in  the  year  of  our  Lord  seventeen  hundred  and 
ninety-one,  subject  to  the  provisions  and  conditions  in  this  act  to  be  made, 
be,  and  the  same  is  hereby  continued  in  force,  for  and  during  the  further  term 
of  twenty  years,  from  and  after  the  fourth  day  of  March  next:  Provided, 
That  the  President  and  Directors  of  the  said  Bank  of  the  United  States,  shall, 
on  or  before  the  thirty-first  day  of  December  next,\  pay  into  the  treasury  of 
the  United  States  one  million  two  hundred  and  fifty  thousand  dollars,  as  the 
price  and  equivalent  for  th<>  renewal  and  continuance  of  their  charter  as  afore- 
said; and  the  better  to  enable  the  said  President  and  Directors  of  the  said 
bank  to  pay  the  said  sum  of  money,  the  said  President  and  Directors  of  the 
Bank  of  the  United  States  shall  be,  and  they  are  hereby  authorised  to  add  to 
the  capital  stock  of  said  bank  two  thousand  five  hundred  shares,  and  to  sell 
and  dispose  of  the  same,  at  such  time,  and  in  such  manner,  and  at  such  price 
as  they  may  think  proper,  and  for  the  most  advantage  for  the  interest  of  their 
said  company:  Provided,  also,  That  the  said  President  arid  Directors  of  the 
said  bank  shall,  at  all  times,  from  and  after  the  passage  of  this  act,  and  during 
the  continuance  of  the  same,  be  bound  and  obliged  to  make  a  loan  or  loans  to 
the  United  States,  if  required  and  authorised  by  law,  of  any  sum  or  sums  of 
money,  not  exceeding  in  the  whole,  at  any  one  time,  five  millions  of  dollars, 
and  at  a  rate  of  interest  not  exceeding  six  per  centum  per  year:  Provided, 
That  it  shall  be  the  duty  of  the  Secretary  of  the  Treasury  of  the  United  States 
to  make  his  application  in  writing,  to  the  President  and  Directors_of  said 
bank,  for  sucfi  loan  or  loans,  at  least  three  calendar  months  previous  to  the 
time  when  such  loan  or  loans  shall  be  required;  and  that  the  said  President 
and  Directors  of  the  said  bank,  shall  not  be  required  to  make  a  loan  of  more 
than  two  million  five  hundred  thousand  dollars  during  the  present  year,  nor 
more  than  the  last  mentioned  sum  during  any  other  year:  Provided,  also,  That 
the  President  and  Directors  of  the  said  bank,  shall,  from  and  after  the  fourth 
day  of  March,  eighteen  hundred  and  eleven,  pay  to  the  United  States  an  in- 
terest at  the  rate  of  three  per  centum  per  year  on  all  sums  of  money  above  the 
sum  of  three  millions  of  dollars,  which  shall  accumulate  to  the  credit  of  the 
Treasurer  of  the  United  States  in  the  said  bank,  or  in  any  of  the  branches  of 
said  bank,  and  which  shall  remain  there  for  one  whole  year:  Provided,  That 
it  shall  be  the  duty  of  the  Secretary  of  the  Treasury  of  the  United  States, 
from  time  to  time,  to  give  notice  in  writing  to  the  President  and  Directors  of 
the  said  bank,  at  least  sixty  days  before  the  term  or  time  at  which  said  in- 
terest, to  be  paid  as  aforesaid,  shall  be  considered  to  commence  and  begin  to 
accrue;  which  notice  in  writing,  shall  specify  the  precise  amount  of  the  de- 
posite,  so  to  remain  for  one  whole  year  as  aforesaid:  Provided,  also,  That  the 
United  States  shall  be  authorised,  at  any  time  during  the  continuance  of  this 
act,  to  increase  the  capital  stock  of  baid  bank  in  such  manner  as  may  here- 
after be  prescribed  by  law,  and  for  which  the  United  States  shall  become  the 

subscriber  and  owner,  to  an  amount  not  exceeding  in  the  whole shares 

and  not  exceeding  in  any  one  year shares:  Provided,  That  the  shares 

thus  to  be  added  and  subscribed  for,  on  behalf  of  the  United  States,  shall  not 

be  sold  by  the  United  States  at  a  price  less  than for  each  share:  And 

provided,  also,  That  nothing  in  this  act  contained,  nor  in  the  act  intended  to 
be  continued  in  force  by  this  act,  shall  be  construed  to  restrict  or  prevent  the 
United  States  from  incorporating  any  bank  or  banks  in  the  District  of  Colum- 
bia: Provided,  That  any  bank  to  be  incorporated  by  the  United  States  in  the 
District  of  Columbia,  shall  be  restricted  from  extending  any  branch  thereof 
beyond  and  without  the  limits  of  the  said  territory. 

SEC.  2.  And  be  it  further  enacted  by  the  authority  aforesaid,  That  it  shall 
be  the  duty  of  the  President  and  Directors  of  the  said  bank,  on  or  before  the 


134  BANK  OF  THE  UNITED  STATES. 

day  of next,  to  signify  to  the  President  of  the  United  States,  their 

acceptance  on  behalf  of  the  Bank  of  the  United  States,  of  the  terms  and  con- 
ditions in  this  act  contained,  and  if  they  shall  fail  to  do  so,  on  or  before  the 
day  above  mentioned,  that  then  this  act  shall  cease  to  be  in  force. 

APRIL  13,  1810. 

The  House  resolved  itself  into  a  Committee  of  the  Whole  on  the  said  bill; 
and  after  some  time  spent  therein,  Mr.  Speaker  resumed  the  chair,  and  Mr. 
MA  CON  reported,  that  the  committee  had,  according  to  order,  had  the  said  bill 
under  consideration,  made  some  progress  therein,  and  directed  him  to  ask 
leave  to  sit  again. 

And  on  the  question,  Shall  the  Committee  have  leave  to  sit  again  on  the 
said  bill?  It  was  determined  in  the  negative. 

APRIL  20,  1810. 

The  House  proceeded  to  consider  the  said  bill. 

A  motion  was  made  by  Mr.  SWOOPE,  to  amend  the  said  bill,  by  striking  out. 
in  the  ninth  line  and  first  section,  from  the  word  "  next"  to  the  word  "  share," 
in  the  sixty-second  line,  for  the  purpose  of  inserting  the  following: 

Provided.  That  on  the  4th  day  of  March,  1811,  the  President  and  Directors 
of  the  said  Bank  of  the  United  States,  shall  be,  and  they  are  hereby,  autho- 
rized to  add  to  the  capital  stock  of  the  said  bank,  twelve  thousand  five  hun- 
dred shares,  and  for  which  the  United  States  shall  become  the  subscriber  and 
owner:  Provided,  also,  That  the  President  and  Directors  of  the  said  bank 
shall  receive  in  payment  therefor,  the  sum  of  five  millions  of  dollars  in  stock 
of  the  United  States,  bearing  an  interest  of  three  per  cent,  per  annum,  payable 
quarter  yearly,  and  redeemable  at  the  pleasure  of  the  Government,  which 
stock  as  aforesaid,  the  Secretary  of  the  Treasury  is  hereby  authorized  to  issue 
and  pay  over  to  the  President  and  Directors,  on  receiving  from  them  a  trans- 
fer, in  behalf  of  the  United  States,  of  the  twelve  thousand  five  hundred  shares 
as  aforesaid:  Provided,  also,  That  the  United  States  shall  be  authorized  at  any 
time  after  the  4th  of  March,  1821,  to  increase  the  capital  stock  of  the  said 
bank  in  such  manner  as  may  be  hereafter  prescribed  by  law,  and  for  which 
the  United  States  shall  become  the  subscriber  and  owner,  to  an  amount  not 
exceeding  twelve  thousand  five  hundred  shares:  Provided,  nevertheless,  That 
such  addition  to  the  capital  shall  not  be  made  at  the  time  aforesaid,  unless 
the  average  dividends  for  the  three  years  preceding  that  period,  shall  have 
amounted  to  eight  per  centum,  on  the  capital  stock  otsaid  bank;  and  after  the 
said  fourth  day  of  March,  1811,  the  Secretary  of  the  Treasury  shall  be  a  di- 
rector of  the  said  bank  ex  officio. 

And,  after  debate  thereon,  the  House  adjourned. 

APRIL  21,  1810. 

*The  House  resumed  Hie  consideration  of  the  motion  made  by  Mr.  SWOOPB 
yesterday. 

A  division  of  the  qustion  on  the  said  amendment  was  called  for,  when  a 
motion  was  made  by  Mr.  LOVE,  that  the  said  bill  be  postponed  indefinitely, 
which  was  determined  in  the  negative.  Yeas  46,  nays  67. 

The  question  was  then  taken  on  the  first  member  of  the  motion  of  Mr. 
SWOOPE,  to  wit:  to  strike  out,  in  the  9th  line,  first  section,  from  the  word 
"  next"  to  the  word  "  share,"  in  the  62d  line,  and  determined  in  the  negative. 

The  second  member  of  the  said  motion  failed,  of  course. 

A  motion  was  then  made  by  Mr.  LOVE,  to  amend  the  said  bill,  by  striking 
out  the  following  words  contained  in  the  first  section  thereof,  beginning  with 
the  following  words:  u  That  the  act,  entitled  4  An  act  to  incorporate  the  sub- 
scribers to  the  Bank  of  the  United  States,'  passed  the  25th  day  of  February, 
in  the  year  of  our  Lord  1791,  subject  to  the  provisions  and  conditions  in  this 
act  to  be  made,  be,  and  the  same  is  hereby,  continued  in  force,"  &c.  and  ter- 
minating with  the  following:  "  Provided,  That  any  bank  to  be  incorporated 
by  the  United  States  in  the  District  of  Columbia,  shall  be  restricted  from 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791, 

extending  any  branch  thereof  beyond  and  without  the  limits  of  the  said  terri- 
tory," for  the  purpose  of  inserting  the  following: 

"  In  case  no  law  shall  been  acted  by  Congress  before  the  fourth  day  of  March, 
one  thousand  eight  hundred  and  eleven,  authorizing  the  further  continuation 
of  the  charter  of  the  company  of  the  United  States  Bank,  the  said  company 
shall,  notwithstanding,  be  authorized,  and  they  hereby,  are  authorized,  to  con- 
tinue for  the  space  of  two  years  from  that  date,  their  loans  which  shall,  on  that 
day  be  in  existance,  by  renewing  the  same  or  otherwise,  in  the  manner  now 
practised  in  the  said  bank  and  the  branches  thereof;  to  sue  and  be  sued,  and 
do  all  other  matters  and  things  which  the  said  company  is  now  able  to  do. 
Provided,  Thati  the  said  company  shall  not  issue  or  alter  any  bank  note 
signed  by  the  President  of  the  said  bank,  or  in  any  other  manner  create 
or  alter,  after  the  said  fourth  day  of  March,  any  note  or  other  currency  under 
the  authority  of  the  said  company  or  directors,  or  any  of  them;  and  that,  after 
that  date,  the  notes  which  may  be  in  circulation  shall  not  be  receivable  in  pay- 
ments due  to  the  United  States,  unless  made  so  by  a  law  hereafter  enacted." 

A  division  of  the  question  on  the  said  amendment  was  called  for.  and  on 
the  question  so  to  strike  out,  it  was  determined  in  the  negative.  Yeas  34, 
navs  73. 

The  second  member  of  the  said  motion  failed  of  course. 

The  bill  was  amended  on  motion  of  Mr.  TAYLOR,  at  the  Clerk's  table. 

A  motion  \yas  then  made  by  Mr.  TROUP,  to  amend  the  bill,  by  striking  out 
the  first  proviso  in  the  first  section  of  the  bill,  which  was  determined  in  the 
negative.  Yeas  35,  nays  75. 

A  motion  was  then  made  by  Mr.  TAYLOR,  to  extend  the  term  to  twenty-five 
years,  and  debate  arising  thereon,  the  House  adjourned. 

APRIL  23,  1810. 

Mr.  TAYLOR  called  for  the  consideration  of  the  aforesaid  bill,  when,  on  mo- 
tion of  Mr.  RUE  A, 

Ordered,  That  the  consideration  of  the  said  bill  be  postponed  till  to-mor- 
row. 
NOTE.— -No  further  proceedings  were  had  upon  this  bill. 

llthCo.NGRF.88.     > 

3d  Session.       5  DECEMBER  18,  1810. 

Mr.  FINDLEY  presented  a  petition  of  the  stockholders  of  the  Bank  of  the 
United  States,  praying  the  renewal  of  their  charter  of  incorporation,  which 
was  read  and  ordered  to  be  referred  to  a  select  committee;  and  Mr.  Burwell, 
Mr.  Findley,  Mr.  Southard,  Mr.  Mitchel,  Mr.  Franklin,  Mr.  Butler,  Mr. 
J.  C.  Chamberlain,  Mr.  W.  Chamberlain,  Mr.  Mosely,  Mr.  N.  R.  Moore, 
Mr.  Miller,  Mr.  Smelt,  Mr.  Johnson,  Mr.  Morrow,  Mr.  Jackson,  Mr.  Gar- 
nett,  and  Mr.  Poindexter,  were  appointed  the  said  committee. 

DECEMBER^,  1810. 

Mr.  LOVE  offered  the  following  resolution: 

Resolved,  That  the  Secretary  of  the  Treasury  be  directed  to  lay  before  this 
House,  information,  first,  of  the  amount  of  debts  due  from  individuals  and 
bodies  corporate  to  the  Bank  of  the  United  States,  distinguishing  the  amount 
due  by  bond,  mortgage,  or  other  specialty,  from  that  payable  by  notes,  bills 
of  exchange,  or  other  security  not  under  seal,  to  the  said  bank  and  its  branches, 
and  what  portion  of  said  debts  are  considered  as  standing  accommodation  to 
the  customers  of  said  bank  and  its  branches:  Second,  of  the  amount  of  notes  of 
said  bank  and  its  branches,  now  in  circulation:  Thirdly,  whether  the  revenue 
of  the  United  States,  or  what  portions  of  it  are  ordered  to  be  deposited  in  the 
said  bank  and  its  branches;  whether  any  portion  of  it  is  ordered  to  be  depo- 
sited in  other,  and  if  so,  what  other  banks;  and  what  will  be  the  probable 
amount  of  deposites  in  favor  of  the  United  States  in  any  of  the  said  banks  or 
then-  branches,  and  which  of  them  on  the  first  day  of  March,  in  the  year  181 1 . 

The  said  resolution  was  read  and  ordered  to  lie  on  the  table. 


136  BANK  or  THE  UNITED  STATES. 

JANUARY  3,  1811. 

The  House,  on  motion  of  Mr.  LOVE,  proceeded  to  consider  the  preceding 
resolution,  which,  being  read,  was  agreed  toby  the  House. 

And  on  the  10th  January,  the  Secretary  of  the  Treasury  communicated  to 
the  House,  the  following  answer  to  this  call: 

The  Secretary  of  the  Treasury,  in  obedience  to  a  resolution  of  the  House  of 

Representatives,  of  the  3d  instant,  respectfully  reports:] 
That  the  annexed  statements,  marked  A,  B,  and  C,*  contain  all  the  infor- 
mation which  the  returns  made  to  the  treasury  afford,  on  the  subjects  em- 
braced by  the  resolution  aforesaid. 

It  appears  by  the  statement  A,  that  the  debts  due  from  individuals  and  bo- 
dies corporate,  to  the  Bank  of  the  United  States,  consisted,  at  the  respective 
dates  of  the  several  returns,  of  the  following  items,  viz: 
Bills  and  notes  discounted,  and  bonds  due  by  individuals,  $15,126,187  04 
Balance  due  by  other  banks  in  account,  after  deducting  the 
sums  due  by  the  Bank  of  the  United  States  and  its  branches, 
to  several  other  banks,      -  1,318,02429 

Bank  notes  of  other  banks,  on  hand,  511,909  06 

Treasury  drafts  not  yet  collected,  31,466  01 

Overdrawn,  32,579  07 

Converted  six  per  cent,  stock,  23,066  23 

17,043,231  70 
To  which,  adding  the  loan  to  the  United  States,    -  -        2,750,000  00 


Makes,  for  the  aggregate  of  debts  due  to  the  bank,  -    $19,793,231  70 

In  a  few  instances,  which  are  noted  in  the  statement  A,  the  amount  due  on 
bonds,  and  also  that  of  notes  discounted,  which  have  been  put  in  suit,  is  dis- 
tinctly stated  in  the  returns  made  to  the  treasury;  but  the  aggregate  alone  is 
given  in  most  of  them,  and  they  do  not,  in  any  instance,  distinguish  the  amount 
"  considered  as  standing  accommodation  to  the  customers  of  the  bank  and  its 
branches."  A  recurrence  to  the  16th  regulation  of  the  7th  section  of  the  act 
incorporating  the  bank,  will  show,  that  the  only  statements  that  can  be  re- 
quired by  the  officer  at  the  head  of  the  treasury,  are  those  of  the  amount  of 
the  capital  stock  of  the  corporation,  of  the  debts  due  to  the  same,  of  the  moneys 
deposited  therein,  of  the  notes  in  circulation,  and  of  the  cash  in  hand;  and 
that  he  has  no  right  to  ask  for  the  account  of  any  private  individuals,  or  for 
any  other  than  the  above  mentioned  general  statements.  Nor  has  the  Secre- 
tary of  the  Treasury  any  knowledge  whatever  of  the  accounts  and  operations 
of  the  bank,  but  what  is  derived  from  the  official  statements  transmitted  to 
him  in  conformity  with  the  above  mentioned  provision  in  the  charter. 

The  statement  B  shows  the  amount  of  notes  of  the  said  bank  and  its  branches, 
in  circulation  at  the  date  of  the  latest  returns,  to  have  been  $5,157,378  83. 

The  Treasurer's  accounts,  annually  laid  before  Congress,  show  correctly 
the  amount  of  public  moneys  deposited  in  the  various  banks,  on  the  last  day  of 
each  quarter.  But  that  amount  is  daily  fluctuating,  and  connot  be  stated  with 
perfect  precision,  except  on  the  quarterly  statements  of  those  accounts.  The 
Treasurer  furnishes,  however,  the  Secretary  of  the  Treasury  with  a  weekly 
estimate  of  the  cash  on  hand,  and  where  deposited,  as  taken  from  the  latest 
received  returns.  A  copy  of  that  furnished  on  the  7th  instant,  marked  C,  is 
herewith  transmitted,  together  with  remarks,  showing  what  portions  of  the 
revenue  are  generally  deposited  in  the  Bank  of  the  United  States  and  its 
branches,  and  what  portions  are  deposited  in  other  banks. 

*  For  the  said  statements,  see  American  State  papers,  published  by  Gales  &  Seaton, 
vol.  2  of  Finance,  pages  462  and  463. 


* 

ON  THE  BILL  TO  RENEW  THE  CHARTER   OF  1791. 

It  is  probable  that  the  amount  of  specie  in  the  treasury  will,  on  the  first  day 
of  March  next,  exceed  2,500.000  dollars,  and  that  the  proportion  deposited  in 
the  banks,  other  than  tliat  or  the  United  States  and  its  branches,  will  not 
materially  vary  from  what  it  is  at  present.  But  it  is  impracticable  to  form 
any  correct  estimate  of  the  probable  amount  at  that  time  in  each  place,  re- 
spectively, since  that  is  always  regulated  by  the  want  of  funds  in  each  place, 
for  the  current  service,  according  to  which  the  public  moneys  are  daily  trans- 
ferred by  drafts,  from  place  to  place,  as  the  occasion  may  require. 
All  which  is  respectfully  submitted, 

ALBERT  GALL  AT  IN. 

TREASURY  DEPARTMENT,  January  9,  1811. 

JANUARY  4, 1811. 

Mr.  BURWELL,  from  the  committee  appointed  on  the  18th  ultimo,  presented 
a  bill  continuing,  for  a  further  time,  me  charter  of  the  Bank  of  the  United 
States,  which  was  read  a  first  and  second  time,  and  committed  to  a  Committee 
of  the  Whole  House,  on  Monday  next,  as  follows: 

A  bill  continuing  in  force  for  the  term  of the  act,  entitled  "  An  act 

to  incorporate  the  subscribers  to  the  Hank  of  the  United  States,"  on  th* 
terms  and  conditions  therein  mentioned. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  the  act,  entitled  "  An  act  to 
incorporate  the  subscribers  to  the  Bank  of  the  United  States,"  passed  the 
25th  day  of  February,  in  the  year  of  our  Lord  1791,  be,  and  the  same  is  here- 
by, continued  in  force,  subject  to  the  provisions  and  conditions  in  this  act 

specified,  for,  and  during,  the  further  term  of years,  from  and  after 

the  4th  day  of  March,  next. 

SEC.  2.  Provided,  however,  and  be  it  further  enacted,  That  the  president 
and  directors  of  the  said  Bank  of  the  United  States,  shall,  on  or  before  the 

day  of next,  pay  into  the  Treasury  of  the  United  States,  for  the 

use  thereof,  one  million  two  hundred  and  fifty  thousand  dollars. 

SEC.  3.  And  be  it  further  enacted,  That  the  president  and  directors  of 
the  said  bank,  shall,  at  all  times,  from  and  after  the  passing  of  this  act,  and 
during  the  continuance  of  the  same,  be  holden  and  bound  to  make  a  loan  or 
loans  to  the  United  States,  if  required  and  authorized  by  law,  of  any  sum  or 
sums  of  money,  not  exceeding  in  the  whole^  at  any  one  time,  five  millions  of  dol- 
lars, reimbursable  at  the  pleasure  of  the  United  States,  and  at  a  rate  of  inter- 
est not  exceeding  six  per  centum  per  year:  Provided,  That  it  shall  be  the 
duty  of  the  Secretary  of  the  Treasury  to  make  his  application  in  writing  to 
the  president  and  directors  of  the  said  bank,  for  such  loan  or  loans,  at  least 
three  calendar  months  prior  to  the  time  when  such  loan  or  loans  shall  be 
required:  Provided,  also,  That  the  sum  of  two  millions  and  seven  hundred 
and  fifty  thousand  dollars,  borrowed  during  the  year  1810,  shall  be  considered 
part  thereof,  and  that  no  greater  amount  shall  be  required,  in  any  quarter  of 
a  year,  than  one  million!  of  dollars.  And  provided,  further,  That  all  such 
loans  shall  be  reimbursable  at  or  before  the  expiration  of  the  said  term  of 

years,  unless  it  shall  be  otherwise  agreed  between  the  said  corporation 

and  the  United  States. 

SEC.  4.  And  be  it  further  enacted,  That  if  the  said  president  and  directors 
shall,  on  any  occasion,  fail  to  furnish  any  loan  or  loans,  to  be  required  by  the 
United  States,  in  the  manner  herein  before  enacted,  their  corporation  shall 
forthwith  be  dissolved,  and  the  powers  thereof  shall  cease  and  determine,  any 
thing  in  this  act,  or  in  the  act  hereby  continued  in  force,  to  the  contrary  there- 
of, in  anywise  notwithstanding. 

SEC.  5.  And  be  it  further  enacted,  That  the  directors,  chosen  by  the  stock- 
holders of  the  said  corporation,  on  the  first  Monday  of  January,  in  the  present 
year,  and  the  president,  chosen  by  the  directors  at  the  first  meeting  after 
18 


I 

138  BANK    OF    THE   UNITED    STATES. 

such  election,  shall  be  capable  of  serving,  by  virtue  of  such  elections,  until  the 
first  Monday  in  January,  1812. 

SEC.  6.  And  be  it  further  enacted,  Tliat  the  act,  entitled  "  An  act  to  punish 
frauds  committed  on  the  Bank  of  the  United  States,"  passed  the  24th  day  of 
February,  1807,  be,  and  the  same  is  hereby,  continued  in  force,  during  the 
continuance  of  the  said  corporation;  and  the  same  shall  at  all  times  hereafter, 
and  in  all  respects,  be  deemed  and  taken  to  apply  to  the  said  corporation,  in 
the  same  manner  that  it  has  been  deemed  and  taken  to  apply  to  the  same  here- 
tofore. 

SEC.  7.  Jind  be  it  further  enacted,  That  the  president  and  directors  of 
the  said  bank,  shall,  after  the  4th  day  of  March  next,  pay  to  the  United  States 
an  interest,  at  the  rate  of  three  per  cent,  per  year,  on  all  sums  of  money  above 

the  sum  of -.millions  of  dollars,  which  shall  accumulate  to  the  credit  of 

the  Treasurer  of  the  United  States  in  said  bank,  or  the  branches  of  the  same, 

and  which  shall  remain  there  for :  Provided,  It  shall  be  the  duty  of  the 

Secretary  ot  the  Treasury,  from  time  to  time,  to  give  notice,  in  writing,  to 

the  president  and   directors,  at  least days  before  the  term,  or  time  at 

which  the  said  interest  shall  begin  to  accrue  and  be  computed;  which  notice 
in  writing,  shall  specify  the  exact  amount  of  the  deposite  so  to  remain  for  the 
whole  year  as  aforesaid. 

SKC.  8.  And  be  it  further  enacted,  That  the  United  States  shall  be  author- 
ized, at  any  time  during  the  continuance  of  this  act,  to  increase  the  capital 
stock  of  the  said  corporation,  in  manner  as  may  be  hereafter  prescribed  by 
law,  and  for  which  the  United  States  shall  be  the  subscriber  and  owner,  to 

an  amount  not  exceeding  in  the  whole shares,   and  not  exceeding  in 

any  one  year  shares:    Provided,  That  during  the  time  the  United 

States  shall  so  hold  stock  in  the  said  corporation,  they  shall  have  a  right  to 
appoint,  in  such  manner  as  shall  be  hereafter  declared  by  law,  a  number  not 

exceeding of  the  directors:  find  provided,  also,  That  the  shares  thus 

to  be  subscribed  and  added,  by  and  on  behalf  of  the  United  States,  shall  not 
be  sold  at  a  price  less  than per  centum  advance  on  each  share. 

SEC.  9.  And  be  it  further  enacted,  That  the  twelfth  section  of  the  before 
mentioned  act,  entitled  "  An  act  to  incorporate  the  subscribers  to  the  Bank 
of  the  United  States,"  passed  March  2d,  1791,  be,  and  the  same  is  hereby  re» 
pealed. 

SEC.  10.  And  be  it  further  enacted,  That  it  shall  be  the  duty  of  the  presi- 
dent and  directors  of  the  said  bank,  on  or  before  the  day  of 

next,  to  signify  to  the  President  of  the  United  States,  in  writing,  their  accept- 
ance on  behalf  of  the  said  corporation,  of  the  terms  and  conditions  in  this  act 
contained;  and  if  they  shall  fail  to  do  so,  on  or  before  the  day  above  mention 
ed,  then  this  act  shall  cease  to  be  in  force. 

JANUARY  16,   1811. 
Mr.  WRIGHT  ottered  the  following  resolution: 

Resolved,  That  the  Secretary  of  the  Treasury  be  directed  to  lay  before 
Congress,  a  list  of  the  directors  of  the  Bank  of  the  United  States,  and  of  the 
several  branches^  and  a  statement  of  the  stock  held  by  foreigners,  and  in  what 
countries;  and  ot  the  stock  held  by  citizens,  and  in  what  States  and  Terrtiories. 

On  suggestion  of  Mr.  EPPES,  the  resolution  was  modified  by  adding  to  the 
information  required,  a  statement  of  the  specie  deposited  in  the  Bank  of  the 
United  States  and  its  branches,  in  the  States  and  Territories,  distinguishing 
between  the  deposites  of  the  United  States,  and  those  of  individuals. 

As  amended,  the  resolution  was  agreed  to. 

The  House  then  resolved  itself  into  a  Committee  of  the  Whole,  on  the  bill 
to  renew  the  charter  of  the  Bank  of  the  United  States,  Mr.  W.  ALSTON  in  the 
chair. 

Mr.  BURWELL  moved  to  strike  out  the  first  section  of  the  bill. 

He  supported  his  motion  in  a  speech  of  great  length,  in  which  he  denied 
the  constitutionality  and  expediency  of  the  bill,  as  follows: 


ON  THE   BILL  TO  RENEW  THE  CHARTER  OF    1791.  J3Q 

Mr.  BURWELL.  1  have  made  you  this  motion,  sir,  because  it  allows  the 
greatest  latitude  of  discussion  up'on  the  important  points  which  are  prelimina- 
ry to  the  examination  of  the  details.  It  tries  the  principle  of  the  bill,  and  may 
save  much  tedious  and  useless  labor.  Should  a  majority  decide  in  favor  of  the 
Bank  of  the  United  States,  as  an  honest  man,  I  will  aul  in  forming  a  system 
best  adapted  to  the  state  of  the  country,  and  most  subservient  to  the  purposes 
of  such  an  institution.  The  gentleman  from  Connecticut  (Mr.  MOSELY) 
has  done  justice  to  my  conduct,  and  the  fairness  with  which  the  subject  has 
been  treated.  I  have  been  anxious  to  present  the  question  fairly,  not  from 
any  <loribtor  indecision  as  to  the  course  I  should  pursue,  but  from  its  magni- 
tude, and  the  sensibility  it  has  excited.  It  will  be  recollected  by  the  commit- 
tee, when  the  gentleman  from  Philadelphia  presented  the  memorial,  upon 
which  the  Secretary  of  the  Treasury  founded  his  report,  on  that,  as  on 
all  subsequent  occasions,  my  opposition  was  manifested;  and  I  will  add,  that 
the  particular  intention  which  my  duty  has  compelled  me  to  bestow  on  the 
bank,  has  confirmed  most  stongly  former  impression?. 

The  remarks  I  shall  make,  are  intended  to  show  tint  Congress  possesses  no 
power  to  incorporate  a  bank;  to  show  its  effect  on  the  Government:  and  to 
satisfy  the  committee  that  the  exercise  of  the  power,  even  if  possessed,  is  in- 
expedient. While,  sir,  I  feel  the  most  ardent  desire  to  consult  the  conveni- 
ence of  the  Government,  and  promote  the  prosperity  of  the  community  in 
general,  I  have  not  lost  sidit  of  the  limits  within  which  I  am  restrained  by  the 
constitution  of  the  United  States,  and  considerations  of  sound  policy.  It  is 
my  most  deliberate  conviction  the  constitution  of  the  countiy  gives  no  autho- 
rity to  Congress  to  incorporate  a  bank,  and  endow  the  stockholders  with  char- 
tered immunities,  and,  even  if  its  dissolution  should  produce  ruin  to  the  mer- 
chants, and,  what  is  of  equal  importance,  embarrassment  to  the  Government, 
they  would  not  be  paramount  to  tin-  sacred  obligation  of  supporting  the  consti- 
tution, though  I  am  persuaded  the  dreadful  evils  which  have  been  predicted 
from  the  annihilation  of  the  bank,  will  soon  vanish,  and  that  no  material  shock 
will  be  produced  by  that  cause.  The  construction  which  the  constitution  has 
received  by  the  various  persons  -,\  ho  have,  at  different  times,  administered  it, 
has  been  rigid  or  liberal,  according  to  their  confidence  in  the  General  or  State 
Governments.  The  unqualified  extent  given  to  its  general  powers,  and  the 
inclusion  of  incidental  powers,  as  flowing  from,  and  belonging  to,  particular 
enumerated  grants,  have  constituted  the  essential  points  of  difference  among 
those  who  have  divided  upon  the  principles  of  the  constitution:  this  has  been 
the  case,  not.  only  in  the  exercise  of  authority  when  the  right  was  question- 
able, but  in  cases  where  the  right  was  undeniable,  tending,  by  its  operation, 
to  increase  the  weight  of  the  General  Government.  In  giving  to  the  constitu- 
tion that  rigid  construction  which  sound  policy  requires,  a  just  regard  to  the 
harmony  of  the  States,  and  the  perpetuation  of  their  Union  dictates,  I  cannot 
find  any  part  of  it  authorising  the  exercise  of  a  power,  which,  from  its  nature, 
is  obnoxious,  its  tendency  alarming,  and  its  influence  in  the  hands  of  those 
who  manage  its  concerns,  irresistible.  The  power  to  establish  a  bank,  cannot 
be  deduced  from  the  general  phrases  "  to  provide  for  the  common  defence  and 
general  welfare,"  because  they  merely  announce  the  object  for  which  the  Ge- 
neral  Government  was  instituted;  the  only  means  by  which  this  object  is  to 
be  attained,  are  specifically  enumerated  in  the  constitution,  and  if  they  are 
not  ample,  it  is  a  defect  which  Congress  are  incompetent  to  supply.  I  think 
this  inference  the  stronger,  inasmuch  as  those  means  were  granted  to  us  by 
those  who  had  acted  under  the  confederation,  and  experienced  its  defects,  and 
knew  precisely  to  what  extent  power  was  requisite  to  provide  for  the  com- 
mon defence  and  general  vyelfare.  In  relation  to  this  particular  subject,  the 
proceedings  of  the  convention  itself,  furnish  the  plainest  evidence,  by  reject- 
ing the  proposition  to  vest  in  Congress  the  right  to  grant  incorporations.  I 
readily  admit  the  motive  of  deliberative  bodies  cannot  always  be  known;  va- 
rious considerations  might  have  operated;  they  might  have  supposed  the  power 
already  vested;  but  it  is  incumbent  on  those  who  can  place  faith  in  an  inter- 


140  BANK  OF  THE  UNITED  STATES. 

pretation  so  repugnant  to  the  cautious  and  guarded  phraseology  of  the  instru- 
ment, to  demonstrate  it.  If  the  right  to  incorporate  exists,  it  is  a  general  grant 
of  power,  equally  applicable  to  all  the  objects  of  incorporations,  and  cannot 
be  assumed  as  a  means  to  carry  into  effect  any  particular  grant  of  authority. 
To  my  mind  it  is  much  more  natural  to  suppose  a  power  to  create  monopolies 
had  been  surrendered  to  quiet  the  fears  ol  those  who  saw  in  the  constitution 
the  germ  which  would,  sooner  or  later,  palsy  the  vitals  of  the  State  authority. 
If  the  general  phrases  are  not  explained  in  the  manner  just  mentioned,  and 
powers  so  extensive  and  important  are  derived  from  them,  it  would  be  ridicu- 
lous to  consider  the  jurisdiction  of  Congress  restricted,'  they  would  confer 
equal  authority  to  establish  monopolies  in  all  the  various  branches  of  indi- 
vidual industry  and  commercial  enterprise.  Sir,  I  will  conclude  this  part  of 
the  subject  by  reminding  you  how  essential  it  is,  when  we  are  giving  an  inter- 
pretation to  the  constitution  to  which  the  States  are  parties,  to  assume  only 
what  clearly  belongs  to  us;  moderation  will  inspire  confidence,  selfishness  will 
excite  disgust  and  suspicion. 

The  parts  of  the  constitution  which  bear  any  analogy  to  this  subject,  are, 

1st.  Congress  shall  have  power  to  lay  and  collect  taxes,  duties,  imposts,  and 
excises,-  to  pay  the  debts,  and  provide  for  the  common  defence  and  general 
welfare,  &c, 

2d.  To  borrow  money  on  the  credit  of  the  United  States. 

3d.  To  regulate  commerce  with  foreign  nations,  and  among  the  several 
States,  and  with  Indian  tribes.  And,  4th.  To  make  all  laws  which  shall  be- 
necessary  and  proper  to  carry  the  foregoing  powers,  and  all  other  powers  vest- 
ed by  the  constitution  in  the  General  Government,  into  effect  It  will  not  be 
denied,  that,  if  the  establishment  of  a  bank  comes  within  the  meaning  of  the 
power  to  lay  and  collect  taxes,  to  pay  the  debts  of  the  United  States,  and  to 
regulate  commerce,  or  is  necessary  and  proper  to  carry  the  foregoing  powers 
into  effect,  it  would  be  a  fair  subject  for  legislation  by  Congress.  But  can  any 
one  pretend,  that  a  bank  would  be  a  mode,  contemplated  by  the  constitution, 
to  lay  and  collect  taxes  on  the  people,  for  the  purpose  of  raising  revenue  r 
Would  it  comport  with  that  wise  principle  of  uniformity,  and  those  guarded 
restrictions  against  unequal  burthens  on  the  people,  which  constitute  the  most 
valuable  safeguard  to  the  citizen  ?  To  understand  these  terms,  we  must  give 
them  a  meaning  which  has  been  affixed  by  their  usual  import.  When  we 
speak  of  the  power  to  lay  taxes,  we  understand  by  it,  a  demand  of  money  from 
the  community,  regulated  by  fixed  and  equitable  principles,  indiscriminate  as 
to  persons,  and  the  species  of  property  taxed.  To  suppose  that  every  law 
which  imposed  burthens,  or  brought  money  into  the  treasury,  was  constitu- 
tional, would  destroy  our  equal  system  of  Government,  and  substitute  a  ca- 
pricious despotism.  It  would  revive  the  exploded  doctrine  of  free  gifts,  be- 
nevolences, and  that  shameful  train  of  extortions  practised  by  the  old  govern- 
ments of  Europe.  Does  it  fall  within  the  power  to  pay  the  debts  of  the  Unit- 
ed States  ?  This  clause  relates  entirely  to  the  application  of  the  funds,  after 
they  have  been  accumulated;  it  is  in  conformity  with  that  article  which  pledges 
the  public  faith  for  debts  which  had  been  contracted,  as  well  as  those  which 
might  be  created  in  pursuance  of  the  authority  to  borrow  money  upon  the  faith 
of  the  United  States.  If  the  power  to  incorporate  a  bank,  grew  out  of  the  ob- 
ligation to  pay  the  debts  of  the  United  States,  its  charter  should  be  so  worded 
as  to  cease  whenever  they  were  extinguished;  and  it  would  be  no  longer  for 
Congress  to  fix  a  definite  period  for  its  expiration.  If  the  right  of  incorpora- 
tion was  ever  meant  to  be  given,  it  would  most  naturally  follow  from  the  regu- 
lation of  commerce;  yet  no  one  has  contended  Congress  could  create  insu- 
rance companies  within  the  States.  Those  who  contend  the  bank  is  constitu- 
tional, consider  it  as  necessary  and  proper  in  collecting  the  revenue.  That  it 
may  be  an  useful  instrument,  I  do  not  deny;  it  forms  depositories  convenient 
to  the  Government;  but  you  should  recollect,  depositories,  equally  safe  and 
convenient,  can  be  procured  without  being  purchased  at  the  expense  of  exor- 
bitant and  invidious  privileges,  to  a  particular  class  in  the  community.  I  ap- 
prehend the  constitution  means  something  extremely  different.  When  it  em- 


ON    THE   BILL   TO    RENEW   THE   CHARTER   OF    1791. 

powers  the  General  Government  to  collect  taxes,  it  relates  exclusively  to  the 
authority  thus  given  to  Congress,  of  employing  compulsory  process,  in  coerc- 
ing the  payment  of  taxes;  it  enables  Congress  to  create,  within  the  jurisdic- 
tion of  the  States,  officers  of  the  revenue,  and  through  them,  to  exercise  over 
the  persons  and  property  of  the  citizens,  a  concurrent  jurisdiction,  from  which 
they  otherwise  would  be  precluded,  and  from  whicli  they  had  been  precluded 
before  the  adoption  of  the  constitution;  it  enables  them  to  impose  penalties 
and  forfeitures,  and  to  inflict  punishment  lor  resistance  to  their  authority. 
But,  sir,  admit  fora  moment  tlie  bank  may  be  formed  to  collect  the  revenue; 
ought  it  not  to  be  exclusively  used  for  that  object?  Whence  the  power  to  make 
it  an  instrument  of  commerce  ?  Why  invest  it  with  a  capital,  immense  in 
amount,  and  sovereign  in  its  control  over  the  external  and  internal  commerce 
of  the  country  ?  Sir,  I  must  again  call  your  attention  to  the  limited  nature  of 
our  Government;  we  must  administer  it  as  we  find  it,  and  not  as  we  think  it 
ought  to  be.  Under  this  view  of  the  subject,  so  long  as  I  understand  the  right. 
to  *4  lay  taxes,"  to  consist  in  drawing  supplies  from  the  people  for  public 
purposes,  and  not  to  tax  one  portion  for  the  benefit  of  another;  and  fci  to  col- 
lect'" them,  the  right  to  enforce  payment;  I  cannot  construe  them  to  authorize 
the  establishment'of  a  bank.  Sir,  a  bank  has  been  improperly  considered  a 
means  of  executing  some  power  expressly  given  to  Congress.  The  nature  of 
incorporations  is  so  clearly  a  distinct  class  of  political  power,  that,  before  they 
can  be  converted  into  means  incidental  to  an  object,  without  the  jurisdiction 
of  the  General  Government,  they  must  be  shown  to  be  absolutely  necessary. 
Permit  me  to  ask  how  has  it  been  ascertained  th;it  a  bank  is  necessary  to  the 
operations  of  the  Goverement?  Has  the  experiment  been  tried?  Upon  a 
question  involving  a  breach  of  the  constitution,  it  would  be  safer  to  be  guided 
by  experience  than  conjecture. 

Sir,  I  am  well  aware  that  1  can  add  nothing  new  upon  the  constitutional 
points.  This  subject  was  more  thoroughly  examined  in  1791,  and  more  ably 
elucidated  than  anv  other  since  the  adoption  of  the  Government.  The  cele- 
brated speech  of  Mr.  Madison,  to  which  1  ascribe  my  conviction,  has  been  re- 
cently presented  to  us  in  the  newspapers,  and  gentlemen  must  be  familiar 
with  it.  I  cannot  give  additional  weight  to  the  arguments,1  but  I  thought  it 
proper  to  call  the  attention  of  the  committee  to  that  part  of  the  subject,  by  the 
remarks  I  have  made. 

I  said,  sir,  it  must  be  shown  that  the  bank  is  necessary  to  the  operations  of 
the  Government;  without  its  aid  our  fiscal  concerns  cannot  be  managed.  So 
far  from  subscribing  to  the  necessity  of  the  bank,  I  believe  the  revenue  would 
be  equally  safe  in  the  State  hunks  and  could  be  distributed  with  inconsider- 
able difficulty;  the  revenue  received  in  most  of  the  States  is  nearly  equal  to 
the  expenditure  within  them,  and  when  a  deficiency  occurred  in  any  one,  it 
could  be  supplied  by  arrangements  with  the  different  banks,  by  transportation 
or  inland  bills  of  exchange,  in  the  same  manner  that  the  public  engagements 
are  fulfilled  abroad.  I  will  venture  to  assert,  the  Secretary  of  the  Treasury 
will  find  no  difficulty  in  contracting  with  individuals  and  corporate  institu- 
tions, upon  the  most  ample  security,  to  transfer  the  public  revenue,  upon 
terms  equally  advantageous  to  the  United  States.  Among  the  several  States 
commercial  intercourse  is  great,  arid  daily  increasing;  the  constant  traffic 
which  the  different  portions  of  the  country  maintain  with  one  another,  will 
give  facility  to  the  operations  of  the  Government;  and  obviate  the  obstacles 
which  are  anticipated.  The  very  commerce  which  enables  the  treasury  to 
remit,  with  ease,  immense  sums  to  every  part  of  Europe,  is  the  result  of  this 
interchange  among  the  States,  and  insures  equal  facility  at  home:  where,  then, 
is  the  necessity  for  this  bank?  The  accommodation  of  the  bank  to  the  Govern- 
ment, in  times  of  emergency,  and  the  use  of  its  resources  to  support  public 
credit,  have  been  urged  as  motives  for  its  establishment:  how  far  such  con- 
siderations weaken  constitutional  objections,  it  is  needless  to  state.  If,  sir, 
the  bank  becomes  a  source  of  supply  to  the  Government,  to  an  adequate  ex- 
tent, it  ceases  to  be  one  to  the  merchants.  It,  therefore,  cannot  answer  in 
both  capacities.  The  same  necessity  which  throws  the  Government  upon  the 


142  BANK   OF  THE    UNITED   STATES. 

chanty  of  the  banks,  renders  it  incapable  of  discharging  the  obligation,  and 
while  the  funds  of  the  institution  are  locked  up  in  the  Government,  its  com- 
mercial functions  must  cease.  The  relief  which  sudden  and  temporary  em- 
barrassments require,  can,  at  all  times,  be  administered  by  the  State  banks, 
and,  therefore,  supersedes  the  necessity  of  aid  from  this  bank.  Whenever, 
by  disasters,  the  ordinary  sources  of  supply  are  exhausted,  or  the  unavoidable 
objects  of  expenditure  exceed  the  revenue,  a  more  copious  and  permanent 
aliment  will  be  found  in  the  wealth  and  capital  of  the  citizens  than  by  loans 
from  banks.  Instead  of  diverting  the  active  and  productive  capital  from  use- 
ful channels,  the  sluggish  and  inert  mass  will  be  drawn  forth,  in  its  aid,  to 
support  public  credit,  and  cherish  private  enterprise.  But,  sir.  is  it  prudent 
to  rely  upon  an  institution  that  may  refuse  you  assistance?  What  will  be  the 
influence  of  such  an  institution  on  the  Government  and  the  country  at  large? 
It  cannot  escape  your  recollection,  that  the  establishment  of  the  Bank  of  the 
United  States  was  the  origin  of  a  system  which  assumed,  as  its  basis,  the  en- 
largement of  the  national  jurisdiction.  Whether  the  principles  of  expediency 
to  which  it  owes  its  birth  be  regarded,  or  the  overweening  influence  it  esta- 
blished over  the  moneyed  institutions  and  merchants  of  the  States,  the  charge, 
to  say  the  least,  is  plausible.  The  close  and  intimate  connexion  between  the 
Government  and  the  bank;  the  dependence  of  the  former  for  loans,  and  the 
latter  for  public  deposited,  have  given  the  Executive  branch  its  full  share  of 
influence  and  odium,  shows  incontestibly  it  was  created  to  augment  the  power 
of  the  General  Government,  and  the  Executive  in  particular.  Yes,  sir,  it  was 
the  commencement  of  those  political  animosities  which  have  poisoned  the 
sources  of  social  intercourse;  it  was  the  origin  of  that  doctrine  of  constructive 
power  which  abrogates  the  constitution,  and  nullifies  the  restrictions  imposed 
upon  Congress.  So  long  as  it  exists,  the  body  politic  will  experience  the  agita- 
tions ami  convulsive  throes  of  well  grounded  jealousy  in  the  States. 

Sir,  in  the  administration  of  this  Government,  two  things  alone  are  neces- 
sary to  ensure  its  durability.  You  must,  1st,  avoid  every  measure  which  will 
produce  uneasiness  among 'the  States;  or,  3d,  that  will  extend  the  jurisdiction 
of  the  United  States  Government  to  subjects  purely  local.  I  do  not  mean  that 
the  rightful  authority  of  Congress  is  to  be  abandoned  for  fear  of  giving  offence; 
but  whenever  called  on  to  take  a  step  which  will  produce  uneasiness,  you 
should  be  perfectly  satisfied  the  letter  and  spirit  of  the  constitution  bear  you 
out.  Do  not  gentlemen  perceive  the  tendency  of  this  measure  to  involve  us 
with  the  States  upon  delicate  points?  Has  not  the  United  States  Bank  pro- 
duced serious  alarm?  Will  not  the  alarm  be  increased  by  its  continuance  at 
this  time?  Yes,  sir,  some  of  the  States  have  already  taxed  this  institution, 
others  have  waited  under  the  expectation  we  shall  render  a  collision  unneces- 
sary. Suppose  the  charter  renewed,  and  the  stockholders  should  be  taxed  in 
such  a  manner  as  to  destroy,  virtually,  the  privileges  you  have  guaranteed  to 
them?  Are  you  to  leave  them  unprotected,  or  will  you  draw  the  sword  in 
their  behalf?  While  you  have  time,  avoid  a  situation  not  less  perilous  than 
the  most  serious  foreign  war.  Since  the  establishment  of  the  bank,  the  States 
have  created  banks;  their  people  have  accumulated  capital,  and  they  will  not 
tamely  witness  the  perpetuation  of  an  institution  whose  strength  can,  at  any 
moment,  overthrow  whatever  State  bank  they  may  mark  for  destruction. 
However  paradoxical  it  may  appear,  I  consider  the  General  Government 
strengthened  by  narrowing  its  jurisdiction:  it  will  produce  disunion  whenever 
they  interfere  with  local  concerns.  The  habits,  local  interests,  and  passions 
of  this  country  vary,  and  no  one  is  a  competent  judge  of  what  will  suit  the 
feelings  of  the  State  out  of  which  he  lives.  But,  sir,  there  are  general  princi- 
ples in  which  our  feelings  and  interests  are  identified.  These  are  subjects 
upon  which  we  may  safely  act,  and  trust  to  the  co-operation  of  every  man 
and  State  in  the  Union.  'Does  the  bank  affect  the  people  locally?  The  an- 
swer is  obvious:  itnot  only  undertakes  to  fix  the  amount  of  capital,  but  inter- 
feres with  the  rights  of  property  most  essentially.  It  may  change  the  funda- 
mental principles  of  State  law  as  to  the  liability  of  property  for  debts,  and 
the  mode  of  recovering  them.  Let  me  caution  you  against  the  renewal  of  the 


t 

ON  THE  BILL  TO  RENEW  THE  CHARTER    OF    1791. 

charter;  it  is  pregnant  with  the  most  baneful  consequences  to  the  trarrquiiity  of 
the  country.  Is  it  not  better  to  sacrifice  this  golden  calf  upon  the  altar  of  con- 
cord, restore  confidence  and  harmony  among  individuals  as  well  as  States, 
and  to  reunite  the  lovers  of  the  constitution. 

In  the  report  of  the  Secretary  of  the  Treasury,  the  convenience  of  obtaining 
loans  from  the  bank  is  mentioned  as  an  inducement  to  establish  a  national 
bank.  To  me,  the  abuse  of  this  convenience  is  more  dreaded  than  any  other 
evil  which  will  follow  from  the  measure.  Where  have  you  seen  a  national 
bank,  connected  with  the  government,  which  has  not  ultimately  ruined  the 
circulating  medium  of  the  nation?  It  is  a  notorious  fact,  that  money  has  de- 
preciated seriously  from  the  unlimited  circulation  of  paper,  and,  if  the  Govern- 
ment should  be  compelled,  by  necessity,  to  use  the  funds  of  the  bank,  they 
must  permit  the  increased  circulation  of  its  paper,  although  its  money  capital 
remains  stationary.  In  this  situation,  the  Government  must  tolerate  an  oper- 
ation which  will  increase  the  evil  of  which  we  complain.  The  example  of 
England  is  a  salutary  monition  to  us,  and  we  ought  to  profit  from  it.  In  that 
country,  there  was  a  time  when  the  stability  of  the  bank  was  a  national  phrase, 
"  as  good  as  the  Bank  of  England/'  How  is  it  now?  The  funds  of  the  bank 
have  been  borrowed  by  the  Government?  its  paper  circulation  increased,  and 
Parliament  has  been  compelled  to  make  it  a  tender  for  the  payment  of  all  con- 
tracts. Who,  sir:  can  estimate  the  complicated  mischiefs  of  a  depreciated 
paper  currency,  without  specie  for  its  redemption?  Should  we  be  involved 
in  war,  or  our  property  seized  abroad,  nothing  can  prevent  universal  bank- 
ruptcy; one  wide  spread  ruin  will  pervade  the  continent.  At  this  time  the 
country  is  inundated  with  paper,  bottomed  upon  the  whole  floating  and  real 
property  of  the  community:  should  an  alarm  exist,  can  these  funds  be  con- 
verted into  money  to  redeem  its  credit?  Certainly  not.  Will  it  not  be  pru- 
dent to  diminish  the  extent  of  this  evil  by  putting  down  this  bunk,  which  is  the 
fountain  from  which  the  whole  system  Hows?  li  is  of  little  importance,  as  it 
regards  the  internal  trade  of  a  country,  what  constitutes  the  representation  of 
property.  Paper,  iron,  or  any  thing  else  which  passes  current,  will  answer 
every  purpose  of  barter  and  trade:  but,  in  its  commerce  abroad,  it  is  indispen- 
sable that  the  circulating  medium  should  be  equally  valuable,  and  readily  ac- 
knowledged among  all  commercial  nations:  otherwise,  all  the  operations  of 
commerce,  carried  on  with  money,  will  be  abandoned,  or  prosecuted  under 
disadvantages  equal  to  the  difference  in  the  value  of  the  currency  at  home  and 
abroad.  In  countries  actively  engaged  in  business,  this  branch  of  trade  is  not 
only  great  in  amount,  but  by  far  the  most  profitable.  How  unwise,  therefore, 
not  only  to  substitute  for  the  precious  metals  paper  currency,  whose  value  is 
confined  to  the  United  States,  but  to  augment  the  quantity  until  it  depreciates 
even  among  ourselves. 

I  cannot  sufficiently  express  my  apprehension  at  a  state  of  things  which  ex- 
poses us  to  irreparable  injury,  whenever  a  foreign  nation  shall  interrupt  our 
commerce,  or  my  regret  at  the  daily  ascendency  of  this  fatal  policy.  In  my 
opinion,  sir,  the  true  corrective  will  be  applied,  if  the  Government,  instead  of 
receiving  the  paper  of  a  particular  bank  in  payment  lor  the  revenue,  shall  re- 
quire specie  as  the  only  tender.  Such  an  operation  would  secure  to  the  coun- 
try its  due  proportion  of  the  precious  metals,  would  restrain  within  rational 
and  useful  limits,  the  circulation  of  paper,  would  insure  stability  to  the  mo- 
neyed institutions,  save  the  people  from  the  dreadful  scene  of  bank  swind- 
ling which  is  exhibited,  and  restore  that  equality  of  trade  with  foreign  nations, 
which  depends  upon  the  fixed  value  of  the  circulating  medium.  I  am  far 
from  intimating  that  banks  are  useless,  when  established  with  a  due  regard  to 
the  actual  wants  of  the  country.  Measured  by  that  standard,  they  form  the 
chief  resource  of  industry,  lubricate  the  wheels  of  commerce,  and  accelerate 
their  motion — but  the  constitution  has  wisely  entrusted  this  measurement  to 
the  States;  they  are  the  most  competent  judges.  If  the  Bank  of  the  United 
States  tended  to  restrain  the  multiplication  of  banks,  and  the  ruinous  emis- 
sion of  paper,  I  acknowledge  it  would  be  a  powerful  argument  in  its  favor — 
it  would  go  far  to  satisfy  me  of  its  expediency.  But,  instead  of  producing 


I 

144  BANK  OF  THE  UNITED  STATES. 

this  effect,  we  have  seen  them,  like  mushrooms  hi  a  genial  soil,  spring  up  un- 
der its  fostering  protection.  The  Bank  of  the  United  States  has  an  interest 
in  the  multiplication  of  similar  institutions,  because  they  all  tend  to  secure  it 
from  danger,  and  enable  it  to  increase  the  discounts  to  the  greatest  amount. 
Before  the  United  States  Bank  can  be  affected,  all  the  other  banks  must  be 
ruined;  because  the  advantage  of  public  deposites  and  the  great  extent  of  ca- 
pital, will  afford  the  means  of  averting  the  storm.  What  has  been  the  fact 
upon  this  subject?  Have  not  the  most  shameful  systems  of  bank  swindling 
been  practised?  The  State  of  Massachusetts  found  it  necessary  either  to  sup- 
press her  banks  or  limit  their  discounts.  They  found,  upon  examining  trie 
vaults  of  the  banks,  the  whole  of  them  did  not  contain  specie  equal  to  the 
paper  issued  by  a  single  one.  Yes,  sir,  instead  of  finding  a  sound  body,  they 
found  a  corpse  rotten  and  decayed;  the  specie  had  fled,  and  the  public  were 
left  without  the  prospect  of  remuneration.  Have  you  forgotten  the  Bank  of 
Rhode  Island?  This  bank  had  issued  notes  to  the  amount  of  $800,000  upon  a 
capital  of  $45.  Will  gentlemen  tell  me,  the  Bank  of  the  United  States  has 
checked,  or  will  keep  down  in  future,  similar  impositions?  I  am  justified  in 
considering  tin's  bank  instrumental  in  depreciating  the  currency  of  the  coun- 
try, and  banishing  its  substantial  capital. 

There  is  no  branch  of  industry  more  materially  injured  by  the  artificial 
state  of  f credit,  and  the  depreciated  currency  of  the  country,  than  manufac- 
tures. The  precarious  condition  of  commerce  has  naturally  turned  the  public 
attention  to  this  subject;  and  we  may  hope  the  time  is  not  distant,  when  the 
United  States  will  furnish  the  articles  of  substantial  utility  for  themselves. 
The  war  in  Europe,  by  deranging  the  operations  of  <he  manufacturer,  and  the 
taxes  with  which  his  industry  has  been  burthened,  have  conspired  to  give  a 
vigorous  impulse  to  them  here.  But,  sir,  we  shall  probably  witness  their  de- 
struction, by  the  rapid  depreciation  of  paper,  which  arises  from  the  price  of 
labor,  and  impedes  the  accomplishment  oi  this  most  desirable  object.  The 
exchange  of  labor  between  the  inhabitants  of  America  and  the  old  world,  has 
-always  been  disadvantageous.  We  have  not  only  paid'full  profits  upon  the 
capital  and  labor  employed  in  the  production  of  what  is  consumed,  but  we 
have  paid  the  taxes  which  the  prodigal  Governments  of  Europe  have  laid  upon 
them. 

Upon  this  subject  a  strong  appeal  has  been  made  to  our  feelings;  it  has  been 
said  the  dissolution  of  the  bank  will  produce  the  most  serious  pressure  in  the 
community,  and  will  devote  numbers  to  ruin.  I  am  confident  no  man  would 
be  more  gratified  than  myself,  to  afford  relief  to  those  who  may  suffer,  if  I  was 
not  precluded  by  constitutional  difficulties.  \Vhile  I  admit  the  sufferings  of 
individuals  will  be  great,  I  am  equally  convinced  the  picture  is  highly  color- 
ed, and  the  facts  exaggerated. 

The  time  when  the  charter  expires  has  been  known  to  every  person;  the 
presumption  against  its  renewal,  strong.  How  can  you,  therefore,  believe  the 
creditors  of  the  bank  have  made  no  provision  to  meet  the  event?  It  is  scarcely 
possible  to  conceive  that  funds  have  not  been  provided  to  extricate  themselves. 
When  I  say  the  presumption  against  the  renewal  of  the  charter  has  been 
strong,  I  do  not  allude  so  much  to  the  sentiment  in  this  House,  as  to  the  so- 
lemn declaration  of  the  President  of  its  unconstitutionality. 

[Mr.  Macon  called  Mr.  Bunvell  to  order,  for  using-  the  name  of  the  President  in 
debate.] 

Sir,  the  violation  of  order  has  been  inadvertently  committed;  his  name  was 
not  used  to  produce  any  effect  here,  because  I  really  am  unacquainted  with 
his  present  opinions,  except  as  I  infer  them  from  his  speech  in  '91.  I  cannot 
suppose  he  would  use  one  set  of  arguments  then,  and  act  upon  another  now. 

Under  such  circumstances,  it  would  be  criminal  in  this  House  to  yield  con- 
stitutional objections,  and  surrender  important  considerations  of  policy,  to 
shelter  those  who  have  shut  their  eyes  to  the  law.  The  Legislature  cannot 
resist  with  too  much  firmness  such  an  appeal;  it  is  placing  them  at  the  mercy 
of  a  few,  and  sacrificing  the  general  good  to  the  clamors  or  follies  of  the  im 
provident. 


ON  THE  BILL  TO   RENEW  THE   CHARTER   OF    1791. 

It  has  been  said  that  $3,000,000  in  specie  will  be  required  from  circula- 
tion, to  meet  the  demands  of  the  bank,  and  that  the  amount  cannot  be 
procured  in  the  United  States.  I  venture  to  assert,  upon  the  statement 
furnished  by  the  bank  agents,  the  sum  will  not  exceed  $2,500,000  over 
and  above  the  specie  in  the  vaults  of  the  bank.  After  paying  and  settling 
with  the  community,  the  bank  will  owe  to  the  stockholders  $10,400,000. 
If  they  retain  the  specie  now  in  the  vaults,  amounting  to  $5,000,000,  the  de- 
mand upon  the  community  will  IKS  lessened  to  that  extent;  if  it  is  paid  out  to 
meet  the  return  of  their  notes  in  circulation,  it  passes  into  other  banks  and 
will  return  to  them:  so  that  in  either  case  it  will  constitute  a  fund  to  pay  the 
stockholders,  and  reduce  their  demand  to  $5,400,000;  from  this  sum  must  be 
deducted  $500,000,  the  amount  of  real  estate  belonging  to  the  corporation, 
$•2,750,000  loaned  to  the  Government,  and  about  $300,000  in  suit;  leaving  a 
balance  not  exceeding  $2,500,000.  Will  it  be  said  that  this  sum  cannot  be 
raised  in  a  country  whose  export  of  specie  for  the  last  year  amounted  to 
$8,000,000?  Will  it  be  said  the  system  of  banks  has  reduced  us  to  this  low 
ebb,  and  yet  we  are  called  upon  to  perpetuate  the  evil?  From  this  view  of  the 
subject,  it  appears  that  the  creditors  of  the  bank  will  be  compelled  to  raise 
$7,500,000. 

Can  gentlemen  seriously  believe,  that  this  sum  will  ruin  the  country?  If, 
sir,  we  judge  from  the  number  of  banks  springing  into  existence,  in  the  differ- 
ent States,  the  conclusion  is  irresistible,  that  their  is  a  redundancy  of  capital, 
more  than  ample  to  accommodate  all  the  debtors  of  the  bank.  Scarcely  a 
single  legislature  has  separated,  without  granting  charters.  You  have  this 
morning,  deposited  in  Committee  of  Ae  Whole,  the  cemetry  for  the  District, 
live  banks,  with  an  aggregate  capital  of  three  and  an  half  millions.  This 
thing  must  be  downright  cheaiery.  or  their  is  a  redundancy  of  capital.  If  it  is 
fraudulent,  the  sooner  the  delusion  is  dissipated,  the  better. 

I  shall,  for  the  present,  admit  these  applications  are  evidences  of  capital,  and 
contend  they  will  operate  effectually  to  relieve  the  community.  But,  sir,  it 
will  be  found,  from  the  statement  of  the  bank  agents,  the  directors  have  con- 
tracted debts,  nearly,  or  quite  equal  to  the  amount  ilue  them,  and  that  they 
will  find  difficulty  in  meeting  the  claims  against  them.  These  claims  will  na- 
turally be  transferred  to  those  who  are  indebted,  or  deposited  in  State  banks, 
where  they  will  constitute  funds,  upon  which  accommodation  can  be  extended. 
The  moment  you  destroy  the  bank,  the  notes  it  has  issued,  to  the  amount  of 
$5,000,000,  will  return:  the  deposited,  amounting  to  nearly  eight  millions  and 
an  half,  will  come  into  the  market;  these,  added  to  the  private  capital  which 
tan  be  spared,  will  supply  the  means  of  sustaining  the  shock. 

1  feel  confident  the  removal  of  public  deposites  will  go  far  to  remedy  the 
evil-  The  loan  obtained  from  (he  bank,  and  payable  the  1st  of  January,  will 
add  to  the  facility  of  satisfying  the  claims  of  the  bank.  Even  the  funds  of  the 
institution  itself,  will  rapidly  glide  into  channels  of  profit,  and  contribute  to 
the  object.  Thus,  sir,  this  omnipotent  association,  whose  influence  pervades 
the  continent;  whose  nod  dispenses  protection,  or  ruin,  like  an  angry  cloud, 
will  be  disarmed  by  the  conducting  powers  of  the  State  banks;  there  will  be  no 
explosion.  Its  substance  will  be  secreted,  mixed  with  their  juices  and  strength- 
en the  general  system, 

In  the  public  discussions  upon  this  subject,  we  have  been  told,  the  quantity 
ot  specie  has  been  reduced  below  the  actual  wants  of  trade;  and  that  the  por- 
tion of  stock  held  by  foreigners,  will  be  carried  abroad  in  money.  Those  who 
endeavor  to  alarm  us  in  this  way,  are  either  ignorant  themselves,  or  they  cal- 
culate largely  upon  our  credulity.  It  is,  sir,  a  melancholy  fact,  that  specie  has 
been  almost  banished  from  circulation,  by  paper,  and  from  the  vaults  of  the 
banks  by  exportation*  abroad,  in  a  commerce  which  does  not  replace  it.  It  is 
equally  true,  that  this  bank  has  contributed,  more  than  any  other,  to  produce 
this  deplorable  result.  But  it  is  evident,  the  exportation  must  be  limited  in 
amount,  or  the  import  of  specie  commensurate,  if  we  do  not  continue  the  pre- 
sent system,  which  threatens  us  with  a  cunvncy  exclusively  paper. 
19 


146  BANK  OF  THK  UNITED  STATKS. 

As  to  the  exportation  of  specie,  by  the  foreign  stockholders,  nothing  can  be 
more  absurd.     Have  not  the  motives  which  induced  them  to  invest  their 


than  I  do,  if  you  suppose  they  will  quit  a  country  whose  institutions  are  safe, 
and  whose  property  is  advancing  rapidly  in  value.  But,  laying  aside  conside- 
rations which,  of  themselves,  are  sufficient  pledges,  the  rate  of  exchange  ren- 
ders the  remittance  of  specie,  particularly  silver,  altogether  improbable. 
VVpuW  any  man  in  his  senses  ship  specie  to  England,  when  he  can  purchase 
bills  of  exchange,  eight  or  ten  per  cent,  below  par?  Will  he  lose  four  per 
cent,  insurance,  freight,  and  commissions,  when  he  can  make  eight  or  ten  by 
remittances  in  bills  of  exchange?  These  questions  carry  conviction  to  every 
man,  unless  he  supposes  money  is  worth  more  than  this  difference  over  the 
paper  currency  of  the  country.  Although  the  exchange  is  in  favor  of  Holland, 
four  per  cent,  it  would  be  cheaper  to  lose  that  amount,  than  pay  fifteen  or 
twenty  per  cent,  insurance,  &c.  for  the  transportation  of  specie,  subject  to 
risk  from  British  cruisers,  and  seizure  from  French  rulers  in  port.  No 
one  will  say  that  the  Dutch  have  any  motives  to  draw  their  funds  from  the 
United  States. 

After  showing,  I  hope  to  your  satisfaction,  that  specie,  cannot  be  remitted 
in  the  actual  state  of  things,  I  will  suppose  foreign  stockholders  should  trans- 
fer their  capital;  how  would  that  operation  affect  this  country?  From  what 
I  have  said,  it  appears  that  the  one  million  held  in  Holland,  and  six  millions  in 
England,  if  withdrawn  from  the  United  States,  would  only  be  an  exchage  of 
funds  with  the  American  merchant,  and  would  not  affect  the  money  in  circu- 
lation. I  confidently  believe,  the  present  embarrassments  of  merchants  arise 
from  the  spoliations  of  the  belligerents,  and  principally  from  the  accumulation 
of  funds  in  England,  which  they  cannot  withdraw  but  at  a  great  loss.  For 
some  time  past  shipments  have  been  almost  confined  to  England;  the  prices 
have  been  goad,  and  the  proceeds  far  above  the  demand  for  English  merchan- 
dise; added  to  this,  whenever  shipments  have  been  made  elsewhere,  the 
profitable  purchases  of  bills  have  increased  their  funds  in  Great  Britain. 

The  fact  is  clearly  demonstrated  from  the  state  of  exchange,  which,  for 
the  first  time,  is  greatly  in  our  favor.  If,  then,  the  stockholders  should  remit 
their  funds  by  bills  of  exchange,  it  would  bring  six  millions  into  the  market, 
and  not  only  relieve  the  American  merchant  from  the  unfavorable  state  of  ex- 
change, but  would  at  once  furnish  the  means  of  meeting  his  engagements  and 
relieving  his  embarrassments:  it  would  be  a  loss  of  that  much  capital  to  the 
United  States;  but,  we  can  bear  the  loss,  as  is  evident  from  the  rapidity  with 
which  new  capital  is  supplied  to  form  new  banks.  Should  they  give  a  prefer- 
ence to  moneyed  institutions  here,  the  community  would  be  equally  relieved. 

It  may  be  asked,  if  foreign  capital  remains,  shall  we  not  be  exposed  to  its 
influence?  I  do  not,  sir,  object  to  the  use  of  foreign  capital  by  individuals,  but 
I  never  will  consent  to  organize  it  under  the  patronage  of  the  Government.  In 
the  hands  of  an  individual^  its  influence  is  comparatively  insignificant.  Com- 
bined in  the  form  of  a  national  bank,  it  becomes  truly  formidable  to  the  best 
interests  of  the  nation;  besides,!  well  know  that  individuals,  who  can  obtain 
money  at  an  interest  less  than  the  profit  it  yields,  cannot  be  prevented  by 
law  from  borrowing.  In  this  form,  it  may  subserve  the  purposes  of  industry, 
but  cannot  control  public  opinion,  or  obstruct  public  measures.  If,  sir,  the 
pressure  upon  the  community  should  not  be  removed  in  the  mode  I  have  sug- 
gested, the  bank  will  naturally  proceed  in  the  collection  of  its  debts,  in  a  man- 
ner best  calculated  to  secure  itself.  I  cannot  imagine, measures  will  be  adopt- 
ed which  will  force  the  merchants,  either  to  fail,  or  to  re  fuse  payment.  Such 
conduct  on  the  part  of  the  bank,  would  be  wantonly  cruel  and  unjust,  and 
would  probably  terminate  in  the  greatest  losses.  In  the  event  of  such  a  pro- 
cedure, the  merchants  would  compel  the  bank  to  resort  to  the  ordinary  course 
for  the  recovery  of  debts,  and.  under  such  circumstances,  1  do  not  apprehend 
their  credit  would  be  affected  with  other  banks.  The  alarming  scarcity  of 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

specie,  produced  by  the  facility  which  the  bank  has  furnished,  to  procure  it 
for  exportation,  and  speculations  in  bills  sold  by  the  agents  of  the  British  for 
the  use  of  their  troops  in  Canada,  and  the  West  Indies,  cannot  be  too  strong- 
ly impressed  on  the  mind  of  the  committee,  or  too  soon  stopped  by  the  Govern- 
ment. It  is  true,  that  a  temporary  inconvenience  results  from  the  latter  mode 
of  exportation,  because  it  is  soon  brought  back  in  return  tor  provisions,  suppli- 
ed by  the  Middle  States.  It  must  be  known,  sir,  to  you,  why  the  import  of 
specie,  which  nurtured  the  East  India  trade,  has  ceased,  since  the  revolution 
in  Spanish  America,  which  opened  the  direct  trade  to  the  English  for  supplies 
of  British  and  East  India  manufactures,  and  the  facility  of  shipping  specie 
direct  to  Spain,  without  the  intervention  of  bills  of  exchange  obtained  in  this 
country,  on  Europe,  the  supply  of  American  produce  to  the  Spanish  colonies, 
has  never  been  more  than  sufficient  to  keep  up  the  necessary  quantity  for  out- 
own  use,  and  for  the  India  trade,  to  an  extent  limited  by  our  own  wants; 
hence,  the  disadvantages  of  the  napcr  system,  which  furnishes  the  means  of 
prosecuting  this  trade  after  its  utility  is  done  a  way.  Gentlemen  will  tell  me 
tins  evil  will  correct  itself,  and  that  the  merchants  will  not  persist  in  a  branch 
of  business,  unprofitable  for  want  of  markets.  I  readily  admit  this  position 
to  be  correct;  but,  before  all  those  sanguine  adventurers  will  be  convinced, 
who  are  tempted  by  the  accommodation  of  the  bank,  we  shall  be  so  far  drained 
of  our  real  capital,  as  to  be  incapable  of  sustaining  public  confidence,  in  the. 
stability  of  our  money  institutions.  There  is  one  effect,  from  the  extent 
to  winch  the  banking  system  has  been  pushed  in  this  country,  which  deserves 
serious  attention.  I  think  the  capital  of  the  banks  should  rather  fall  short, 
than  exceed  the  demand  of  those  engaged  in  trade;  whenever  there  is  an  excess 
of  capital,  the  competition  will  be  among  the  banks  to  lend,  and  they  will  ad- 
vance funds  to  those  who  are  not  entitled  to  credit.  This  tictitious  credit, 
'/tvon  to  individuals  without  properly,  will  expose  the  fanners  and  planters  to  the 
most  serious  injury  5  because,  whenever  they  fail,  their  property  will  go  entire- 
ly into  the  cotters  of  the  bank,  or  the  hands  of  their  endorsers.  In  Baltimore, 
where  the  bank  capital  lias  always  exceeded  the  demand,  by  solvent  custom- 
ers, and  where,  to  give  full  employment  to  their  funds,  the  banks  have,  been 
induced  to  accommodate  mere  speculators;  failures  have  happened  to  the 
amount  of  a  million,  without  property  to  pay  the  creditors  twenty  cents  in  the*, 
dollar.  This  has  been  the  effect  of  excessive  bank  capital.  [A  gentleman 
from  Maryland  corrected  Mr.  Burwell,  by  stating  that  the  failures  had  ex- 
ceeded, i»i  the  a.nsivgate,  the  sum  he  had  mentioned,  but  in  no  single  instance, 
had  the  loss  to  rrednors  exceeded  600,000  dollars.]  [  stand  corrected;  only 
600,000  dollars;  why,  sir,  this  moderate  sum  would  ruin  a  whole  country,  if 
it  had  fallen  upon  the  farmers.  If  the  apprehensions  of  the  public  should  co- 
erce you  to  renew  the  charter  at  this  time,  I  shall  consider  it  perpetual.  The 
same  means  which  secured  it  now,  will  not  be  forgotten,  or  neglected,  hereaf- 
ter. You  may  rest  assured,  the  magic  terror  of  bankruptcy  will  be  reviv- 
ed, when  there  is  occasion.  Perhaps  the  growing  wealth  of  the  people,  may 
hereafter  raise  them  above  the  control  of  the  bank,  with  ten  millions  capital, 
but  if  you  should  unfortunately  adopt  the  favorite  project  of  some,  to  establish 
a  grand  national  bank,  with  a  capital  stock  equal  to  30,000,000  dollars;  if, 
afterwards,  you  keep  pace  with  the  growth  of  the  nation,  you  may  indeed  de- 
spair of  all  control  over  it  in  future.  It  will  become  so  interwoven  with  the 
fiscal  transactions  of  society,  and  so  intimately  blended  with  the  existence  of 
the  Government,  that  their  duration  will  be  co-equal;  the  dangerous  power  of 
a  bank,  extended  over  the  continent,  with  a  capita!  which  would  necessarily 
embrace  in  its  funds,  all  the  individuals  of  wealth  and  influence,  would  pro- 
duce the  same  effect  with  a  national  debt,  to  that  amount;  and  when  you  re- 
collect, that  this  machine  will  be  controlled  and  managed  by  the  executive 
branch  of  the  Government,  you  cannot  but  feel  the  most  serious  apprehension 
of  the  consequences.  Sir,  I  do  not  discuss  this  question  with  party  feelings; 
I  look  forward  to  the  time  when  the  bank  and  Government,  will  feel  in  unison, 
and  act  in  concert;  the  opposition  of  the  bank  is  temporary,  and  will  soon 
yield  t  >  its  obvious  interest.  It  is  that  period  to  which  my  fears  arQ  Directed.. 


BANK    OF   THE    UNITED    STATES. 

Who  can  doubt  (hut  the  present  misunderstanding  is  the  result  of  momentary 
csuses?  Yes,  sir,  the  quarrel  is  an-  unnatural  one,  explanations  will  take 
place,  reconciliation  will  ensue,  and  then  we  may  deplore  their  intimate  friend- 
ship, infinitely  more  than  their  hostility  now. 

Banks  are  commercial  institutions;  the  first  impulse  of  their  nature  is  to 
make  money,  and  support  the  power  which  can  promote  their  profits;  the 
individuals  concerned  in  them  will  feel  political  passions,  and  may  indulge 
them,  but  they  will  learn,  from  experience,  the  wisdom  of  suppressing  their 
passions  when  they  hazard  the  loss  of  profit  and  patronage.  1  have,  there- 
fore, felt  no  disposition  to  know  any  thing  about  the  directors,  or  to  hear  the 
instances  of  political  intolerance  and  individual  favoritism.  It  would  be  silly 
to  found  our  views  of  the  tendency  of  such  an  institution  upon  its  conduct 
during  a  particular  period.  I  am  against  giving  any  set  of  men  such  exorbi- 
tant power  over  the  persons  and  property  of  the  community;  I  am  opposed  to 
a  moneyed  aristocracy  which  can  hunt  down  whoever  may  be  offensive  to  them, 
and  riot  from  hostility  to  the  particular  persons  who  now  compose  the  bank. 
Sir,  the  time  may  arrive  when  the  Government  may  fall  into  the  hands  of 
men  whose  policy  may,  in  my  estimation,  lead  to  the  destruction  of  the  con- 
stitution, and  the  corruption  of  public  virtue.  Would  you  wish  to  see  such 
men  bolstered  up  by  the  influence  of  a  national  bank?  Would  you  be  satis- 
fied to  see  the  good  sense  of  the  country  hood-winked  by  money  influence? 
A  corporation,  possessed  of  such  ample  funds,  could  control  presses  or  esta- 
blish them  to  support  the  most  iniquitous  men,  and  advocate  the  most  detesta- 
ble principles.  You  should  bear  in  mind  that  this  influence  cuts  both  ways; 
and  it  is  better  to  leave  public  opinion  unfettered,  trusting  to  the  sound  sense 
and  discretion  of  the  People,  free  from  the  operation  of  all  extraneous  power. 

What  would  the  world  say  if  you  should  demolish  this  bank  to  create  ano- 
ther? Is  there  a  man  in  the  community  who  would  not  condemn  you,  and 
justly  reprobate  a  policy  so  short  sighted  and  selfish?  Such  conduct  would 
give  full  scope  to  swindling  and  speculation;  and  scenes  which  stain  with 
shame  the  history  of  this  Republic,  would  be  renewed.  Sir,  the  system  of 
paper  credit,  against  which  I  have  entered  my  protest,  and  to  which  I  attri- 
bute the  artificial  and  insecure  state  of  this  country,  deserves  nothing  from 
you.  You  need  not  violate  the  constitution  to  preserve  and  extend  it;  with- 
out your  fostering  care,  enough  vyill  remain  to  alarm  those  who  prefer  solid 
wealth  to  the  mere  appearance  of  it;  although  those  who  think  the  wealth  of 
a  nation  can  be  augmented  by  printing  a  few  reams  of  paper  will  be  dissatis- 
fied, they  exult  in  the  deception  and  premature  prosperity  which  flows  from 
public  delusion,  and  will  be  overthrown  the  first  moment  your  real  condition 
may  be  tested  by  difficulties.  I,  sir,  have  been  accustomed  to  think  the 
wealth  of  a  nation  consisted  in  its  productive  labor,  and  its  capital  could  be 
safely  augmented  only  in  the  ratio  of  the  difference  between  its  consumption 
and  productive  labor.  This  is  the  true  mode  of  acquiring  capital;  the  process 
will  be  slow,  but  the  advance  will  be  permanent.  It  will  depend  upon  prin- 
ciples of  economy,  industry,  and  steady  exertions;  it  is  incompatible  with 
prodigality,  speculation,  and  profligate  acquisition  of  wealth.  Virtue  is  the 
basis  of  one,  delusion  and  imposture  of  the  other;  a  people  thus  situated, 
steadily  exerting  its  powers,  will  furnish  ample  means  to  procure  circulating 
medium,  and  prudent  habits  will  add  to  it  with  sufficient  rapidity;  I  have 
always  preferred  being  a  happy  to  a  splendid  nation.  Sir,  I  have  now  closed 
my  remarks;  the  particular  situation  assigned  to  me,  by  the  House,  in  rela- 
tion to  this  subject,  has  compelled  me  to  state  the  extent  of  my  objections  to 
the  bill.  I  have  carefully  refrained  from  expressions  which  could  wound  the 
feelings,  or  impeach  the  motives  of  those  who  differ  from  me  in  opinion.  I 
have  no  disposition  to  say  any  thing  about  the  transactions  of  the  bank;  they 
are  all  unknown  to  me,  and  I  care  nothing  about  them.  My  conscientious 
belief  is,  that  the  law  was  unconstitutional,  and  I  sincerely  trust  we  shall 
destroy  what  has  so  long  defaced  its  original  purity — close  up  the  breach 
which  has  been  made,  and  cement  it  by  a  vote  upon  principle.  I  confess  the 


ON  THE  BILL  TO   RENEW  THE  CHARTER  OF   1791. 

consolation  I  shall  feel,  in  the  success  of  my  motion,  will  be  greatly  diminish- 
ed if  it  obtains  by  the  intervention  of  other  motives. 

When  he  concluded,  the  committee  rose  and  reported  progress,  and  the 
House  adjourned. 

JANUARY  17,  1811. 

Same  question  depending: 

Mr.  FISK.  Mr.  Chairman:  I  regret  that  we  arc  called  upon  to  vote  for  or 
against  striking  out  the  first  section  of  this  bill,  at  this  time.  I  could  have 
wished  that,  upon  a  bill  of  so  much  interest  and  importance,  we  could  have 
proceeded  to  have  filled  the  blanks,  and  made  such  amendments,  as  would 
have  obviated  many  objections  which  may  be  urged  against  it  in  its  present 
form.  I  am  not  prepared  to  give  my  vote  in  favor  of  a  renewal  of  the  charter  of 
the  Bank  of  the  United  States,  either  upon  the  terms  upon  which  it  was  ori 
ginally  granted,  or  in  the  manner  contemplated  by  this  bill;  .vet,  upon  condi- 
tions less  objectionable.  I  should  feel  myself  bound  to  vote  in  favor  of  a  re- 
newal. But  the  question  presented  unon  this  motion  is  not  upon  what .  term> 
this  charter  shall  be  renewed;  but  wnether  it  shall  be  renewed  upon  any 
terms,  subject  to  any  conditions  Congress  may  impose. 

In  this  view,  I  consider  it  the  most  important  subject  upon  which  this  Con- 
gress will  be  required  to  act.  It  is  determining  a  question,  which  is  connected 
with  our  finances,  with  the  circulating  medium  of  the  country,  and  with  our 
agricultural,  commercial,  and  manufacturing  interests;  and,  as  such,  it  cannot 
but  be  interesting  to  eveiy  cla»  of  our  citizen>. 

The  interests  and  prosperity  of  the  Tinted  States,  are  not  only  intimately, 
but  inseparably,  connected  with  trade.  The  market  of  the  farmer  depends 
greatly  upon  the  merchant  and  the  shipper.  And  the  price  and  demand  of 
every  article  of  produce  i^in  a  great  degree,  regulated  by  the  difficulties  or  fa- 
cilities of  payment.  Let  the  difficult?  of  paving  be  increased,  and  the  price 
of  produce  immediately  falls;  tor  the  demand  for  exportation  becomes  very 
limited,  the  markets  are  overstocked,  and  prices  reduced.  Any  .sudden 
check  to  our  commerce,  \\hether  produced  by  our  own  municipal  regulations, 
or  the  outrages  of  foreign  power.-,  checks  the  market  and  the  price  of  produce, 
so  that  not  only  the  merchants,  but  the  farmers,  feel  its  effects.  1  scarcely 
need  recur  to  the  history  of  the  times,  \\hen  trade  was  principally  Appended 
in  this  country,  to  show  how  severely  the  suspension  operated  upon  every 
class  of  our  citizens  and  in  every  part  of  the  country.  This  period  in  our 
political  annals  will  be  long  remembered.  So  great  was  the  distress  in  some 
States,  and  agricultural  States  too,  that  their  legislatures  deeded  it  necessa- 
ry, for  the  protection  of  the  debtor  from  the  power  of  his  creditor,  to  stay  the 
administration  of  justice,  and  prohibit  by  statute  the  issuing  of  an  execution 
for  the  collection  of  any  debt. 

This  proves  the  connexion  which  subsists  between  the  two  great  agricultu- 
ral and  commercial  interests  of  this  country. 

Agriculture,  commerce,  and  manufactures,  constitute  the  source  of  our 
wealth,  revenue,  and  prosperity.  To  foster  and  cherish  the  principles  unon 
which  rests  our  existing  hopes  and  future  prospects,  can  never  be  a  question 
of  doubtful  policy  with  a  wise  and  patriotic  legislature. 

We  have  seen  that  commerce  is  essential  to  our  interests;  but  commerce 
will  not  flourish  without  credit.  It  never  has  prospered  independent  of  ere  • 
dit.  As  credit  is  essential  to  trade:  so  is  punctuality  to  support  credit. 
Look  at  the  business  of  any  commercial  people  and  see  the  integrity  and 
fidelity  with  which  punctuality  is  maintained  iu  order  to  support  their  credit. 

For  several  centuries  past,  banks  have  been  the  successful  medium  through 
which  credit  has  not  only  been  preserved,  but  great  wealth  acquired.  Tins 
assertion  is  warranted  by  the  history  of  these  institutions,  and  of  the  countries 
where  they  have  been  patronized.  The  first  bank  established  in  Europe,  was 
at  Genoa,  in  1407,  401  years  ago:  this  was  soon  followed  by  one  at  Venice. 

The  Bank  of  Amsterdam  was  established  in  1609;  and  shortly  after,  those  of 
Hamburg  and  Rotterdam;  and  the  Bank  of  England  in  1094.  The  Royal 


150  BANK   OF   THE    UNITED    STATES. 

Bank  at  Paris  in  1718.  The  Bank  of  North  America  in  1784,  a  memorable 
period  in  our  history,  and  the  Bank  of  the  United  States  in  1791. 

All  these  different  institutions  show,  that  enlightened  legislators  have  enter- 
tained but  one  opinion  upon  this  subject  both  in  Europe  and  America,  for  the 
last  four  hundred  years.  They  have  seen  and  acknowledged  their  utility. 
Banks  have  long  since  been  considered  not  only  essentially  useful  in  the  trans- 
action of  commercial  concerns,  but  as  highly  necessary  to  aid  the  fiscal  opera- 
tions of  Government.  And  a  more  unanswerable  argument  cannot  be  urged 
in  favor  of  their  general  utility,  than  their  uniform  success;  to  this  may  be 
added  the  prosperity  of  the  people,  and  the  countries,  where  banks  have  been 
supported.  Their  immediate  advantages  arc,  a  convenient  circulating  medi- 
,uin ;  the  safe  depository  they  afford  tor  cash  and  funds.  And  they  serve  to 
keep  the  standard  of  money  steady  and  correct;  to  insure  punctuality;  to  pre- 
serve credit;  to  inspire  confidence,  and  to  promote  a  spirit  of  industry  and 
enterpnze.  They  are  not,  as  many  have  supposed,  in  their  nature  hostile  to 
government  and  dangerous  to  liberty.  They  rather  form  a  barrier  to  tyranny 
and  oppression.  Their  principal  business  is  to  lend  money  at  the  common 
rate  of  interest,  and  thus  prevent  usury.  The  owners  of  banks  are  generally 
rich  men,  who  have  not  only  their  personal  liberty,  but  a  large  property  to 
risk,  by  sedition,  treason,  and  rebellion.  It  is  their  interest  to  resist  oppres- 
sion. We  need  scarcely  point  to  the  continent  of  Europe  for  proof  of  the  fact, 
when  we  assert,  that  trade  and  banks  cannot  flourish  where  despotism  prevails. 
Despotic  power  generally  ruins  trade  and  banks,  but  no  instance  occurs  in 
history,  Where  banks,  not  under  the  control  of  government,  have  ruined  a  State. 
A  bank  owned  by  government,  and  under  its  command,  would  be  an  engine 
dangerous  to  the  people.  But  when  owned  by  individuals,  neither  the  peo- 
ple nor  the  government  have  any  thing  to  fear  from  it.  It  is,  then,  depend- 
ent on  both  for  its  business,  prosperity,  and  usefulness. 

With  the  evidence  which  both  history  and  experience  offers  to  our  reflec- 
tion, we  cannot  doubt  the  utility  of  banks,  nor  deny  but  that  they  have  been 
beneficial  to  us.  And  we  are  justified  in  the  conclusion,  that,  under  proper 
regulations,  they  may  subserve  the  best  interests  of  the  people  of  the  United 
States.  They  are  now  in  successful  operation  in  almost  every  State  in  the 
Union,  and  that  they  have  been  useful,  the  present  prosperous  state  of  the 
country  abundantly  proves.  We  enjoy  as  perfect  security  for  life,  liberty,  and 
property,  as  any  people  under  any  government  ever  did.  These  arc  the  great 
objects  of  a  good  government.  And  we  may  triumphantly  ask,  where  is  the 
nation  or  people  that  enjoy  these  with  more  freedom  and  safety  than  the  Ameri- 
can people  ?  A  parallel  for  our  liberty  and  prosperity,  for  the  last  twenty 
years,  is  not  to  be  found  in  the  history  of  man.  Our  wealth,  population  and 
resources,  have  increased  beyond  what  any  one  would  have  calculated,  or 
imagined;  and  beyond  what  strangers  and  foreigners  now  believe.  Industry, 
wealth,  and  contentment  pervade  every  quarter  of  our  country,  and  poverty 
and  oppression  are  unknown  to  our  citizens. 

in  1791,  the  year  this  bank  was  incorporated,  our  exports  amounted  to  about 
eighteen  millions  of  dollars,  and  in  1801,  they  had  increased  to  about  seventy- 
six  millions,  gaining  in  thirteen  years,  fifty -eight  millions;  and  our  tonnage  in 
about  the  same  proportion. 

Much  of  this  prosperity  is  to  be  attributed  to  the  active  capital,  which  has 
excited  industry  and  a  spirit  of  enterprize  among  us;  and  the  activity  of  this 
capital  has  been,  in  a  great  degree,  created  and  promoted  by  the  Bank  of  the 
United  States.  Its  operations  have  been  extensive  in  all  our  trading  towns. 
It  has  aided  in  loans  and  discounts,  and  assisted  in  the  collection,  sale-keep- 
ing, and  transmission  of  our  revenues.  It  has  been  the  depository  of  our 
treasury,  and  is  now  become  incorporated  with  the  administration  of  the  fis- 
cal department  of  our  Government.  The  connexion  which  it  has  formed  with 
almost  every  branch  of  business  in  the  country,  is  not  slight  and  trifling,  and 
so  easily  to  be  severed  as  some  seem  to  believe.  Its  operation  are  deeply  in- 
terwoven with  the  dealings  and  concerns  of  all  the  men  of  business  in  the 
United  State?. 


ON   THE    BILL   TO  RENEW    THE  CHARTER    OF    1791. 

With  a  capital  of  ten  millions,  it  has  furnished  accommodations  of  fifteen 
millions  a  year.  This  has  been  employed  principally  in  trade,  in  making 
prompt  and  cash  payments  to  our  farmers  lor  their  produce.  This  again  has 
furnished  to  our  citizens  a  ready  and  profitable  market  for  every  article  of  pro- 
duce. These  high  profits  of  a  good  market  have  gone  into  the  hands  of  the 
farmer,  to  cultivate,  improve,  and  enrich  the  country.  And  travel  through  any 
State  in  the  Union,  and  their  effects  may  be  readily  seen,  affording  a  prospect, 
consoling  and  elevating  to  the  philanthropist  and  the  patriot.  The  land  is 
highly  cultivated,  good  buildings,  turnpike  roads,  bridges,  and  other  expensive 
improvements  indicate  the  wealth  of  our  citizens,  and  the  prosperity  of  the 
country.  Money  has  been  freely  circulated;  trade  has  been  active;  produce 
high,  and  our  country  has  been  improved  by  these  unexampled  advantages  to  a 
degree  far  beyond  what  the  most  sanguine  calculations  twenty  years  ago  could 
have  anticipated.,'  And  yet,  sir,  we  are  gravely  told,  that  this  bank  has  nearly 
ruined  the  country;  that  it  is  threatening  our  best  interests  with  destruction! 
As  well  might  gentlemen  tell  us,  that  total  darkness  prevails  at  noon  day;  or 
that  the  sun  in  his  meridian  splendor  affords  neither  light  nor  heat  to  any  part 
of  this  globe. 

The  principal  portion  of  the  trade  and  business  of  the  United  States^ has 
been  conducted  by  a  paper  medium,  metallic  has  scarcely  been  seen.  The 
amount  of  this  circulating  medium  is,  say  fifty  millions.  Now,  what  is  pro- 
posed by  denying  a  renewal  of  the  United  States  Bank  charter?  That^  tills 
bank  shall  close  its  concerns,  and  of  course  stop  all  its  iccomodations.  This 
must  necessarily  check  and  change  at  least  one-third  of  the  circulating  me- 
dium of  the  country.  It  will  undeniably  require  $-3-1,000,000  to  be  directed  to 
one  operation,  and,  fora  time,  to  one  point:  for  the  capital  U  $10,000,000. 
This  is  to  be  collected  to  divide  among  the  stockholders.  There  are  $19,000,000 
due  to  the  bank?  this  must  be  collected.  This  will  occasion  a  demand  for 
this  amount  from  other  sources  ;  it  must  be  paid.  And  the  $5,000.000  in  (he 
bank,  makes  the  sum  $21,000.000  which  must  be  suddenly  called  in.  The 
effect  this  will  have  upen  the  \ariuus  interests  in  the  country,  can  neither  be 
described,  or  conceived.  It  must  inevitably  give  a  genera  I  and  heavy  shock  to 
all  paper  credit — this  credit  so  much  and  profitably  in  operation  must  recehea 
severe  if  not  a  mortal  wound.  And  what  substitute  have  we  lor  ihis,  when  it 
shall  be  destroyed?  Silver  and  gold  coin  cannot  be  relied  on.  There  is  not, 
from  the  best  estimate,  an  amount  to  exceed  $10,000,000  snecie  in  all  our  cities 
and  trading  towns,  and  this  will  be  collected  by  this  bank.  The  price  of  all 
stocks  and  every  kind  of  produce  and  species  of  property  must  suffer  a  great 
depression:  for  a  scarcity  of  money  enhances  its  value,  and,  consequently,  de- 
presses the  value  of  every  other  species  of  property.  That  this  sudden,  if  not 
total  change  in  our  system,  must  occasion  great  embarrassment,  produce  fail- 
ures, dissapointments,  and  distress  among  our  citizens,  is  certain. 

To  say  the  least  of  such  a  measure,  is  to  term  it  an  experiment  which  no 
well  regulated  State  has  ever  dared  to  make,  from  the  first  institution  of  civil- 
ized society  to  the  present  time.  Stronger  governments  than  ours,  in  risking 
such  an  experiment,  would  ensure  their  overthrow  and  ruin.  Perhaps  the 
good  fortune  of  the  American  people  is  a  sufficient  guarantee  against  all  the  dis- 
astrous consequences  which  any  other  people  might  experience  from  such  a 
measure.  But  I  own,  sir,  I  dare  not  incur  by  my  vote  the  awful  responsibility 
of  this  bold  and  untried  experiment,  unless  compelled  by  the  constitution. 
This, in  my  most  deliberate  opinion,  the  constitution  does  not  require. 

But  the  question  of  constitutionality  I  shall  not  at  this  time  discuss.  If  it  is 
a  question  which  Congress  may  discuss  and  decide,  it  was  discussed  and  de- 
liberately decided  at  the  time  this  charter  was  granted.  The  decision  it  then 
received  has  met  with  the  general  approbation  of  the  States  and  of  the  people. 
Branches  have  been  established  in  a  number  of  the  States,  and  the  bills  have 
circulated  without  opposition  or  difficulty  in  all.  And  counterfeiters  of  this 
paper  are  punishable  lor  forgery,  by  the  statutes  of  the  different  States.  For 
twenty  years,  this  institution  has  received  the  countenance  and  patronage  of 
the  Government.  In  this  patronage  there  has  been  no  difference  in  the  several 


152  BANK  OF  THE  UNITED  STATES. 

administrations,  unless  that  of  the    republican   administration  has  been  the 

most  extensive.     This  bank  has  been  employed  by  the  Government  to  keep  its 

treasure,  to  collect  and  transmit  the  revenue — and  the  Government,  it  will  be 

recollected,  originally  owned  two-fifths  of  the  capital,  which  has  been  sold  at 

a  great  advance.  The  United  States  owned  $2,000,000,  equal  to  5,000  shares. 

2493  shares  were  sold  in  171)0 — 7,  at  an  advance  of  25  per  cent.      $097,200 

25  per  cent,  gain,  298,600 

First  sale  amounted  to    -  $1,295,800 

287  shares  sold  in  1797,   -  $114,800 

At  20  per  cent,  advance,  gain,  22,960 

$137,760 

By  the  republican  administration  in  1802,  2,220  shares,  888,000 

At  45  per  cent,  advance,  gain,  -  399,600 

$1,287,600 

137,760 

1,295,800 


$2,721,160 

So  that  the  United  States  gained  $721,000;  ^and  of  this,  $399,600  has  been 
received  by  the  administration  under  Mr.  Jefferson.  This  sale  was  sanction- 
ed by  a  vote  of  the  House  of  Representatives,  although  it  was  to  a  foreigner,  an 
Englishman,  Mr.  Baring;  and  our  Government  gained  on  this  sale  $399,600. 
This  conduct  of  the  Government,  and  of  the  then  republican  majority  of  the 
House  of  Representatives,  did  not  evince  any  scruples  about  the  constitution- 
ality of  the  charter.  If  it  was  deemed  unconstitutional  and  dangerous  to  the 
liberties  and  best  interests  of  the  people  it  was  not  for  those  who  entertained 
this  opinion  to  give  it  countenance  and  support.  They  ought  rather  to  have  taken 
measures  to  have  checked  and  stopped  its  operations.  And  there  is  nothing  in 
the  argument  that  the  faith  of  Government  was  pledged  for  twenty  years,  and 
the  law,  although  unconstitutional,  could  not  have  been  repealed:  for  Con- 
gress cannot  pledge  the  faith  of  Government  by  an  unconstitutional  law.  If 
Congress  should  establish  a  monarchical  Government  in  any  State  or  Terri- 
tory, and  by  law  guarantee  it  to  the  people  for  twenty  years,  would  any  one 
dare  to  contend  that  the  faith  of  Government  was  pledged  for  twenty  years, 
and  this  law  could  not  be  repealed?  Certainly  not.  And  why?  Because  such 
a  law  would  be  unconstitutional.  It  would  be  the  duty  of  the  legislature  to 
repeal  it,  because  the  members  are  sworn  to  support  the  constitution.  And 
how  will  gentlemen  who  have  been  members  of  this  House  many  years,  and 
entertaining  the  opinion  that  this  charter  was  a  violation  of  the  constitution, 
and  voting  to  approbate  the  sale  of  the  bank  stock,  and  for  other  measures  to 
countenance  its  operation,  and  never  attempting  to  rid  the  country  of  this 
monster,  reconcile  their  conduct  with  their  duty?  It  can  only  be  reconciled 


mentary  to  the  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States." 

"  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
Slates  of  .ftmerica,  in  Congress  assembled,  That  the  president  and  directors 
of  the  Bank  of  the  United  States  shall  be,  and  they  are  hereby,  authorised  to 
establish  offices  of  discount  and  deposite  in  any  part  of  the  territories  or  depen- 
dencies, of  the  United  States  in  the  manner  and  on  the  terms  proscribed  in  the 
act  to  which  this  is  a  supplement.'' 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791. 

If  the  original  law  was  unconstitutipnal,  this  act  extending  the  powers  of 
the  corporation  was  equally  unconstitutional.  This  act  was  passed  by  a 
republican  Congress,  who  did  not  believe  that  the  original  charter  was  uncon- 
stitutional. It  is  but  lately,  very  lately,  that  constitutional  difficulties  have 
suggested  themselves  to  some  gentlemen.  Even  at  this  time,  the  administra- 
tion has  no  objection  to  the  constitutionality  of  the  measure.  The  report  of 
the  Secretary  of  the  Treasury,  the  proper  officer  to  speak  the  opinion  of  the 
Executive  upon  this  question,  is  my  authority  for  the  assertion,  that  the  Exe- 
cutive will  nave  no  constitutional  difficulties  to  encounter  in  passing  a  bill 
for  the  renewal  of  this  charter.  That  report  was  made  pursuant  to  a  resolu- 
tion of  this  House,  and  has  been  laid  upon  our  tables.  It  states  no  objections 
to  the  renewal  of  the  charter,  but  points  out  the  advantages  the  Government 
have  derived  from  this  bank,  and  hereafter  may  derive,  if  it  shall  be  continued. 
How  is  it  that  this  report  or  the  chancellor  of  the  exchequer,  upon  a  question 
of  financial  economy,  is  not  respected,  as  were  his  reports  in  former  times? 
Has  he  lost  his  talents  at  calculation?  Does  he  tell  unwelcome  truths,  or 
is  there  "  something-  rotten  in  Denmark?"  Great  exertions  have  been  made 
to  excite  sensibilities,  and  clamor  against  the  renewal  of  this  charter.  The 
money  changers,  stockbrokers,  and  speculators,  vultures  that  prey  upon  the 
vitals  of  the  community,  have  been  flying  through  the  country,  denouncing 
all  who  should  express  or  entertain  an  opinion  in  favor  of  the  measure.  But, 
I  trust,  we  are  not  yet  arrived  to  that  period  in  the  history  of  our  Govern- 
ment, when  Congress  must  legislate  under  the  hissings  of  the  gallery,  or  the 
denunciations  of  prostituted  or  misguided  presses.  If  we  are,  sir,  we  may 
bid  adieu  to  our  liberties.  Unawed  by  these  vaticinations,  it  becomes  us  to 
examine  patiently,  and  decide  deliberately  this  great  question  presented  to 
our  consideration  for  decision. 

In  examining  this  question,  we  are  naturally  led  to  inquire,  is  an  institu- 
tion of  this  nature,  in  the  present  state  of  our  country,  necessary — is  it  proper  ? 
and  in  pursuing  this  inquiry,  let  me  recur  to  the  report  of  the  Secretary  of 
the  Treasury;  and  see  if  the  aid  of  this  institution  is  required  in  the  administra- 
tion of  the  financial  department  of  the  Government.  Will  not  his  experience 
enable  him  to  answer  the  question  correctly  ?  To  what  better  authority  shall 
we  resort?  What  are  the  principal  duties  of  the  Treasury  Department?  The 
collection,  safe  keeping,  transmission  and  disbursement  of  public  moneys. 
For  performing  all  these  duties,  this  bank  has  been  the  efficient  and  faithful 
agent.  In  twenty  years  past,  it  has  collected  and  disbursed,  at  it  own  risk, 
not  less  than  100,000,000  dollars  public  moneys.  If  you  allow  the  revenue  to 
have  averaged  $5,000,000  a  year,  it  would  amount  to  this  sum  received  in, 
and  the  same  amount  transmitted  and  disbursed,  amounts  to  $200,000,000  in 
twenty  years.  Having  a  greater  capital  than  any  other  company  in  the  coun- 
try, the  public  money  is  more  secure  with  this  company  than  any  other.  It 
then  assists  essentially  in  the  safe  keeping  of  the  money,  and  this  the  report 
tells  us  is  one  of  its  advantages  to  the  Government.  But  its  more  essential 
assistance  to  the  Government  is  in  the  collection  and  transmission  of  the 
revenue  at  its  own  risk.  Our  revenues  are  secured  by  bonds,  and  these  bonds 
are  payable  at  this  bank  and  its  branches,  in  the  different  ports  of  collection. 


They  are,  accordingly,  lodged  in  the  bank  for  payment,  and  when  due,  they 
/  must  be  punctually  paid,  or  the  debtor  loses  his  credit  at  the  bank,  and  of  course 
in  the  commercial   world.     Hence  every  exertion  is  made  to  pay  at  the  time 


the  bond  becomes  due  ;  and  hence  our  revenue  has  been  paid  with  such 
scrupulous  punctuality  and  with  so  few  losses.  And  is  it  not  an  object  of 
magnitude,  that  we  provide  for  the  safe  and  sure  collection  of  our  revenues, 
which  in  prosperous  years,  may  amount  to  eighteen  or  twenty  millions  of 
dollars? 

Put  down  this  bank,  and  how  are  your  revenues  to  be  collected?  Through 
the  medium  of  the  State  banks?  You  do  what  no  prudent  man  in  his  individual 
concerns,  would  think  of  doing.  You  discard  a  faithful,  honest,  responsible 
agent,  whose  integrity  and  fidelity  you  have  known  for  twenty  years,  and  you 
place  your  estateln  the  hands,  and  at  the  disposal  of,  twenty  or  thirty  entire. 
20 


154  BANK  OF  THE  UNITED  STATES. 

strangers,  of  whose  character  and  responsibility  you  know  nothing,  nor  have/ 
the  means  of  acquiring  any  knowledge,  and  orer  whose  conduct  you  have  no 
control.  Should  an  individual  act  thus  with  his  property,  he  would  be  deemed 
to  have  lost  all  regard  for  it,  if  not  considered  a  madman.  In  resorting  ta 
the  State  banks,  we  are  offering. the  amount  of  our  revenue  as  a  bounty  for 
intrigues,  cabals,  and  faction,  through  the  country.  In  almost  every  State  there 
are  a  number  of  banks,,  and  each  will  endeavor  to  get  the  revenue  collected 
in  that  State,  to  keep  and  trade  with.  It  must  be  given  to  one  or  divided 
among  them  all.  If  one  is  selected  as  the  fovorite,  all  the  rest  become  jealous^ 
dissatisfied,  and  exert  their  capital  and  influence  against  the  favorite  bank,  and 
its  patron,  the  Government.  This  will  awaken  a  spirit  of  faction  in  every 
State,  yet  unknown  in  this  country^  If  all  are  to  be  gratified  in  their  request 
for  the  depositesTthe  Government  must  open  separate  accounts  with  all  the 
different  banks  in  the  country,  to  the  amount  of  fifty  or  sixty,  and  new  com- 
panies will  be  formed,  and  new  applicants  request  to  divide  the  business  and 
share  the  profits.  Indeed,  there  will  be  no  end  to  the  scenes  of  speculation 
and  intrigue  which  will  soon  appear,  if  this  course  is  adopted  by  the  Govern- 
ment. 

Again:  the  Government  have  no  means  of  ascertaining  the  system  or  princi- 
ples upon  which  these  different  banks  conduct  their  business;  they  are  creatures 
of  the  States,  and  in  no  way  answerable  to  the  General  Government.  The* 
treasury  cannot  inspect  their  books,  nor  ascertain  their  funds;  of  course  we 
must  be  ignorant  of  their  responsibility.  And  yet  we  are  to  deposite  moneys 
in  their  hands,  to  five  or  ten  times  the  amount  of  their  capital,  But  few  of 
the  State  banks  have  a  capital  beyond  a  million.  In  New  York  and  Boston 
the  revenue  deposites  may  amount  to  five  or  six  millions  a  year;  and  are  we  to 
intrust  this  with  a  corporation,  which,  if  it  failed r  would  not  pay  more  than  a 
fifth  part  of  it?'  Besides  you  may  not  be  able  to  command  these  moneys  when 
required,  if  left  with  those  over  whom  you  have  no  power.  It  is  possible 
some  of  these  State  institutions  may  be  hostile  to  your  Government;  they  may 
refuse  payment,  and  this  refusal  be  supported  by  the  State.  Shall  we  place 
our  public  treasure  under  the  control  of  States  which  can  order  out  their 
militia,  to  oppose  and  resist  the  execution  of  our  laws,  or  refuse  their  aid 
to  enforce  them? 

But,  suppose  the  revenue  collected,  and  safely  kept  by  these  different  banks, 
how  is  it  to  be  safely  arid  speedily  transmitted  to  different  parts  of  the  Union, 
to  answer  the  demands  of  Government,  and  at  whose  risk  and  expense?  Can 
the  opponents  of  this  bill  obviate  this  difficulty?  It  is  a  difficulty  of  a  two- 
fold nature,  first,  in  finding  a  safe  mode  of  conveyance,  and  secondly,  a  con- 
venient medium  to  transmit.  Specie  cannot  be  procured;  and  what  State 
bank  bills,  if  sent,  would  pass  current  in  every  part  of  the  United  States,  as 
the  bills  of  this  bank  do?  Carolina  and  Kentucky  bills  are  unknown,  and 
would  not  pass  in  New  York  and  Boston;  and  New  York  bills  would  not 
pass  in  Kentucky  or  Carolina,  New  England  bills  do  not  pass  in  New  York, 
but  at  a  considerable  discount.  But,  under  the  present  system,  if  Govern- 
ment have  five  millions  deposited  in  Boston,  and  it  is  required  to  be  paid  at 
New  Orleans,  a  draft  is  given  by  the  branch  in  Boston  upon  that  in  New  Or- 
leans, and  the  money  is  paid  at  the  latter  places  as  soon  as  the  mail  can  travel 
there. 

Again:  if  the  Government  is  to  take  the  risk  of  collecting  and  distributing 
the  revenue,  jet  us  inquire  what  this  can  be  done  for.-  The  revenue  amounts 
to,  say  ten  millions  of  dollars,  collected  and  paid  out  annually,  and  allow 
one  and  a  half  per  cent,  for  collecting,  and  one  and  a  half  per  cent,  for  trans- 
mitting, as  low  a  rate  as  it  would  be  done  for,  and  this,  on  twenty  millions., 
amounts  to  600,000  dollars  a  year,  a  sum  equal  to  pur  civil  list. 

But,  another  serious  evil  is  to  be  encountered  in  putting  down  this  bank; 

you  deprive  the  country  at  once  of  a  circulating  medium.    Silver  and  gold 

cannot  be  had;  and  what  paper,  but  that  of  the  United  States  Bank,  will  pass 

1  current  in  every  part  of  the  Union?    None.    You  can  outride,  in  twenty-four 

hours,  the  credit  of  any  other  bank  in  the  country.     This  evil  will  be  most 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

seriously  felt  in  the  interior.  It  will  at  once  check  emigration  from  the  North 
•and  East  to  the  West.  For  those  who  wish  to  remove,  will  not  be  able  to 
sell  their  property;  it  will  tall  essentially  in  value;  and  if  they  should  sell, 
coin  not  being  in  circulation,  they  could  not  procure  any  paper  money  which 
would  pass  current  to  pay;  the  expenses  of  travelling  from  Massachusetts  to 
Ohio  and  Tennessee;  and  if  they  should  arrive  there,  they  would  have  noth- 
ing to  purchase  land  with.  The  sales  of  our  land  must  stop  for  a  time,  at 
least  till  specie  can  be  brought  into  circulation,  for  specie  only /is  taken  in 
payment;  this  comes  now  through  banks;  but  the  banks  will  require  it  all  for 
their  own  support 

And  will  not  the  people  inquire  why  all  this  pressure  and  embarrassment? 
They  certainly  will.  And  will  they  be  satisfied  with  the  answer,  that  the 
bank  was  unconstitutional,  and  could  not  therefore  be  continued?  No,  they 
will  not  believe  it  They  will  justly  reply,  that  this  state  of  things  ought  to 
have  been  foreseen  and  provided  for  by  their  rulers.,  as  it  might  nave  been. 
In  the  ten  past  years  of  peace,  plenty,  and  prosperity,  which  we  have  expe- 
rienced, instead  of  devising  a  system  to  take  the  place  of  the  present  bank,  on 
the  4th  of  March,  what  have  the  rulers  done?  They  seem  never  to  have  once 
thought  of  the  event  that  is  now  about  to  happen?  By  the  acts  of  Govern- 
ment, the  country  has,  in  a  degree,  been  deprived  of  the  capital  which  might 
have  been  here  to  meet  the  crisis.  Above  $30,000,000  have  been  sent  out  of 
the  country,  and  much  of  it  in  specie,  to  pay  the  public  debt,  when  payment 
was  not  demanded.  All  internal  taxes  have  been  repealed,  and  reliance  for 
revenue  has  been  made  on  imposts  and  tonnage,  which  are  now  about  to  fail 
us,  and  that,  too,  when  the  treasury  is  nearly  exhausted.  For,  after  paying 
the  $2,750, 000  to  this  bank,  there  will  not  remain  much  more  than  this  amount 
in  the  treasury.  The  revenue  bonds  outstanding,  to  the  amount  of  about 
$10,000,000,  will  not,  cannot  be  paid,  if  bank  accommodations  are  to  stop. 
Recourse  must  be  had  to  loans,  the  last  resort  of  empty  purses  and  empty 
heads,  and  a  press  for  money,  and  its  high  price,  will  render  loans  difficult 
to  be  effected,  and  subject  the  Government  to  a  high  rate  of  interest . 

These  considerations  suggest  to  us  the  imperious  necessity  of  continuing 
the  operations  of  this  bank,  under  such  restrictions  as  may  be  deemed  most 
advisable,  and  thus  to  keep  in  motion  the  present  system  of  credit,  and  sup- 
port the  existing  principles  of  doing  business  throughout  the  country. 

And  what  are  the  reasons  for  reluming  a  renewal  of,  this  charter?  Let  them 
be  examined,  and,  unless  they  are  solid  and  substantial,  let  them  not  prevail. 
One  reason  assigned  is,  that  it  employs  a  foreign  capital,  which  is  injurious  to 
our  country. 

This  is  not  an  objection  of  any  weight;  and  if  it  were,  have  Congress  the 
power  to  prohibit  the  employment  of  foreign  capital  in  the  United  States?  If 
we  prevent  it  from  being  employed  in  this  bank,  it  may  go  into  the  State  banks, 
or  take  any  other  direction,  not  prohibited  by  the  constitution  or  laws  of  the 
country.  But  it  has  ever  been  the  liberal  policy  of  this  Government,  to  invite 
foreign  capital,  and  foreigners,  to  come  among  us. 

Gentlemen  seem  to  consider  that  portion  ot  this  stock,  held  by  foreigners, 
as  haying  no  other  connexion  with  our  own  citizens,  than  compelling  them  to 
pay  eight  per  cent,  per  annum  interest  for  it. 

Let  us  for  a  moment  see  how  this  money,  to  the  amount  of  $7,200,000, 
owned  by  foreigners,  is  employed,  and  the  objection  urged  on  this  ground  must 
vanish.  It  will  not  be  denied,  but  that  it  is  used  in  trade.  And  it  is  wanted 
here,  to  make  cash  payments  for  shipments  made  to  Europe.  This  enables 
the  American  merchant  to  make  prompt  payment  for  the  goods  he  imports 
from  Europe,  by  which  he  obtains  them,  say  eight  per  cent,  below  the  credit 
price,  while  he,  instead  of  obtaining  this  credit  in  Europe,  obtains  it  at  the 
bank  for  six  per  cent  Here,  then,  is  a  difference  of  two  per  cent,  in  favor  of 
the  American  merchant.  This,  on  $7?200,000,  amounts  to  $144,000  a  year— 
in  twenty  years,  to  $2,880,000.  This  is  one  item  saved  in  retaining  this  capi- 
tal, in  this  institution— and  $1,200,000,  the  sum  to  be  paid  by  those  stock- 
holders for  the  privilege  of  continuing  their  capital  in  this  btenk,  is  another 


156  BANK  OF  THE  UNITED  STATES. 

item — and  another,  larger  than  either  of  these,  is  the  advance  upon  the  stock 
proposed  to  be  subscribed  by  the  United  States,  which  may  be  estimated  at 
$2,000,000.  These,  together,  amounted  to  $6,080,000,  which  the  Govern- 
ment and  citizens  of  this  country  will  receive  by  passing  this  bill.  So  far, 
this  would  be  raising  a  revenue,  and  not  liable  to  any  constitutional  objection. 
But,  it  is  said,  this  capital  has  an  influence  upon  elections,  unfriendly  to 
liberty.  Whatever  may  have  formerly  been  the  political  influence  of  this  in- 
stitution, the  competition  of  banking  business  has  long  since  rendered  it  harm- 
less as  a  political  engine.  But,  while  gentlemen  complain  of  its  accommoda- 
tions being  partial,  they  propose  the  singular  remedy  of  destroying  them  en- 
tirely; because  it  has  committed  the  fault  of  not  accommodating  every  body, 
it  must  now  cease  to  accommodate  any  body. 

If  we  have  not  too  much  capital,  our  citizens  will  find  a  profitable  use  for 
this.  That  this  is  wanted,  and  engaged  in  business,  is  incontestibly  proved  by 
the  dividends  which  this  bank  has  made  of  eight  and  nine  per  cent,  profit.  If 
the  charter  shall  expire  an  the  4th  of  March,  this  $10,000,000  capital,  which 
may,  and  probably  will  be  collected  in  specie,  will  be  again  thrown  into  circu- 
lation here,  or  sent  out  of  the  country. 

Suppose  it  retained  here,  what  are  we  to  gain  or  lose  by  the  experiment? 
The  scarcity  of  specie  consequent  to  this  operation,  will  appreciate  its  va- 
lue, and,  in  like  proportion,  depreciate  the  price  of  every  other  kind  of  proper- 
ty, say  thirty  per  cent.  These  foreign  stockholders,  having  $7,200,000  in 
specie,  will  be  able  to  speculate  on  the  distresses  of  your  own  citizens.  They 
will  be  the  gainers,  we  the  losers.  If  they  can  make  by  the  bargain,  as  they 
undoubtedly  may,  30  per  cent,  this  on  $7,200,000  would  amount  to  $2,160,000; 
which,  added  to  their  present  capital,  would  be  $9,360,000.  This  amount, 
vested  in  any  other  bank  stock,  or  valuable  property,  would  continue  to  yield 
them  eight  per  cent,  profit  annually.  This,  on  $9,360,000  amounts  to  $744,860> 
a  year,  $168,800  more  in  a  year  than  they  would  receive  by  continuing  their 
capital  in  this  bank.  It  is  evident  that  a  refusal  to  renew  the  charter  of  the 
Bank  of  the  United  States  will  not  prevent  the  use  of  foreign  capital  among 
us,  as  has  been  urged  by  gentlemen  opposed  to  a  renewal.  I  do  not  allude  to 
the  gentleman  from  Virginia,  [Mr.  BURWELL]  he  does  not  consider  it  an 
objection  that  so  much  ot  this  stock  is  owned  by  foreigners. 

But  let  us,  for  a  moment,  suppose,  that,  on  a  dissolution  of  this  bank,  this 
capital  goes  out  of  the  country;  it  is  owned  by  proprietors  who  reside  in  Eng- 
land, where  bullion  is  15  per  cent,  above  their  paper  currency,  and  if  this 
$7,200,000  should  be  sent  to  Europe  it  would  drain  nearly  all  the  specie  from 
the  country.  Unless  it  can  be  employed  here  to  more  advantage,  it  will,  as 
an  article  of  merchandise,  leave  the  country  for  a  better  market.  But  it  will, 
at  any  rate,  be  in  the  hands  oi  those  who  may  not,  after  the  refusal  to  renew 
this  charter,  feel  very  solicitous  to  aid  the  operations  of  your  Government,  or 
relieve  the  distresses  of  the  people,  by  sending  this  specie  into  circulation 
among  us.  We  should  require  strong  arguments,  indeed,  to  induce  us  to 
adopt  a  measure  which  may  at  once  drive  out  of  the  country,  or  lock  up  so 
large  a  portion  of  the  specie  capital.  Whether  it  goes  out  of  the  country,  or 
remains  for  a  year  inactive  here,  the  effect  upon  the  community  will  be  the 
same.  The  great  demand,  and  high  price  of  specie,  will  depress  the  price  of 
every  kind  ot  stock  and  every  species  of  property;  our  wheat,  cotton,  hemp, 
tobacco,  and  every  article  of  produce,  must  suffer  a  depression  of  at  least  10 


country  may  be  estimated  at  $100,000,000;  a  loss  of  10  per  cent,  would  be 
$10,000,000,  a  sum  equal  to  our  revenues  for  one  year.  By  whom  is  this  loss 
to  be  sustained?  By  the  merchants?  No,  it  will  fall  upon  the  farmers,  the 
manufacturers,  and  mechanics;  your  rich  moneyed  capitalists  are  safe,  nay, 
they  are  the  only  men  v  ho  will  profit  by  such  a  state  of  confusion  and 
distress. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791. 

"When  I  advocate  a  continuance  of  the  present  system,  I  advocate  the  in- 
terest of  the  farmer,  the  mechanic,  and  even  the  laborer,  who,  alone,  must 
suffer  most  severely  by  the  experiment  of  breaking  up  this  bank  and  your 
present  system  of  paper  credit.  Of  this  we  may  all  be  convinced  when  too 
late  to  remedy  the  evil.  The  effect  it  may  produce  may  be  entirely  different 
from  what  the  opponents  to  this  bill  now  believe.  Instead  of  a  blessing,  it 
may  prove  a  scourge  and  a  curse  to  the  country.  Politicians,  we  all  know, 
are  liable  to  err  in  their  calculations,  and  often  mistake  the  real  bearing  and 
effect  of  their  measures  upon  the  community.  The  Turkish  Government 
once  devised  and  adopted  an  infallible  expedient,  as  the  rulers  believed,  to 
prevent  a  scarcity  of  corn,  by  prohibiting  the  exportation  of  this  article.  But 
the  consequence  of  this  favorite  measure  was  a  famine,  want,  and  calamity, 
instead  ot  plenty  and  happiness. 

And  are  gentlemen,  who  are  opposed  to  the  renewal  of  this  charter,  quite 
sure  what  will  be  the  consequence  of  stopping  at  once  the  operations  of  this 
bank?  I  apprehend  not.  'Ihey  all  admit  it  will,  for  a  time,  occasion  some 
embarrassment  to  our  citizens  and  our  treasury;  but  they  differ  as  to  the  ex- 
tent of  the  evil,  and  tell  us  that  all  the  calamity  is  to  be  far  outweighed  by  the 
blessings  which  are  to  follow;  and,  among  other  blessings  which  are  to  result, 
is  the  check  which  is  to  be  given  to  trade.  We  are  told  that  there  is  too 
much  credit,  and  too  much  trade;  that  failures  are  continually  occurring,  and 
that,  although  the  merchant  fail,  the  fanner  bears  the  loss.  A  single  glance 
at  the  manner  of  transacting  business  in  our  commercial  towns  must  convince 
any  gentleman  that,  when  a  merchant  stops  payment  he  is  seldom  indebted  to 
the  farmer.  His  credit  contracts  are  with  the  banks  and  merchants  in  town; 
instead  of  purchasing  produce  from  the  farmer  upon  credit,  the  merchant 
obtains  a  credit  at  the  bank,  procures  bills,  and  is,  in  this  way?  able  to  pur- 
chase from  the  farmer  for  ready  money,  and  if  the  merchant  tails,  his  credi- 
tors in  town,  not  in  the  country,  are  generally  the  sufferers.  By  lessening  or 
destroying  bank  accommodation,  you  transfer  the  credit  from  the  city  to  the 
country.  Then,  if  a  merchant  should  fail,  his  creditors  in  the  country,  the 
farmers,  would  suffer;  should  this  be  the  effect  of  putting  down  this  bank, 
the  agriculturist,  who  now  sells  his  wheat,  hemp,  cotton,  and  tobacco,  for 
cash,  will  be  compelled  to  sell  upon  credit,  and  take  the  risk  of  failure  from 
the  banks  and  merchants  to  himself.  Is  this  the  manner  in  which  trade  is  to 
be  lessened  by  stopping  bank  credit? 

But  it  has  been  urged  that  we  have  too  much  paper  in  circulation.  Admit 
it.  The  destruction  of  this  bank  will  increase,  not  diminish,  the  quantity  of 
circulating  bank  paper;  and  1  consider  the  embarrassment  which  must  im- 
mediately follow  the  closing  of  the  concerns  of  this  institution  as  the  least  of 
the  evils  the  community  will  experience  from  a  refusal  to  renew  the  charter. 
Congress  may,  indeed,  prevent  the  operation  of  this  bank  after  the  4th  of 
March,  but  Congress  can  neither  prevent  a  spirit  of  trade,  nor  subdue  the 
passion  for  speculation.  For,  while  we  are  debating  the  expediency  of  de- 
stroying this  bank,  in  order  to  free  the  country  from  the  mischiefs  of  an 
extended  bank  credit,  we  find  new  banks  springing  into  -existence  in  every 
direction.  We  have  no  less  than  live  bills  now  on  our  table  for  incorporating 
this  number  of  banks  in  this  ten  mile  square  district.  And  the  gentleman 
from  Virginia  [Mr.  BURWELL]  has  told  us,  that  these  applications  are  an  evi- 
dence of  capital  or  of  corruption;  but  I  consider  them  rather  as  evidence  of 
the  destroying  spirit  of  speculation,  which  threatens  to  stand  upon  the  ruins 
of  the  United  States  Bank,  till  the  country  shall  be  overwhelmed  with  new 
emissions  of  paper  from  these  new  manufactories.  The  banks  established  by 
the  State  Legislatures  will  scramble  for  the  privilege  of  filling  the  chasm  to 
be  made  by  the  destruction  of  the  Bank  of  the  United  States.  Already  are 
they  preparing  for  the  patriotic  endeavor.  Our  State  legislatures  are  to  be 
importuned  to  become  bank-jobbers,  and  joint  undertakers  and  copartners 
in  the  enterprize.  The  profits  are  to  furnish  revenues  sufficient  to  satisfy 
both  avarice  and  ambition.  Notwithstanding  the  provision  in  the  constitu- 
tion that  no  State  shall  kt  emit  bills  of  credit,"  \ve  find  almost  every  State  in 


158  BANK  OF  THE  UNITED  STATES. 

the  Union  interested  in  baftks,  authorising  corporations  to  issue  bank  bills, 
which,  so  far  as  they  exceed  the  capital  upon  which  they  are  issued,  are  in  the 
nature  of  bills  of  credit.  Several  States  own  stock  in  these  banks,  and,  as 
such  stockholders^are  responsible  for  the  payment  of  these  bills;  Pennsylva- 
nia, Virginia,  and  Vermont,  are  large  stockholders  in  their  State  banks; 
New  York  and  North  Carolina  have  also  an  interest  in  some  of  their  banks. 
The  States  cannot  be  restrained,  nor  is  it  to  be  wished  that  they  should  be 
prohibited  altogether  from  incorporating  banks.  But  what  difficulties  are  we 
to  experience  in  resorting  to  these  numerous  and  conflicting  institutions  for 
the  collection,  safe-keeping,  and  transmission  of  our  revenues.  The  depo- 
sites  of  >lhe  Government  will  render  banking  profitable  to  the  favorite  bank 
that  receives  them.  The  aid  of  the  Government  will  make  this  bank  supe- 
rior in  funds  and  credit  to  any  of.  the  others  which  do  not  share  this  solid 
patronage.  This  will  produce  jealousies  and  collisions  of  interests  between 
banks  in  the  same  State,  and  thus  form  cabals  against  the  State  and  General 
Governments.  It  will  not  stop  here,  but  will  extend  from  State  to  State.  If 
the  States  and  State  banks  are  to  regulate  trade  in  the  article  of  paper  money, 
they  may  prescribe  the  terms.  To  give  the  preference  to  their  own  paper, 
they  may  exclude  that  of  any  other  State  from  circulation  among  them  in  the 
same  way  that  the  paper  of  unincorporated  banks  is  excluded  by  some  States, 
and  bills  of  a  certain  amount  from  others. 

The  great  commercial  States  will  have  in  their  power  the  paper  of  the  small 
and  agricultural  States:  for  where  there  is  most  trade,  there  the  most  current 
bills  will  be  the  most  valuable.  The  bills  of  New  York  and  Pennsylvania, 
from  the  great  trade  and  frequent  intercourse  between  their  capital  cities, 
would  be  in  greater  demand  than  any  other;  the  bills  of  either  State  would 
pass  current  in  the  other,  and  this  would  give  them  a  credit  and  currency 
superior  to  all  other  bills.  They  would  of  course  drive  the  others  out  of 
the  market.  And,  sir.  it  is  possible  that  other  banks  may  attempt  to  make 
up,  in  the  quantity  of  their  paper,  the  deficiency  in  its  quality  and  credit,  and 
all  may  overtrade  their  capital,  discount  far  beyond  their  funds,  until  a  gene- 
ral depreciation  of  their  paper  shall  produce  general  failure,  and  universal 
distrust  in  all  paper  credit.  It  is  the  duty  ot  the  Government,  if  in  their 
power,  to  avert  such  a  state  of  confusion,  to  protect  and  preserve  the  country 
from  such  complicated  ruin.  But  we  are  about  to  invite  and  precipitate  this 
destruction  by  throwing  away  the  only  means  we  possess  to  prevent  it.  Stop 
this  bank,  and  what  check  is  there  then  to  limit  the  discounts  of  all  other 
J3anks?  They  may  issue  paper  to  any  amount  and  without  funds  to  redeem 
it.  There  may,  and  very  probably  will  be,  a  common  interest  and  feeling 
among  them  to  uphold  each  other,  until  all  shall  deem  it  advisable  to  fall. 
Hitherto  the  Bank  of  the  United  States,  by  its  large  capital,  and  the  amount 
of  its  specie  always  on  hand,  has  confined  the  discounts  of  other  banks  to  cer- 
tain limits,  and  compelled  them  to  observe  some  proportion  between  their 
loans  and  actual  funds.  And,  in  this  way,  it  has  served  as  a  barometer  to 
ascertain  the  credit  of  other  banks;  as  a  regulator  to  keep  them  within  such 
bounds  as  might  be  safe  to  the  community.  But  take  away  this  regulator, 
and  the  other  banks  may  go  on  without  fear  or  restraint  to  loan  millions,  with- 
out having  a  dollar  in  their  vaults,  until  all  will  be  reduced  to  bankruptcy,  as 
we  have  already  witnessed,  in  some  parts  of  New  England.  We  have  been 
told,  by  gentlemen,  that  this  bank  has  been  the  cause  of  the  excess  of  bank 
paper,  which  has  prevailed  in  some  of  the  Eastern  States.  This  I  deny. 
What  has  been  the  conduct  of  banks  in  that  quarter?  A  considerable  num- 
ber of  banks  were  established  in  the  interior  of  Massachusetts  and  New  Hamp- 
shire, and  they  went  on  to  issue  their  bills  to  a  great  amount,  without  re- 
gard to  their  actual  funds,  and  without  any  specie  to  redeem  them-  And  had 
these  bills  circulated  only  in  places  where  banks  were  conducted  in  a  man- 
ner equally  loose  and  unprincipled,  the  imposition  would  not  have  been  readily 
detected; 'but  when  these  bills  appeared  at  the  Branch  Bank  of  the  United 
States,  their  real  value  was  tested;  they  were  returned,  and  the  system  of 
banking  without  specie  or  capital  was  broken  up  and  destroyed.  It  will 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF   1791. 

hardly  be  contended  that  our  revenues  would  have  been  perfectly  secure  in 
these  banks.  And  what  assurance  have  we  that  they  will  be  more  safe  in  the 
others?  The  Government  of  the  United  States  cannot  limit  their  discounts, 
inspect  their  books,  or  ascertain  the  state  of  their  funds,  or  the  principles  upon 
which  they  act.  It  never  can  be  seriously  insisted,  that  it  would  be  advisable 
to  deposite  the  public  moneys  in  this  manner.  It  would  be  offering  the  reve- 
nues of  the  Government  as  a  bounty  for  bank  factions,  and  bank  frauds.  And 
why  shall  we  be  driven  to  make  these  dangerous,  ruinous  experiments?  We 
experience  no  hardships,  no  real  difficulties  growing  out  of  our  present  sys- 
tem. If  we  continue  it,  none  are  to  be  apprehended.  We  shall  preserve  a 
paper  medium,  well  known  and  long  approved,  with  which  the  people  of  this 
country  are  well  satisfied:  for  not  a  single  remonstrance  has  been  offered 
against  continuing  the  operations  of  this  bank,  whilst  thousands  of  petitioners 
have  solicited  Congress  to  renew  the  charter.  Nothing,  but  considerations  of 
the  most  imperious  nature,  should  induce  Congress,  at  this  time,  to  refuse  a 
renewal  of  this  charter,  and  thus  compel  the  extensive  moneyed  operations  of 
this  company  to  stop  at  once.  The  situation  of  the  country  is,  at  this  period, 
peculiarly  unfavorable,  if  not  unequal  to  such  an  operation.  But  a  small 
amount  of  specie  in  circulation?  and  the  course  of  exchange  continually  les- 
sening the  quantity,  draining  it  from  the  country;  a  large  portion  of  the 
merchant's  property  seized  in  Europe;  our  treasury  nearly  exhausted;  a  non- 
importation about  to  be  adopted;  our  revenue  to  be  thus  cut  off;  our  army  and 
navy  expenditures  to  be  increased;  and,  in  this  state  of  our  national  affairs, 
we  are  about  to  destroy  all  confidence  in  paper  credit;  to  adopt  a  measure 
which  must  produce  grneral  disappointment,  failures,  and  bankruptcy.  How- 
ever unconcerned  ;iiid  secure  some  gentlemen  may  feel  about  the  consequences 
which  may  result  from  such  a  state  of  things,  I  cannot  but  contemplate  them 
with  the  most  fearful  apprehension.  Can  the  people  extend  their  confidence 
to  the  wisdom  and  expediency  of  measures  which,  instead  of  promoting  the 
general  welfare,  produce  general  distress?  Why,  sir,  we  seem  to  cherish  as 
little  regard  for  the  opinions  of  the  People,  as  it  they  had  nothing  to  do  with 
the  Government. 

But  the  remedy  for  all  the  evils  growing  out  of  this  breaking  down  measure, 
is  to  be  found,  we  are  told  by  some  of  its  advocates,  in  the  establishment  of  a 
new  national  bank  upon  the*  ruins  of  this.  The  country  is  to  be  subjected 
to  the  sp:isms  and  throes  of  death  and  birth,  at  the  same  instant,  in  order  to 
preserve,  by  this  bold  practice,  its  constitution.  This  is  a  refinement  in  State 
quackery,  which  must  prove  fatal  to  the  patient. 

Are  the  advocates  for  a  national  bank  quitCT  sure  that  they  could  obtain  a 
law  of  Congress  for  its  establishment,  if  the  United  States  Bank  were  out  of 
the  question?  I  apprehend  not.  Many  serious,  if  not  insurmountable  difficulties, 
would  be  found  to  exist.  When  an  increased  demand  for  money  should  have 
rendered  it  scarce,  it  would  illy  comport  with  that  discretion  and  intelligence 
which  ought  ever  to  distinguish  the  proceedings  of  Congress,  to  increase  the 
scarcity  of  this  article,  by  enlarging  the  immediate  demand  for  it.  While 
$-24,000,000  would  be  employed  in  closing  the  concerns  of  one  bank,  $30,000,000 
are  to  be  called  for  to  commence  the  operations  of  another.  This  would 
be  levying  a  requisition  upon  all  the  circulating  medium  of  the  country  at 
once.  It  would  create  a  demand  which  could  not  be  satisfied.  If  this  ob- 
jection could  be  removed,  there  are  others  still  stronger  to  be  obviated.  It 
would  be  found  difficult  to  convince  the  States  concerned  in  banks,  that 
their  interests  are  to  be  promoted  by  a  great  rival  bank,  with  a  capital  and 
ability  equal  to  the  management  of  all  the  banking  business  in  the  country. 
Will  the  great  commercial  States  of  Massachusetts,  New  York,  and  Penn- 
sylvania, accede  to  this  measure?  They  will  not,  unless  they  disregard  all  the 
profits  they  might  derive,  by  uniting  to  give  credit  and  currency  to  the  paper 
of  their  own  banks,  unless  they  neglect  to  improve  the  advantage  they  would 
in  such  case  have  over  the  other  States.  If  some  States  now  recommend  to 
their  representatives  to  oppose  a  renewal  of  this  charter,  would  they  be  less 
attentive  to  their  own  interests,  and  more  sparing  of  their  advice,  when  a 


150  BANK  OF  THE  UNITED  STATES. 

national  bank  should  be  attempted?  No,  sir.  Nor  would  their  recommenda- 
tions be  less  regarded  than  upon  the  present  occasion.  If  a  bank  with  but 
$10,000,000  capital,  has  awakened  State  jealousies,  and  roused  to  action  State 
interests  against  it,  what  are  we  to  expect  when  a  new  bank  of  $30,000,000 
shall  be  proposed?  That  such  an  institution  could  be  established  without  op- 
position? No.  It  could  not  succeed  against  the  opposition  it  must  and  would 
encounter.  Put  down  the  Bank  of  the  United  States,  and,  however  essential 
an  institution  of  the  kind  may  be  found,  either  to  furnish  a  circulating  me- 
dium, which  shall  pass  current  throughout  the  United  States,  or  aid  in  the 
administration  of  the  finances,  the  Government  will  not  have  the  power  to  es- 
tablish it.  A  law  for  the  purpose,  would  never  be  sanctioned  by  a  majority 
of  both  Houses  of  Congress.  And,  if  we  cannot  continue  the  present  bank 
upon  any  terms,  no  other  ought  ever  to  be  authorized  by  Congress.  For  to 
what  a  state  of  things  might  a  new  national  bank,  with  twenty  or  thirty  mil- 
lions capital,  reduce  the  country  at  the  expiration  of  twenty  years  from  this 
time?  Its  stock  might  get  into  the  hands  of  foreigners,  or  be  owned  by  those 
who  would  be  found  in  the  opposition  to  the  administration;  and  surely,  this 
would  furnish  reasons  as  powerful  for  putting  down  the  national  bank,  as  the 
Bank  of  the  United  States;  and  the  country  would  be  compelled  to  submit  to 
another  general  shock,  and,  perhaps,  destruction  of  paper  credit.  If  we  have 
not  stability  and  discretion  sufficient  to  continue  and  support  such  an  institu- 
tion, we  most  certainly  should  not  undertake  to  establish  it.  For  we  are  ex- 
posing the  country  to  alternate  affluence  and  penury;  making  experiments 
ruinous  to  the  people,  and  destructive  to  the  Government. 

Some  gentlemen  tell  us  that  this  corporation  can  close  its  concerns  without 
occasioning  any  embarrassment  in  the  community.  If  the  trial  is  to  be  made, 
I  most  sincerely  wish  they  may  not  be  mistaken;  but  to  me  it  appears  utterly 
impracticable.  The  gentleman  from  Virginia  [Mr.  BURWELL]  seems  to  think 
that  the  shock  will  be  slight,  and  scarcely  perceivable;  that  this  angry  cloud 
will  be  disarmed  by  the  conducting  powers  of  the  State  banks.  But  can  he 
assure  us,  that  such  will  be  the  result  from  any  actual  experiments  which 
have  ever  been  made  in  this  branch  of  philosophy?  I  believe  not.  And  it  is 
to  be  apprehended,  that,  even  if  this  cloud  should  disappear,  clouds  of  dis- 
content and  faction  will  succeed,  and  may  soon  be  seen  hurrying  and  chasing 
each  other  over  the  political  firmament  of  America,  until  the  tempest  comes 
on,  which  shall  close  forever  the  prospect  of  our  united  strength  and  happi- 
ness. 

The  times  are  dangerous  for  national  experiments.  When  we  look  around 
us,  we  find  the  political  passions  of  man  rising  to  madness;  long  established 

Governments  breaking  up  their  strong  foundations,  and  the  world  almost 
eluged  with  blood  and  warfare;  we  alone,  stand  upon  the  narrow  isthmus  of 
peace  and  prosperity.  And  is  it  for  us  to  complain;  to  be  discontented  with 
the  pre-eminent  happiness  we  enjoy;  to  hazard  our  present  enviable  condition 
upon  the  doubtful  result  of  this  great  and  sudden  change  in  the  administration 
of  our  national  finances?  No,  sir.  It  becomes  us  to  beware  of  innovations; 
to  weigh  well  the  consequences  of  embracing  any  new  system,  or  abandoning 
an  old  one.  But,  sir,  I  will  not  detain  the  committee  longer.  I  have  already 
occupied  more  of  their  time  than  I  intended;  but  a  sense  of  duty  has  com- 
pelled me  to  state  my  opinion  at  length  upon  the  important  question  before 
us.  And,  if  the  charter  of  this  bank  is  not  to  be  renewed,  or  continued  upon 
any  conditions,  I  am  ready  to  hope,  that  my  apprehensions  of  the  effects  that 
the  refusal  will  produce  in  this  community,  may  prove  groundless;  that  the 
dissolution  of  this  institution  may  not  be  the  organizing  of  ruin  to  a  con- 
siderable portion  of  the  country. 

Mr.  SEYBERT.  It  may  be  said  that  this  subject  has  been  exhausted,  by  the 
discussions  of  the  ablest  politicians  of  our  country.  I  will  premise,  the  re- 
marks which  I  shall  offer,  are  intended  solely  to  justify  the  vote  which  it  is 
my  intention  to  give  on  this  momentous  occasion. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

The  question  pending  the  United  States  Bank  has  excited  a  peculiar  inte- 
rest throughout  this  nation,  more  especially  in  our  seaports.  The  dissolution 
of  this  institution,  which,  form  its  limitation,  will  expire  on  the  fourth  of  March 
next,  lias  been  portrayed  in  colors  of  the  darkest  shades,  and  the  distresses 
\yhich  many  maintain  will  be  consequent  to  that  event,  call  seriously  for  a 
fair  and  deliberate  investigation.  I  hope,  sir,  I  shall  be  pardoned  for  nnp9S- 
ing  on  the  patience  of  the  House,  when  it  is  recollected  that  the  community 
which  I  represent,  have  employed  four-tenths  of  the  capital  stock  of  the  Unit- 
ed States  Bank.  If  evil  consequences  are  to  attend  the  dissolution  of  this 
establishment,  or  if  beneficial  results  proceed  from  its  continuance,  in  either 
case  I  must  feel  myself  essentially  interested.  It  is,  therefore,  my  wish,  to  be 
distinctly  understood,  upon  the  important  principles  which  have  connexion 
with  the  great  question  now  before  us. 

At  the  last  session  of  Congress,  I  presented  the  memorial  of  the  president, 
directors,  and  stockholders  of  the  Bank  of  die  United  States;  at  that  time  I 
entertained  no  positive  opinion  on  the  subject;  the  discussions  which  took 
place  in  the  committee  to  whom  the  memorial  was  referred,  necessarily,  as  a 
duty  on  my  part,  excited  that  attention  which  the  importance  of  the  question 
imperiously  demanded.  Under  circumstances  of  doubt,  I  voted  in  tavor  of 
reporting  a  resolution  in  support  of  the  bank,  for  the  purpose  of  giving  to  the 
establishment  every  chance  which  reason  could  urge;  at  the  same  time  re- 
serving to  myself  the  right  (o  pronounce  a  final  decision,  according  as  policy 
and  expediency,  but  more  especially  as  prtnctp/«  should  dictate.  I  will  admit, 
sir,  that  this  is  not  the  time  or  place  to  institute  the  general  inquiry,  whether 
banks  are  or  are  not,  beneficial  to  a  nation?  Because,  whether  the  charter  of 
the  United  States  Hank  be  renewed  or  not,  ihe  several  Suites,  who  have  the 
unquestioned  authority  to  incorporate  bank  establishments,  have  already  cre- 
ated many,  which  it  is  not  ill  our  power  to  control.  I  do  not  hesitate  to  de- 
clare?  though  many  persons  in  the  United  States  are  decidedly  opposed  to  a 
banking  system,  under  every  possible  circumstance,  I  am  not  ot  this  class. 
Experience  lias  proved,  in  a  manner  very  satisfactory  to  my  mind,  the  advan- 
tages which  are  derived  from  banks,  when  they  are  impartially  directed,  and 
when  the  accommodation  att'orded  by  them  is  prudently  employed;  (he  great 
difficulty  seems  to  be  to  confine  the  system  within  its  proper  limits.  I  under- 
stand the  proposition  as  applicable  to  the  agricultural,  manufacturing,  and 
commercial  interests  of  the  United  States. 

For  my  proofs  of  this  proposition,  I  will  not  rely  upon  the  famous  Bank  of 
St.  George,  at  Genoa,  whose  authority,  by  a  gentleman  Irani  New  York,  (Mr. 
FISK)  has  been  considered  of  much  weight.  I  will  recall  to  the  mind  of  my 
friend,  the  remark  of  an  intelligent  traveller,  who,  when  he  visited  this  bank 
of  antiquity,  exclaimed,  "  Here  lies  concealed  the  enigma,  whether  the  bank 
possesses  millions  of  millions,  or  whether  it  is  indebted  millions  of  millions;" 
he  concludes,  upon  this  important  secret  rests  the  safety  of  the  State.  Unhappy 
State,  sav  I,  whose  safety  depends  upon  a  secret  concealed  within  the  vaults 
of  a  bank.  Perhaps,  to  a  development  of  this  secret,  may  we  attribute  the 
present  servile  condition  of  the  people  of  the  once  far  famed  and  powerful 
Republic  of  Genoa. 

I  am  one  of  those  who  do  not  entertain  fears  in  consequence  of  foreigners 
becoming  the  stockholders  of  our  banks;  provided,  on  all  occasions,  you  deny 
them  the  privilege  of  voting  either  directly  or  by  proxy.  I  would  even  go  so 
far  as  to  prohibit  their  being  original  subscribers  to  any  stock  which  may  be 
created  in  our  territory.  The  States  do  not  object  to  a  foreigner  holding  the 
stock  of  their  banks.  Any  political  consequences  which  can  arise  from  such 
an  interest,  will  exist,  without  the  General  Government  having  power  over 
them.  For  the  present,  I  am  opposed  to  the  exclusion  of  foreign  capital  from" 
our  country,  because  it  is  not  established  that  we  possess  a  surplus  of  our 
own,  and  that  the  introduction  of  more  from  abroad  depresses  that  which  is 
immediately  the  property  of  our  citi/.ens;  the  prices  which  are  at  present  paid 
as  the  interest  for  a  borrowed  capital,  convince  me  that  it  would  be  impolitic, 
at  this  time,  to  adopt  the  principle  of  exclusion. 
21 


16^  BANK  OF  THE  UNITED  STATES. 

Though  I  have  admitted,  that,  under  certain  specific  provisions  of  the  law. 
foreigners  should  be  permitted  to  hold  the  stock  of  the  banks  of  the  United 
States,  it  is  not  thence  to  be  inferred,  because  they  have  become  the  stock 
holders,  they  are  to  be  confirmed,  from  time  to  time,  in  the  exercise  of  an  ex- 
clusive privilege  in  our  country. 

Sir,  I  am  decidedly  opposed  to  a  prominent,  and  what  to  me  appears  to  be  a 
very;  dangerous  feature  in  the  bill  now  under  consideration.  I  allude  to  the  3th 
section,  which  admits  of  an  increase  of  the  present  capital  stock  of  the  bank. 
If  you  adopt  this  provision,  you  will  thereby;  create  an  Herculean  power, 
which  will  have  at  its  mercy  all  the  minor  institutions  of  the  States;  thus  con- 
stituted, it  can  oppress  and  destroy  them,  as  whim  or  interest  may  dictate. 
The  steps  which  have  been  taken  preparatory  to  a  dissolution  of  the  present 
bank,  it  is  said,  occasion  much  embarrassment,  and  threaten  with  ruin  many 
of  our  citizens.  If  the  present  capital  often  millions  can  thus  affect  society, 
who  will  pretend  to  accumulate  present  evils,  or  risk  entailing  misery  on  pos- 
terity, solely  for  the  purpose  of  a  temporary  gain  to  the  Government?  In  this 
question  Pennsylvania  is  deeply  concerned 5  she  has  several  millions  of  dollars 
invested  in  her  banks;  this  to  her  is  a  valuable  source  of  revenue;  up>on  this 
may  she  predicate  much  of  her  future  prosperity;  hence  will  she  derive  the 
funds  requisite  for  future  internal  improvements;  but  if  you  fill  up  the  blanks 
in  this  section  with  a  considerable  sum,  all  these  prospects  will  be  blasted 
forever;  you  will  thereby  destroy  the  tree,  from  whose  ramifications  were  to 
emanate  the  blessings  of  peace  arid  the  sinews  of  war.  Those  of  her  Repre- 
sentatives who  may  deem  it  politic  and  constitutional  to  vote  for  a  continu- 
ance of  the  charter  of  the  United  States  Bank,  ought  surely  to  oppose  any 
increase  of  the  present  capital.  We  have  been  told,  that  that  which  now  ex- 
ists, has  been  found  sufficient  for  all  purposes,  at  a  time  when  our  commerce 
was  much  more  extensive  than  we  have  reason  to  suppose  will  soon  again  be 
the  case. 

If,  as  some  say,  the  bank,  by  its  capital,  is  to  facilitate  the  fiscal  operations 
of  the  Government,  I  am  decided  this  should  never  be  greater  than  what  will 
be  barely  sufficient  for  this  purpose.  If  you  go  further,  you  place  in  the  hands 
of  the  Government  an  engine  which  may  destroy  the  freedom  of  this  nation. 
We  are  further  told,  that,  in  case  of  war,  the  Government  may  derive  advan- 
tage, in  the  form  of  loans,  from  the  bank.  Admitting  this  to  be  the  fact,  it  is 
very  evident,  under  the  uncertainties  of  a  war,  the  demands  of  our  merchants 
upon  the  banks  will  diminish,  so  that  the  bank  capital  already  created  through- 
out the  Union,  may  be  very  readily  had  for  the  exigencies  of  the  State.  If  a 
greater  sum  shall  be  found  to  be  necessary,  the  patriotic  zeal  of  your  citizens 
will  prove  itself  all-sufficient  to  supply  your  wants  in  a  cause  which  will  be 
deemed  just  and  honorable  by  the  nation. 

I  am  also  opposed  to  the  United  States  having  the  right,  in  any  manner,  to 
appoint  any  of  the  directors  of  the  bank,  not  so  much  on  account  of  any  influ- 
ence which  the  Government  might  derive  from  such  appointment,  as  to  pre- 
vent ruinous  consequences  to  all  who  may  be  concerned.  Who  will  such 
directors  generally  be?  Certainly  persons  who  need  the  aid  of  the  banks:  for 
none  others  would  make  application  for  the  appointments.  When  they  are  ap- 
pointed, they  would  be  subservient  to  the  views  of  such  of  the  directors  as 
are  chosen  by  the  stockholders;  in  their  places  they  will  lose  sight  of  the  pub- 
lic welfare;  they  will  be  interested  by  the  accommodations  which  they  may 
find  necessary  ior  their  purposes;  to  obtain  these,  they  will  yield  to  their  as- 
sociates. Instead  of  being  the  guardians  of  the  public  treasure  in  case  of  dan- 
ger, they  will  remain  silent,  until  a  spontaneous  explosion  of  the  bubble  solves 
tor  the  world  the  important  secret  of  the  insolvency  of  the  institution.  Sir, 
notwithstanding  many  arguments  may  be  adduced  in  support  of  a  banking 
system,  no  degree  of  importance,  whatever,  whether  derived  from  the  facili- 
ties ottered  to  the  Government  by  bank  establishments,  or  from  the  consider- 
able «ums  which  may  be  thereby  had  for  the  treasury ?  in  consequence  of  sales 
which  may  be  made  of  the  stock  belonging  to  the  nation,  or  of  the  bonus  to  be 


ON   THE   BILL  TO  RENEW    THE  CHARTER  OF  1791. 

given,  shall  induce  me  to  vote  in  favor  of  a  measure  which  is  not  grounded 
upon  strict  constitutional  principles. 

The  history  of  the  banks  in  our  country  informs  us,  that  the  one  usually 
termed  the  Bank  of  North  America,  was  the  first  establishment  of  the  kind 
which  received  the  sanction  of  the  Government.  This  institution  was  incor- 
porated by  an  act  of  Congress,  in  the  month  of  May,  1781,  under  the  autho- 
rity of  the  "Articles  of  Confederation."  The  present  Bank  of  the  United 
States  was  incorporated  by  an  act  of  Congress,  on  the  25th  February,  1791, 
during  the  operation  of  the  present  constitution  of  the  United  States. 

Without  an  attempt  to  examine  every  hypothesis  which  has  been  or  which 
might  be  proposed,  respecting  the  constitutionality  of  the  principle,  1  will 
content  myself  with  a  statement  of  the  case,  such  as  it  appears  to  my  mind. 
The  first  public  act  which  I  performed,  as  a  member  of  the  Congress  of  the. 
United  States  was,  to  swear,  solemnly,  that  I  would  support  the  constitution 
of  the  United  States.  It  therefore  is  my  duty  to  examine  and  consider  its 
precepts,  according  to  the  best  of  my  ability. 

The  "  Articles  of  Confederation"  and  the  present  constitution  of  the  Unit- 
ed .States,  dp  not  differ,  as  regards  any  power  delegated  by  the  States  to  Con- 
gress, touching  charters  of  incorporation.  I  can  never  persuade  myself  that 
the  constitution  was  intended  other  than  to  have  a  definite  meaning;  or  that 
it  was  ever  contemplated  to  speak  an  equivocal  language;  ambiguity  arises 
solely  from  the  misconceptions  of  its  interpreters.  It  is  very  plain  and  of  easy 
comprehension,  especially  as  it  relates  to  the  present  question,  since  it  is 
totally  silent  on  the  right  to  create  corporations:  its  wisdom  is  further  illus- 
trated by  the  special  provision  lor  the  only  exclusive  privilege  which  is  con- 
sistent with  a  free  and  equal  Government*  and  that  is  in  favor  of  genius.  The 
powers  delegated  by  the  States  are  special  and  defined,  and  it  is  expressly  de- 
clared by  the  constitution,  that  "  the  powers  not  delegated  to  the  L.  States  by 
the  constitution,  nor  prohibited  by  it  to  the  States,  are  reserved  to  the  States 
respectively, or  to  the  people."  Tins  language  needs  no  interpretation.  1  cannot 
for  a  moment  permit  myself  to  suppose,  that  the  patriots  who  were  tested  dur- 
ing the  long  continued  uncertainty  of  the  most  important  events  of  our  revo- 
lutionary period,  and  to  whom  was  ultimately  assigned  the  right  and  power 
to  construct  the  instrument  which  is  to  guide  us  in  the  political  labyrinth, 
that  they  intended  this,  their  great  work,  should  alone  be  explicable  by  that 
refined  reasoning,  to  which  common  sense  is  a  stranger,  I  never  can  admit; 
surely,  that  which  they  framed  for  the  good  and  security  of  every  individual 
in  the  nation,  must  be  expressed  in  a  manner  to  be  understood  by  ordinary 
men,  and  those  whom  it  was  intended  to  direct.  Sir,  if  simplicity  was  not 
originally  contemplated  by  the  framers  of  the  constitution,  why  the  imposi- 
tion on  the  people  in  publishing  it  to  the  vyorld?  Was  it  not  a  prodigal  waste 
of  labor  and  materials,  to  furnish  every  citizen  of  our  country  with  a  copy  of 
that  which  can  only  be  understood  by  professional  men,  or  such  as  are  emi- 
nently skilled  in  scholastic  research?  It  had  better  remain  a  secret  concealed 
amongst  the  musty  rolls  in  the  archives  of  State,  than  be  a  puzzle  for  man- 
kind. As  long  as  this  instrument  is  preserved  pure  and  untarnished,  it  will 
receive  a  becoming  respect  from  your  fellow-citizens — it  will  be  regarded  as 
*4  the  stupendous  fabric  of  human  invention."  Remember,  the  present  argu- 
ment, in  several  important  points  of  view,  affects  posterity  in  common  with 
ourselves.  You  had  better  commit  the  unintelligible  jargon  to  the  flames, 
than,  by  the  agency  of  construction,  neutralise  wisdom  by  folly.  Sir,  if  we 
have  a  constitution  which  the  people  cannot  understand,  I  then  say,  cut  the 
original  into  slips,  and  provide  the  means  for  a  better;  or  if  that  is  not  to  be 
done,  and  we  are  to  be  ruled  by  the  iron  hand  of  power,  in  that  case,  as  one 
of  the  American  people,  I  will  pray  you  to  be  graciously  pleased  to  grant  a 
plain  bill  of  rights  lor  our  better  government. 

If  we  look  back  and  attentively  view  the  occurrences  which  took  place  when 
the  law  incorporating  the  present  Bank  of  the  United  States  was  enacted,  we 
shall  find  our  reasoning  supported  and  confirmed  by  many  important  circum- 
stances,- we  shall  then  perceive  that  the  act  of  incorporation  was  opposed  on 


264  BANK  OF  THE  UNITED  STATES. 

constitutional  ground,  by  men  who  were  and  continue  to  be  esteemed  for  their 
talents,  political  skill,  judicial  knowledge,  probity,  and  patriotism,  and  it  has 
been  admitted  that  the  arguments  formerly  urged  are  unanswerable.  That 
the  power  to  create  corporations  was  never  intended  to  be  ceded  on  the  part 
of  the  States,  is  proved  beyond  all  manner  of  contradiction;  for  we  are  told 
by  the  highest  authority,  by  one  who  was  a  member  of  the  General  Convention,, 
that  it  had  been  proposed  to  cede  to  Congress  the  power  to  create  corpora- 
tions, and  that  the  proposition  was  rejected,  after  a  cleliberate  discussion.  In 
my  opinion,  this  decision  is  in  proof  of  the  sagacity  and  wisdom  of  those  who 
made  it;  it  was  highly  justifiable  to  retain  this  power  to  be  exercised  by  the 
States;  because  corporations  are  generally  founded  on  circumstances  which 
are  entirely  local;  as  such  they  can  be  better  understood  by  the  Legislatures 
of  the  respective  States,  than  by  that  of  the  General  Government, 

The  experience  of  every  session  proves,  that  the  decisions  of  Congress  vary 
with  the  men  who,  at  different  times,  compose  that  body;  therefore,  the  act  of 
February,  1791,  can  have  no  force  in  settling  the  principle  contended  for. 

I  have  heard  it  urged  that  the  States  have  recognised  the  constitutionality  of 
the'United  States  Bank,  by  their  laws.  I  know  of  no  law  in  any  of  the  States 
which  declares  this  charter  constitutional;  were  it  even  proved  that  several  of 
the  States  had  published  this  declaration,  with  me  it  would  signify  nothing, 
unless  the  sanction  of  two  -thirds  of  the  States  was  thus  had.  On  a  former 
occasion,  several  of  the  States  were  induced,  from  peculiar  circumstances,  to 
relinquish,  for  a  time,  their  right  in  favor  of  a  particular  case — I  allude  to  the 
first  establishment  of  the  Bank  of  North  America.  If  this  had  been  intended  to 
decide  this  very  important  question,  without  any  reservation  of  their  power 
in  other  cases,  they  would  have  expressed  it  in  the  most  positive  and  unequi- 
vocal manner. 

Sir,  it  may  be  asked,  how  did  the  Congress,  whilst  acting  under  the  "Ar- 
ticles of  Confederation,"  incorporate  the  Bank  of  North  America,  though 
their  powers  were  no  more  extensive  than  those  of  the  present  Congress?  We 
shall  not  lose  by  this  investigation;  they  declared,  that  "the  exigencies  of  the 
United  States  rendered  it  indispensably  necessary  that  such  an  act  be  imme- 
diately passed;"  and,  at  that  period  the  Board  of  War  confessed  they  had  not 
money  sufficient  to  pay  the  expense  of  forwarding  an  express  to  the  Com- 
mander-in-  Chief  of  the  army !  Notwsthstanding  such  urgent  necessities  on  the 
part  of  the  General  Government,  they  were  too  conscious  of  the  rights  of  the 
States,  to  attempt  an  usurpation  of  authority,  or  to  pretend  to  force  this  act 
without  their  sanction;  accordingly,  we  find  the  resolution  by  which  this  bank 
was  established,  followed  by  another,  which  recommended  to  the  Legislature 
of  each  of  the  States  the  necessity  to  pass  such  laws  as  they  judged  requisite 
for  giving  the  ordinance  by  which  the  subscribers  of  the  Bank  of  North  Ame- 
rica were  incorporated,  its  full  operation;  every  provision  in  the  charter  of 
this  bank,  to  have  full  effect,  was  recommended  to  the  Legislatures  of  the  se- 
veral States,  for  their  approbation.— See  Journals  of  Congress  for  1781,  vol. 
7//t,  pp.  257  and  258. 

It  is  a  well  known  and  an  important  fact,  that  the  subscribers  to  the  Bank 
of  North  America  did  not  rest  satisfied  of  the  authority  of  Congress  to  incor- 
porate them:  subsequently  to  the  original  act  of  incorporation,  they  accepted 
from  the  Legislature  of  Pennsylvania  a  charter,  by  which  their  privileges  were 
very  much  abridged. 

Some  maintain,  the  States  having  made  it  penal  to  pass  counterfeits  of  the 
notes  of  the  United  States  Bank,  is  in  proof  of  their  recognizing  the  constitu- 
tionality of  the  institution.  No  one  will  pretend,  that  these  laws  were  in- 
tended other  than  to  guard  the  people  against  fraud;  these  statutes  were  en- 
acted without  any  connexion  with,  or  reference  to,  the  principle  upon  which 
the  original  act  was  founded.  It  is  but  too  well  known,  notwithstanding  these 
salutary  provisions,  that  counterfeit  bank  notes,  of  every  denomination,  are 
in  daily  circulation.  I  will  ask,  what  would  be  the  case  if  such  laws  had  not 
been  passed  by  the  States?  Sir,  if  it  requires  all  our  care  to  prevent  an  inun- 
dation from  such  bank  paper,  as  is  acknowledged  to  be  genuine,  for  Heaven's 


ON  THE  BILL  TO  RENEW  THE   CHARTER  OF   1791. 

sake,  do  not  risk  the  security  of  the  people,  by  an  indirect  sanction  of  such 
as  is  known  to  be  spurious. 

I  have  often  heard  the  constitutionality  of  a  national  bank  defended,  upon 
the  ground  of  its  being  absolutely  necessary  to  the  fiscal  operations  of  the  Ge- 
neral Government.    A  friend  from  New  York,  [Mr.  FISK,]  said  he  "  would 
demonstrate,  that  this  institution  was  indispensably  necessary  to  the  fiscal 
concerns  of  the  Government."     I  confess  if  he  could  do  this,  he  would  go  far 
to  remove  an  important  difficulty.     If  there  be  higher  authority,  whereon  to 
rely  for  his  proofs,  than  the  officer  who  is  at  the  head  of  your  Treasury  De- 
partment, he  might  have  succeeded;  I  pledge  myself  upon  the  statements  of 
this  officer  to  demonstrate,  that  this  bank  is  not  even  necessary*  for  the  fiscal 
operations  of  the  Government.     Upon  this  plea,  it  is  attempted  to  be  justified 
by  the  17th  article  of  the  8th  section  of  the  constitution  of  the  United  States, 
\vhich  gives  to  Congress  the  power  "'  to  make  all  laws  which   shall  be  neces- 
sary and  proper  for  carrying  into  execution"  the  several  specific  powers  dele- 
gated to  Congress  by  the  States.     I  never  did  doubt  for  a  moment,  the  con- 
venience of  a  bank,  to  the  moneyed  transactions  of  the  Government.     I  was 
often  induced  to  believe,  that  a  bank,  sanctioned  by  the  General  Government* 
was  necessary  for  these  purposes.    1  am  now  confirmed  in  a  very  different 
sentiment  by  th-;  treasury  report,  made  the  third  of  January,  1811.   In  the  llth 
page  of  that  report,  we  are  told,  it  is  one  of  the  duties  which  are  assigned  to  a 
clerk  in  the  Treasurer's  office,  to  keep  a   "•  bank   cash  b:»ok,  wherein  an  ac- 
count is  opened  with  every  bank  in  which  the  United  States  have  money  de- 
posited,    in  1798,  the  number  of  these  were./Vrf:  they  are  now  augmented  to 
twenty."*    The  establishment,  constituting  the  United  States  Bank,  and  its 
branches,  consists,  in  all.  of  nine  banks;  consequently,  by  the  statenient  just 
made,  it  is  proved  the  Treasury  Department  has  been  doing  business  with 
eleven  banks,  other  lhan  those  sanctioned  by  Congress.     The  same  report 
states,  that  this  business  is  transacted  in  all  the  banks  upon  precisely  the  same 
plan.     We  have  never  been  told  of  any  losses  having  been  sustained  in  any 
of  them.     Why,  then,  pretend,  that  it  is  impossible  to  transact  this  business 
through  the  agency  of  the  State  banks,  when  we  have  the  best  authority  for 
asserting,  that  this  has  been  done  already  in  a  majority  of  cases,  with  the 
greatest  success,  facility,  and  certainty?     That  no  advantages,  which  are  pe- 
culiar, can  be  derived  to  the  nation,  from  the  United  States  liank,  as  respects 
the  collection  of  the  revenue,  the  safe  keeingof  its  specie,  or  the  transmission 
of  its  moneys  from  place  to  place,  will  be  made  evident  by  the  same  excellent 
authority.     It  is  there   stated,  that  considerable  sums,  to  the  credit  of  the. 
Government,  are  deposited  in  the  State  banks,  even  in  cities  where  the  mother 
bank  and  its  branches  are  situated.    On  the  7th  of  January,  1811,  very  consi- 
derable sums  belonging  to  the  Government,  remained  in  the  Manhattan  Hank 
of  New  York;  the  Bank  of  Pennsylvania,  in   Philadelphia:  and  the  Hank  of 
Columbia,  in  Georgetown,  District  of  Columbia.    As  to  the  transmission  of 
money,  we  are  told  in  the  same  report,  that  the  deposites  in  the  Manhattan 
Bank  arise  from  collections  of  the  revenue*  in  the  States  of  Rhode  Island  and 
Connecticut;  and  that  those  in  the  Bank  of  Pennsylvania,  occur  from  the  pay- 
ments which  are  made  for  public  lands,  into  the  banks  of  Ohio  and  Kentucky; 
from  these,  it  is  transmitted  to  the  branch  bank  of  Pennsylvania,  at  Pit  tabu  rg, 
and  thence  it  passes  to  the  Hank  of  Pennsylvania,  in  the  city  of  Philadelphia, 
where  it  remains  subject  to  the  drafts  of  the  Treasurer.     From  this  we  per- 
ceive, that  collections  and  transmissions  of  money,  for  the  benefit  of  the  Go- 
vernment, arc  made  without  the  aid  of  the  United  States  Bank,  or  its  branches, 
and  that  through  a  considerable  extent  of  country,  from  one  extremity  of  the 
States  to  the  other.     After  this,  will  any  one  pretend  to  urge  the  absolute 
necessity  of  the  United  States  Bank? 

It  is  said,  all  agree  that  banks  are  necessary  for  the  collection  of  taxes;  but 
that  of  the  United  States  is  not  absolutely  necessary  for  this  purpose,  since 

these  operations  can  be,  and  have  been  performed  for  the  General  Government, 

by  tin,   State  banks.     Sir,  1  deny  the  position,  and  will  maintain  that  for  this 
purpose,  JK>  bank  whatever  is  required.     [  will  ask  gentlemen  who  maintain  this 


16(3  BANK  OF  THE  UNITED  STATES. 

doctrine,  to  name  to  me  the  banks  which  are  employed  to  collect  the  taxes, 
which  are  levied  by  the  States?  1  know  of  none,  and  1  believe  it  impossible 
to  point  out  a  single  instance,  where  the  States  make  use  of  their  agency. 

Sir,  I  will  for  a  moment  permit  myself  to  suppose,  notwithstanding  the 
well  founded  objections  to  the  establishment  of  a  bank  under  the  authority  of 
the  General  Government,  Congress  shall  nevertheless  deem  it  expedient  to 
renew  the  charter  of  the  present  United  States  Bank,  or  establish,  what  some 
may  fancifully  reconcile  to  themselves,  by  the  title  of  a  national  bank,  it  then 
becomes  a  question,  how  the  States  will  receive  the  act?  Whether  they  can- 
not render  its  provisions  abortive?  That  many  of  the  States  are  hostile  to  a 
bank,  authorised  by  the  General  Government,  is  evident,  from  numerous  facts; 
for  proofs  we  may  refer  to  the  acts  of  the  Georgia  Legislature,  by  which,  the 
bank  capital  of  me  branch  at  Savannah,  wras  made  liable  to  taxation:  North 
Carolina  has  taxed  the  capital  of  her  banks:  the  Legislature  of  New  Jersey, 
passed  but  a  single  act  at  their  last  session;  that  was  to  levy  a  tax  on  bank 
capital.  No  one  can  pretend,  that  the  disposition  of  Virginia  or  Maryland, 
is  very  favorable  to  a  pretended  national  bank.  1  can  state,  upon  the  best  au- 
thority, that  it  was  a  subject  of  consideration  with  the  Legislature  of  Penn- 
sylvania, during  the  last  winter,  to  tax  the  capital  of  the  mother  bank  in  Phi- 
ladelphia. They  did  not  proceed,  because  they  relied  on  the  refusal  of  Con- 
gress to  renew  the  present  charter  of  the  United  States  Bank.  The  taxation 
of  the  capital  stock  of  this  bank,  is  to  be  looked  for  on  the  part  of  the  States 
in  which  the  mother  bank  and  its  branches  may  be  established;  because,  the 
States  generally  require  a  bonus,  or  in  other  words,  they  raise  a  tax  from  the 
banks,  which  they  themselves  have  sanctioned;  in  many  instances,  the  amount 
has  been  very  considerable.  We  cannot  suppose  the  States  will  hesitate  to 
tax  the  United  States  Bank;  because  if  they  do,  they  will  act  unjustly  towards 
such  of  their  immediate  citizens,  as  have  invested  their  capitals  in  the  stock 
of  State  banks;  a  partial  taxation  is  contrary  to  the  spirit  and  letter  of  our 
constitutions.  The  States  haying  the  right  to  tax  the  institutions,  which  you 
may  sanction  within  their  jurisdiction,  they  have  it  in  their  power  to  render 
inoperative  the  statutes  which  you  may  enact  on  this  subject;  they  may  tax 
to  an  amount,  which  shall  equal  the  dividends  arising  upon  the  capital.  Who 
can  pretend,  that  banks  will  do  business  without  the  prospect  of  a  handsome 
profit?  Thus  disposed,  the  States  may  place  the  United  States  in  a  very  un- 
pleasant situation.  Let  us]avoid  every  possible  source  of  discord.  The  General 
Government  may  be  reduced  to  the  dilemma,  either  to  relinquish  a  pretended 
right,  or  to  pay  tribute  to  the  States,  to  permit  them  to  exercise  an  authority 
which  is  unquestionably  an  attribute  of  sovereign  power.  This  would  consti- 
tute an  epoch  in  the  political  annals  of  our  country.  I  hope  such  absurdities 
will  not  be  committed;  we  may  avoid  them,  by  a  strict  compliance  with  the 
principles  of  the  constitution  of  the  United  States. 

JANUARY  18,  1811. 

Mr.  BURWELI/S  motion  to  strike  out  the  first  section,  still  depending: 

Mr.  P.  B.  PORTER  spoke  in  favor  of  it,  as  follows: 

Mr.  CHAIRMAN:  As  this  bank  has  excited  so  extraordinary  an  interest  in 
every  part  of  the  United  States,  and  particularly  in  the  State  which  1  have 
the  honor  to  represent;  as  I  am  apprehensive,  from  what  took  place  yester- 
day, that  I  shall  be  found,  on  this  question,  in  opposition  to  a  majority  of  my 
colleagues;  and,  (what  will  always  be  an  imperative  motive  with  me)  as  I 
think  this  bill  aims  a  deadly  blow  at  some  of  the  best  principles  of  the  consti- 
tution, I  feel  it  my  duty  to  state  to  the  House  the  grounds  on  which  I  shall 
be  constrained  to  vote,  for  striking  out  the  section  now  under  consideration. 

1  acknowledge  that  1  had  not,  until  lately,  paid  any  particular  attention  to 
the  question  of  the  constitutionality  of  this  institution.  I  stand,  therefore,  in 
this  respect,  on  safer  ground  than  the  respectable  member  from  North  Caro- 
lina, (Mr.  MACON)  for  I  have  no  reason  to  suspect  myself  of  any  long-rooted 
prejudices  on  the  question.  The  Bank  of  the  United  States  was  established 


0>T    THE  BILL  TO   RENEW    THE    CHARTER  OF    1791. 

at  a  time  when  I  was  not  in  the  habit  of  troubling  myself  with  such  questions. 
I  had  been  accustomed  to  think  of  it  as  an  institution,  the  constitutionality  of 
which  ^yas  conceded  by  common  consent.  But,  sir,  when  the  question  was 
again  stirred,  I  felt  it  my  duty  to  give  it  a  thorough  investigation  before  I 
should  sanction  it  by  my  vote.  I  have  given  it,  if  not  a  thorough,  at  least  a 
candid  and  impartial  examination;  and  the  result  has  been,  a  full  conviction 
that  we  have  no  right  to  incorporate  a  bank  upon  the  principles  of  the  bill  on 
the  table;  or,  rather,  upon  the  principles  of  the  original  charter,  which  this  bill 
proposes  to  renew.  The  ground  of  my  objection  is,  that  it  assumes  the  exer- 
cise of  legislative  powers  which  belong,  exclusively,  to  the  State  Govern- 
ments. 

I  shall  not  touch  the  question  of  the  expediency  of  this  bank,  much  less  the 
expediency  of  banking  generally.  If  I  were  competent,  which  I  confess  I  am 
not,  to  the  task,  I  should  think  it  a  verv  unprofitable  one,  to  follow  the  gen- 
tleman through  all  the  mazes  of  the  banking  system;  a  system,  sir,  about  the 
various  and  important  operations,  and  effects  of  which,  on  civil  society,  aside 
from  a  few  obvious  truths  which  it  furnishes,  I  have  found  that  those  gentle- 
men who  have  professed  to  understand  them  best,  have  differed  most.  As  I 
propose  to  confine  myself  to  the  constitutional  question  solely,  I  hope  I  shall 
be  allowed  to  take  a  little  broader  range  en  this  point,  than  has  been  taken  by 
the  gentlemen  who  have  preceded  inc. 

I  am  aware  how  ungracious  constitutional  objections  to  the  powers  of  this 
House,  are  with  those,  (and  there  are  many  such)  who  believe  that  the  powers 
of  the  Federal  Government  are,  at  best,  too  contracted,  and  who  would  be  glad 
to  see  all  the  State  rights  merged  and  sunk  into  a  consolidated  government. 
Whatever  may  be  my  speculative  opinions  on  this  subject,  I  can  never  be  in- 
fluenced, by  motives  of  expediency,  to  swerve  from  my  allegiance  to  the  con- 
stitution. This  sentiment  is  indelibly  fixed  on  inv  mind,  and  I  trust  it  is  a 
common  one  to  the  members  of  this  committee,  that,  in  adhering  strictl^  to 
the  obligation  we  have  taken,  to  support  the  constitution  of  the  United  States, 
we  not  only  perform  a  sacred  duty  to  ourselves,  but  we  render  a  better  ser- 
vice to  the  real  and  permanent  interests  of  our  country,  than  we  could  po>si- 
bly  render  by  a  departure  from  that  obligation,  even  though  that  departure 
were  to  avert  so  serious  a  calamity  as  ageneral  bankruptcy;  a  calamity,  which, 
in  order  to  alarm  the  timid,  has  been  held  out  as  the  inevitable  consequence 
of  a  refusal  to  renew  this  charter. 

I  should  be  surprised  at  the  general  acquiescence  which  seeing  to  have  been 
yielded  to  the  constitutionality  of  this  institution,  did  I  not  believe  that  others 
had  been  as  superficial  in  their  examination  of  the  subject  as  I  had  myself. 
When  objections  are  made  to  the  constitutionality  of  a  law,  the  people,  in  the 
cursory  views  which  they  are  accustomed  to  take  of  such  objects,  are  apt  to 
adopt,  as  the  tests  of  its  constitutionality,  the  powers  of  the  State  and  Fede- 
ral Governments, cojlectively;  and  if  they  find  nothing  in  the  law  offensive  to 
the  principles  of  civil  liberty,  nothing  uncongenial  with  the  spirit  of  a  repub- 
lican government,  they  rest  satisfied,  and  do  not  trouble  themselves  with  nice 
distinctions  between  the  powers  peculiar  to  the  one  or  the  other  of  these  go- 
vernments. Such  reasoning  would,  however,  ill  become  the  sagacity  of  this 
House. 

One  of  the  most  serious  dangers  with  which  our  Government  is  threatened, 
and  it  is  a  danger  growing  out  of  the  very  nature  and  structure  of  the  Govern- 
ment itself,  consists  in  its  tendency  to  produce  collisions  between  State  and 
Federal  authorities.  The  Federal  Government,  as  was  observed  by  my  learned 
colleague,  (Mr.  MITCHILL)  is,  imperium  inimperio,  a  government  within  a  go- 
vernment; and  the  misfortune  is,  that  there  exists  no  friendly  third  power  to 


preservation  ot  both  these  govern- 
ments— as  we  are  as  well  the  subjects  of  the  iinperio  as  of  the  imperium,  we 
ought  to  act  with  great  circumspection  and  delicacy,  in  the  assumption  of  pow- 


BANK  OF  THE   UNITED   STATES. 

ers  which  do  not  clearly  belong  to  us.  It  is  better  to  forego  the  exercise  of 
powers  to  which  we  are  entitled,  if  the  exercise  of  them  is  not  very  import- 
ant, rather  than  hazard  the  assumption  of  doubtful  ones,  the  fatal  consequen- 
ces of  which  my  honorable  friend  from  Virginia.  (Mr.  BURWELL)  has  so  just- 
ly deprecated. 

The  great  line  of  demarcation  between  the  powers  of  the  State  and  Federal 
Governments,  is  well  understood.  The  powers  of  the  State  Governments  ex- 
tend to  the  regulation  of  all  their  internal  concerns,  those  of  the  Federal  Go- 
vernment to  the  management  of  all  our  external  rejations — external,  as  regards 
the  individual  States,  as  well  as  the  States  in  their  collective  capacity.  The 
general  ideas  upon  which  our  republic  is  founded,  are  these:  that  small  terri- 
tories are  better  adapted  to  the  successful  administration  of  justice  than  large 
ones.  In  a  Republic,  where  the  people  are  the  sovereigns  and  source  of  pow- 
er, it  is  important  that,  in  order  to  enable  them  to  execute  this  power  discreet- 
ly, they  should  possess  correct  information  in  relation  to  the  character  and 
conduct  of  their  rulers,  and  in  relation,  also,  to  the  character  of  the  measures 
which  they  pursue,  or  ought  to  pursue;  and  this  information  is  better  attained 
in  a  small  than  in  a  large  territory.  The  individual  States,  have,  therefore, 
reserved  to  themselves  the  exclusive  right  of  regulating  all  their  internal,  and, 
as  I  may  say,  municipal  concerns,  in  relation  both  to  person  and  property. 
But  a  single  State  maybe  inadequate  to  its  own  protection  against  foreign  vio- 
lence; it  may  also  be  unable  to  enforce  the  observance  of  proper  rules  and 
regulations  tor  carrying  on  its  foreign  trade  and  intercourse.  The  confederacy 
of  the  States  is,  therefore,  formed  for  the  purpose  of  attaining  these  two  ob- 
jects, namely,  the  regulation  and  protection  of  the  trade  and  intercourse  of  the 
States  with  each  other,  and  foreign  nations,  and  their  security  against  foreign 
invasion.  It  has  some  other  objects  in  view  of  minor  consequence,  and  imme- 
diately connected  with  these  principal  ones.  The  constitution  of  the  United 
States  is  the  basis  of  thh  confederacy,  and  it  is  only  necessary  to  read  the 
constitution  to  perceive  that  it  is  nothing  more  than  a  delegation  of  specific 
powers  for  these  specific  purposes,  ami  that  the  general  sovereignty  of  the 
States  over  their  respective  territories,  is  expressly  retained  by  the  States. 

But,  sir,  independent  of  these  specific  powers  and  duties  of  the  Federal  Go- 
vernment, it  has  another  and  distinct  set  of  powers  and  duties  to  perform  and 
execute.  The  national  domain,  as  it  has  been  called,  embracing  the  lands  ac- 
quired by  the  revolutionary  conflict,  the  lands  since  purchased  of  foreign  na- 
tions, and  the  lands  ceded  by  the  several  States  to  the  General  Government, 
belong  to  the  United  States,  in  their  federate  capacity;  and  no  individual 
State,  as  such,  has  any  claim  to,  or  jurisdiction  over  them.  As  to  these  lands, 
the  powers  of  the  United  States  are  sovereign,  independent,  and  complete, 

for  ' 


ments,  in  relation  to  the  States.  I  have  adverted  to  this  branch  of  the  powers 
of  the  Federal  Government,  as  a  means  of  dispelling  the  obscurity  which  has 
been  thrown  over  the  constitutional  question,  to  which  I  shall  soon  come,  by 
confounding  the  powers  of  Congress  over  the  States,  with  their  powers  over 
the  Territories.  Arguments,  to  which  I  shall  have  occasion  to  advert,  in  the 
course  of  my  observations,  have  been  used  to  justify  the  exercise  of  particu- 
lar powers  Within  the  limits  of  the  States,  from  our  acknowledged  nght  to, 
and  practical  exercise  of,  similar  powers  within  the  Territories. 

In  discussing  constitutional  questions,  then,  we  may  lay  down  these 
axioms — That  in  relation  to  the  Territories,  the  powers  of  Congress  are  su- 
preme and  exclusive:  that  in  relation  to  the  State,  they  are  specifically  de- 
fined and  limited  by  the  constitution;  and  that  we  have  no  right  to  exercise, 
within  the  limits  of  a  State,  any  power  as  resulting  from  the  general  rights  of 
sovereignty;  because  that  sovereignty  belongs  to  the  States  and  to  the  People, 
and  not  to  the  Federal  Government.  To  show  that  these  two  last  positions 
are  correct,  I  will  read  the  tenth  article  in  amendment  of  the  constitution: 
"  The  powers  not  delegated  to  the  United  States  by  the  constitution,  nor  pro- 


ON  THE  BILL  TO  RENEW   THE  CHARTER  OF   1791. 

hibited  by  it  to  the  States,  ire  reserved  ites  respectively,  or  the 

People,"" 

.  then,  the  incorporation  of  this  bank  involves  the  exercise  of  legislative 
powers  within  the  jurisdiction  of  t  -  .in  relation  to  the  rights  of  proper- 
ty between  the  citizens  of  th<  :  and  as  no  power  to  incorporate  a  bank 
€0  nomine  is  to  be  found  in  the  constitution,  it  would  seem  sufficient  for  us 
to  rest  the  argument  here,  by  a  mere  denial  of  the  power:  and  to  call  on  the 
advocates  of  the  bank  to  show  its  constitutionality.  An  attempt  to  prove  this 
constitutionality  has  been  made:  not,  however,  >ir.  by  arguments  advanced 

:itJemen  on  the  other  side  of  the  House  in  their  places,  (for  they  have, 
so  tar,  observed,  and  I  understand  that  they  will  continue  to  observe,  a  pro- 
found silence  on  this  question.")  but  by  arguments  which  have  been  gratuitous- 

roduced,  by  t;  f  the  bank.  T  allude  to  the  pamphlet,  which  has, 

within  a  few  day?  past /been  printed  and  distributed  among  the  members,  con- 
taining the  celebrated  argument   of  General  Hamilton,  on  the  constitut 
ality   of  a  national  bank  if  pamphlet  is  de  facto*  if  not  dcjitrc,  before 

the  committee.  I  will,  if  the  i  will  indulge  me.  attempt  to  examine 

some  of  the  principal  argurm  ..ned  in  IT.  uial  I  will  also  notice  some 

additional  ones,  advance  .y  by  my  honorable  friend  ami  colleague  on 

my  left.  (Mr.  FISK.)    In  thecourse  of  the"  observations  which  I  have  to  sub- 
mit, I  shall,  without  doubt,  n-  uentsand  remarks  made  by  the  gentle- 
men who  I,                                             s  which  are  famil  nembersof  the 
commit  tee.    M  .                                 ;  the  difficuhv  of  taking  a  connected  view  of 
the  subject,  without  s>uch  rep-                                                  -.mate  as  to  throw  a 
single  new  ray  of  light  on  this  important  cnie--       .  I  -hall  feel  amply  remune- 
ouble,  and  I  >hall  think  the  time  of  the  committee  not  alto- 
T  misspent. 

The  first  argument  in  this  pamphlet,  is  founded  on  the  sovereignty  of  the 
powers  of  Congress-     The  Federal  Government  is  sa  !  vereign,  a*  to 

all  the  objects/or  which  that  Government  tea*  instiiuled,  A  sovereign  nouer 
inch:  :ce  of  the  term,  a  right  to  all  the  means  applicable  to  the  at- 

tainment ot  the  ends  for  which  \  -.  and  ther  ']oF&& 

in  virtue  of  their  -  jr,  create  incorporations  for  attaining 

is  or  otyc 

This  argument  i>  founded  on  what  the  logicians  call  petitio  principii,  or, 

'if  question.     The  proposition,  that  the  Government  is  sovereign,  is 

assumed,  to  prove  that  it  possesse-  the  attributes  of  sovereignty:  or,  in  other 

words,  the  fact  of  sovei-  '-d.  to  prove  that  sovereignty.     If  the 

position,  that  the  power?  oT  this  Government  are  sovereign,  as  to  all  the  objects 

of  them,  be  proved.  I  will  concede  the  consequence,  to  wit:  that  we  have  a 

;  Derations  to  attain  those  objects.   But  I  deny  the  fact  of 

The  acts  of  Congo  -  .id,  are  declared  by  the  con^titu- 

tion,  to  be  ••  the  supreme  law  of  the  land:"  and  the  power  which  can  make  the 

supreme  law  of  the  land,  is,  necessari!  ei^n?power.    Bull  deny  that 

-  a  correct  definition,  or  exposition  o:  _  ity.     It  is  not  the  high 

nature  of  an  act,  nor  the  authority  of  the  act.  that  stamps  the  character  of 
sovereignty  en  him  who  performs  it.  The  sheriff'of  a  county,  who  puts  a  man 
to  death,  under^the  sentence  of  the  law,  executes  an  act  of  as  high  import  and 
authority  as  human  power  can  execute:  and  yet  the  sheriffof  a  county  is  not, 
therefore,  a  sovereign.  His  authority  is  a  mere  dekgated  authority:  h'is  act  is 
a  mere  ministerial, mechanical  act.  "The  ido  eignty  imports  the  exer- 

t  discretion — of  judgment — of  will.     It  is  oft  ->ence  of  - 

reign  power,  that  you  may^  execute  that  power,  or  not  execute  it:  that  you 
may  execute  it  when  you  will,  and  how  you  will.  A  sovereign  power,  as  to 
any  object,  includes  a  right  to  any  means",  and  all  the  means  applicable  to  the 
attainment  of  theobject/  But.  >iV.  do  i  -s  sovereign  powers;  or, 

what  is  the  same  tiling,  discretionary  means,  as  to  the  attainment  of  the  ob- 
jects of  this  Government?  No.  sir.  The  constitution  is  not  a  general  authority 
to  Congress  to  attain  the  objects  for  which  the  Government  "was  established; 
but  it  is  an  enumeration  of  the  particular  powers,  or  means,  by  which,  and  by 


170  BANK  OF  THE  UNITED  STATES. 

which  only,  certain  objects  are  to  be  accomplished.  If  the  powers  of  Con- 
gress were  sovereign,  they  would  of  necessity  comprehend  all  the  means  ap- 
plicable to  the  attainment  of  their  objects;  but,  inasmuch  as  they  are  specific 
and  circumscribed,  that  very  circumstance  proves  that  they  are  not  sovereign. 
The  People  of  the  United  States  are  the  true  sovereigns  of  this  country. 
From  them  all  power  emanates,  and  on  their  will  all  the  authority  of  this  Go- 
vernment depends.  The  powers  of  the  Federal  Government  are  mere  dele- 
gated chartered  authorities;  and  in  the  exercise  of  them,  we  are  tied  down  to 
the  letter  of  the  constitution.  We  have,  to  be  sure,  a  certain  latitude  of  dis- 
cretion allowed  us,  within  the  letter  and  pale  of  the  constitution;  and,  so  far, 
we  may  be  said  to  possess  a  sort  of  limited,  qualified  sovereignty.  But  the 
constitution  is  the  standard  by  which  to  measure  the  quantum  and  extent  of 
pur  sovereignty.  And  our  sovereignty,  which  is  the  result  of  the  powers  given 
in  the  constitution*  is  not  the  standard  by  which  to  measure  the  constitution. 
The  constitution  is  the  true  bed  of  Procrustes;  and  our  sovereignty,  however 
unwillingly  we  may  yield  it,  must  be  the  victim. 

Another  argument,  which  is  rather  an  argument  to  the  favor,  than  to  the  righf 
of  this  bank,  is,  that  it  is  an.  innocent  institution;  that  although  its  erection 
involves  the  exercise  of  legislative  powers  within  the  States,  it  does  not 
abridge  nor  affect  the  rights  of  the  citizens,  as  secured  to  them  by  the  laws  of 
those  States.  A  corporation,  it  is  said,  is  a  fiction  of  the  law — a  mere  politi- 
cal transformation  of  a  number  ot  individuals  from  their  natural  into  an  arti- 
ficial character,,  for  the  purpose  of  enabling  them  to  do  business  to  better  ad- 
vantage, and  on  a  more  extended  scale:  but,  that,  when  this  political  associa- 
tion, this  legal  entity,  is  once  formed,  it  becomes  subject  to  the  laws  of  the 
State  in  which  it  happens  to  be  placed. 

I  know,  sir,  that  there  is  nothing  formidable  in  the  abstract  idea  of  a  cor- 
poration. It  is  a  mere  phantom  or  the  imagination;  invisible,  intangible,  and, 
of  course,  innocent.  But,  sir,  when  the  legal  effects  of  this  incorporation  are, 
to  invest  the  individuals  whom  it  associates^  with  privileges  and  immunities 
to  which  they  were  not  before  entitled^  when  this  legal  hction  is  interposed 
to  shield  certain  individuals  from  <he  liabilities  to  which  they  would  be  sub- 
ject as  ordinary  citizens,  it  then  becomes  a  matter  of  important  and  serious 
consequence.  What  are  some  of  the  legal  effects  of  this  incorporation? 

One  of  its  most  obvious  and  distinguished  characteristics  is,,  that  it  exempts 
the  private  property  and  persons  of  the  stockholders  from  all  liability  for  the 
payment  of  the  debts  of  the  company.  By  the  laws  of  every  State  in  the 
Union,  every  man  is,  I  believe,  liable  for  the  payment  of  his  debts,  to  the  full 
amount  of  his  private  fortune;  and,  in  case  that  fortune  prove  insufficient,  his 
personal  liberty  is  at  the  disposal  of  his  creditor;  at  least,  to  a  certain  extent. 
Is  not,  then,  the  exemption  from  these  liabilities  an  important  immunity?  Is 
it  not  an  exclusive  privilege  secured  to  the  stockholders  of  this  bank?  Assur- 
edly it  is.  I  know  it  has  been  said,  that  a  number  of  individuals  may,  by  a 
private  association,  secure  to  themselves  all  the  advantages  of  an  incorporated 
company f  that,  by  forming  a  common  fund  or  stock,  upon  which  to  do  busi- 
ness, and  issuing  notes  chargeable  upon  that  fund,  they  may  exonerate  their 
persons  and  private  property  from  all  liability  for  the  payment  of  the  debts 
contracted  in  that  business..  I  am  no  lawyer,  sir;  but  if  the  law  be,  what  it 
is  said  to  be,  and  what  I  believe  it  to  be,  siimma  ratio^,  then  I  pronounce  this 
doctrine  not  to  be  law:  for  nothing  can  be  more  preposterous  in  principle  than 
to  say,  that  a  man  may,  by  his  own  act,  avoid  the  force  of  an  obligation, 
which  the  law  has  made  universal  and  unqualified.  If  a  man  owes  a  debt,, 
acknowledges  he  owes  it,  and  has  received  a  consideration  for  it;  the  law  has 
prescribed  the  nature  anil  extent  of  his  liability  to  pay  it;,  and  it  is  not  for  him 
to  say  that  it  shall  only  be  paid  out  of  a  certain  fund,,  or  particular  part  of  his 
property,  and  no  other.  When  men  contract  a  debt  jointly,  the  legal  obliga- 
tion to  pay  it,  extends  as  well  to  the  persons  and  separate  property  of  the  in- 
dividual partners,  as  to  their  joint  property. 

Another  feature  of  this  incorporation  is,  that  it  authorizes  the  stockholders 
to  take  usurious  interest  for  their  money.  By  the  provisions  of  the  law,  the 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791. 

bank  may  issue  notes  and  make  discounts  to  double  the  amount  of  their  capi- 
tal stock;  and,  in  addition  to  that,  to  the  amount  of  any  moneys  which  may 
happen  to  be  deposited  in  their  vaults  for  safe  keeping;  and  this,  too,  inde- 
pendent of  the  debts  created  by  these  deposites.  Thebank  then  may,  and  in 
fact,  in  many  instances,  does,  draw  an  interest  on  three  or  four  times  its  capi- 
tal. Every  State  in  the  Union  has  laws  regulating  the  rate  of  interest,  and, 
in  most  of  the  States,  this  rate  is  fixed  at  six  per  cent,  a  year.  By  these  laws, 
it  is  made  penal  for  a  man  to  receive  more  than  six  per  cent,  interest  for  the 
use  of  any  sum  of  money,  which,  by  a  loan,  he  puts  at  hazard,  and  the  use  of 
which  he  deprives  himself  of.  Now,  sir,  this  bank  is  permitted,  contrary  to 
those  laws,  to  draw  an  interest  on  twenty  or  thirty  millions  of  dollars,  when, 
in  truth,  the  whole  extent  of  its  responsibility,  the  whole  sum  which  it  puts  at 
hazard,  and  the  use  of  which  it  foregoes,  is  only  its  original  stock  often  mil- 
lions. In  answer  to  this,  it  will  be  said,  that  an  individual  may,  by  issuing 
notes  to  an  amount  greater  than  his  property,  legally  receive  an  interest  on  a 
capital  which  he  does  not  possess.  But,  it  must  be  recollected,  in  case  of  the 
individual,  that,  although  he  may  not,  at  the  particular  time,  possess  a  pro- 
perty adequate  to  the  payment  of  his  debts,  yet,  that  all  the  property  which 
he  may  subsequently  acquire,  will  be  liable  for  the  payment  of  those  debts: 
And,  what  is  more,  sir,  his  personal  liberty  is  always  put  in  jeopardy.  In  this 
point  of  view,  the  liability  and  the  hazard  of  the  individual  may  fairly  be  said 
to  be  co-extensive  with  the  whole  amount  of  the  capital  on  which  he  draws  an 
interest;  and  which  is  often  the  case  with  the  bank. 

This  bank  incorporation  possesses  other  qualities  at  war  with  the  laws  of  the 
several  States,  one  of  which  is,  that  it  authorises  stockholders,  who  may  be 
foreigners,  to  hold  real  estate.  But,  sir,  I  will  not  detain  the  committee  any 
longer  on  this  part  of  the  argument:  for  this  institution  cannot  be  said  to  be 
innocent,  as  regards  the  rights  of  the  States,  when  its  effects  on  the  rights  of 
property  are  to  exonerate  the  stockholders  from  some  of  the  most  important 
responsibilities  which  the  laws  of  the  several  States  have  provided  for  the  pay- 
ment of  debts;  and  when  it  authorizes  the  taking  of  usurious  interest.  I  lay 
it  down,  then,  asa  position  which  cannot  be  controverted,  that  the  granting  of 
this  charter  is  not  only  an  inteference  with  the  municipal  regulations  of  the 
several  States,  in  relation  to  the  rights  of  property,  but  that  it  is  an  uafraction 
of  the  rights  of  individuals  as  secured  by  those  regulations. 

But,  it  is  contended,  that  a  right  to  incorporate  a  bank  of  the  United  States 
is  delegated  to  Congress  by  the  constitution:  and  five  or  six  different  pro- 
visions of  the  constitution  are  referred  to  as  giving  this  right.  It  is  said,  that 
it  is  implied  in  the  power  to  lay  and  collect  taxes— \n  the  power  to  borrow 
money — in  the  power  to  regulate  trade  and  intercourse  between  the  several 
States — in  the  power  to  provide  for  the  general  welfare — and  in  the  power  to 
make  all  needful  rules  and  regulations  respecting  the  territorial  and  other  pro- 
perty of  the  United  States.  The  very  circumstance  of  referring  this  right  to 
many  different  heads  of  authority,  is,  in  itself,  conclusive  evidence,  that  it  has 
no  very  direct  relation  to  any  ot  them:  for  it  can  scarcely  be  imagined,  that 
the  single  act  of  incorporating  a  bank,  can  be,  at  the  same  time,  anything  like 
a  direct  execution  of  so  many  and  such  distinct  and  independent  powers.  But 
I  will  examine  these  provisions  separately. 

Before  I  proceed,  however,  I  will  premise,  that  all  the  arguments  in  support 
of  the  right  to  incorporate  a  bank,  as  deducible  from  the  provisions  of  the  con- 
stitution itself,  are  built  up  by  the  aid  of  the  clause  of  the  constitution,  which 
has  been  sometimes  called  "the  sweeping  clause."  I  allude  to  the  clause 
which  declares  that  Congress  shall  have  me  right  to  pass  all  laws  necessary 
and  proper  for  the  carrying  into  execution  the  delegated  powers.  All  the 
powers  in  the  constitution  are  given  for  certain  ends  or  objects.  But  each 
power  is  not  a  general  authority  to  attain  a  particular  object,  and  comprehend- 
ing, of  course,  all  the  means  or  powers  aplicable  to  its  accomplishment;  but. 
in  most  instances,  it  is  a  specific  mean  for  effecting  some  particular  end,  and 
all  other  means  or  powers,  (for  means  and  powers  are  the  same  thing,)  conducive 


172  BANK  OF  THE  UNITED  STATES. 

to  the  same  end,  are  expressly  excluded,  by  the  restrictive  clauses  of  the  con- 
stitution. 

The  mode  of  reasoning  adopted  by  General  Hamilton,  and  the  other  advo- 
cates of  implied  powers,  is  this:  They  first  search  for  the  end  or  object  for 
which  a  particular  power  is  given;  and  this  object  will  be  an  immediate  or 
ultimate  one,  as  may  best  suit  the  purpose  of  the  argument.  Having  ascer- 
tained the  end  or  object,  they  abandon  the  power;  or,  rather,  they  confound 
the  power  and  the  object  of  it  together,  and  make  the  attainment  of  the  objectr 
and  the  execution  of  the  power  given  to  accomplish  it,  convertible  terms. 
Whatever,  they  say,  attains  the  object  for  which  any  power  is  given ?  is  an 
execution  of  that  power.  But  the  constitution  gives  to  Congress  a  right  to 
make  all  laws  necessary  and  proper  for  carrying  into  execution  the  delegated 
powers:  and,  therefore,  as  the  execution  of  a  power,  and  the  attainment  of  its- 
object,  are  synonymous  terms,  the  constitution  gives  to  Congress  a  right  to 
make  all  laws  necessary  and  proper  for  attaining  the  ends  or  objects  for  which 
the  various  powers  in  the  constitution  are  given, 

I  beg  leave  to  read  a  passage  from  this  pamphlet:  "  The  relation  between 
the  measure  and  the  end;  between  the  nature  of  the  mean  employed  towards 
the  execution  of  a  power,  and  the  object;  must  be  the  criterion  of  constitu- 
tionality." Here,  then,  is  the  axiom:  Now  for  the  application  of  it.  The 
constitution  git es  to  Congress  the  power  to  levy  taxes,  and  also  the  power  to 
borrow  money.  But  the  establishment  of  a  bank  is  neither  levying  taxes  nor 
borrowing  money ;  nor  is  the  law  incorporating  the  bank,  a  /aw'tolevy  taxesy 
or  a  law  to  borrow  money.  But  the  immediate  end  or  object,  for  which  these 
two  powers  were  given,  was,  to  enable  the  Government  to  raise  a  revenue j 
and  a  bank  may  promote  this  object.  Then,,  sir,  by  a  dexterous  application, 
of  the  argument  which  I  have  stated,  the  fallacy  of  which  consists  in  the  sud- 
den and  unobserved  transitions  which  are  made  from  the  power  to  the  object r 
and  from  the  object  back  again  to  the  power,  they  prove  that  the  establish- 
ment of  a  bank  is  in  execution  of  the  powers  to  lay  taxes  and  to  borrow  money. 
I  will  now,  sir,  proceed  to  examine  the  particular  provisions  of  the  constitu- 
tion which  have  been  relied  on,  and  to  place  the  subject  in  some  different  as- 
pects. 

In  the  first  place,  then,  it  is  contended  that  the  right  to  incorporate  a  bank 
of  the  United  States,  is  included  in  the  power  to  lay  and  collect  taxes.  And 
how  is  the  argument  by  which  this  position  is  maintained?  Why,  sir,  it  is 
said  that  the  law,  by  creating  bank  paper,  and  making  that  paper  receivable 
in  payment  for  taxes,  increases  the  circulating  medium  in  which  taxes  are 
paid,  and,  of  course,  must  facilitate  the  payment  of  them:  that  whatever  faci- 
litates the  payment  of  taxes,  facilitates  also  the  collection  of  them;  arid  what- 
ever aids  or  tacilitates  the  collection  of  taxes,  is  a  means  for  their  collection. 
And,  therefore,  the  incorporation  ot  a  bank  is  in  execution  of  the  power  to  lay 
and  collect  taxes. 

No  man,  sir,  ought  to  complain  of  the  weakness  of  a  government,  whose 
powers  may  be  reasoned  up  by  logic  like  this,  Amidst  the  infinite  variety  of 
relations,  and  connexions,  and  dependencies,  and  analogies,  by  which  all  hu  - 
man  transactions  are  allied  to  each  other,  he  must  be  a  weak  politician  who 
cannot,  by  hooking  together  a  chain  of  implication  like  this,  justify  any  and 
every  measure  of  political  policy  or  economy,  as  a  means  of  executing  some 
of  the  powers  with  which  tliis  Government  is  intrusted.  Take  this  latitude 
of  implication  or  construction,  and  you  want  no  other  power  but  the  power 
to  lay  and  collect  taxes.  It  may  be  tortured  into  a  justification  of  every  mea- 
sure which  ambition  itself  could  desire.  No  tyrant  ever  made  a  law  without 
assigning  the  public  good  as  the  motive  of  it.  No  man  on  this  floor,  however 
wicked  his  designs,  would  venture  to  propose  a  measure,  (indeed  few  could 
be  proposed)  in  t'avor  of  which  he  could  not  adduce  some  plausible  argument, 
to  shew  that  it  would  tend  to  promote  the  general  prosperity  of  the  country. 
And  in  showing  this,  he  would  show  its  constitutionality;  for  it  is  demonstra- 
ble, that  whatever  would  promote  the  general  prosperity  of  the  country, 
would,  and  tor  that  very  reason,  facilitate,  in  some  greater  or  less  degree,  the 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

payment  of  taxes;  and  might,  therefore,  be  justified  as  a  means  for  the  col- 
lection of  taxes. 

But,  sir,  the  constitution,  as  I  have  said  before,  and  I  must  repeat  it  again — 
for  this  is  the  radical  source  of  all  the  error  on  this  subject— the  constitution 
of  the  United  States  is  not,  as  such  reasoning  supposes  it  to  be,  a  mere  gene- 
ral designation  of  the  ends  or  objects  for  which  the  Federal  Government  was 
established;  and  leaving  to  Congress  a  discretion  as  to  the  means  or  powers 
by  which  those  ends  shall  be  brought  about.  But  the  constitution  is  a  spe- 
cification of  the  powers  or  means  themselves  by  which  certain  objects  are  to 
be  accomplished.  The  powers  of  the  constitution,  carried  into  execution  ac- 
cording to  the  strict  terms  and  import  of  them,  are  the  appropriate  means,  and 
the  only  means  within  the  reach  of  this  Government,  for  the  attainment  of  its 
ends.  It  is  true,  as  the  constitution  declares,  and  it  would  be  equally  true 
if  the  constitution  did  not  declare  it,  that  Congress  have  a  right  to  pass  all 
laws  necessary  and  proper  for  executing  the  delegated  powers:  but  this  gives 
no  latitude  of  discretion  in  the  selection  of  means  or  powers.  A  power  given 
to  Congress  in  its  legislative  capacity,  without  the  right  to  pass  laws  to  exe- 
cute it,  would  be  nugatory;  would  be  no  power  at  all:  it  would  be  a  solecism 
in  language  to  call  it  a  power.  A  power  to  lay  and  collect  taxes,  carries  with 
it  a  right  to  make  laws  for  that  purpose;  but  they  must  be  laws  to  lay  and 
collect  taxes,  and  not  laws  to  incorporate  banks.  If  you  undertake  to  justify 
a  law  under  a  particular  power,  you  must  show  the  incidentally  and  appli- 
cability of  the  law  to  the  power  itself,  and  not  merely  its  relation  to  any  sup- 
posed end  which  is  to  be  accomplished  by  its  exercise.  You  must  show  that 
the  plain,  direct,  ostensible,  primary  object  and  tendency  of  your  law  is  to 
execute  the  power,  and  not  that  it  will  tend  to  facilitate  the  execution  of  it. 
It  is  not  less  absurd  than  it  is  dangerous,  first,  to  assume  some  great,  distinct, 
and  independent  power,  unknown  to  the  constitution,  and  violating  the  rights 
of  the  States;  and,  then,  to  attempt  to  justify  it,  by  a  reference  to  some  re- 
mote, indirect,  collateral  tendency,  which  the  exercise  of  it  may  have  towards 
facilitating  the  execution  of  some  known  and  acknowledged  power.  This 
word  facilitate,  has  become  a  very  fashionable  word  in  the  construction  of 
powers;  but,  sir,  it  is  a  dangerous  one;  it  means  more  than  we  are  aware  of. 
JTo  do  a  thing,  and  to  facilitate  the  doing  of  it,  are  distinct  operations;  they 
are  distinct  means;  they  are  distinct  powers?.  The  constitution  has  expressly 
given  to  Congress,  the  power  to  do  certain  things;  and  it  has,  as  explicitly, 
withheld  from  them  the  power  to  do  every  other  thing.  The  power  to  lay 
and  collect  taxes  is  one  thing;  and  the  power  to  establish  banks,  involving  in 
its  exercise  the  regulation  ol  the  internal  domestic  economy  of  the  States,  is 
another  and  totally  distinct  thing;  and  the  one  is  therefore  not  included  in 
the  other. 

Again,  sir,  it  is  contended  tint  the  right  to  incorporate  a  bank  is  implied  in 
the  power  to  regulate  trade  and  intercourse  between  the  several  States.  It 
is  said  to  be  so,  inasmuch  as  it  creates  a  paper  currency,  which  furnishes  a 
convenient  and  common  circulating  medium  of  trade  between  the  several 
States.  Money,  sir,  has  nothing  more  to  do  with  trade,  than  that  it  furnishes 
a  medium  or  representative  of  the  value  of  the  articles  employed  in  trade. 
The  only  office  of  bank  bills  is  to  represent  money.  Now,  if  it  be  a  regulation 
of  trade,  to  create  the  representative  of  the  representative  of  the  articles  or 
subjects  of  trade,  a  fortiori,  will  it  be  a  regulation  of  trade  to  create  the  arti- 
cles or  subjects  themselves.  By  this  reasoning,  then,  you  may  justify  the  right 
of  Congress  to  establish  manufacturing  and  agricultural  companies  within  the 
several  States;  because  the  direct  object  and  effect  of  these  would  be,  to  in- 
crease manufactures  and  agricultural  products,  which  are  the  known  and 
common  subjects  of  trade.  You  might,  with  more  propriety  say,  that,  under 
the  power  to  regulate  trade  between  the  States,  we  have  a  right  to  incorporate 
canal  companies;  because  canals  would  tend  directly  to  open,  facilitate,  and 
encourage  trade  and  intercourse  between  the  several  States;  and,  in  my  hum 
ble  opinion,  sir,  canals  would  furnish  a  much  more  salutary,  direct,  and  effi- 
cacious means,  for  enabling  the  great  body  of  the  people  to  pay  their  taxes, 


174  BANK  OF  THE  UNITED  STATES. 

than  is  furnished  by  banks.  But,  sir,  these  various  powers  have  never  been 
claimed  by  the  Federal  Government,'  and,  much  as  I  am  known  to  favor  that 
particular  species  of  internal  improvement,  I  would  never  vote  to  incorporate 
a  conipany  for  the  purpose  of  opening  a  ranal  through  any  State,  without  first 
obtaining  the  consent  of  that  State,  whose  territorial  rights  would  be  affected 
by  it.  There  can  be  no  question,  but  canal  companies,  and  agricultural  com- 
panies, and  manufacturing  companies,  and  bunking  companies  may  all  tend, 
more  or  less,  to  facilitate  the  operations  of  trade;  but  they  have  nothing  to  do 
with  the  political  regulations  ot  trade:  and  such  only  come  within  the  scope 
of  the  powers  of  Congress. 

But,  it  is  again  said,  that  the  right  to  grant  this  charter,  is  included  in  the 
power  to  borrow  money.  The  right  is  attempted  to  be  deduced  by  a  train  of 
reasoning  similar  to  that  employed  in  relation  to  the  provisions  which  I  have 
already  noticed.  By  forming  a  string  of  implications,  by  which  you  prove 
that  a  power  to  act  in  certain  cases,  and  in  relation  to  certain  subjects,  implies 
the  power  to  create  those  cases  and  subjects  to  act  upon.  The  Government, 
it  is  said,  may  want,  and  must  have  money^  in  any  great  national  crisis.  A 
national  bank,  with  an  extensive  capital,  will  furnish  ample  means  for  loans; 
will  facilitate  the  exercise  of  the  power  to  borrow;  and,  therefore,  the  right  to 
establish  such  a  bank,  is  implied  in  the  power  to  borrow.  No  one,  but  a  logi- 
cian, sir,  would  imagine  that  a  power  to  lend,  and  a  power  to  borrow,  had  any 
relation  to  each  other,  much  less  could  lie  conjecture,  that  a  power  to  borrow, 
and  a  power  to  create  the  ability  to  lend,  mean  the  same  thing.  A  plain  unso- 
phisticated man,  on  reading  the  constitution,  would  say,  that  the  power  to 
borrow,  necessarily  and  by  force  of  the  term,  pre-supposed  the  existence  of 
the  ability,  and  the  disposition  to  lend;  and  that  it  could  not  be  exercised  un- 
less such  ability  and  disposition  should  actually  exist.  But  the  favorite  doc- 
trine is,  that  all  powers  are  given  for  particular  ends,  and  include  all  the  means 
applicable  to  their  attainment.  Here  the  end  is  to  borrow  money;  to  borrow 
honestly  if  we  can,  but,  TO  BORROW.  The  ability  to  lend  is  a  necessary  means 
or  ingredient  toward  perfecting  the  execution  of  the  power  to  borrow.  But, 
sir,  let  me  ask,  whether  the  disposition  to  lend  be  not  as  necessary  a  mean  to- 
wards accomplishing  a  loan  as  the  ability?  It  unquestionably  is.  And,  of 
course,  by  the  doctrine  that  the  end  justifies  the  means,  you  may  coerce  the 
will  to  lend;  and  this,  top,  equally,  in  cases  where  the  ability  is  created  by 
Congress,  and  where  it  is  derived  from  any  other  quarter.  A  loan  obtained 
by  bringing  into  fair  operation  all  the  implications  of  this  power,  would  be 
borrowing  in  an  off-hand  style.  Such  a  loan,  if  effected  by  Bonaparte,  we 
should  call  robbery.  But  in  this  mild  Republic,  it  would  be  nothing  more  than 
the  fair  exercise  of  an  implied  constitutional  power. 

I  have  pursued  this  argument  thus  far,  merely  for  the  purpose  of  showing 
the  absurdities  into  which  this  doctrine  of  implication  will  lead  us.  But, 
suppose,  sir,  that  the  argument  of  the  gentlemen  on  the  other  side  of  the  ques- 
tion be  correct,  as  far  only  as  they  have  carried  it,  to  wit:  that  the  power  to 
borrow,  implies  a  right  to  furnish  the  ability  to  lend.  What,  I  would  ask,  is 
the  probable  fact,  as  to  the  facilities  which  this  bank  will  afford  the  Govern- 
ment in  borrowing? 

It  will  be  conceded  that  we  shall  have  no  occasion  for  borrowing,  except  in 
case  of  a  war;  and  if  we  have  a  war,  the  probability  is,  that  that  war  will  be 
with  Great  Britain.  I  say  this,  not  as  a  party  man,  sir,  but  because  the  inter- 
ests of  that  nation,  from  her  situation,  and  her  rival  pursuits,  will  be  much 
more  likely  to  come  in  collision  with  ours,  than  those  of  any  other  power. 
Now,  it  is  a  fact,  in  evidence  before  the  committee,  that  more  than  one-half  of 
the  stock  of  this  bank  belongs  to  British  subjects;  and  although,  as  foreigners, 
they  can  have  no  direct  agency  in  the  affairs  of  the  bank,  yet  we  well  know, 
that,  through  the  instrumentality  of  their  friends  and  agents,  of  whom  there 
are,  unfortunately,  too  many  in  this  country,  they  may  completely  control  its 
operations.  Now,  I  would  ask,  whether  it  is  probable,  that  British  subjects 
would  be  willing  to  lend  us  money  to  carry  on  war  against  their  sovereign? 
Would  they  not,  on  the  contrary,  exert  the  immense  influence  which  they  are 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1701. 

said  to  possess  over  the  moneyed  interests  of  this  country,  for  the  purpose  of 
depressing  the  credit  of  the  country?  for  the  purpose  ot  crippling  the  opera- 
tions of  the  State  banks?  and  for  the  purpose  of  drying  up  the  sources  from 
which  the  Government  might  otherwise  calculate  to  derive  supplies?  But,  sir, 
this  has  little  to  do  with  the  question  of  constitutionality,  to  which  I  will  again 
return. 

Another  ground  upon  which  the  constitutionality  of  this  institution  has  been 
attempted  to  be  supported,  is,  that  it  is  necessary  to  the  regular  and  success- 
ful administration  ot  the  finances.  There  is  no  question,  but  this  bank,  and 
its  branches,  afford  convenient  places  for  the  deposite  and  safe  keeping  of  the 
public  revenue.  It  is  not  to  be  controverted  that  they  also  furnish  a  safe, 
convenient,  expeditious,  and  cheap  means  for  the  transmission  of  moneys  from 
one  part  of  the  United  States  to  another,  as  they  may  be  wanted  by  the  Go- 
vernment. And  if  these  facilities  were  not  to  be  attained  in  any  other  way, 
I  should  say  it  would  afford  an  argument  in  favor  of  a  bank;  not  a  bank  in 
fringing  and  violating  the  rights  of  the  States;  but,  a  bank  upon  principles 
consistent  with  those  rights. 

But,  sir,  is  there  not,  in  every  State  in  which  there  is  a  branch  of  the  Unit- 
ed States  Bank,  also  one  or  more  State  banks,  of  equal  respectability,  and  of 
equal  security;  at  least  to  the  extent  of  any  sum  for  which  they  are  willing  to 
undertaker  These  State  banks  may  be  used  as  depositories  for  the  public 
moneys,  and  they  will  be  equally  sate  and  convenient.  And,  if  you  will  give 
to  these  State  banks  the  advantages  of  these  deposites,  as  you  have  hitherto 
given  them  to  the  United  States  Bank,  they  will  furnish  means  for  the  trans- 
mission of  moneys  from  place  to  place,  equally  safe,  convenient,  cheap,  and 
expeditious.  This  object  will  be  attained  by  connexions  which  will  be  formed 
between  the  banks  of  the  different  States.  Such  connexions  have  already,  in 
many  instances,  been  formed.  But,  they  have  not  been  carried  to  the  extent 
they  otherwise  would  have  been,  on  account  of  the  United  States  Bank  and 
its  branches;  between  which,  there  is  so  intimate  and  so  necessary  a  connexion. 

But,  in  answer  to  this,  it  is  said  that,  if  the  Bank  of  the  United  States 
would  be  constitutional  without  the  existence  of  the  State  banks,  it  is  equally 
so  with.  That  a  power  which  is  once  constitutionals  equally  so  at  all  times, 
and  under  all  circumstances.  That  a  right  which  must  depend  for  its  exist- 
ence on  the  will  of  the  State  Legislatures,  over  whom  we  have  no  control,  is 
incomplete,  and,  indeed,  as  to  us,  is  no  right  at  all.  This  argument  is  found- 
ed on  the  supposition,  that  the  Federal  Government  is  a  complete  Govern- 
ment, containing  in  itself  all  the  principles  and  powers  necessary  for  its  own 
operations;  which  supposi^n  is  wholly  false.  The  Federal  Government  does 
not  profess  to  be  complete  in  itself.  It  is  expressly  predicated  on  the  exist- 
tence  of  the  State  Governments;  and  most  ot  the  facilities  for  its  exercise  are 
derived  from  the  State  Governments.  It  cannot  perform  even  its  own  pecu- 
liar powers  and  functions,  without  the  aid  and  co-operation  of  the  State  au- 
thorities. How,  let  me  ask  you,  sir,  is  your  Government  constituted?  Your 
Senate  is  appointed  directly  by  the  State  Legislatures.  Your  President  and 
House  of  Representatives,  indirectly,  by  the  same  authority.  Suppose  they 
should  neglect  or  refuse  to  make  these  appointments,  can  you  compel  them  to 
do  it?  No,  sir.  Can  you  punish  them  for  not  doing  it?  Not  in  the  least.  They 
may  appoint,  or  not,  as  they  think  proper;  and  it  they  should  neglect,  or  re- 
fuse to  do  it,  your  boasted  complete  Government  would  die  a  natural  death,  by 
its  own  imbecility.  It  is  not  fair,  then,  to  say  that  a  power  is  constitutional, 
because  the  Government  would  be  incomplete  without  it.  It  is  not  fair  to 
say,  that  what  would  be  constitutional,  without  the  existence  of  the  State  Go- 
vernments, and  their  appendages,  is  equally  so  with.  This  would  prove  that 
you  have  a  right  to  appoint  your  own  President,  Senate,  and  House  of  Repre- 
sentatives. It  would  go  to  usurp  all  the  powers  of  the  State  Governments: 
for  the  Government  could  not  be  said  to  be  complete,  without  possessing  the 
powers  of  both  Governments  combined.  Indeed,  this  Federal  Government 
cannot  be  said  to  be  complete,  as  to  a  single  power,  without  all  the  auxiliary 
powers  of  the  State  Governments:  for  there  is  not  a  single  act  which  it  can 


176  BANK   OF  THE   UNITED    STATES. 

perform  without  their  assistance,  directly  or  indirectly.  The  very  bank  law 
now  under  consideration,  is  an  illustration  of  this:  for  how  are  the  provisions 
of  this  law  to  be  enforced;  how  are  the  debts  which  it  authorizes  to  be  con- 
tracted, to  be  collected,  but  through  the  medium  of  the  State  courts?  The 
doctrine  of  perfect  rights,  then,  if  it  prove  any  thing,  proves  too  much.  If  it 
proves  that,  in  order  to  manage  your  revenues,  you  may  establish  banks  with- 
in the  States,  it  equally  proves,  that,  in  order  to  carry  the  provisions  of  your 
bank  laws  into  execution,  you  may  establish  courts  and  offices  within  the 
States  for  that  purpose.  I  think,  then,  sir,  I  may  fairly  conclude,  that,  so  long 
as  the  State  Governments  furnish  you  with  all  the  facilities  which  you  can 
reasonably  require,  for  conducting  your  revenues  by  means  of  their  State 
banks;  so  long,  it  will  be  unnecessary;  so  long,  it  will  be  improper;  and,  there- 
fore, so  long,  it  will  be  unconstitutional,  to  invade  the  jurisdiction  of  the  States, 
to  establish  national  banks. 

Again:  The  constitutionality  of  the  bank  has  been  attempted  to  be  main- 
tained, by  a  reference  to  the  phrase  in  the  constitution,  in  relation  to  the  power 
of  Congress  to  provide  for  the  general  welfare.  I  will  read  the  clause  in 
which  this  phrase  is  contained :  "  The  Congress  shall  have  power  to  lay  and 
collect  taxes,  duties,  imposts  and  excises,  to  pay  the  debts  and  provide  for  the 
common  defence  and  general  welfare  of  the  United  States."  This  clause  has 
been  erroneously  construed  by  some,  to  contain  a  successive  delegation  of 
three  or  four  distinct  powers,  to  wit:  a  power  to  lay  taxes;  a  power  to  pay 
the  debts;  a  power  to  provide  for  the  common  defence  and  general  welfare. 
If,  then,  it  is  said,  Congress  have  power  to  provide  for  the  general  welfare, 
they  may  choose  the  means,  which  are  here  not  made  specific?  but  left  discre- 
tionary, for  the  attainment  of  that  object:  and  if,  in  their  opinion,  a  national 
bank  will  conduce  to  that  object,  they  have  a  right  to  establish  a  national 
bank.  But,  sir,  this  is  a  total  misconception  of  the  meaning  of  this  clause  of 
the  constitution.  Instead  of  three  or  four  distinct  grants  of  power,  this  clause 
contains  but  one  grant  of  power,  namely,  the  power  to  raise  money  by  taxes, 
&c.  and  all  the  subsequent  parts  of  the  clause,  are  a  mere  limitation  of  this 
power  to  raise  money;  or  a  specification  of  the  purposes  for  which  money  may 
be  collected.  That  this  is  not  a  general  authority  to  Congress  to  provide  for 
the  common  defence  and  general  welfare,  is  instantly  discovered  by  a  com- 
parison of  this  clause  with  the  subsequent  part  of  this  section,  which  consists 
of  a  list,  or  enumeration  of  the  specific  means  or  powers,  by  which  Congress 
may  provide  for  the  comnion  defence  and  general  welfare.  And  it  would  be 
unnecessary  and  absurd  in  itself,  as  well  as  repugnant  to  the  whole  spirit  and 
character  of  this  constitution,  to  give,  first,  a  general  power,  and  then  to  de- 
legate specific  powers,  all  comprehended  in  the  general  one.  Although  I  do 
not  think  there  is  any  ambiguity  in  this  clause,  as  it  now  stands,  yet,  its  mean- 
ing might,  perhaps,  be  rendered  more  perspicuous  and  definite,  by  altering 
the  phraseology  so  as  to  read  in  this  way:  "  Congress  shall  have  power  to  lay 
and  collect  taxes,  duties,  imposts  and  excise,  for  the  purpose  of  paying  the 
debt, and  providing  for  the  common  defence  and  general  welfare  of  the  United 
States;  but,  (going  on  again,  sir,  with  a  further  qualification  of  the  same  pow- 
er to  raise  money)  all  duties,  imposts  and  excise,  shall  be  uniform  throughout 
the  United  States."  This,  then,  is  merely  a  right  to  raise  revenue;  and,  so 
far  as  regards  the  objects  for  which  revenue  may  be  raised,  the  powers  of  Con- 
gress are  discretionary;  provided  those  objects  come  within  the  description  of 
providing  for  the  common  defence  and  general  welfare.  But,  so  far  as  regards 
the  means  by  which  these  revenues,  when  collected,  shall  be  applied  to  their 
destined  objects,  we  must  look  to  the  powers  of  Congress,  as  defined  and  limit- 
ed in  the  subsequent  parts  of  this  section.  In  other  words,  this  clause  gives 
plenary  powers  to  raise  money;  but  it  gives  no  powers,  I  should  say  political 
powers,  in  relation  to  its  application  and  expenditure.  The  powers  of  Con- 
gress over  the  money,  when  collected,  in  reference  to  its  expenditure,  would 
be  the  same  which  an  individual  possesses  over  his  private  property;  powers 
resulting  from  the  nature  of  property?  and,  as  regulated  by  the  laws  of  the 
State  in  which  it  might  happen  to  be  situated.  I  will  illustrate  my  idea  by  a 


ON  THE   BILL  TO  RENEW   THE    CHARTER   OF   1791.  ^77 

case.  Suppose  the  constitution  had  given  to  Congress  the  power  to  raise  a 
million  of  dollars,  to  provide  for  a  national  university.  Would  it  thence 
follow,  that  we  might  go  into  the  State  of  North  Carolina,  and  take  your  pro- 
perty—property secured  to  you  t3y  the  laws  of  this  State— to  make  this  es- 
tablishment upon?  Could  we  take  the  public  property  of  that  State  for  this 
purpose?  To  both  of  these  questions,  every  man,  who  understands  any  thing 
of  the  constitution,  will  promptly  answer,  no.  This  power,  then,  to  raise  mo- 
ney, for  the  purpose  of  establishing  a  national  university ,  is  only  a  power 
to  raise  money;  and,  for  the  means  of  applying  it,  we  must  search  for  our 
power  in  other  parts  of  the  constitution.  On  doing  this,  we  should  find  that 
we  must  erect  the  university  either  in  the  District  of  Columbia,  or  in  one  of 
the  territories  over  which  we  have  exclusive  jurisdiction,  or  in  case  we  should 
choose  to  erect  it  within  the  limits  of  a  particular  State,  \ye  must  first^  not 
only  purchase  the  land,  but  obtain  a  cession  of  the  jurisdiction  from  the  State 
Government.  The  phrase  of  providing  for  the  general  welfare,  then,  is  a 
mere  qualification  of  the  power  to  levy  taxes,  and  can  give  no  authority  in  re- 
lation to  banks. 

There  is  one  more^  and  I  believe  but  one  more,  provision  in  the  constitu- 
tion, which  is  relied  on  as  authorizing  the  establishment  of  this  bank.  It  is 
this:  ;*  Congress  shall  have  aright  to  cfispuse  of  and  make  all  needful  rules 
and  regulations  respecting  the  territory,  or  other  property  belonging  to  the 
United  States."  It  is  said  that,  in  virtue  of  this  provision,  Congress  have  es- 
tablished the  territorial  Governments,  which  are  corporations  of  the  highest 
and  most  extensive  nature,  exercising  political  powers  over  the  person,  as  well 
as  the  property  of  citizens  of  the  United  States:  and  that  no  complaint  has 
been  made,  that  Congress  has  exceeded  its  authority  in  this  particular.  AVhy 
may  we  not,  then,  it  is  asked,  establish  corporations  to  regulate  and  manage 
the  personal  property  of  the  United  States,  which  is  coupled  in  the  constitu- 
tion with  the  territorial  property?  The  fallacy  of  this  argument  consists  in 
not  marking  the  distinction  which  exists  in  these  two  species  of  property,  and 
the  consequent  powers  of  the  Government  over  them.  The  property  which 
the  United  States  possess  in  the  territorial  lands,  is  not  a  mere  right  of  soil,  a 
mere  usu  fruct;  but  it  also  includes  the  right  of  jurisdiction  and  sovereignty. 
It  is  in  virtue  of  this  right  of  jurisdiction,  of  those  sovereign  plenary  and  ex- 
clusive powers  over  the  territories,  which  I  noticed  in  a  tormer  part  of  my 
observations,  that  these  corporations  or  territorial  Governments  have  been 
established.  On  the  other  hand,  our  revenues  are  not  only  personal  property, 
but  a  qualified  property.  They  are  collected  for  certain  objects,  ana  are  sub- 
ject in  transitu  to  the  local  jurisdictions.  This  argument,  then,  which  is 
founded  on  an  analogy  that  does  not  exist,  must  fall  with  the  analogy  that  sup- 
ports it. 

But,  Mr.  Chairman,  my  honorable  friend  [Mr.  FISK]  has  advanced  a  new 
argument  in  support  of  the  constitutionality  of  this  bank;  an  argument,  not 
deduced  from  the  provisions  of  the  constitution  itself,  but  founded  on  pre- 
scription. He  tells  us  that  this  bank  was  originally  incorporated  by  a  Con- 
gress fully  competent  and  qualified  to  decide  on  its  constitutionality;  that  its 
existence  is  almost  coeval  with  the  Government;  that  it  has  been  counte- 
nanced by  all  succeeding  administrations;  that  laws  have  been  passed  to  en- 
force the  provisions  of  the  original  charter;  and,  therefore,  the  constitutional 
question  must  be  considered  as  settled,  adjudicated,  and  at  rest. 

Whatever  may  be  the  opinion  of  the  gentlemen  of  the  long  robe,  I  cannot, 
for  myself,  yield  to  this  doctrine  of  prescriptive  constitutional  rights.  It  may 
answer  in  England,  where  they  have  no  constitution;  or  where,  rather,  as 
they  choose  to  explain  it,  immemorial  usage,  or  prescription,  are  evidence  of 
what  their  constitution  is.  It  may  do  in  Connecticut — (it  is  not  my  design  to 
derogate  from  the  respectability  of  that  State,  nor  of  its  institutions) — it  may 
be  good  doctrine  in  Connecticut,  where  ancient  custom  and  steady  habits  ARE 
their  constitution.  But,  sir,  such  doctrine  should  never  be  tolerated  in  this 
House,  where  every  member  has  a  printed  constitution  on  his  table  before 
him;  a  constitution  drawn  up  with  the  greatest  care  and  deliberation;  with 
25 


J78  BANK   OF  THE    UNITED    STATES. 

the  utmost  attention  to  perspicuity  and  precision;  a  constitution,  the  injunc- 
tions of  which,  as  we,  in  our  best  judgments  shall  understand  them,  and  not 
as  they  shall  be  interpreted  to  us  by  others,  we  are  solemnly  bound,  by  our 
oaths,  to  obey. 

It  is  true,  that  this  bank  was  originally  established  by  a  Congress  competent 
to  judge  of  its  constitutionality.  It  is  equally  true,  that  a  respectable  minority 
of  that  Congress  opposed  the  passage  ot  the  law,  on  the  ground  of  its  uncon- 
stitutionally; and,  if  I  have  been  rightly  informed,  it  is  also  true,  that  the 
then  President,  General  Washington,  in  giving  his  sanction  to  that  law,  did 
it  with  more  doubt  and  hesitation  than  almost  any  other  act  of  his  administra- 
tion. It  is  true,  that  subsequent  Congresses,  of  different  political  complex- 
ions, have  passed  laws  enforcing  the  provisions  of  the  original  charter;  and 
that  no  attempts  have  been  made  to  repeal  it.  But,  it  is  equally  true,  that  all 
this  might  be  done  with  the  most  perfect  propriety  and  consistency,  although 
they  totally  disbelieved  in  its  constitutionality.  I  need  not  state  to  this  House, 
that  this  is  not  a  law  in  the  ordinary  course  of  legislation;  a  law  prescribing  a 
common  rule  of  conduct  for  the  government  or  the  citizens  of  the  United 
States  at  large;  liable  to  be  repealed  at  any  time;  and  the  obligations  of  which 
would  cease  with  its  repeal.  This,  sir,  is  not  the  nature  of  the  law;  but  it  is 
a  law  in  the  nature  of  a  contract  between  the  Government  and  certain  indivi- 
duals, and  the  existence  of  it  was  extended  to  twenty  years.  The  moment 
this  contract  was  made,  and  its  operations  commenced,  private  rights  were 
vested;  and  it  would  have  been  a  breach  of  national  faith  to  have  repealed  it. 
The  original  Congress  had  the  same  right  that  we  have  to  judge  of  the  consti- 
tutionality of  a  law;  and  having,  under  that  right,  passed  this  law,  or  made 
this  contract,  we  are  bound  to  carry  it?  as  a  contract,  into  execution.  As  a 
contract,  every  successive  Congress,  ot  whatever  materials  composed,  is  one 
party  to  it;  and  it  is  well  known  that  a  party  cannot  violate  the  obligations  of 
nis  own  contract;  but,  on  the  contrary,  is  bound  to  carry  them  into  effect.  It 
was  competent  in  the  State  Governments  to  have  opposed  the  execution  of  this 
law,  on  the  ground  of  its  unconstitutionally;  but,  perhaps,  under  all  circum- 
stances, they  acted  a  wise  and  discreet  part,  in  not  attempting  it.  The  na- 
tional faith  was  pledged  in  the  passage  of  this  law.  Thre  national  credit, 
which  it  was,  at  that  time,  and  which,  indeed,  it  is  at  all  times,  of  the  first  im- 
portance to  support,  was  at  stake  on  the  faithful  execution  of  this  contract: 
and  it  was  better  to  suffer  for  twenty  years,  under  an  unconstitutional  law, 
rather  than  to  attempt  so  violent  a  remedy — a  remedy  which  would  have  crip- 
pled the  credit  of  the  nation  in  its  infancy;. 

But,  sir,  because  these  were  proper  considerations  with  our  predecessors  and 
the  States,  to  suffer  the  continuance  of  this  law,  does  it  tollow?  that  now, 
when  that  law  has  expired  by  its  own  limitation;  when  the  obligations  of  that 
contract  are  complied  with  and  discharged;  when  the  national  faith  is  emanci- 
pated, that  they  are  motives  for  us  to  make  a  new  unconstitutional  contract? 
No,  sir.  The  question  now  is  a  question  de  novo.  It  is  a  question  of  con- 
science in  the  interpretation  of  the  letter  and  spirit  of  the  constitution,  unem- 
barrassed by  any  collateral  considerations;  and  as  such,  I  shall  feel  bound  to 
vote  upon  it.  It  is  the  province  of  the  executive  and  judicial  departments  to 
explain  and  direct  the  practical  operation  of  each  particular  law;  and  I  must 
submit  to  the  decisions.  But  the  commentaries  of  courts  are  not  to  furnish 
the  principles  upon  which  I  am  afterwards  to  legislate.  It  is  to  this  book,  (the 
constitution)  so  justly  dear  to  us  all,  and  not  to  the  books  of  reports,  that  we 
must  look,  as  a  guide,  to  direct  us  in  the  path  of  our  oath  and  our  duty. 

I  believe,  sir,  that  I  have  gone  through,  lamely  1  know,  but  I  hope  intelli- 
gibly, with  the  examination  of  all  the  principal  arguments  that  have  been  ad- 
vanced in  support  of  the  constitutionality  of  this  law.  Having  already  occu- 
pied so  much"  time,  I  will  detain  the  committee  but  a  few  moments  longer. 

If  the  views  which  I  have  taken  of  the  subject  are  correct,  these  positions 
may  be  considered  established.  First,  that  we  have  no  right  to  incorporate  a 
bank,  unless  that  right  be  delegated  by  the  constitution:  for  such  is  the  decla- 
ration of  the  constitution  itsell.  Secondly,  that  if  this  right  be  given  by  the 


ON  THE   BILL    TO   RENEW   THE  CHARTER  OP   1791. 

constitution,  it  is  included  in  some  of  the  provisions  upon  which  I  have  been 
commenting. 

The  only  question,  then,  as  relates  to  the  constitution,  is,  whether  we  shall, 
by  the  passage  of  this  bill,  recognise  the  doctrine  of  implied  or  constructive 
powers.  Before  we  do  this,  I  must  entreat  every  member  of  the  committee 
to  examine  well  the  consequences  of  such  a  recognition.  This  is  not  a  ques- 
tion about  the  utility  or  inutility  of  a  bank;  but  it  is  a  great  question  of  con- 
stitutional principle.  It  is,  whether  we  shall  consider  this  Government  as  the 
servant  and  instrument  of  the  people  for  managing  and  protecting  their  rights, 
and  subject,  at  all  times,  to  their  control;  or,  whether  we  shall  make  it  a  giant, 
capable  of  crushing  its  masters?  A  moment's  careful  attention  to  this  sub- 
ject will  show  us  that  the  doctrine  of  implied  or  constructive  powers,  as  con- 
tended for  in  this  case,  is  nothing  more  nor  less  than  the  doctrine  of  general 
expediency;  and  that,  once  established,  it  will  warrant  Congress  in  the  adop- 
tion of  any  measure  not  expressly  prohibited  by  the  constitution. 

The  great  ends  or  purposes  of  our  Government  are,  the  liberty,  the  security, 
and  the  happiness,  of  the  people.  The  raising  and  management  of  revenue; 
the  establishment  and  support  of  armies;  the  institution  of  courts  of  justice; 
and  the  regulation  of  trade  and  intercourse  between  the  States  and  foreign  na- 
tions, are  some  of  the  great  means  or  instruments  by  which  these  results  are 
finally  produced.  There  is  a  natural  and  intimate  connexion  and  coincidence 
between  all  these  great  measures  or  powers  of  government;  they  are  expressly 
calculated  to  aid  and  assist  each  other  in  their  operations,  and,  in  fact,  form 
different  parts  only  of  one  great  political  machine;  every  possible  measure  of 
civil  policy  is  expedient  exactly  in  proportion  to  its  fitness  or  tendency  to 
promote  the  combined  operation  of  these  great  causes  or  instruments  of  human 
happiness  and  security.  But,  sir,  by  the  doctrine  of  implied  powers,  the  con- 
stitutionality of  every  measure  is  also  made  to  depend  on  its  tendency  or  fit- 
ness to  promote  the  final  objects  for  which  these  various  powers  are  given; 
and  thus  resolves  itself  into  a  question  of  expediency.  From  the  view  we  have 
taken  of  the  arguments  in  support  of  the  right  to  incorporate  this  bank,  we 
perceive  that  its  constitutionality  is  not  made  to  depend  on  the  peculiar  appli- 
cability of  the  measure  to  any  particular  power  in  the  constitution:  for  it  is 
equally  applicable  to  half  a  dozen  different  powers;  but  its  constitutionality  is 
made  to  depend  on  its  general  tendency  to  promote  the  ultimate  objects  for 
which  these  different  powers  were  given.  In  other  words,  it  is  made  to  depend 
on  its  expediency.  We  speak  of  implied  powers  as  innocent  things — as  mat- 
ters of  course.  But  the  idea  of  express  constitutional  powers,  and  implied 
constitutional  powers,  gives  us  the  exact  definitions  of  limited  and  arbitrary 
Governments.  The  final  object  of  both  these  Governments  is  the  same— the 
happiness  of  the  people.  The  only  difference  between  them  is,  that  in  the  one 
case  the  powers  or  means  by  which  this  end  is  attained,  or  intended  to  be 
attained,  are  limited  and  denned;  in  the  other,  they  rest  on  the  discretion  or 
will  of  the  despot — they  are  all,  vvith  him,  questions  of  expediency. 

There  is  another  point  of  view  in  which,  this  subject  may  be  placed;  and 
in  which,  it  seems  to  me  impossible  for  the  strongest  advocates  of  implied 
powers  to  reconcile  the  passage  of  this  bill.  It  will  not  be  denied,  that  the 
constitution  contemplates  the  existence  of  two  distinct  sets  of  powers — the  one 
in  the  State  Governments,  and  the  other  in  the  Federal  Government:  that 
there  are  certain  powers  which  maybe  said  to  belong  peculiarly  and  exclusively 
to  the  State  Governments;  and  certain  other  powers  which  may  be  said  to 
belong  peculiarly  and  exclusively  to  the  Federal  Goyerment.  Now,  sir,  if 
there  be  any  power  which  ran  be  said  to  belong  peculiarly  and  exclusively  to 
the  State  Governments,  it  is,  in  my  humble  apprehension,  the  very  power  of 
erecting  the  corporations  for  the  purpose  of  carrying  on  moneyed  or  other  ope- 
rations; connected  immediately,  necessarily  and  inseparably  with  the  internal 
political  economy  of  the  State:  it  is  the  power  of  regulating  the  rights  and 
relations  of  property  between  citizen  and  citizen  of  the  same  State:  it  is  the 
power  of  erecting  a  banking  company,  in  order  to  facilitate  and  direct  the  daily 
and  ordinary  operations  of  trade  and  industry  among  the  citizens  of  the  same 


180  BANK  OF  THE  UNITED  STATES. 

State.  Although,  then,  I  say,  the  power  of  incorporating  a  bank  might,  at 
first,  seem  to  be  implied  in  some  of  the  powers  of  the  Federal  constitution? 
yet,  when  we  see  that,  in  its  exercise,  it  goes  to  obliterate  and  destroy  the  great 
characteristic  feature  of  distributive  power  in  this  Republic;  when  we  see  thatr 
in  its  execution,  it  obtrudes  and  ramifies  itself  into  all  the  transactions  of  do- 
mestic economy,  which  are  the  peculiar  subjects  of  local  or  State  regulation, 
we  ought,  on  that  account,  to  reject  it. 

But,  sir,  I  will  conclude  by  again  cautioning  my  republican  friends,  and 
my  worthy  colleague  in  particular,  to  beware  how  they  familiarise  themselves 
with  (his  doctrine  of  constructive  power.  It  is  a  creed,  at  war  with  the  vital 
principles  of  political  liberty.  The  pride  and  the  boast  of  the  American  Go- 
vernments is,  that  they  are  the  governments  of  the  laws  and  not  of  men — that 
they  are  the  regular  and  necessary  operations  and  results  of  principles  and 
powers,  established  in  the  moments  of  cool  and  deliberate  reflection,  by  the 
combined  wisdom  of  the  nation;  and  that  they  are  not  the  effects  of  the  mo- 
mentary passion,  pride,  interest,  whim  or  caprice,  of  a  few  individuals  collected 
on  this  floor. 

Little  did  the  framers  of  this  constitution,  when  they  were  so  nicely  adjust- 
ing and  balancing  its  various  provisions;  when  they  were  so  carefully  erecting 
guards  and  barriers  against  the  encroachments  of  power  and  ambition — Little, 
I  say,  sir,  did  they  imagine,  that  there  lay  concealed  under  the  provisions  of 
this  constitution,  a  secret  and  sleeping  power,  which  could,  in  a  moment, 
prostrate  all  their  labors  with  the  dust.  Still  less,  sir,  did  the  people  when 
they  adopted  this  constitution,  with  even  more  caution  and  scruple  than  that 
with  which  it  was  formed,  conjecture  that  they  were  singing  the  death  warrant 
of  all  their  State  rights.  But,  once  adopt  the  doctrine  that  you  may  travel  out 
of  the  letter  of  this  constitution,  and  assume  powers,  merely  on  the  ground 
that  they  will  tend  to  facilitate  the  execution  of  powers  which  are  here  given; 
and  you  compass,  at  a  single  sweep,  all  the  rights  of  the  States;  and  form  the 
basis  of  a  cansoliclated  government.  Let  the  principle  of  constructive  or  im- 
plied powers  be  once  established,  in  the  extent  to  which  it  must  be  carried,  in 
order  to  pass  this  bill,  and  you  will  have  planted  in  the  bosom  of  this  consti- 
tution a  viper,  which,  one  day  or  other,  will  sting  the  liberties  of  this  country 
to  the  heart. 

The  question  was  then  taken  on  striking  out  the  first  section,  and  carried,  59 
to  46.  Whereupon  Mr.  ALSTON  reported  the  said  amendment  to  the  House. 

JANUARY  19,  1811. 

Mr.  LOVE,  this  day,  offered  the  following  resolution: 

Resolved,  That  it  is  expedient  to  repeal  so  much  of  an  act  passed  the  10th 
day  of  May,  1800,  as  makes  it  the  duty  of  certain  collectors  to  deposite,  for 
collection,  in  the  bank  of  the  United  States  or  any  of  its  branches,  the  bonds 
taken  by  them  for  the  payment  of  duties;  and,  that  it  be  expedient  to  provide 
that  the  bonds  or  money,  now  deposited  in  the  said  bank  or  its  branches,  may 
be  withdrawn. 

The  said  resolution  was  read  and  ordered  to  lie  on  the  table. 

FEBRUARY  12,  1811. 
The  following  proceedings  took  place: 

Mr.  LOVE  moved  that  the  House  do  proceed  to  consider  the  said  resolution. 
And,  the  question  being  taken  thereon,  it  was  determined  in  the  negative. 
[See  Journals  of  the  House  of  the  above  dates.] 

The  Committee  of  the  Whole?  having  reported  to  the  House,  that  they  had 
agreed  to  strike  out  the  first  section  of  the  bill. 

Mr.  FISK  moved  that  the  report  of  the  said  committee  should  lie  on  the 
table.  This  was  disagreed  to  by  a  vote  of  57  to  46, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF    1791. 

The  House  then  proceeded  to  consider  the  report  of  the  Committee  of  the 
Whole. 

Mr.  DESHA  spoke  in  favor  of  the  report:  Mr.  PICKMAX,  against  it:  Mr.  W. 
ALSTON,  in  favor  of  the  report,  but  also  in  favor  of  a  national  bank,  on  the 
ground  of  constitutionality;  and  Mr.  KEY  conlcuded  the  debate  of  this  day, 
in  a  speech  against  the  report. 

The  several  speeches  are  inserted  in  their  order,  as  follows: 

Mr.  DESHA.  Mr.  Speaker:  the  question  is  on  a  concurrence  with  the  Com- 
mittee of  the  Whole,  in  striking  out  the  first  section  of  the  bill  that  contem- 
plates a  renewal  of  the  charter  of  the  Bank  of  the  United  States;  or,  in  other 
words,  whether  we  will  foster  a  viper  in  the  bosom  of  our  country,  that  will 
spread  its  deadly  venom  over  the  land,  and  finally  affect  the  vitals  of  your 
republican  institutions;  or,  whether  we  will,  as  it  is  our  duty,  apply  the  pro- 
per antidote,  by  a  refusal  to  renew  the  charter,  thereby  checking  the  canker- 
ing poison,  the  importation  and  dissemination  of  foreign  influence  that  has 
already  brought  our  Government  almost  to  the  brink  ot  ruin.  Sir,  I  am  op- 
posed to  the  renewal  of  the  charter  on  constitutional  grounds,  as  well  as  on 
the  score  of  expediency.  I  view  it  as  being  directly  at  war  with  not  only  the 
letter,  but  the  spirit  of  the  constitution,  and  replete  with  principles  incompati- 
ble with  republicanism.  As  to  the  constitutionality,  the  ground  that  I  in- 
tended to  have  occupied,  was  taken  from  me  by  the  gentleman  from  New 
York,  who  spoke  yesterday,  (Mr.  PORTER)  and  I  will  say  ably  managed.  The 
points  he  made,  1  consider  incontrovertible,  and  the  arguments  deduced  from 
them,  unanswerable;  consequently,  as  I  deem  the  constitutional  question 
nearly  exhausted,  I  shall  but  barely  touch  upon  it. 

The  States,  sir,  from  the  time  they  determined  to  be  free,  were  particularly 
guarded  against  the  adoption  of  any  measure  that  could,  in  the  most  remote 
degree,  lead  to  aristocracy  or  consolidation.  Let  gentlemen  examine  that  in- 
strument— the  pledge  of  union;  I  mean  the  articles  of  confederation.  They 
will  find  it  couched  in  cautious  language;  they  will  find  that  the  framers  of 
that  instrument,  were  particularly  guarded  against  vesting  powers  in  the  Gen- 
eral Government,  that  could,  in  the  most  distant  manner,  place  their  rights 
and  liberties  in  jeopardy;  they,  no  doubt,  viewed  large  moneyed  institutions, 
like  the  one  under  consideration,  as  moneyed  aristocracies  which  might,  with 
their  different  ramifications,  jeopardize  liberty,  by  imperceptibly  gliding  into 
consolidation.  A  power  expressly  given  to  the  General  Government  to  grant 
charters  of  incorporation  will  not  be  found  in  the  articles  of  confederation; 
and  if  gentlemen  will  cast  their  eyes  over  the  second  article  of  that  instru- 
ment, they  will  find  it  expressly  provides,  that  each  State  retains  its  sove- 
reignty, freedom,  and  independence,  and  every  power,  jurisdiction,  and  right, 
which  is  not,  by  the  articles  of  confederation,  expressly  delegated  to  the  United 
States  in  Congress  assembled.  This,  sir,  I  show  to  prove,  that,  from  the  time 
the  States  determined  to  shake  oft'  the  shackles  of  despotism,  the  power  of 
granting  charters  of  incorporation  was  never  intended  to  be  given  to  the  Gen- 
eral Government. 

Sir,  those  gentlemen  who  are  the  advocates  of  this  measure  will  not  pretend, 
that  the  power  to  grant  charters  is  expressly  given  by  the  constitution,  and, 
sir,  they  must  be  well  apprised  that  such  a  power  was  never  intended  to  be 
given.  This  fact  ought  not  to  be  lost  sight  of.  Did  not  Mr.  Madison  urge, 
in  energetic  language,  in  1791,  on  the  floor  of  Congress,  that  the  power  to 
grant  charters  ot  incorporation  was  in  the  original  plan,  reported  by  the  com- 
mittee to  the  convention  among  the  enumerated  powers  delegated  in  the  eighth 
section  of  the  first  article  of  the  constitution,  but,  that  after  three  days'  delib- 
eration and  ardent  debate,  it  was  expunged,  as  a  power,  dangerous  and  impro- 
per to  be  vested  in  the  General  Government?  It  is  on  remote  constructive 
powers,  that  gentlemen  must  bottom  this  measure;  and  in  my  mind,  there 
they  are  cut  short  by  the  10th  article  of  the  amendment  to  the  constitution 
of  the  United  States,,  where  it  expressly  provides,  that  u  the  powers  not 


182  BANK  OF  THE  UNITED  STATES. 

delegated  to  the  United  States  by  the  constitution,  nor  prohibited  by  it  to  the 
States,  are  reserved  to  the  States  respectively,  or  to  the  People."  Are  not 
those  prohibitory  words  strongly  and  clearly  expressed?  Sir,  I  defy  gentle- 
men to  lay  their  finger  on  any  clause  of  the  constitution  that  would  justify 
the  granting  monopolies  or  exclusive  privileges.  No,  sir,  it  cannot  be  done, 
unless  they  lay  hold  of  the  horrid  doctrine  of  implication— a  doctrine  as 
absurd  as  it  is  dangerous,  particularly  when  you  have  a  specific  instrument  for 
your  guide,  and  one  which  you  have  taken  a  solemn  obligation  to  support  invi- 
olate. 1  had  hoped  that  the  doctrine  of  implied  powers,  had  long  since  been 
exploded.  Ever  since  the  reign  of  terror;  ever  since  the  federal  gentlemen, 
under  the  head  of  constructive  powers,  adopted  the  alien  and  sedition  laws, 
the  People  of  the  United  States,  in  whom  the  powers  of  Government  right- 
fully rest,  signified  their  disapprobation  of  the  doctrine  of  implication,  in 
forcible  language,  by  hurling  the  then  majority  out  of  power.  Sir,  if  you 
subscribe  to  this  doctrine,  the  barriers  of  your  constitution  are  broken  down; 
it  will  ultimately  become  a  dead  letter;  you  will  have  nothing  to  restrain  you. 
But,  say  gentlemen,  our  predecessors  have  said  it  was  constitutional;  they 
were  men  of  wisdom  and  solemnly  passed  upon  it  as  being  within  the  pale  of 
the  constitution.  Sir,  I  acknowledge  they  were  men  of  wisdom,  and  perhaps 
actuated  by  the  purest  of  motives:  but  they  were  men;  consequently,  fallible, 
and  liable  to  err;  and  in  my  mind,  they  did  err  most  egregiously.  And  am  I 
to  take  for  granted  what  they  have  done,  without  examining  and  judging  for 
myself,  particularly  when  I  am  acting  under  the  solemnity  of  an  oath?  No, 
sir,  while  I  have  the  honor  of  a  seat  on  this  floor,  and  any  measure  is  about  to 
be  adopted  which,  in  my  opinion,  conflicts  with  that  instrument  that  I  am 
sworn  to  support,  I  will  raise  my  voice  against  it,  and  if  possible,  check  its 
progress. 

But,  sir,  we  are  gravely  told,  that  it  is  expedient  to  renew  the  charter  of 
the  Bank  of  the  United  States,  inasmuch  as  the  evils  arising  to  Government 
and  individuals  would  be  desperate  on  its  being  suffered  to  expire;  therefore, 
it  was  constitutional.  Then,  sir,  we  are  to  understand  expediency  and  con- 
stitutionality to  be  synonymous  terms;  then,  if  that  is  the  fact,  the  constitution 
is  a  nullity  in  itself;  Congress  has  nothing  to  restrain  them  but  their  judg- 
ment. They  are  fully  at  liberty  to  adopt  any  measure  they  may  think  proper 
under  the  sweeping  clause  of  providing  for  the  common  defence  and  general 
welfare. 

Sir,  much  confidence  as  I  have  in  Congress,  after  witnessing  the  fluctua- 
tions and  vibrations  that  have  passed  in  review  for  several  sessions  past,  I  am 
afraid  your  republican  Government  would  be  prostrated;  your  liberties  would 
be  shortly  at  an  end.  Gentlemen  talk  of  republicanism;  -they  say  they  are 
real  Americans  in  principle,  and  would  go  any  length  that  was  necessary  in 
defending  our  rights  against  oppression;  and,  sir,  at  the  same  time  are  doing 
the  very  thing  our  lasting  and  inveterate  enemy,  Britain,  would  wish  them 
to  do;  and  the  very  thing,  if  adopted,  that  will  strengthen  her  power  and 
inevitably  accelerate  the  dissolution  of  Government.  What  did  that  able 
statesman  say,  who,  with  some  gentlemen,  have  been  considered  almost  ora- 
cular? I  mean,  sir,  William  Pitt;  speaking  of  the  American  policy--"  let  them 
adopt  their  funding  system  and  go  into  their  banking  institutions,  and  their 
independence  is  a  mere  phantom."  Sir,  keep  close  to  your  chartered  authori- 
ties, or  the  most  direful  evils  await  you.  If  you  are  at  liberty  to  twist  that 
instrument  on  which  the  perpetuity  of  your  civil  liberty  depends,  into  any 
shape  the  caprice  of  party  may  think  proper,  you  may  calculate  on  your  boast- 
ed institutions  being  of  but  short  duration.  If  your  constitution  is  defective, 
amend  it.  The  manner  is  pointed  put,  and  which  is  certainly  much  safer 
than  to  slide  into  the  dangerous  doctrine  of  implication.  If  you  can  multiply 
and  link  together  remote  implications,  you  may,  from  the  same  parity  of  rea- 
soning, take  in  every  object  of  legislation  that  comes  within  the  whole  scope 
of  the  political  sphere. 

Sir,  it  is  not  only  astonishing,  but  painful,  to  behold  gentlemen  who,  on  for- 
mer occasions,  were  loud  against  the  doctrine  of  constructive  powers,  now  its 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

warmest  advocates.  They  come  forward  with  the  greatest  ardor  imaginable, 
in  support  of  a  measure  that  has  nothing  in  the  constitution  on  which  they^can 
bottom  it,  without  laying  hold  of  the  dangerous  doctrine  of  implication.  The 
federal  gentlemen  have  the  same  justification  for  the  adoption  of  this  measure, 
that  they  had  for  the  adoption  of  the  alien  and  sedition  laws.  The  doctrine 
of  implied  powers  will  hold  them  out.  But,  sir,  their  object  is  to  pull  down 
the  administration  and  republicanism — ours  to  support  it.  The  minority  is 
not  responsible;  the  majority  has  the  whole  responsibility  on  their  shoulders; 
consequently,  ought  to  act  with  great  circumspection.  Sir,  what  were  the 
causes  that  produced  a  change  of  administration?  Was  it  not  constitutional 
encroachments  and  abuses?  Most  unquestionably  it  was.  And  will  gentle- 
men wantonly  steer  their  bark  against  the  same  rock  on  which  the  former 
administration  split?  Rest  assured,  sir,  that  the  People  of  the  United  States 
will  not  tamely  look  on  and  see  their  sacred  bill  of  rights  trampled  under 
foot.  No,  sir;  when  they  discover  a  disposition  in  the  public  agents  to  fritter 
away  their  constitution  into  a  mere  cipher,  they  will  rise  in  their  majesty,  and, 
in  a  constitutional  way,  apply  the  proper  corrective.  They  will  tell  you, 
gentlemen,  that  you  have  betrayed  the  trust  reposed  in  you,  by  abusing  the 
powers  delegated  to  you ;  that  you  must  give  place  to  more  able  and  safer 
hands  to  steer  the  national  bark. 

Well,  sir,  as  to  expediency,  we  are  told  that  inevitable  ruin  would  follow  a 
refusal  to  renew  the  charter  of  the  Bank  of  the  United  ^States,  as  it  is  impro- 
perly called.  Pray,  sir,  in  what  way  have  the  United  States  a  single  cent  of 
money  or  interest  in  this  bank?  Certainly  none.  Does  she  not  merely  lend 
her  name,  and,  by  that,  foster  speculation?  Most  unquestionably  she  does. 
For,  sir,  lean  view  it  in  no  other  light,  than  a  complete  system  of  speculation. 
A  system,  sir,  that  has  drained  a  considerable  portion  of  your  precious  metals 
from  your  country.  Has  there  not,  within  less  than  twenty  years,  nearly 
nineteen  millions  of  dollars,  dividends  arising  from  this  colossal  bank,  been 
principally  sent  out  of  the  country  to  fatten  the  European  shareholders,  who 
are  the  principal  stockholders?  For,  sir,  I  believe  it  will  not  be  denied,  that 
about  three-fourths  of  this  ten  million  capital  belongs  to  foreigners,  and  prin- 
cipally to  the  citizens  of  the  island  of  Britain;  the  balance,  in  all  probabili- 
ty, principally  to  her  agents  and  partisans  in  this  country:  for  I  recollect 
that,  on  a  former  occasion,  a  gentleman  from  Virginia  laid  a  resolution  on  the 
table  for  consideration,  that  contemplated  making  the  shareholders  known, 
and  that  extraordinary  opposition  was  manifested  by  the  other  side  of  the 
House,  I  presume,  lest  the  measure  should  become  more  unpopular,  when 
it  was  ascertained  that  nearly  the  whole  of  the  capital  stock  belonged  to 
Britain  and  her  partisans. 

Mr.  Speaker,  money  is  naturally  calculated  to  command  influence.  Then 
what  must  be  the  influence  wielded  by  this  ten  millions  of  capital  in  the  bosom 
of  our  country,  and  held  principally  by  our  lasting  and  inveterate  enemy? 
This  is  one  of  the  engines,  and  no  inconsiderable  one,  that  is  set  to  work,  in 
in  order  to  overturn  civil  liberty,  and  which  will,  in  all  probability,  unless 
checked  by  timely  resistance,  go  lengths  in  producing  the  effect:  and,  sir, 
from  the  influence  it  has  already  obtained  in  different  sections  of  the  Union, 
and  the  ardent  manner  it  is  advocated.  I  should  not  be  surprised,  if  a  renewal 
of  the  charter  should  take  place,  if  it  should  ultimately  make  its  way  into  the 
national  councils.  Let  gentlemen  reflect  on  the  hardihood  of  the  agents  of 
this  bank.  They  come  forward  in  the  face  of  the  nation,  and  openly  offer  to 
bribe  its  councils  with  upwards  of  a  million  of  dollars  for  the  renewal  of  the 
charter;  for,  sir,  I  may  be  wrong,  but  I  can  view  it  in  no  other  light  than  as 
a  bribe  in  order  to  obtain  the  name  and  sanction  of  Government  to  carry  on 
their  destructive  speculations.  I  have  no  doubt  but  that  George  the  3d  is  a 
principal  stockholder  in  this  bank;  and  I  believe,  rather  than  not  succeed  in 
obtaining  a  renewal  of  the  charter,  that  he  would  authorise  his  agent  in  this 
country  to  bid  up  several  millions;  because,  sir,  he  has  never  pardoned  us 
since  our  independence,  and  by  this  means  he  would  necessarily  calculate  on 
effectuating  his  nefarious  purposes  of  overturning  your  Government  and  bring- 


184  BANK  OF  TIIE  UNITED  STATES. 

ing  you  under  his  power  again,  and  which  would  be  a  much  safer  method  than 
encountering  the  Americans  in  arms:  for  of  that  he  became  extremely  tired 
when  we  were  in  a  state  of  infancy. 

But,  it  is  said,  that  this  bank  can  be  of  infinite  service  to  Government,  in 
making  her  deposites  in,  and,  in  case  of  necessity,  to  borrow  money  from,  to 
answer  governmental  purposes.  Indeed,  sir,  if  we  continue  temporising  and 
playing  the  losing  game  much  longer,  we  will  have  but  little  to  deposite — and 
would  it  not  be  as  safe  to  make  the  deposites  in  some  of  the  State  banks  as  in 
this  foreign  bank?  For  we  must  be  in  a  desperate  situation,  indeed,  if  it  would 
not  be  equally  as  safe  to  trust  ourselves  as  to  trust  foreigners,  and  the  very 
ones  who  are  oppressing  us,  and  whose  interest  as  well  as  inclination  is  to 
oppress  us  in  every  imaginable  way.  And,  sir,  as  to  the  obtaining  of  loans  in 
case  of  emergency,  I  would  much  rather  be  dependent  on  my  own  Govern- 
ment— on  the  citizens  of  my  own  Government,  than  a  foreign  Government  or 
its  agents,  and  especially  one  that  is  at  war  with  us;  for  I  deem  it  tantamount 
to  war,  when  they  are  perpetually  plundering  our  property,  impressing  and 
ill-treating  our  countrymen,  as  well  as  depriving  us  of  important  inherent 
rights,  the  liberty  of  the  seas.  This  measure,  perhaps,  may  be  a  conveniency 
in  our  fiscal  concerns,  in  the  collection  and  transmission  of  revenue;  but,  sir, 
there  is  no  danger  of  the  wheels  of  Government  being  stopped  for  it;  and,  sir,  I 
should  regret  extremely,  if  it  was,  as  has  been  insinuated,  that  the  existence 
of  our  Government  depended  on  foreign  capital;  I  should  regret  extremely 
indeed,  if  we  held  our  rights,  privileges,  and  independence,  on  so  uncertain  a 
tenure.  No,  sir,  in  my  mind  government  can  be  carried  on  equally  as  well 
without  this  darling  bank  as  with  it:  therefore,  it  is  time  to  abandon  this  de- 
structive system.  J  confess,  sir,  that  I  am  not  very  favorably  disposed  to 
banking  institutions;  I  view  them  as  in  direct  hostility  with  the  principles  of 
our  Government:  but  if  we  must  have  banks,  in  the  name  of  common  sense, 
let  us  have  a  bank  of  our  own,  with  home  capital  and  not  foreign,  and  one  that 
will  not  import  foreign  influence,  (for  God  knows  we  have  enough  of  it  among 
us  already)  and  one  that  will  not  extract  the  wealth  from  your  country  and 
export  it,  nor  undermine  the  foundation  of  your  liberty.  Well,  sir,  on  whom 
is  this  ruin,  that  is  spoken  of  in  such  lively  colors,  to  fall?  Why,  sir,  it  is  to 
fall  on  a  few  speculating  merchants,  who  have  been  so  incautious  as  to  be- 
come involved  in  debt  in  consequence  of  wishing  to  carry  on  extensive  specu- 
lations, therefore  borrowed  freely  of  this  foreign  bank,  the  calling  for  which 
sums  would,  in  all  probabilty,  bring  on  bankruptcies.  These  are  riot  the 
people  that  I  would  make  any  considerable  sacrifice  for.  They  are  not  de- 
serving it.  Government  has  already  made  very  considerable  sacrifices  in 
attempting  to  comply  with  their  memorials  and  petitions  respecting  the  pro- 
tection of  commerce;  and  how  have  they  been  rewarded?  Why,  sir,  by  fly- 
ing in  the  face  of  authority,  and  trying  to  bring  the  laws  of  Government  into 
ridicule.  Yet  they  are  the  few  who  are  to  be  favored  at  the  expense  of  the 
many.  But,  notwithstanding  their  reprehensible  conduct,  there  are  respect- 
able exceptions:  I  speak  of  the  speculator,  not  of  the  honest  and  fair  trader. 

I  wish  not  to  be  considered  an  enemy  to  commerce.  The  reverse  is  the 
fact.  I  am  a  friend  to  it  to  a  certain  extent;  as  an  auxiliary  to  agriculture; 
but  I  never  wish  to  see  it  have  the  ascendency  in  Government,  to  sway  the 
national  councils  and  give  law. 

But,  sir,  if  the  evils  will  be  so  great  at  this  time  on  a  failure  to  renew  the 
charter,  what  will  they  be  at  the  end  of  twenty  years,  the  time  contemplated 
to  extend  it?  For  it  is  reasonable  to  suppose,  that  the  evil  will  increase  in 
equal  ratio  for  twenty  years  to  come,  as  it  has  for  twenty  years  past.  Agree- 
ably to  this,  a  renewal  will  be  tantamount  to  a  perpetuation;  for,  agreeably  to 
the  doctrine  held  forth  by  gentlemen,  a  failure  then  to  renew  the  charter 
would  engulph  the  Government  in  ruin,  and  overturn  the  fabric  of  liberty. 
W7ho  are  to  be  favored  particularly  by  the  continuance  of  this  destructive 
system?  The  speculating  mercantile  class,  I  may  say,  exclusively.  And,  sir, 
it  they  increase  in  extravagance  and  arrogance  for  twenty  years  to  come,  in 
equal  ratio  with  what  they  have  for  a  few  years  past,  nothing  will  satisfy  them 


X)N  THE  BILL  TO   RENEW   THE  CHARTER  OF   1791, 

short  of  swaying  the  national  councils,  and  giving  law  to  Government,  and 
making  every  thing  subserve  to  their  cupidity.  Sir,  I  hold  commerce  essen- 
tially necessary,  and  would  go  as  far  as  reason  would  justify  in  the  protection 
of  it,  but  I  am  for  keeping  it  directly  within  the  pale  of  reason,  and  not  sutter- 
ing  it  to  drown  every  thing  in  the  whirlpool  of  its  power. 

Are  not  Government  well  aware,  that  this  large  foreign  capital,  in  the  bosom 
of  our  country,  has  an .  extraordinary  influence  in  certain  sections  of  the 
Union  in  our  elections,  the  keeping  which  pure,  ought  to  be  an  object  of  the 
first  magnitude?  How  was  it,  sir,  formerly,  in  New  York?  Did  they  not,  in 
consequence  of  this  moneyed  aristocracy,  give  complete  tone  to  the  elections; 
and,  sir,  was  it  checked,  until  Burr  surreptitiously  obtained  the  Manhattan 
Bank,  under  the  mask  of  vyatering  the  city,  which  formed  a  counterbalance? 
And,  when  it  obtains  an  influence  in  your  elections,  you  may  necessarily 
calculate  on  its  making  its  way  into  your  national  councils;  then  every  thing 
must  bend  to  this  monstrous  speculating  institution,  your  constitution  not  ex- 
cepted. 

It  will  be  said,  no  doubt,  as  I  am  from  the  West,  where  banks  are  not  com- 
mon, that  I  am  unacquainted  with  the  nature  and  operations  of  banking  institu 
dons.  Sir,  I  do  not  pretend  to  go  into  details  practically;  I  acknowledge,  I  am 
unacquainted  with  them:  my  information  on  subjects  of  this  kind  is  principally 
theoretical.  But,  sir,  I  am  sufficiently  acquainted  with  the  nature  and  opera- 
tions of  them,  to  convince  me  that  they  are  systems  of  speculation,  calculated 
to  suit  the  speculatory  and  mercantile  class,  at  the  expense  of  the  agricultu- 
rist.-.; at  the  expense  of  those  who  are  the  support  and  sheet  anchor  of  your 
Government?  How  is  it,  sir,  when  your  banks  break,  which  has  been  the  case 
in  several  instances,  in  some  of  the  Eastern  States?  The  Farmer's  Exchange 
Bank  of  Rhode  Island^  when  it  was  ripped  up,  had  but  some  odds  of  forty 
dollars  in  its  vaults.  Ihe  Berkshire,  ana  Northampton  banks,  both  of  Mas- 
sachusetts, when  their  vaults  were  examined,  one  had  perhaps  thirty  or  forty 
dollars  in  it,  the  other,  I  believe,  was  entirely  empty;  the  Coos  Bank,  (I  be- 
lieve it  was  called)  of  New  Hampshire,  was  nearly  in  the  same  situation,  and 
thousands  of  their  bills  in  circulation  at  the  time.  Well,  sir,  who  were  the 
-uftl'rera?  The  note  holders;  the  people  at  large?  And,  sir,  as  it  is  a  system 
of  speculation,  vyhon  they  ha\e  emitted  bills  to  the  amount  of  their  limitation, 
where  they  are  limited  they  may  break  (as  the  saying  is)  full  handed,  and  the 
Aveightofthe  shock  falls  on  the  noteholders,  who  are  principally  agicrultu- 
rists,  as  they  compose  eight- tenths  of  the  people. 

But,  sir,  the  accounts  of  the  speculations,  impositions,  and,  I  must  add, 
swindling  and  corruptions,  that  have  been  practised  in  the  East,  under  the 
head  of  banks,  have  reached  the  West,  and  the  people,  notwithstanding  they 
have,  by  some  of/the  eastern  gentry,  been  deemed  scarcely  in  a  state  of  civil- 
ization, have  sympathised  with  their  eastern  friends,  and  had  regretted  that 
turpitude  had  become  so  deeply  rooted  in  the  East,  in  the  line  of  banking, 
where  all  but  exclusive  civilization  was  claimed,  and  which  has  made  them 
cautiously  guard  against  the  possibility  of  being  engulphed  in  a  similar  vortex. 
But,  sir,  if  gentlemen  would  cast  their  eyes  emphatically  over  the  history  of 
the  West,  1  expectancy  would  not  only  find  civilization,  but  pure  patriotism; 
patriotism,  sir,  that  would  not  fade  before  the  sun;  they  would  find  the  people 
uncontaminated  with  foreign  partialities,  prejudice  or  influence,  and  where 
the  last  torch  of  liberty  would  be  held  up  on  the  continent,  as  a  terror  to  ty- 
rants. 

Mr.  Speaker,  perhaps  I  am  mistaken,  but  I  view  this  measure  as  the  greatest 
test  ot  political  orinciple  that  has  been  on  the  carpet  lor  many  years  back, 
and  if  adopted,  federalism,  or,  if  gentlemen  please,  aristocracy,  will  regularly 
progress,  and  finally  obtain  the  ascendancy;  republicanism  will  have  to  take 
the  back  ground,  and  ultimately  be  prostrated;  your  boasted  institutions  will 
only  figure  m  the  pages  of  history,  like  ancient  republics,  as  a  mournful  mon- 
ument ot  the  iall  of  man,  and  a  sorrowful  memento  of  his  degraded  condition- 
therefore,  in  my  mind,  the  adoption  of  this  measure  would  seem  like  com  mi  f- 
tmg  a  most  horrid  treason  against  the  principles  of  the  cons  " 
24 


BANK  OF  THE  UNITED  STATES 

liberty;  consequently,  I  consider  it  not  only  the  true  interest,  but  the  bounden 
duty  of  every  man  who  has  any  pretensions  to  friendship  for  the  American 
Government,  or  civil  liberty,  to  assist  in  strangling  this  infant  Hercules  in  the 
cradle,  or  at  least  preventing  it  from  coming  to  maturity.  If  this  measure  was 
only  calculated  to  perpetuate  the  memory  of  its  founder,  I  should  not  so 
much  object  to  it;  but  then  I  should  think  it  unnecessary  and.  improper.  But, 
sir,  it  will  do  more;  it  will  further  the  views  of  federalism,  by  increasing  their 
power,  and  assist  them  in  overturning  the  present  system  of  government,  on 
the  ruins  of  which  they  will  calculate  on  raising  one  more  congenial  to  their 
purposes. 

Mr.  Speaker,  from  my  present  impressions,  I  think  it  would  be  more  advi- 
sable, if  the  British  Government  should  not  rescind  their  destructive  measures 
affecting  our  rights,  and  do  us  justice,  rather  than  renew  the  charter  of  the 
Bank  ot  the  United  States,  as  it  is  called,  thereby  furthering  their  views  on  this 
country,  to  lay  our  hand  on  the  capital  stock,  or  at  least  so  much  as  belongs  to 
citizens  of  the  island  of  Britain,  in  order  to  indemnify  us  in  part  for  the  da- 
mages we  have  sustained  by  British  outrages,  and,  if  it  becomes  necessary,  (as- 
l  presume  it  will)  to  make  use  of  it  in  defraying  the  expenses  necessary  in 
the  subjugation  of  the  North  American  provinces,  which  will  have  to  be  re- 
sorted to,  if  you  wish  to  give  peace  to  the  land:  for  I  have  no  hesitation  in 
saying,  that,  while  this  large  foreign  capital  is  in  existence  in  your  country r 
and  the  British  hold  their  North  American  possessions,  that  British  principles 
will  be  disseminated;  that  federalism— if  gentlemen  like  the  term  better,  aris- 
tocracy— will  regularly  progress,  and  finally  convulse  your  Government  to  its 
centre.  You  may  rest  assured,  sir,  that  if  the  charterof  the  Bank  of  the  Unit- 
ed States  is  renewed,  it  will  prove  a  powerful  weapon  in  the  hands  of  our 
enemies,  and  will  be  calculated  to  rule  the  Government,  instead  of  the  Govern- 
ment ruling  itself.  Then,  sir.  is  it  not  high  time  that  the  accounts  of  this  co- 
lossal speculating  institution  should  be  suffered  to  close,  by  letting  the  char- 
ter expire  on  the  3d  of  March  next,  that  we  may  know  whether  this  Diana  of 
the  Ephesians,  be  a  goddess  of  solid  silver,  or  only  of  clay  silvered  over. 

Sir,  much  has  been  said  about  the  want  of  capital;  if  gentlemen  would  cast 
their  eyes  around,  and  examine  our  resources,  they  must  be  fully  apprised 
that  we  have  capital  adequate,  and  beyond  our  wants.  Then  is  it  not  time  to 
cut  asunder  those  leading  strings,  by  which  corruption  has  led  credulity?  Yes, 
sir,  it  is  not  only  time  that  we  should  have  the  name  of  freemen,  but  be  so  in 
reality. 

Sir,  in  justice  to  my  own  feelings,  and  the  future  prosperity  of  my  country,. 
I  am  bound  to  vote  in  favor  of  concurring  with  the  Committee  of  the  Whole  in 
striking  out  the  first  section  of  the  bill. 

Mr.  PICKMAN.  I  acknowledge,  sir,  that  I  feel  very  anxious  to  have  the  char 
ter  of  the  United  States  Bank  renewed.  Not  from  any  personal  interests 
which  I  have  therein — for  I  have  none.  Nor  from  a  regard  to  the  interest  of 
the  stockholders,  tor  I  consider  that  very  unimportant,  wnen  compared  with  the 
interests  of  the  Government,  and  of  the  community.  This  question  has  ac- 
quired an  artificial  importance  from  the  manner  in  which  it  was  originally 
discussed  and  in  which  it  has  been  discussed  at  this  time.  It  has  been  treated 
as  a  great  constitutional  question,  when,  according  to  my  view,  it  involves  no 
great  constitutional  principles.  Ingenuity  has  surrounded  it  with  a  mist  of 
sophistry  which  has  obscured  it,  ami  presented  it  to  the  mental  eye  though  a 
very  delusive  medium.  I  shall  not  attempt  to  follow  the  gentleman  from  N. 
Y.  (Mr.  PORTER)  in  all  his  nice  and  ingenious  distinctions  between  the  pow- 
ers vested  in  the  Federal  and  State  Governments,  nor  in  his  metaphysical  re- 
finements on  objects,  ends,  powers  and  means;  but  shall  leave  that  task  to 
gentlemen  of  more  industry  and  more  talent  than  myself.  His  observations, 
however,  on  the  position  laid  down  by  the  late  General  Hamilton,  in  his  cele- 
brated argument  on  this  subject,  appear  to  me  so  extraordinary  that  I  cannot 
forbear  to  notice  them.  The  position  is,  that  every  power  vested  in  a  govern- 
ment is,  in  its  nature,  sovereign,  and  includes,  by  force  of  the  term,  a  right  to 


ON  THE   DILL  TO  RENEW  THE  CHARTER  OF  1791. 

employ;  all  the  means  requisite,  and  fairly  applicable  to  the  attainment  of  the 
ends  of  such  power,  and  which  are  not  precluded  by  restrictions  and  excep- 
tions specified  in  the  constitution,  or  not  immoral,  or  not  contrary  to^the  es- 
sential ends  of  political  society.  And  to  prove  that  the  powers  of  the  Federal 
Government,  as  to  its  objects,  are  sovereign,  the  following  clause  in  the  con- 
stitution is  considered  as  dcsisive:  "  That  the  constitution,  and  the  laws  of 
the  United  States  made  in  pursuance  of  it,  and  all  treaties  made  or  which  shall 
be  made  under  their  authority,  shall  be  the  supreme  law  of  the  land."  Now 
the  words  supreme  and  sovereign  are  synonymous  terms;  if  there  be  any  dif- 
ference, the  word  supreme  is  of  the  highest  import,  it  being  frequently  applied 
to  the  Almighty  himself.  But  the  gentleman  from  New  York,  (Mr.  PORTER) 
as  I  undertood  him.  observed,  that  the  power  to  pass  the  supreme  law  does  not 
give  the  Government  sovereign  power:  for  the  highest  law  which  any  govern- 
ment can  pass,  is  a  law  to  inflict  the  punishment  of  death.  The  sheriff  who 
executes  this  law,  said  he,  is  not,  therefore,  possessed  of  sovereign  power. 
Certainly  not;  he  is  only  the  instrument  of  the  sovereign  power,  as  much  so  as 
the  axe  or  the  halter  with  which  he  executes  the  sentence.  But  "  the  Govern- 
ment is  not  sovereign  because  it  is  made  to  depend,  in  some  degree,  on  the 
State  Legislatures"— if  they  were  to  omit  to  appoint  Senators  the  Government 
would  die  a  natural  death.  If  they  were  to  neglect  it  they  would  violate  their 
oath  to  support  the  constitution  of  the  United  States.  But,  "  the  sovereign 
power  is  in  the  people."  The  sovereign  and  the  physical  power  are  often  con- 
founded together.  The  people,  in  their  collective  capacity,  are  as  much  bound 
by  the  immutable  rules  of  justice,  as  each  one  is  in  his  individual  capacity. 
The  people  of  the  United  Stales  are  under  a  constitutional  and  moral  obliga- 
tion to  support  the  Federal  Government:  and  it  is  not  proper  to  presume  tnat 
they  will  omit  to  do  what  it  is  their  duty  to  do,  and  found  an  argument  on  such 
presumption. 

But,  to  return  to  the  subject  of  the  bank.  If  we  consider,  sir,  what  are  the 
purposes  for  which  it  was  established,  and  what  are  the  privileges  with  which 
it  is  invested,  we  sluill,.  I  think,  find,  that  the  former  are  not  only  constitu- 
tional, but  highly  necessary,  proper,  and  useful,  and  that  the  latter  do  not  in- 
terfere with  State  rights.  The  constitution  of  the  United  States  vests  Con- 
gress with  the  power  fcbto  lay  and  collect  taxes,  duties,"  &c. ;  to  pay  the  debts 
and  to  provide  for  the  common  defence  and  general  welfare  of  the  United 
States;  "to  borrow  money  on  the  credit  of  the  United  States;  to  regulate 
commerce  with  foreign  nations,  and  among  the  several  States;  and  to  make 
all  laws  which  shall  be  necessary  and  proper  for  carrying  into  execution  the 
foregoing  powers."  It  is,  therefore,  the  right  and  duty  of  Congress  to  facili- 
tate, and  to  render  as  certain  as  possible,  the  collection  of  the  revenue.  It  is 
their  riff ht  and  ditty  to  provide  places  of  safe  deposite  for  the  public  moneys;  it 
is  their  duty  to  discharge  the  public  engagements  with  punctuality  and  good 
faith,  and,  if  possible,  to  provide  the  means  of  transmitting  the  public  moneys 
from  one  place  to  another,  as  the  public  exigencies  may  require,  without  the 
risk  of  loss  to  the  United  States.  Has  not  the  bank  answered  all  these  highly 
important  and  necessary  purposes?  Can  they  be  so  well  accomplished  by  any 
other  means  ?  I  presume  not;  for  the  ingenuity  of  those  who  oppose  the  re- 
newal of  the  charter — and  certainly,  sir,  they  have  displayed  much  ingenuity — 
has  not  suggested  a  plausible  substitute.  It  is  surmised  that  the  public  mo- 
neys may  be  transmitted  from  one  part  to  another,  in  specie,  which  may  be 
carried  by  land,  or  sent  by  water  in  Government  vessels;  or,  that  it  may  be 
done  by  the  private  drafts  of  merchants.  The  objections  to  these  modes  are 
too  obvious  to  render  it  necessary  to  enumerate  them.  It  is  sufficient  to  say, 
that  each  of  them  would  subject  the  United  States  to  frequent  losses,  and  the 
Government  to  constant  disappointment.  But,  it  is  thought,  by  many,  that 
the  fiscal  concerns  of  the  Government  may  be  conducted  through  the  instru- 
mentality of  the  State  banks;  and,  in  fact,  it  is  the  interest  of  the  State  banks 
which  excites  much  of  the  opposition  to  the  renewal  of  the  charter  of  the  Unit- 
ed States  Bank.  In  my  opinion,  however,  it  is  an  erroneous  view  of  their 
interest.  I  apprehend  that  many  of  them  will  sustain  a  shock  from  the  sup- 


188  BANK  OF  THE  UNITED  STATES. 

pression  of  this  institution,  from  which  they  will  never  recover.  How  can 
the  public  business  now  done  by  the  United  States  Bank,  be  executed  by  the 
State  banks  ?  Congress  have  no  control  over  them:  are  ignorant  of  their 
funds;;  unacquainted  with  the  conditions  on  which  tney  are  granted,  and  of 
the  principles  by  which  they  are  governed.  Some  of  mem  are  undoubtedly 
entitled  to  confidence,  but  many  of  them  are  not.  It  would  be  imposing  on 
the  Secretary  of  the  Treasury  an  invidious  task,  and  a  most  unpleasant  re- 
sponsibility, to  make  a  selection.  In  every  view  which  1  can  take  of  the 
subject,  it  appears  to  me  that  it  would  be  the  height  of  imprudence  and  indis- 
cretion to  suppress  the  Bank  of  the  United  States,  and  deposite  public  moneys 
in  the  State  banks.  If,  however,  the  privileges  conferred,  and  necessarily 
conferred,  on  the  United  States  Bank,  are  unconstitutional,  then  it  is  our 
duty  to  suppress  it.  Let  us  candidly  consider  what  these  privileges  are.  The 
greatest,  in  my  opinion,  is,  that  its  bills  are  receivable  for  duties.  I  do  not 
know  that  any  one  has  pretended  that  Congress  transcended  their  powers  in 
conferring  this  privilege.  It  is  this,  however,  and  this  only,  which  gives  its 
bills  a  circulation  throughout,  the  United  States;  it  is  this  which  enables  it  to 
transmit  large  sums  from  one  extreme  of  the  Union  to  the  other,  as  the  exi- 
gencies of  the  Government  require;  nor  do  I  see  how  this  necessary  privilege 
could  be  conferred  on  the  State  banks.  Certainly  it  would  not  be  sate  to  give 
it  to  all  of  them;  and  if  you  were  to  select  a  few,  it  would  excite  the  most  se- 
rious discontents.  Besides,  it  is  necessary  that  the  banks  between  which  this 
intercourse  is  to  subsist,  as  that  of  drawing  upon  each  other,  should  have  a 
common  parent  to  regulate  their  affairs,  and  to  secure  them  from  ruin  from 
unexpected,  and,  of  course,  unprepared  for,  drafts.  It  is  necessary,  in  fact, 
that  there  should  be  such  an  institution  as  the  United  States  Bank;  and  the 
only  question  is,  how  shall  it  be  established  ?  By  the  State  Legislatures,. 
or  the  Federal  Government  ?  But,  it  is  said  that  the  establishment  ot  branches 
in  the  different  States,  is  a  violation  of  the  State  sovereignties;  and  the  gen- 
tleman from  New  York,  (Mr.  PORTER)  says  it  is  so  because  the  States  have 
laws  against  usury,  and  that  the  bank  makes  more  thai>  lawful  interest  upon 
their  capital,  and  thereby  violates  the  laws  of  the  States.  This  objection  ap- 
plies to  all  banks.  Now,  so  far  are  the  banks  from  having  practised  or  en- 
couraged usury,  the  suppression  of  it  may  be  considered  as  one  of  the  best  ef- 
fects of  their  establishment.  The  United  States  Bank  is  restrained  by  their 
charter  from  letting  their  money  at  a  rate  exceeding  six  per  cent.;  and  I  be- 
lieve that  this  is  not  usury  in  any  of  the  States;  in  some  of  them  the  legal  rate 
of  interest  is  higher.  Their  profits,  over  six  per  cent.,  are  what  they  make 
as  bankers  and  not  as  money  lenders.  It  is  said  to  violate  the  State  laws, 
because  the  persons  and  private  property  of  the  stockholders  are  not  responsi- 
ble for  the  payment  of  its  notes.  This  is  the  case  with  every  artificial  person; 
he  is  not  accountable,  in  his  private  capacity,  for  the  notes  which  he  gives,  or 
the  contracts  which  he  makes,  as  such.  The  stockholders  of  the  bank  may  be 
considered  as  public  agents,  and,  as  such,  it  would  not  be  reasonable  to  sub- 
ject their  private  fortunes  to  the  payment  of  its  debts,  unless  they  abuse  the 
trust  reposed  in  them.  Such  a  responsibility  would  render  it  impossible  to 
establish  the  institution;  nor  is  it  necessary  for  the  public  security:  for,  it  is 
next  to  impossible  for  a  bank  with  such  funds  to  become  insolvent,  if  its  affairs 
are  honestly  and  judiciously  managed;  if  they  are  otherwise,  no  guards  will 
afford  security  to  the  public. 

It  appears  to  be  thought  by  many,  that,  because  the  State  Governments 
have  a  right  to  incorporate  banks,  therefore  the  United  States'  Government 
has  not  the  right.  Now,  it  is  an  implied  power  in  the  State  Governments;  for 
there  is  no  such  power  expressly  delegated  to  them  in  any  of  the  State  con- 
stitutions; they  assume  the  right,  because  it  is  not  prohibited  to  them.  Upon 
the  same  principles  has  the  United  States'  Government  the  right  to  establish 
a  bank,  provided  it  be  necessary  to  the  accomplishment  of  the  purposes  lor 
which  the  Government  was  instituted.  I  again  inquire,  Mr.  Speaker,  if  the 
fiscal  operations  of  the  Federal  Government  do  not  require  such  an  institu- 
tion? Has  not  the  experience  of  twenty  years  fully  evinced  its  utility  to  Go- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

vernment?  Have  not  the  public  moneys  been  safely  kept  ?  Have  not  large 
sums  been  continually  transmitted  from  one  place  to  another,  as  the  public 
exigencies  have  required,  and  without  any  loss  to  the  United  States  ?  Why 
then  suffer  an  institution,  which  has  done  so  much  good,  which  has  proved  so 
safe  and  so  useful,  to  run  down,  and  trust  to  precarious  and  unpromising  sub- 
stitutes r  But,  while  I  am  anxious  to  have  the  charter  of  this  bank  renewed, 
from  a  lull  conviction  that  the  fiscal  concerns  of  the  Government  cannot  be 
managed  with  convenience,  or  safety,  in  any  other  way,  I  feel  infinitely  more 
anxious  that  it  should  not  be  suppressed  at  this  time,  on  account  of  the  commu- 
nity at  large.  Such  an  event  must,  in  my  opinion,  be  productive  of  the  most 
distressing  consequences.  Perhaps  there  has  never  been  a  period  when  our 
merchants  were  more  embarrassed  than  they  are  at  present,  and  when  it  was 
more  difficult  to  raise  money.  They  have  large  funds  in  England,  but  at  pre- 
sent there  is  no  demand  for  exchange  upon  that  country.  They  have  large 
quantities  of  imported  merchandise,  out  the  prices  of  most  articles  are  merely 
nominal.  The  bank  has  seventeen  millions  of  dollars  due  to  it  from  the  Unit- 
ed States  and  individuals;  it  has  to  the  amount  of  five  millions  of  dollars  in 
gold  and  silver  in  its  vaults:  there  is  due  to  it,  from  the  State  banks,  about 
two  millions  of  dollars,  on  their  bills,  and  on  deposites.  It  owes  about  four- 
teen millions  of  dollars,  payable  on  demand;  and  it  will  probably  be  very  soon 
called  upon  for  this  money.  To  fulfil  its  own  engagements,  therefore,  it  must. 
immediately  call  for  seven  millions  of  iis  debts,  and,  within  a  short  period, 
for  the  remainiKg  ten  millions;,  and  this  last  sum  must,  eventually,  be  paid  in 
specie.  Whence  is  this  specie  to  come  ?  From  the  vaults  of  the  State  banks, 
if  it  be  there:  for  the  payments  to  the  United  States  Bank  will  be  in  bills  of 
the  State  banks;  these  bills  will  be  immediately  sent  to  those  banks  to  \; 
changed  for  specie.  Thus  they,  instead  of  having  it  in  their  power  to  aid  the 
debtors  to  the  United  States  Bank,  as  some  erroneously  suppose,  will  be  oblig- 
ed to  call  on  their  own  debtors,  and  every  specie  dollar  taken  from  a  bank, 
may,  and  probably  will,  oblige  it  to  call  for  two  or  three  dollars  of  its  debts. 
It  does  not  appear  to  me  unreasonable  to  suppose,  that,  by  compelling  the 
United  States  Bank  to  call  in  the  seventeen  millions  of  dollars  due  to  it,  we 
shall  compel  the  State  banks  to  call  in  as  large,  if  not  a  larger  sum.  {low 
these  payments  are  to  be  made,  and  what  effects  are  to  result  from  such  a 
state  of  things,  I  pretend  not,  sir,  to  sufficient  discernment  to  foresee.  It  v/ill 
probably  produce  a  genera!  suspension  of  the  payment  of  debts,  and  an  almost 
total  stagnation  of  business:  it  will  greatly  depreciate  the  value  of  every  spe- 
cies of  property,  and  thereby  reduce  many  persons  to  insolvency,  who  flatter 
themselves  that  they  have  much  more  than  enough  to  pay  their  debts.  It  will 
raise  an  enormous  demand  for  money,  and,  of  course,  throw  many  persons 
into  the  hands  of  the  griping  usurer.  It  will  distress  all  classes  of  people  ex- 
cept the  moneyed  capitalist  If,  in  addition  to  this  measure,  our  non-importa- 
tion act  should  go  into  effect,  thousands  must  be  overwhelmed  by  ruin:  the 
shock  may  first  be  felt  in  the  seaport  towns,  but  will  ultimately  extend  to  the 
remotest  villages  in  the  country.  [  deem  it,  sir,  a  very  unfortunate  circum- 
stance, that  our  paper  circulating  medium  so  greatly  exceeds  the  amount  of 
our  specie;  that  so  large  a  portion  of  it  is  the  representative,  of  lands,  houses, 
and  merchandise,  instead  of  being  the  representative  of  gold  and  silver.  But 
this  is  not  the  fault  of  the  Federal  Government;  it  is  owing  to  the  numerous 
banks  which  have  been  instituted  by  the  State  Governments.  This  furnishes, 
to  my  mind,  a  strong  argument  against  the  institution  of  banks  by  the  States, 
and  in  favor  of  the  power  being  vested  in  the  Federal  Government,  which  su- 
perintends the  affairs  of  the  United  States.  As  i  have  before  observed,  our 
paper  circulating  medium  dangerously  exceeds  our  specie;  should  we  adopt  a 
measure  which  will  affect  its  credit,  it  v/ill  produce  consequences  which  none 
of  us  can  foresee.  On  the  one  hand,  by  continuing  the  bank,  we  tread  un;>ii 
perfectly  safe  ground;  twenty  years  experience  of  it  has  proved  that  it  is  c-i!- 
culated  to  answer  all  the  purposes  for  which  it  was  established;  it  has  proved 
very  useful  to  our  merchants,  and  to  the  community  at  large,  not  only  by  fur- 
nishmg  loans,  but.  also,  by  supplying  a  medium  which  circulates  throughout 


190  BANK  OF  THE  UNITED  STATES. 

the  United  States,  and  thereby  renders  it  much  easier  for  the  merchant  of 
the  Northern  States  to  purchase  the  productions  of  the  Southern  States.  It 
may  be  truly  said,  that  it  has  aided  the  agriculture,  the  commerce,  and  the 
manufactures  of  our  country;  its  affairs  have,  generally,  if  not  uniformly,  been 
conducted  with  fidelity  and  ability.  Yet  we  are  about  to  suffer  this  valuable 
institution  to  fall;  we  shall  thereby  compel  the  Secretary  of  the  Treasury  to 
have  recourse  to  untried,  troublesome,  and  hazardous  expedients,  for  the 
management  of  our  finances,  and  we  shall  probably  lead  many  of  our  fellow- 
citizens  into  ruinous  speculations.  It  is  absurd,  after  the  experience  we  have 
had,  to  ascribe  to  it  any  great  political  influence:  it  was  established  by  the 
federal  republicans  when  they  were  the  ruling  party;  it  has  always  been  un- 
der their  management.  Vet,  with  this  monstrous  engine  in  their  hands— this 
engine  which  is  to  govern  the  Government — their  political  opponents  have 
gained  an  absolute  and  uncontrolable  ascendency.  Continue  it,  sir,  and  you 
will  probably  do  much  good;  suppress  it,  and  you  may  bring  on  incalculable 
evils. 

Mr.  W.  ALSTON  said,  that  the  motion  to  strike  put  the  first  section,  was- 
undoubtedly  a  fair  way  of  attacking  the  principle  of  the  bill;  but  as  the  same 
motive,  even  if  he  did  hereafter  vote  against  the  bill,  would  not  govern  him  as 
it  had  other  gentlemen,  he  begged  leave  to  state  tne  reasons  why  he  should 
vote  against  the  motion.  It  has  been  contended  (said  he)  by  gentlemen  who 
have  gone  before  me  in  this  debate,  that  the  constitution  dkl  not  authorize 
Congress  to  continue  this  charter,  or  to  have  created  it,  in  the  first  instance. 
I  am  opposed  to  this  doctrine  of  the  restriction  of  our  powers,  because  I  be- 
lieve, if  practised  upon  to  the  extent  that  gentlemen  of  great  talents  contend, 
the  Government  itself  cannot  get  along.  I  do  not  believe  that  gentlemen  can 
put  their  finger  on  the  constitution,  and  show  their  authority  for  a  number  of 
acts  which  we  are  compelled  to  pass,  any  more  than  they  can  put  their  finger 
on  the  particular  passage  which  authorizes  the  granting  this  charter. 

Sir,  we  are  met  on  the  threshold  of  this  question,  tiy  the  gentleman  from 
Virginia,  (Mr.  BURWELL)  on  constitutional  grounds;  and  I  will  take  the  ar- 
gument of  that  gentleman  alone,  and  I  think  can  prove,  that  he  himself  has 
given  up  the  consitutional  question.  In  the  clause  which  many  gentlemen 
have  called  the  sweeping  clause  in  the  constitution,  I  find  these  words:  "  Con- 
gress shall  have  power  to  make  all  laws  necessary  and  proper  for  carrying 
into  execution  the  foregoing  powers,  and  all  other  powers  vested  by  this  con- 
stitution in  the  Government  of  the  United  States,  or  in  any  department  or 
office  thereof."  The  gentleman,  well  satisfied  that  this  clause  confers  the 
power,  attaches  to  it,  to  make  it  the  more  important,  the  word  "  absolutely," 
before  he  is  able  to  give  any  weight  to  the  construction  for  which  he  contends. 
I  have  examined  the  constitution  over  and  over  again,  for  the  word  absolutely, 
and  can  find  no  such  word.  Where  then  does  the  gentleman  get  it  from,  but 
from  the  very  same  source  that  he  charges  on  the  favorers  of  the  constitutional 
right  to  pass  the  law?  It  is  by  implication,  that  he  calls  in  the  aid  of  the  word 
absolutely  before  necessary.  With  what  propriety,  then,  can  he  refuse  to 
others  the  exercise  of  the  same  right  that  he  himself  has  taken?  If  gentlemen 
have  the  right  to  interpolate  this  word,  why  may  we  not  as  well  interpolate 
others?  It  is  denied  that  the  doctrine  of  implication  can  apply  with  respect  to 
granting  charters.  If  it  can  apply  in  any  way,  why  not  in  this  way?  If  I  can 
show  to  the  House  that  it  might  apply  in  some  cases,  or  it  will  be  impossible 
that  you  can  execute  the  object  of  the  constitution,  why  may  it  not  as  well 
apply  in  the  case  of  granting  charters,  as  in  any  other.  I  ask  gentlemen  to 
put  their  finger  on  the  clause  of  the  constitution,  which  authorizes  them  to 
pay  away  one  cent  of  the  public  money?  How  do  they  get  at  the  power,  but 
by  implication?  You  have  a  power  by  the  constitution,  to  pay  the  debts  of  the 
United  States — but  that  part  which  provides  for  the  payment  of  debts,  means 
debts  already  contracted,  and  owing  at  the  time  of  the  adoption  of  the  consti- 
tution; that  too  is  in  the  sweeping  clause,  which  gentlemen  will  certainly  not 
avail  themselves  of.  But  you  have  not  the  power  expressly  given,  to  create  a 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

debt,  other  than  the  clause  which  authorizes  you  to  borrow  money  on  the  credit 
of  the  United  States;  but  none  will  contend,  that,  by  this  you  are  authorized  to 
make  contracts,  and  go  in  debt.  There  is  an  important  clause  of  the  consti- 
tution, which  gives  to  the  United  States  power  to  call  out  the  militia  of  the 
States  for  particular  purposes.  Show  me  Jthe  spot  in  the  constitution  which 
authorizes  the  payment  of  the  militia.  Not  one.  The  power  to  call  them 
out,  implies  the  power  to  pay  them.  It  inevitably  follows,  that  the  power  to 
lay  and  collect  taxes  and  raise  a  revenue,  implies  the  power  to  take  care  of  it. 
Will  gentlemen  pretend  to  deny  it?  What  is  the  argument  of  gentlemen  on 
this  point?  They  say  it  is  true,  that  a  bank  is  necessary  for  the  safe  keeping 
and  paying  the  debts  of  the  United  States;  but,  say  they,  the  banks  of  all  the 
States  are  open  to  you.  How  does  this  doctrine  apply  to  the  United  States? 
Have  not  the  States  themselves  denied  the  connexion  of  the  State  and  Fede- 
ral Governments?  Can  I  quote  a  State  which  docs  not  afford  an  example  of 
this  disposition?  The  seat  of  a  gentleman  of  high  standing  in  the  Legislature  of 
Virginia,  was  vacated  merely  because  he  was  a  contractor  for  carrying  the 
mail.  Will  then  the  State  of  Virginia,  who  is  so  jealous  of  your  influence 
over  her  officers,  permit  you  to  exercise  that  influence,  by  placing  your  mo- 
ney under  officers  created  by  her?  Let  gentlemen  examine  this  question- 
The  argument  will  not  bear  them  out.  In  the  State  which  I  represent,  also,  a 
law  has  been  passed,  to  prevent  a  person  from  holding  any  office  or  appoint- 
ment at  the  same  time,  under  the  State  and  Federal  Governments.  What 
right  have  the  directors  in  a  State  bank,  appointed  by  the  State,  to  contract 
with  the  General  Government  to  keep  its  money?  I  deny  their  right. 

Putting  the  State  banks  out  of  the  question,  it  is  necessary  that  we  should 
create  means  by  which  we  can  transfer  the  money  of  the  Government  without 
expense,  hazard,  or  loss?  1  will  state  a  case.  Wo  have  an  army  in  the  city 
of  New  Orleans,  which  must  be  paid.  By  paying  the  money  at  Baltimore  or 
Philadelphia,  it  is  transferred  to  the  paymaster  at  New  Orleans,  without  cost- 
ing you  a  cent.  Is  not  this  convenient  expedient  necessary  to  comply  with 
the  interest  of  the  United  States  in  the  case  I  have  suited?  1  do  not  believe 
it  possible,  taking  the  ground  that  they  have  a  right  to  place  money  in  the 
banks  of  the  individual  Static,  that  such  a  connexion  between  them  could 
i-viM-  be  established  as  with  the  same  ease,  convenience,  and  safety,  as  at  pre- 
sent, to  pay  in  the  different  part  8  of  the  Union  monry  which  the  United  States 
are  bound  to  pay.  1  ask  the  question — Will  a  bank  in  North  Carolina  trust 
a  bank  in  New  Hampshire:  No:  but  the  State  and  every  individual  in  it, 
would  trust  the  Bank  of  the  United  States.  You  could  not  establish  a  con- 
nexion between  North  Carolina  and  New  Hampshire,  so  that  either  would 
trust  the  other.  The  establishment  of  the  Bank  of  the  United  States,  affords 
in  this  case,  a  facility  useful  and  absolutely  necessary,  in  my  opinion,  to  carry 
on  the  measures  of  Government.  How  will  putting  down  the  Bank  of  the 
United  States,  have  an  effect  to  lessen  the  quantity  of  paper  in  circulation? 
If  I  could  think  so?  I  would  join  the  gentleman  most  seriously;  but  the  very 
contrary,  in  i«y  opinion,  would  be  the  effect.  The  Bank  of  the  United  States 
and  its  paper,  serves  as  a  controlling  power,  keeps  the  State  banks  in  proper 
bounds;  and  prevents  them  from  issuing  a  vast  quantity  of  paper,  which  would 
inundate  the  country.  They  are  very  confident  if  they  issue  too  much  paper, 
that  there  will  be  a  run  upon  them;  because  the  interest  of  the  United  States 
Bank  and  the  State  banks,  do  not  at  all  times  go  hand  in  hand.  At  this  time 
it  certainly  restrains  the  circulation  of  State  bank  paper. 

It  is  said,  sir,  that  the  States  are  not  compelled  to  do  particular  acts  which 
they  are  required  to  do.  To  be  sure,  the  States  have  the  physical  power,  but 
they  are  bound  by  the  same  solemn  oath  to  carry  into  effect  the  constitution 
of  the  United  States,  that  the  members  of  this  House  are.  It  may  as  well  be 
said,  that  the  State  Legislatures  may,  if  they  choose,  refuse  to  appoint  electors 
to  vote  for  President  and  Vice-President,  or  elect  Senators;  but  the  obligation 
upon  them  is  as  strong  as  upon  any  other  department  of  the  Government,  as 
it  is  upon  the  members  of  this  House,  to  perform  its  duties.  They  have  taken 
a  solemn  oath,  and  must  perform  its  obligations. 


192  BANK  OF  THE  UNITED  STATES. 

Sir,  there  is  one  part  of  this  constitution,  which,  in  my  humble  opinion, 
gives  the  power  completely.  It  is  a  part  of  the  constitution  which  1  never 
heard  any  gentleman  mention,  nor  any  writer  on  the  subject.  I  may  put  an 
erroneous  construction  on  it;  but  if  I  am  correct,  the  conclusion  is  inevitable. 
In  the  10th  section  of  the  first  article,  it  is  said,  "  No  State  shall  coin  money, 
emit  bills  of  credit,  or  make  any  tiling  but  gold  and  silver  coin,  a  tender  in 
payment  of  debts;"  and  the  interpretation  which  1  give  to  it  is,  that  the  United 
States  possess  the  power  to  make  any  thing  besides  gold  anil  silver,  a  legal 
tender. 

If  this,  then,  be  the  correct  construction,  it  is  a  clause  which  I  have  never 
before  heard  relied  on.  If,  what  I  conceive  to  be  the  fair  interpretation,  be 
admitted,  it  must  follow,  that  they  have  a  right  to  make  bank  paper  a  tender. 
Much  more,  then,  sir,  have  they  the  power  ot  causing  it  to  be  received  by  them- 
selves in  payment  of  taxes.  If  they  have  power  to  make  paper  of  any  descrip- 
tion whatever,  receivable  in  payment  of  all  debts  whatever,  can  any  one  deny 
that  they  have  a  power  to  make  it  a  tender  in  payment  01  taxes  or  debts  to 
the  United  States?  After  admitting  the  power,  will  you  place  the  exercise 
of  it  in  your  Secretary  of  the  Treasury,  or  in  the  hands  of  fifteen  or  twenty 
men  whom  you  call  directors?  But  I  might  not  have  voted  against  concur- 
ring with  the  committee  in  striking  out  the  first  section  of  the  bill,  if  I  stood 
on  this  ground  alone. 

To  the  bill  in  its  present  shape,  I  should  have  no  hesitation  in  giving  a  de- 
cided negative;  but  there  is  a  plan  on  which  I  would  vote  for  the  renewal. 
.Sir,  I  ask  gentlemen  who  have  voted  against  it  on  constitutional  ground,  to 
meet  me  on  this  point—the  plan  is,  that  the  additional  stock  shall  be  taken 
wholly  by  the  United  States;  that  they  shall  be  bound  to  distribute  it  among 
the  individual  States,  having  respect  to  their  relative  numbers,  at  its  par 
value.  The  States  would  take  it  if  they  think  proper;  if  taken,  there  is  an 
end  to  the  violation  of  State  rights.  In  a  plan  of  this  kind,  a  distinction  is 
brought  to  the  mind  of  every  man,  whether  he  will  prefer  the  interest  of  the 
great  body  of  those  people  who  are  represented  in  the  State  Legislature,  or 
whether  he  will  support  the  interest  of  a  few  who  think  proper  to  incorporate 
themselves  for  the  support  of  a  bank.  The  true  question  is,  whether  the  emo- 
luments of  the  banking  system  should  belong  exclusively  to  a  few,  or  collec- 
tively to  the  whole  United  States.  I  therefore  hope,  the  first  section  will  not 
be  stricken  out.  In  discussing  the  detail,  such  a  plan  would  be  more  interest- 
ing than  any  other  can  be  to  the  States.  The  advantages  of  such  a  system 
must  be  seen.  The  anxiety  evinced  for  the  renewal  of  this  charter,  and  the 
credit  of  the  State  banks  altogether,  in  consequence  of  the  money  made  by 
the  banking  system,  is  then  done  away.  The  money  arising  from  the  profit 
of  the  banks  will  belong  to  the  States  in  their  individual  capacity,  and  the 
taxes  of  every  individual  lessened  in  proportion  to  its  share  of  the  capital. 
Let  gentlemen  bring  the  question  home  to  them;  let  them  examine  how  it 
concerns  their  constituents,  and  put  the  question  which  of  the  two  will  in- 
terest the  great  body  of  the  people  the  most. 

Putting  down  the  charter  of  the  United  States  Bank,  will  not  put  an  end 
to  the  banking  system.  Cast  your  eyes  about  you  at  what  has  taken  place  at 
the  last,  sessionsof  the  State  Legislatures?  Has  one  of  them  adjourned  without 
establishing  a  bank?  It  is  bank  paper  as  much  when  issuing  from  State  banks 
as  when  from  the  Bank  of  the  United  States.  There  is  no  sort  of  difference. 
If  this  question  had  not  been  attacked  on  constitutional  ground;  if  it  had  oeen 
left  merely  to  expediency,  I  should  not  have  troubled  the  House  on  the  sub- 
ject. I  know  too  little  of  the  concerns  of  a  bank  to  think  of  making  a  speech 
on  the  details  alone.  But  1  know  how  much  interest  moves  us  on  this  ques- 
tion. When  you  place  money  in  the  State  banks,  you  give  a  complete  license 
to  the  State  banks  to  issue  what  they  please.  What  was  the  loss  of  paper 
money  during  our  revolution?  Did  it  not  foil  on  those  who  had  given  cretlit? 
And  are  we  prepared  to  meet  such  a  shock  as  that?  Could  we  have  stood  it  in 
any  other  cause  than  that  in  which  we  were  engaged?  Here  let  me  enter  my 
protest  against  the  banking  system  altogether;  but  we  have  it.  Is  not  the 
consequence  more  dangerous—will  not  the  loss  ultimately  be  greater,  to  let 


ON  THE    BILL  TO  RENEW  THE  CHARTER  OF    1791.  J  93 

the  State  banks  issue  paper  at  will,  than  to  control  them  by  the  Bank  of  the 
United  States? 

If  the  doctrine  which  gentlemen  advance,  about  putting  the  finger  on  that 
part  of  the  constitution  which  gives  f>ower  to  carry  on  the  Government  itself, 
be  true,  we  may  as  well  quit  legislation  altogether.  You  cannot  go  a  single 
step  without  calling  in  the  aid  of  implication.  When  a  means  is  necessary 
and  expedient;  when  the  operations  of  Government  cannot  as  well  be  carried 
on  in  any  other  way  as  by  it,  then  it  is  necessary,  and,  being  necessary,  is 
constitutional. 

Mr.  KEY.  Mr.  Speaker:  This  House,  in  Committee  of  the  Whole,  having 
struck  out  the  first  section  of  the  bill  in  relation  to  the  charter  of  the  Bank  ot 
the  United  States,  and  thereby  defeated  the  bill ;  and  this  House  being  called 
upon  to  concur  with  or  reject  the  vote  of  the  committee,  a  question  ot  the  ut- 
most magnitude  and  importance  is  presented  to  our  consideration.  Few  sub- 
jects more  deeply  affect  the  welfare  and  prosperity  of  our  country,  and  none 
deserves  a  more  calm  and  temperate  investigation.  I  shall  not  attempt  to  ex- 
cite the  feelings  of  the  House  by  painting  the  scenes  of  distress  that  will  proba- 
bly flow  from  a  non-renewal  of  the  charter;  but  address  myself  entirely  to 
your  understandings. 

All  parties  seem'to  concur  in  the  utility  and  convenience  of  the  bank  to  aid 
the  collection  and  payment  of  our  taxes  and  revenue,  to  safe  keep  the  amount, 
and  distribute  it  when  wanted.  But  many  deny  that  we  have,  under  the  con- 
stitution, a  right  to  incorporate  a  bank  eVen  for  such  purposes.  I  have  listened 
with  pleasure  to  the  arguments  urged  by  those  who  deny  the  right,  and  have 
weighed  them  with  attention,  and  soliciting  the  same  indulgence  from  them  in 
return,  I  do  not  despair  of  producing  conviction, 

I  shall  contend,  that  we  have  a  right  to  create  a  national  bank,  and  that  it 
is  our  duty  to  do  so,  to  avoid  the  general  calamity  that  will  result  to  the 
country,  if  we  fail  to  do  it.  I  beg  of  gentlemen  to  take  the  constitution  in 
their  hands,  and  follow  me,  step  by  step,  while  I  demonstrate  the  existence  of 
the  right. 

The  eighth  section  of  the  first  article  of  the  constitution,  contains  the  grant 
of  powers  given  to  Congress,  to  enable  it  to  conduct  the  affairs  of  the  Union. 
The  powers  given  are  enumerated  and  specified,  being  eighteen  in  number. 
In  the  first  we  find  these  words:  4'  The  Congress  shall  have  power  to  lay  and 
collect  taxes,  duties,  imposts  and  excises,  to  pay  the  debts  and  provide  for  the 
common  defence  and  general  welfare  of  the  United  States;  but  all  duties,  im- 
posts and  excises,  shall  be  uniform  throughout  the  United  States."  These 
words  give  to  the  United  States,  a  definite,  explicit  power,  "to  lay  and  collect 
taxes,  duties,  imposts,*'  &c. — the  only  qualification  of  the  power  is,  that  the 
duties  and  imposts,  not  the  taxes,  shall  be  uniform.  The  eighteenth  enume- 
rabed  power  is,  4k  for  Congress  to  make  all  laws  which  shall  be  necessary  and 
proper  for  carrying  into  execution  the  foregoing  powers,"  &c. 

The  powers  thus  given  to  Congress  are  sovereign  in  their  nature,  and  ex- 
plicit in  their  terms  of  grant;  but  the  jealousy  and  provident  wisdom  of  the 
framers  of  the  constitution,  knowing  that  the  power  might  be  abused  in  its 
exercise,  have,  in  the  ninth  section  of  the  first  article,  enumerated  seven  spe- 
cific limitations  or  restrictions  of  the  powers  previously  given.  The  grant  of 
power  is  in  affirmative  terms;  the  restrictions  are  in  negative  terms. 

The  general  grant  of  power,  "  to  lay  and  collect  taxes  and  imposts,"  &c. 
given  in  the  eighth  section,  is  thus  restricted  in  the  ninth:  "No  capitation  or 
other  direct  tax,  shall  be  laid,  unless  in  proportion  to  the  census,"  &c. 
Secondly,  "No  tax  or  duty  shall  be  laid  on  articles  exported  from  any  State." 
It  is  a  sound  rule  of  construction,  and  is  founded  in  common  sense  as  well  as 
wisdom,  that,  where  a  grant  creates  a  general  power,  and  enumerates  excep- 
tions to  its  exercise,  the  expression  and  enumeration  of  those  exceptions, 
operate  to  exclude  all  others;  because,  having  exceptions  in  view,  and  having 
specified  some,  it  demonstrates  that  if  others  had  been  intended,  they  would 
also  have  been  expressed.  This  rule  is  so  true,  that  it  has  long  been  a  maxim, 
£5 


194  BANK   OF  THE    UNITED    STATES. 

that,  4  *  Expressio  unuis  est  exclusio  alterius^  and  governs  the  construction 
of  all  grants  and  instalments  in  public  or  in  private  lite.  I  am  then  warranted 
in  saying,  that  the  grant  of  power  "to  lay  and  collect  taxes  and  imposts,  &c. 
provided  the  latter  are  uniform,"  is  fettered  or  restricted  by  no  other  limita- 
tion than  the  two  above  expressed  in  the  ninth  section;  and  it  follows,  that  we 
can  make  any  laws  necessary  and  proper  to  lay  taxes,  if  we  do  not  violate  the 
restrictions  interdicting  us  from  laying  a  tax  on  exports,  and  a  capitation  tax 
contrary  to  the  proportion  of  the  census. 

Mr.  Speaker,  an  honorable  gentleman  from  Virginia,  on  the  constitutional 
question,  limits  the  power  of  Congress,  by  what  1  call  an  interpolation  in  the 
constitution.  The  words  of  that  instrument  expressly  give  Congress  the 
power  "to  lay  and  collect  taxes,"'  and  "to  make  all  laws  necessary  and  pro- 
per to  carry  those  powers  into  effect;"  but  the  honorable  gentleman  adds,  that 
"  necessary,"  means  indispensably  necessary.  To  this,  I  answer,  that  the 
word  indispensable  is  not  used  in  the  constitution;  the  words  used  are,  ne- 
cessary and  proper.  The  error  into  which  that  gentleman  and  an  honorable 
member  from  New  York  have  fallen,  is  a  want  of  precise  meaning  of  the  terms 
they  use,  or  rather  confounding  two  things,  in  their  nature  essentially  differ- 
ent. They  confound  the  means  or  mode  by  which  an  end  i&  attained,  with 
the  end  itself,  and  nothing  can  be  more  erroneous.  The  end,  or  power  given, 
is  to  lay  and  collect  taxes  and  pay  the  public  debts;  the  power  to  make  laws 
necessary  and  proper  to  effect  that  end,  is  also  given,  and  consists  in  devising 
and  establishing  the  means  of  accomplishing  it.  The  means  to  accomplish  the 
end  are  no  where  restricted.  All  the  restrictions  are  upon  the  power.  The 
means  or  mode  by  which  the  collection  is  to  be  effected,  is  left  to  the  wisdom 


debt,"  that  it  necessarily  results  that  the  party  to  do  the  act,  may  do  it  by  any 
mode  or  means  he  pleases,  (if  more  means  than  one  exist)  if  such  mode  or 
means  are  not  prohibited;  and  I  further  state,  that  the  party  in  executing  the 
power,  is  imperatively  bound  to  use  the  means  best  adapted  to  accomplish  the 
end. 


sary 

is  definitely  within  the  power  of  Congress.  And  more;  it  is  the  bounden'duty 
of  Congress  to  establish  it;  because  they  are  bound  to  adopt  the  best  practica- 
ble, or,  in  other  words>  necessary  and  proper  means  to  collect  the  tax  and 
imposts. 

If  more  means  than  one  exist  to  carry  a  power  into  effect,  neither  can  be 
said  to  be  indispensably  necessary,  because  either  may  be  adopted  to  the  ex- 
clusion of  the  other;  and  this  mode  of  reasoning,  pushed  far,  proves,  that, 
where  more  means  than  one  exist  to  execute  a  power,  the  power  is  a  dead 

That  the  creation  of  a  bank,  is  a  means  to  excite  a  given  power,  and  not  the 
power  itself,  will  follow  from  a  careful  view  of  the  subject.  Here  my  oppo- 
nents and  myself  are  precisely  at  issue.  They  say  the  creation  of  the  bank 
is  a  power  not  given  by  the  constitution.  I  state  it  to  be  a  means  of  executing 
a  power  given,  and  not  the  power  itself.  Let  spund  reasoning  test  our  prin- 
ciples: what  is  a  power,  but  an  authority  to  attain  a  given  end?  What  is  the 
power  given  in  this  case?  Let  the  constitution  speak  for  itself:  "  to  lay  and 
collect  taxes,  imposts,"  &c.  and  pay  the  public  debts.  Now,  the  power  and 
the  end  are  express,  definite,  and  precise:  there  is  but  one  power  and  one  end; 
human  ingenuity  can  make  no  more  out  of  the  words  of  the  constitution;  but 
there  are  many  means  by  which  the  power  may  be  executed,  by  which  the  end 
may  be  attained,  and  those  means  are  vested  in  Congress,  by  the  power  ex- 
pressly given  them  "to  make  all  laws  necessary  and  proper  to  execute  the 
powers  before  enumerated." 

Congress  is  a  body  politic  and  incorporeal,  and  must  use  some  agency  or 
means  "to  carry  a  power  into  effect.  To  do  it  in  this  instance  by  the  agency 


ON   THE  BILL  TO   RENEW  THE  CHARTER   OF   1791. 

bank,  is  one  means;  to  do  it  by  the  appointment  of  officers  to  collect  the 
taxes,  is  another;  to  make  the  debtors  themselves  pay  into  the  treasury,  is  a 
third.  Now  is  it  not  an  equal  exercise  of  power,  to  create  and  appoint  officers 
to  collect,  preserve  and  pay  away  public  money,  as  to  create  a  bank  for  that 
purpose?  The  power  is  the  saine,  though  exercised  in  a  different  way;  but  the 
mode  of  its  exercise  does  not  affect  the  nature  or  essence  of  the  power.  This  is 
most  clear;  and  I  ask  gentlemen,  in  the  sense  they  use  the  word  power,  where 
is  the  express  power  in  the  constitution,  to  appoint  and  pay  officers  to  collect 
taxes?  Certainly  it  grows  out  of  the  power  4'  to  make  all  laws  necessary  and 
proper,"  &c.  and  is  no  where  else  to  be  found;  then  the  necessary  conse- 
quence is,  that  the  creation  of  a  bank,  or  the  creation  of  officers,  to  collect 
taxes  and  imposts,  &c.  is  not  a  constitutional  question,  but  of  sound  discretion, 
as  most  suitable  to  promote  the  public  good,  and  the  House  has  power  to  adopt 
•either,  as  in  their  judgment  shall  be  found  most  necessary  and  proper. 

Now,  for  the  great  objects  of  economy  in  collection,  safety  in  keeping,  and 
facility  of  paying  it  away^  as,  and  where  the  exigencies  of  Government  require, 
a  bank  has  a  decided  preference  over  the  appointment  of  a  multitude  of  offi- 
cers, with  salaries  or  commissions,  the  chance  of  negligence,  the  risk  of 
loss,  and  almost  insuperable  difficulty  and  embarrassment  of  transmission, 
at  home  or  abroad, 

I  trust,  Mr.  Speaker,  that  I  have  shown,  that,  correctly  viewed,  the  crea- 
tion of  a  bank  is  a  means,  not  an  original  power;  that,  as  a  means,  it  is  best 
adapted  to  the  end  or  execution  of  the  power;  and  that,  to  attain  the  end,  a 
full,  express,  definite  grant  of  power  is  given  by  the  constitution.  But,  sir,  I 
ask,  is  our  Government  never  to  settle  down  to  stability,  an  object  so  desira- 
ble and  so  important  to  the  happiness  of  the  People?  If,  from  the  inexplicit- 
ness  or  imperfection  of  language,  doubts  have  existed,  which  have  been  de- 
cided by  the  concurrence  of  this  House,  the  Senate,  and  the  illustrious  Wash- 
ington, in  the  exercise  of  their  constitutional  function-,  and  twenty  years  last 
past  have  exhibited  a  practical  commentary  on  the  constitution,  ought  we  not 
now  to  regard  it  as  sacred? 

Has  not  Congress,  and  have  not  all  the  States,  sanctioned  the  legitimacy  of 
the  bank,  by  passing  penal  laws  against  counterfeiters  of  its  paper?  Have  not 
many  of  the  judiciaries  inflicted  imprisonment  and  deprivation  of  liberty,  on 
offenders  under  those  laws;  and  are  we  now  to  be  told,  that  the  original  law 
which  induced  all  these  punishments,  is  unconstitutional,  and  of  course,  no 
law?  But,  sir,  I  will  not  repose  my  argument  on  the  fact  of  long  acquies- 
cence in  the  States,  nor  of  acquiescence  under  the  administrations  of  Wash- 
ington, Adams,  Jefferson  and  Madison;  1  will  advance  a  step  further,  and 
show  that  this  House,  under  the  ad  ministration  of  Mr.  Jefferson,  and  that  Mr. 
Jefferson  himself,  did,  under  his  own  hand, -acknowledge  the  legitimacy,  and 
consequently  the  constitutionality,  of  the  bank.  In  1804,  Mr.  Nicholson,  of 
Maryland,  made  a  report,  authorizing  the  Bank  of  the  United  States  to  estab- 
lish an  office  of  discount  and  deposite  at  New  Orleans;  a  bill  was  drawn,  it 
passed  this  House,  it  passed  the  Senate,  and  was  signed  by  President  Jeffer- 
son the  day  it  was  presented  to  him.  It  was  entitled,  "  An  act  supplementa- 
ry tootle  act,  entitled  An  act  to  incorporate  the  subscribers  to  the  Bank  of 
the  United  States."  Here  let  us  pause;  it  is  really  ludicrous,  sir,  to  see  the 
gravity  and  wisdom  of  the  nation,  engaged  in  passing  a  supplement  to  an  un- 
constitutional law.  One  would  suppose,  sir,  that  if  the  original  law  was 
brought  into  view,  if  deemed  unconstitutional,  the  object  of  bringing  it  into 
view  would  be  to  repeal  it;  but  what  was  the  fact?  Why,  the  very  reverse 
took  place;  instead  of  repealing  it,  they  enlarged  the  powers  of  the  bank. 

Now,  sir,  I  call  on  honorable  men  to  answer  me  with  precision;  to  meet  two 
questions  in  the  teeth:  First,  Was  it  not  as  unconstitutional  to  enlarge  the 
powers  of  the  bank,  as  originally  to  create  it?  Second,  Is  not  the  enlargement 
so  for  as  it  goes,  a  new  creation  of  power?  Gentlemen  cannot  escape  from 
these  questions,  by  saying,  that  the  bank  had  this  power  before  the  act  of  1804 
I  deny  it;  but  for  the  sake  of  argument,  be  it  so?  Then  I  ask,  why  was  that 
supplement  passed?  And  was  not  the  passage  of  the  supplement  a  direct  af- 


196  BANK   OF   THE   UNITED   STATES. 

firmative  recognition  of  the  power,  if  already  in  the  bank,  and  to  give  it  to 
them,  if  they  had  it  not. 

Sir,  I  will  trouble  the  House  no  longer  on  this  part  of  the  subject.  I  trust  I 
have  satisfied  gentlemen  that  we  have  authority  to  create  a  bank  under  the 
constitution;  that  this  authority  has  been  acted  on  by  federal  and  republi- 
can administrations;  and  the  united  States  and  the  States  have  acquiesced 
in  it,  and  sanctioned  it  many  years,  without  murmur  or  remonstrance. 

Mr.  KEY  then  proceeded  to  examine  the  question  on  the  ground  of  ex- 
pediency, &c.* 

JANUARY  21, 1811. 

Mr.  NEWTON  moved  to  postpone  indefinitely,  the  further  consideration  of 
the  bill,  but  withdrew  his  motion  until  more  members  should  come  in. 

Mr.  GARLAND  said,  that  on  this  very  important  subject,  the  House  ought 
to  act  uriderstaridingly  and  prudently.  He  wished  that  they  should  not  pre- 
cipitate the  Government  into  difficulties,  from  which  it  would  not  be  easy  to 
extricate  themselves.  He  wished  at  least,  that  they  should  take  a  little  time 
to  reflect:  that  his  friend  from  Virginia  (Mr.  Love)  should  be  permitted  to 
go  on,  and  take  out  his  letters  of  administration,  as  proposed  on  Saturday,, 
and  see  what  could  be  done.  If  the  gentleman  could  show  that  the  Govern- 
ment could  conveniently  carry  on  its  fiscal  operations  without  the  bank,  Mr. 
G.  said  he  should  be  ready  to  go  with  IXm.  But,  until  that  were  shown,  he 
did  not  wish  a  decision  precipitated.  He,  therefore,  moved  to  postpone  the 
further  consideration  of  the  bill  till  the  first  of  February.  There  would  in  the 
interim,  be  time  to  see  how  they  could  form  their  plans,  and  how  they  would 
be  able  to  conduct  the  fiscal  operations  of  the  Government.  If  a  suitable 
substitute  could  be  offered  for  the  purposes  of  collecting  and  transferring 
revenue,  it  would  be  the  means  of  reconciling  many  gentlemen  to  vote  against 
the  bank.  He  hoped,  therefore,  that  the  postponement  would  be  agreed  to. 

Mr.  NEWTON  said  the  House  had  had  ample  time  for  reflection  on  the  sub- 
ject. He  did  not  believe  that  any  alteration  would  be  wrought  in  the  opinions 
of  members  by  a  postponement. 

Gentlemen  ought  to  recollect  that  the  subject  had  been  under  consideration 
for  three  or  four  years  past.  Every  one  had  revolved  it  in  his  mind.  Sir, 
gaid  Mr.  N.,  I  know  these  moneyed  institutions.  I  know  what  sort  of  things 
they  are;  and  after  the  time  we  have  had  to  consider  the  subject,  I  think  it 
all  important,  that  we  should  come  to  a  decisive  determination.  Let  me  tell 
you,  sir,  that  intrigue  and  artifice  will  wear  away  the  best  principles.  Ample 
time  has  been  given  for  it  already. 

I  am  for  laying  the  legislative  axe  at  the  root  of  the  evil:  I  am  for  imme- 
diately deciding  this  question,  and  turning  to  some  other  business,  and  for  this 
purpose,  move  that  the  further  consideration  of  the  bill  be  indefinitely  post- 
poned. 

The  motion  of  Mr.  NEWTON  superseded  that  of  Mr.  GARLAND. 

Mr.  LOVE  said  he  rose  principally,  at  this  time,  to  ask  for  the  yeas  and 
nays  on  this  question-  He  thought  with  the  gentleman  last  up,  that  it  was 
highly  important  that  there  should  be  an  immediate  decision,  and  he  would 
add  to  the  reasons  already  offered  in  favor  of  it  another-  It  is  now  three 
years,  said  he,  since  Congress  were  called  upon,  in  the  most  imperative  terms, 
to  act  upon  this  subject.  In  the  petition  of  the  stockholders,  three  years  ago, 
it  will  be  recollected,  that  it  was  stated  that,  unless  a  certain  assurance  was 
given,  that  the  charter  would  be  renewed,  they  must  immediately  comnience  a 
curtailment  of  their  discounts,  &c.  We  have  now  progressed  to  within  six 
weeks  of  the  time  when  this  institution  will  cease  to  exist;  and,  yet,  we  find, 
by  an  inspection  of  their  accounts,  that  they  stand  very  nearly  in  the  situa- 
tion in  which  they  were  at  the  time  the  subject  was  first  brought  before  Con- 

*  The  remainder  of  Mr.  KKT'S  speech  does  not  appear  to  have  been  published. 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

gress.  If  this  company  were  not  to  have  their  charter  renewed,  the  sooner 
they  know  it  the  better.  On  the  part  of  the  Government,  it  is  important  that 
an  early  decision  should  be  had,  that  they  may  not  run  the  risk  of  losing 
revenue  to  an  immense  amount;  for,  who  knew  who  was  to  administer  on  the 
assets  of  this  institution?  In  consequence  of  the  law  now  in  existence,  re- 
quiring deposites  to  be  made  in  the  Bank  of  the  United  States,  and  its  branches, 
there  would  soon  be  within  their  control,  in  specie  and  bonds,  an  amount 
of  sixteen  millions  of  dollars  of  the  public  property.  Under  present  circum- 
stances, it  is  highly  proper  that  immediate  measures  should  be  taken  to  with- 
draw these  deposites.  Every  gentleman,  before  this  time,  must  have  had  an 
opportunity  to  make  up  his  mind;  and  I  hope  the  question  will  be  decided 
without  further  delay.  As  the  mind  of  no  gentleman  in  the  House  could  be 
changed  by  a  discussion,  it  is  to  be  hoped  that  the  question  will  immediately 
be  taken. 

Mr.  TROUP  conceived  the  motion  now  made  to  be  perfectly  proper.  He 
felt,  however,  under  no  obligation  to  accommodate  the  bank.  The  act  grant- 
ing an  act  of  incorporation  was  entirely  a  voluntary  act,  and  the  duration  of 
it  limited  in  the  act  itself,  to  a  term  of  twenty  years.  If  the  bank  had  acted 
the  part  of  an  ordinary  or  discreet  merchant,  it  would  have  taken  care,  before 
the  expiration  of  its  charter,  to  have  wound  up  its  business,  and  be  prepared 
to  meet  the  event;  because,  the  Legislature  was  not  bound  to  renew  it,  not 
having,  either  by  the  original  charter,  or  by  any  subsequent  act,  given  any 
pledge,  that  it  would  do  so.  The  bank  not  having  received  any  pledge  of  re- 
newal, ought  to  have  been  prepared  for  its  dissolution.  If  the  institution  had 
done  what  they  ought  to  have  done,  the  Government,  so  far  as  it  is  concerned, 
would  have  prepared  itself  against  the  event,  as  he  was  told  it  was  now  about 
to  do,  by  substituting  arrangements  with  the  State  banks,  for  arrangements 
with  the  United  States  Bank,  or  its  branches.  Mr.  T.  could,  therefore,  see 
no  difficulty  in  assenting  to  this  proposition,  whether  as  respected  the  Go- 
vernment, or  as  respected  the  individuals  concerned  in  the  bank. 

Mr.  FISK  inquired  whether  it  was  understood  that  the  deposites  in  the  United 
States  Bank  would  be  transferred  to  the  State  banks  without  the  sanction  of 
law. 

Mr.  WRIGHT  spoke  at  length  on  the  principles  of  the  bill,  and  in  favor  of 
indefinite  postponement. 

Mr.  BOYD  spoke  in  favor  of  the  motion. 

Mr.  McKEE  followed  in  reply,  and  against  the  poposed  postponement. 

Mr.  BARRY  spoke  at  length  on  the  constitutional  question,  and  in  favor  of 
indefinite  postponement. 

Mr.  FINDLEY  spoke  against  the  motion. 

Mr.  WRIGHT.  Mr.  Speaker:  The  importance  of  this  subject,  and  the  great 
attentionUhat  has  been  paid  to  gentlemen  while  delivering  their  opinions  upon 
it,  is  a  sure  guarantee  that  I,  also,  in  my  turn,  shall  receive  the  attention  of 
this  House,  while  I  deliver  my  sentiments.  1  pledge  myself,  in  this  exhaust- 
ed state  of  the  debate,  not  to  consume  more  of  their  time  than  a  correct  sense 
of  duty  to  my  constituents  shall  impose. 

This  subject,  sir,  is  presented  to  our  consideration  in  a  two-fold  point  of 
view:  as  to  its  constitutionality,  and  as  to  its  expediency.  I  will,  therefore, 
proceed  to  consider  it  in  that  order. 

On  the  point  of  its  constitutionality  I  shall  take  the  liberty  to  recal  your  at- 
tention to  those  parts  of  the  constitution  on  which  its  advocates  have  seem- 
ed to  rely.  The  gentleman  from  Maryland  (Mr.  KEY)  cites  the  1st  article, 
8th  section,  "  Congress  have  a  right  to  lay  and  collect  taxes,  imposts,  du~ 
ties,  and  excises,  to  pay  the  debts,  and  provide  for  the  general  defence  and 


198  BANK  OF  THE  UNITED  STATES. 


common  welfare  of  the  United  States."  He  also  read  the  1st  art.  9th  section, 
**  No  capitation,  or  other  direct  tax  shall  be  laid,  unless  in  proportion  to  the 
census  or  enumeration  herein  before  directed  to  be  taken."  However,  not 
yet  himself  satisfied  with  being  able  to  derive  an  authority  from  these  sections, 
he  calls  in  aid  the  last  paragraph  of  the  section,  "  Congress  shall  have  power 
to  make  all  laws  necessary  and  proper  for  carrying  into  execution  the  fore- 
going powers,  and  all  other  powers  vested  by  this  constitution  in  the  Govern- 
ment of  the  United  States,  or  in  any  department  or  officer  thereof."  The 
gentleman  insists,  that  the  power  to  lay  and  collect  taxes,  &c.  &c.  and  the 
sweeping  clause  empo\yering  Congress  to  make  all  laws  necessary  to  carry 
that  power  into  execution,  will  authorize  Congress  to  grant  a  charter  to  this 
bank;  that  it  is  necessary  to  the  collection  of  taxes,  that  Congress  provide  by 
law  the  means  whereby  the  taxes  should  be  paid.  I  had  always  presumed 
that  the  power  to  lay  and  collect  taxes,  to  provide  for  the  general  defence  and 
common  welfare,  only  authorized  Congress,  under  the  limitations  of  Ihe  con- 
stitution, to  provide  by  law  for  those  purposes,  by  directing  whether  the  tax 
should  be  a  direct  or  an  indirect  tax,  or  by  capitation;  and  that  their  powers 
extended  no  further  than  the  specification  of  the  objects,  if  the  tax  was  di- 
rect, and  the  rate  at  which  the  specific  articles  should  be  valued £in  the  case 
of  a  capitation,  what  should  be  paid  by  the  head;  and,  in  the  case  of  indirect 
taxes,  what  should  be  the  duty  on  the  several  articles  taxed;  and,  in  either 
case,  to  direct  the  mode  of  ascertaining  and  collecting  the  same;  by  whom  to  be 
ascertained,  and  by  whom  collected,  and  to  whom  paid.  But  1  never  did 
suppose  that  this  power,  even  aided  by  the  sweeping  clause,  could  be  conceiv- 
ed, seriously,  to  extend  to  the  providing  means  to  those  who  had  to  pay  the 
tax,  whereby  they  were  to  be  aided  in  the  payment.  Such  a  construction 
would  as  well  justify  the  passing  a  law,  compelling  the  culture  of  land  in  a 
particular  way,  whereby  the  crops  might  be  increased;  as  the  farmer  cannot 
pay  his  tax,  unless  he  raises  produce  for  sale;  or,  indeed,  it  might  be  extend- 
ed to  compel  him  to  use  plaister  of  Paris  to  improve  his  crop,  and  facilitate 
the  payment;  which  I  should  deny,  even  if  the  tax  was  made  payable  in  pro- 
duce. 

The  same  gentleman  seems  to  have  relied  on  the  article,  "  That  no  capita- 
tion, or  other  direct  tax  should  be  laid,  but  in  proportion  to  the  census,"  as 
forming  an  exception  to  the  powers  of  Congress;  and,  I  presume,  means  to 
infer,  as  this  bill  will  not  be  a  capitation  tax,  that  Congress  may  pass  it  under 
their  power  "  to  lay  and  collect  taxes,"  and  the  sweeping  clause  to  carry  their 
specific  powers  into  execution.  Sir,  the  convention  never  intended  that  Con- 
gress should  have,  or  exercise,  the  power  to  establish  banks,  or  they  would 
nave  made  use  of  apt  words  to  have  vested  them  with  it.  Bank,  sir,  is 
a  technical  term;  and  if  they  had  j  intended  that  power,  they  would  cer- 
tainly have  used  that  term.  When  it  was  intended  to  give  any  power,  we 
find  the  convention  had  no  difficulty  in  expressing  it:  as,  Congress  shall 
have  power  "  to  coin  money  and  regulate  the  value  thereof,  and  of  foreign 
coin. "  And  here,  let  me  remark,  is  an  express  power  "  to  coin  money," 
which,  if  we  were  left  to  legal  construction,  would  be  an  affirmative  pregnant 
that  they  should  not  omit  bills  of  credit.  But,  sir,  we  need  not  rely  on  con- 
struction to  prove  what  powers  Congress  have  not,  as  one  of  the  amendments 
to  the  constitution  provides,  that  "  Congress  shall  have  no  power  that  is  not 
expressly  given."  And,  to  give  a  power  by  expression,  is  to  use  apt  words 
for  that  purpose,  and  it  of  course  becomes  necessary  to  the  power  in  Congress 
to  establish  a  bank,  that  such  a  power  should  be  given  by  such  specific  terms, 
as  would,  unequivocally,  and  without  construction,  convey  the  right. 

As  to  the  sweeping  clause,  "  to  pass  all  laws  necessary  to  cany  into  effect 
the  foregoing  powers  of  Congress,"  the  letter  of  this  section  confines  its  opera- 
tion to  the  specific  powers  of  Congress,  previously  enumerated,  and  can,  in 
no  sort,  create  constructive  powers,  or  be  construed  into  a  creation  or  exten- 
sion of  power.  Sir,  if  a  doubt  can  remain  of  its  harmless  and  inoperative  na- 
ture, I  trust  it  will  be  removed  by  a  reference  to  the  second  volume  of  the 
/  Federalist,  page  202:  "  It  is  expressly  to  execute  these  powers,  that  the 


ON  THE  BILL  TO  RENEW  THE   CHARTER    OF    1791. 

sweeping  clause,  as  it  has  been  affectedly  called,  authorizes  the  National  Le- 
gislature to  pass  all  necessary  and  proper  Jaws.     If  there  be  any  thing  excep- 


one  of  the  framers  of  this  instrument,  when  defending  this  article  called  the 
*'  sweeping  clause,"  from  the  charge  of  being  used  to  extend  the  powers  of 
Congress,  or  to  embrace  other  than  the  specific  powers,  himself  confining  it  to 
the  express  powers,  and,  indeed,  declaring  that  it  §ave  no  power,'  was  a  mere 
tautology.  Yet  gentlemen  seem  to  think  that  it  is  an  important  delegation 
of  power,  and  confidently  quote  it  as  such;  and,  indeed,  if  their  construction 
of  it  was  indulged,  it  would  discharge  us  from  every  constitutional  obligation, 
that  ice,  in  our  discretion,  might  suppose  the  public  good  required;  but  I  trust 
the  good  sense  and  patriotism  of  this  House  will  never  suffer  it  to  substitute. 
discretion  for  expression*  their  will  for  the  law. 

An  honorable  member  from  North  Carolina,  [Mr.  ALSTON]  has,  with  some 
confidence,  cited  the  10th  section  of  the  1st  article:  "No  State  shall  emit  bills 
of  credit,  or  make  any  thing  but  gold  and  silver  a  tender/'  He  urged  this 
denial  of  the  right  to  the  States  to  emit  bills  of  credit,  as  a  perfect  prohibition 
of  the  States  to  grant  bank  charters,  and  insisted  that  bank  notes  were  bills  of 
credit.  He  spoke  of  this  section  as  a  discovery  of  his  own,  riot  noticed  by 
any  body  before  him,  as  applicable  to  the  case.  Sir,  the  gentleman  certainly 
misapplies  the  term  *•  bills  of  credit"  to  "  bank  notes."  The  term  4>  bills  of 
credit,"  was  surely  intended  to  express  and  prohibit  the  emission  of  paper 
money,  which  had  been  emitted  by  the  States  and  by  Congress,  during  the 
war  of  the  Revolution,  and  had  Bo  depreciated,  as  to  impress  the  convention 
with  the  propriety  of  prohibiting  their  emission  in  future.  By  a  recurrence  to 
the  proceedings  of  the  old  Congress,  and  the  laws  of  the  several  States,  it  will 
be  found  that  the  term  "  bills  of  credit,"  was  technically  used  for  paper  money; 
nor  can  there  be  less  doubt  that  bank  notes  have  also  their  technical  meaning, 
as  the  paper  issued  by  bank  directors;  and  neither  of  the  terms  "  bills  of  cre- 
dit," or  4*  bank  notes,"  could,  by  men  of  legal  intelligence,  be  used  for  the 
other.  i4  Bank  note,"  and  a  "  bill  of  credit,"  are  terms  so  well  known  to  the 
law,  that,  in  legal  parlance,  neither  could  be  substituted  for  the  other.  On  a 
prosecution  for  counterfeiting  either,  the  other  could  not,  I  apprehend,  be 
given  in  evidence.  I  must,  therefore,  insist,  that  the  gentleman's  construc- 
tion of  the  constitution  is  incorrect.  But,  sir,  if  it  was  correct,  and  the  States 
could  not  grant  bank  charters,  would  it  follow  that  the  Government  of  the 
United  States  would  possess  the  right?  I  presume  not:  unless  that  article  of 
the  constitution,  which  declares,  "  that  all  powers  not  granted  to  Congress 
are  reserved  to  the  States,  or  the  People,  shall  be  blotted  out  of  the  instru- 
ment, or  totally  disregarded.  Sir,  I  hope  we  have  not  already  arrived  to  that 
lust  of  power:  and  I  trust  the  present  case,  when  its  expediency  comes  to  be 
examined }  will  not  seduce  any  member  of  this  House  from  his  regard  to  this 
hallowed  instrument. 

Sir,  the  Secretary  of  the  Treasury,  [A.  Hamilton]  at  the  time  of  the  pas- 
sage of  the  law  establishing  the  United  States  Bank,  and  who  may  be  called 
the  father  of  it,  labored  with  unceasing  assiduity,  in  every  stage  of  it,  to  give 
it  a  legitimate  existence.  We  see  him,  sir,  insisting  on  the  power  to  grant 
this  charter,  as  conferred  by  the  section  that  authorizes  Congress  to  lay  and 
collect  taxes,  and  by  the  svyeepin^  clause,  "  to  pass  all  laws  necessary  to 
carry  the  preceding  powers  into  effect,"  any  thing,  in  his  opinion,  in  the  Fe- 
deralist, before  cited,  as  to  the  harmless  quality  of  the  sweeping  clause,  to  the 
contrary  notwithstanding.  Sir,  we  see  him  driven  from  these  stands  by  the 
Attorney  General,  [Mr.  Randolph]  and  by  the  then  Secretary  of  State, 
[Mr,  Jefferson]  the  last  of  whom  insisted,  that  a  proposition  in  the  conven- 
tion, to  authorize  Congress  to  grant  corporations,  had  been  rejected;  which 
so  thoroughly  closed  the  case,  that  we  find  Mr.  Hamilton,  although  he  ques- 
tioned the  authenticity  of  the  document  relative  to  the  rejection  (by  the  con- 
vention) of  the  articles  alleged  to  have  been  rejected,  taking  post  behind  that 


200  BANK  OF  THE  UNITED  STATES. 

article  of  the  constitution,  that  "  Congress  shall  have  power  to  dispose  of,  and 
make  all  needful  rules  and  regulations  respecting  the  territory,  or  other  pro- 
perty, belonging  to  the  United  States,"  and  insisting,  that  the  shares  ot  the 
stock  contemplated  to  be  subscribed  by  the  United  States,  would  bring  the 
law,  granting  the  charter,  within  that  section  which  authorized  the  United 
States  to  make  all  needful  rules  and  regulations  respecting  the  property  of 
the  United  States.  But  this  would  not  justify  a  renewal,  as  Congress  have 
sold  their  stock.  Thus,  sir,  we  find  the  advocates  of  this  power  in  Con- 
gress to  grant  a  charter  to  the  Bank  of  the  United  States,  fixing  on  a  va- 
riety of  the  sections  of  the  constitution,  from  whence  they  infer  we  have  the 
right.  And,  although,  by  the  express  letter  of  an  amendment  to  the  constitu- 
tion, Congress  can  exercise  no  power  not  expressly  or  specifically  granted, 
yet  these  gentlemen  insist  we  have  the  right,  although  they  cannot  agree 
among  themselves  on  the  article  by  which  it  is  specified;  and,  indeed,  each  is 
an  authority  against  the  other,  that  the  power  is  not  granted  at  all.  And  al- 
though they  all  agree  on  its  being  constitutional,  they  areas  much  at  a  loss  to 
fix  oh  the  article  by  which  it  is  made  so,  as  the  ladies  of  Strasburg  were  to 
decide  on  the  composition  of  Stern's  celebrated  nose,  though  they  ail  agreed 
it  was  a  noble  nose. 

The  gentleman  from  Maryland  says,  Congress  have,  by  the  law  authorizing 
a  branch  of  this  bank  to  be  established  at  New  Orleans,  recognised  their  right 
to  grant  a  charter;  and  insists  that  this  ought  to  be  considered  as  an  authority 
to  that  purpose.  'Strange  that  the  gentleman's  zeal  should  so  transcend  his 
judgment  as  to  induce  him  to  press  so  futile  an  argument.  Congress,  at  the 
time  of  passing  that  law,  had  a  right  to  make  any  law  necessary  for,  and  be- 
neficial to  New  Orleans;  it  was  men  a  territory,  and,  by  the  positive  provi- 
sions of  the  constitution,  Congress  have  the  power  to  make  all  *'  needful  rules 
and  regulations  respecting  their  territories  or  other  property;"  they  have  ex- 
clusive legislation  over  it,  and  may  make  any  law  that  a  State  could,  as  to  its 
government,  as  well  as  any  law  authorized  by  the  constitution  to  be  passed  by 
Congress. 

Sir,  by  this  charter,  the  directors  of  this  bank  were  authorized  to  fix 
branches  in  every  part  of  the  United  States;  and  when  Congress  became  the 
purchasers  of  New  Orleans,  they  considered  it  a  portion  of  the  United  States, 
and,  of  course,  that  the  directors  of  this  bank  had  the  right  to  establish  the 
New  Orleans  branch  bank,  and  felt  no  hesitation  to  declare  it  by  law,  as  they 
had  a  perfect  constitutional  right  to  make  all  needful  laws  for  their  territories, 
of  which  the  Orleans  territory  then  was,  and  yet  is  one.  Yet,  sir,  this  act  of 
good  faith  in  the  nation,  to  this  bank,  is  pressed  as  an  authority  to  bind  this 
House  to  consider  the  constitutionality  of  this  question  as  settled;  but  the 
good  sense  of  this  body  will  secure  the  United  States  from  the  calamity  of  re- 
chartering  this  bank,  and  committing  the  best  interests  of  this  nation  to  its 
foreign  and  domestic  enemies. 

Now,  sir,  having  presented  this  view  of  the  unconstitutionally  of  this  ques- 
tion, I  must  beg  the  further  indulgence  of  the  House  while  I  present  also  my 
view  of  its  inexpediency. 

Sir,  this  charter  is  very  nearly  allied  to  the  funding  system;  they  had  a  co- 
eval conception,  and  the  same  progenitors.  They  were  conceived  in  sin, 
and  born  in  iniquity.  The  funding  system  was  founded  in  the  basest  of 
frauds  to  the  best  of  men,  the  war-worn  soldier,  whose  necessities  compelled 
him  to  part  with  his  certificates,  the  price  of  his  blood  and  toil  during  an  eight 
years'  war:  and  out  of  which  the  arch  speculator,  availing  himself  of  those 
necessities^  had  trepanned  him,  at  ha!/ a  crown  in  the  pound.  These  certi- 
ficates, sir,  were  landed  to  the  holders,  with  their  interest,  at  par,  and  with 
other  certificates,  for  supplies  for  the  army  and  navy,  which  had  also  depre- 
ciated, were  funded  at  par;  and  although  it  was  ably  contended,  that  the  certi- 
ficates granted  to  the  original  holders  only,  should  be  funded  at  par,  and  that 
those  held  by  speculators  should  be  funded  at  a  certain  exchange.  Yet,  sir, 
such  was  the  influence  of  that  well  organized  band,  under  the  auspices  of  the 
then  Secretary  of  the  Treasury,  that  no  discrimination  could  be  effected 


ON  THE  BILL  TO   RENEW  THE  CHARTER   OF    1791. 

whereby  Congress  might  have  been  justified  in  paying  the  poor  soldier  for  his 
loss,  by  being  obliged  to  part  with  his  certificate  at  less  than  its  nominal  value; 
a  loss  occasioned  by  the  inability  of  Congress  to  pay  them  at  the  time,  agree- 
ably to  their  contract;  a  loss  by  Congress  forcing  upon  them  these  certificates, 
ana  their  total  inattention  to  the  payment  of  them,  for  many  years,  and  until 
they  were  possessed  by  the  hopeful  band  of  speculators,  who  were  the  active 
agents  of  this  system.  As  an  evidence  of  its  corruption,  the  continental  bills 
«t  credit  which  had  been  issued  from  time  to  time,  were  to  be  funded  at  one 
dollar  in  the  hundred-  They,  sir,  were  as  a  circulating  medium  in  the  hands 
of  the  People,  who,  however  honestly  they  might  have  receivedSthem  for  sup- 
plies to  the  army  and  navy,  at  the  same  time,  and  at  the  same  price  that  their 
neighbors  furnished  them  supplies  for  which  they  took  their  certificates, 
which  this  system  funded  ai  par  for  the  benefit  of  speculators,  while  the  hold- 
ers of  the  bills  of  credit  were  funded  at  one  hundred  for  one— could,  sir,  any 
tiling  but  corruption  have  prevented  the  discrimination  between  the  original 
holders  of  the  certificates  and  the  speculators,  or  have  induced  the  funding  of 
certificates  (for  supplies  furnished  at  the  same  time  and  the  same  price)  at  par, 
that  denied  it  to  those  holding  the  bills  of  credit? 

This  banking  system  was  partly  made  upof  these  corrupt  materials  of  the 
funding  system,  which  composed  a  portion  of  its  stock;  was  illegitimate  in  its 
conception,  partial  in  its  establishment,  and  corrupt  in  its  administration;  is  a 
mammoth  moneyed  aristocracy,  violative  of  the  constitution,  of  unlawful  origin, 
under  the  control  of  foreigners,  who  have  proved  their  principles,  by  the  se-. 
lection  of  its  directors — all  federalists.  This  stock  was  to  be  subscribed  at  a 
short  day  in  Philadelphia,  convenient  only  to  that  neighborhood :  it  was  therefore 
partial  When  in  Maryland  a  bank  is  to  be  established  by  law,  the  propor- 
tion of  each  county  is  allotted  to  it;  books  are  opened,  and  the  stock  subscrib- 
ed for  in  each  county;  and  why  were  not  books  opened  in  each  State,  and 
their  portions  of  the  stock  allotted  to  them,  as  in  Maryland?  Sir,  when  we 
consider  that  the  directors  of  the  mother  bank  in  Philadelphia  are  elected 
under  the  influence  of  foreign  stockholders,  to  the  amount  of  upwards  of  seven- 
tenths  of  the  whole  capital,,  we  are  not  left  much  to  conjecture,  why  these 
twenty-five  directors  are  all  of  a  particular  political  complexion,  nor  why  a 
list  of  them,  and  of  the  directors  of  the  branches,  (as  required)  has  not  been 
furnished,  as  an  agent  here  had  it  in  his  power.  Sir,  I  should  have  been  glad 
of  the  list,  as,  being  prett}'  well  read  in  the  biography  of  the  people  of  this 
country,  1  should  lutvo  been  enabled  to  have  pointed  out,  I  have  no  doubt,  a 
number  of  traitors  to  the  Revolution,  Burrites,  and  embargo  breakers;  the 
whole  phalanx  being  at  every  stage  of  the  republican  administrations  of  this 
country,  \\i\hfew  exceptions,  opposed  to  every  measure  of  those  administra- 
tions. I  am  a  little  surprised  at  their  temerity  in  asking,  and  expecting  a  re- 
newal of  that  charter,  by  which  its  directors  have  used  their  influence  cor- 
ruptly, to  control  the  measures  of  the  Government,  and  the  elections  of  the 
patriotic  favorites  of  the  People.  We  have  seen  a  petition,  signed  by  a  num- 
ber'of  the  merchants  of  Philadelphia,  addressed  to  General  Washington,  to 
ratify  Jay ?s  memorable  treaty,  a  number  of  whom  were  known  to  have  been 
its  bitter  enemies;  and  it  is  a  well  known  fact,  that  the  reason  assigned  by 
them  for  that  act  was,  that  they  were  induced  to  subscribe  it  under  the  threats 
of  these  bank  directors,  that,  if  they  did  not,  they  need  expect  no  more  accom- 
modation at  the  bank.  We  have  seen,  at  Baltimore,  their  influence  exerted 
in  the  memorable  election  between  Gen.  Smith  and  Mr.  Winchester,  where 
Edward  Johnson,  now  mayor  of  Baltimore,  and  a  bank  director  of  the  State  of 
Maryland,  and  Mr.  Matthews,  now  and  often  a  bank  director,  were  put  out 
because  they  had  the  presumption  to  think  for  themselves,  and  the  temerity 
to  vote  for  General  Smith.  These  gentlemen  were  of  unblemished  reputation, 
and  equally  entitled  to  respect  with  their  successors.  I  have  not  a  single 
doubt  but  they  did  not  suit  the  directors  of  the  mother  bank;  they  had  sup- 
ported a  patriotic  soldier  of  the  Revolution,  a  sin  of  too  deep  a  die  to  be  for- 
given by  this  Britannic  chosen  band,  who  have  lately  put  the  seal  to  their 
principles  in  the  election  of  Evan  Jones,  now  president  of  the  branch  bank  at 
26 


202  BANK   OF   THE   UNITED    STATES. 

New  Orleans,  who  succeeds  a  gentleman  of  republican  principles.  This  Mr 
Jones  is  said  to  be  a  refugee  from  the  United  States  at  the  commencement  of 
the  American  Revolution,  and  a  British  officer  during  that  period,  who  has  been 
lately  more  than  supected  to  be  one  of  Burr's  chosen  band.  If,  at  a  time  when 
the  directors  are  soliciting  the  renewal  of  their  charter,  they  can  thus  outrage 
every  principle  for  which  our  patriots  bled,  and  prefer  the  parricide  to  the  pa- 
triot^ at  a  time  when  the  eye  of  the  nation  was  fixed  upon  them;  what,  I  ask, 
after  a  twenty  years'  renewal  of  the  charter,  may  they  not  be  expected  to  do, 
or  how,  in  the  case  of  a  war  with  Great  Britain,  might  they  not  be  expected  to 
act?  How  would  a  patriot  of  America  be  expected  to  act  in  supplying  funds 
to  our  enemies,  to  prosecute  a  war  against  this  country?  It  would  certainly 
be  a  treasonable  adhering  to  our  enemies,  giving  them  aid  and  comfort.  But, 
sir,  we  are  told  this  is  a  harmless  institution,  all  important  to  the  fiscal  con- 
cerns of  the  United  States;  influenced  by  no  motives  but  the  common  good. 
Strange,  indeed,  would  it  be,  to  ascribe  to  the  stockholders  of  seven-tenths  of 
the  capital  of  this  bank,  (reported  by  the  Secretary  of  the  Treasury  to  be  fo- 
reigners) and  known  to  be  Englishmen,  a  disposition  friendly  to  this  coun- 
try. Sir,  here  is  a  strong  foreign  influence  on  the  moneyed  concerns  of  this 
country;  money  has  been  correctly  called  the  sinews  of  war;  and  are  we  to 
suppose  that  Britons  are  not  as  much  attached  to  their  country  as  Americans 
are  to  theirs;  or  that  the  strength  and  influence  of  this  institution  will  not  be 
put  in  full  operation  against  us,  when  it  has  been  committed  to  the  care,  and 
put  under  the  direction  of  men,  known  to  be  in  hostility  to  the  best  interests 
of  this  country? 

Gentlemen  on  the  other  side,  however,  insist  that  there  is  no  improper _ in- 
fluence to  be  apprehended,  and  deny  it  to  be  a  party  question,  although  it  is 
well  known  to  have  originated  in  party,  under  the  auspices  of  the  great  federal 
leader,  Alexander  Hamilton;  although  it  has  been  conducted  by  directors  of 
the  mother  bank,  exclusively  federalists;  and  although  every  federalist  in  this 
House  is  now  its  advocate.  It  is  said  to  be  harmless;  I  think,  sir,  the  placing 
in  the  hands  of  twenty-five  directors,  elected  by  stockholders,  seven- 
tenths  foreigners,  to  have  the  direction  of  twenty  millions  of  dollars,  when 
money  is  admitted  to  be  the  sinews  of  war,  particularly  when  we  consider 
their  political  complexion,  and  retrace  their  political  conduct,  cannot  be  safe 
to  our  republican  institutions,  on  the  score  of  its  moneyed  influence;  but  when 
we  consider  the  patronage  of  these  directors,  who,  by  the  charter,  have  a  right 
to  establish  as  many  branches  in  the  United  States  as  they  please,  say  one  to 
each  State,  with  the  appointment  of  thirteen  directors,  a  president, and  seven 
officers  to  each  branch,  with  as  great  accommodations  as  directors,  and  salaries 
to  their  officers  averaging  a  thousand  dollars  a  year,  each  making  upwards  of 
one  hundred  and  seventy  thousand  dollars  to  their  officers,  and  more  to  their 
directors — sir,  this  is  a  patronage  greater  than  is  possessed  by  the  President 
of  the  United  States;  and  will  any  gentleman  who  regards  the  solid  interest 
of  this  country,  be  disposed  to  give  this  aristocracy,  organized  as  it  is,  and 
composed  of  such  materials,  the  key  of  this  treasury,  with  its  privileges?  I 
had  always  supposed  that  the  treasury  of  this  country  ought  to  be  in  the  hands 
of  representatives  of  the  American  People;  they  are  said  to  hold  the  purse  string 
of  the  nation's  treasure,  and  not  that  body  who  now  directs  this  bank.  Have 
they  not  denounced  the  administration,  and  every  measure  of  the  Government, 
and  supported  its  most  inveterate  enemies?  But,  suppose  them  to  have  been 
correct  in  all  their  measures,  ought  the  nation's  representatives  to  give  to  fo- 
reigners, knowing  them  to  be  such,  the  immense  advantages  flowing  from  the 
renewal  of  this  charter,  or  to  one  set  of  her  citizens  this  benefit,  which  they 
have  enjoyed  for  twenty  years,  in  exclusion  of  her  other  citizens,  who,  to  say 
no  more,  are  equally  entitled  to  the  favors  of  Government? 

If,  sir,  we  have  the  power,  and  feel  it  necessary  to  the  fiscal  concerns  of  the 
nation,  to  have  a  national  bank,  the  eight  millions  two  hundred  thousand  dol- 
lars held  by  foreigners  in  its  funds  ought  to  be  withdrawn,  and  that  share  of 
stock  distributed  among  the  States,  having  an  eye  to  the  stock  already  held  by 
citizens,  so  that  the  proportion  of  each  State,  agreeably  to  the  relative  census 


ON  THE  KILT.  TO  RENEW  THE  CHARTER   OF    1791.  203 

t>fthe  States,  might  be  apportioned  and  subscribed,  whereby  the  establish- 
ment might  be  purged  of  its  foreign  influence.  But,  it  is  said,  these  foreign- 
ers will  send  their  gold  to  England.  Can  any  man  of  sound  judgment  sup- 
pose they  would  transfer  their  capital  to  England,  and  take  four  per  cent,  in 
England,  and  that  in  paper,  when  they  can  loan  their  money  in  this  country, 
at  nic  per  cent,  and  get  the  interest  in  specie? 

Sir.  there  can  be  no  possibility  of  their  exporting  their  stock  in  specie  very 
speedily,  when  you  take  a  view  of  the  late  report  of  the  treasury;  they  will  not 
have  specie  to  meet  the  specie  engagements  of  the  bank.  Sir,  this  institution 
was  established  by  the  Secretary  of  the  Treasury  without  a  bonus,  or  any  solid 
advantage  to  the  United  States:  he  well  knowing  what  had  been  the  en- 
gagements of  the  stockholders  of  the  Bank  of  England,  at  its  establishment, 
and  frequent  extensions  in  its  accommodations  to  the  British  Government; 
and  that  the  derangement  in  its  fiscal  concerns  had  forced  these  extensions  on 
that  Government.  He  also  well  knew  that,  when  the  two  insurance  fire  com- 
panies, the  London  and  the  Royal  Fire  Insurance  Companies  were  es- 
tablished, with  a  capital  of  four  hundred  and  fifty  thousand  pounds  sterling 
each,  they  gave  as  a  bonus  to  the  British  Government,  one  hundred  and  fifty 
thousand  pounds  sterling  each;  and  yet  this  experience  was  not  turned  to  the 
benefit  of  the  United  Sta  es;  but,  this  charter  was  granted  without  any  bene- 
fit but  to  speculators,  who  were  holders  of  the  funded  debt,  which  was  made 
a  part  of  the  stock  of  this  bank.  .Sir.  in  the  provisions  of  the  law  for  the  esta- 
blishment of  this  bank,  whose  capital  fca.-i  fo  have  been  ten  millions  of  dollars, 
the  stockholders  were  so  favored,  us  to  lu>  permitted  to  go  on  as  soon  as  four 
hundred  thousand  dollars  wero  paid  in,  (one  twenty:fifth  part  of  the  capital) 
and  thus,  on  that  small  sum,  they  proceeded  to  business,  and  soon  received 
an  interest  on  fifteen  millions  of  dollars;  and  so  much  in  conclave  are  its  con- 
cerns, and  so  much  under  tlu1  control  of  men  of  a  particular  political  complex- 
ion— «// 1  he  directors  of  the  mot  her  bank,  at  all  times,  have  been  federal,  or  worse, 
many  of  them  toric-s,  or  monarchists — so  that,  as  to  its  secrets,  it  might  be  com- 
pared to  the  inquisition;  and  being  under  such  control,  I  have  ever  doubted 
the  statement  of  its  funds.  Sir.  the  humiliation  of  having  such  an  assemblage 
of  characters,  selected  by  foreigners,  to  select  directors  for  the  branches  in 
each  State,  has  ever  boi'ii  truly  grating  to  the  honest  feelings  of  republicans, 
and  violativeof  the  rights  of  the  States,  to  whom  an  independent  republican 
Government  has  been  guarantied. 

Sir,  there  can  be  n<>  necessity  for  this  bank.  The  State  banks  are  abun- 
dantly sufficient  to  supply  every  requisition,  if  the  United  States'  deposites  are 
made  in  them.  This  goes  all  lengths  to  defeat  the  arguments  of  gentle 
men,  predicated  on  the  principle  of  necessity,  as  vesting  this  po\yer  in  Con- 
gress. There  are  banks,  in  Baltimore,  alone,  with  a  nominal  capital  of  eight 
millions  two  hundred  and  eighty  thousand  dollars,  four  millions  nine  hun- 
dred thousand  dollars  of  which  is  paid  in:  and  if  a  ?io?m»«/ capital  of  the  Unit- 
ed States'  Bank  often  millions  of  dollars,  with  four  hundred  thousand  dollars 
only  paid  in,  could  begin  and  progress  in  business,  is  it  possible  to  doubt  that 
the  banks  of  Baltimore,  with  four  millions  nine  hundred  thousand  dollars  paid 
in,  already  in  operation,  could  not  go  on,  with  the  deposites  of  the  United 
States,  and  extend  their  business,  so  as  to  give  every  necessary  accommodation 
to  individuals,  and  the  public?  Can  there  be  any  magic  in  the  U.  States'  Bank? 
Or  can  any  honest  American  feel  a  predilection  to  its  foreign  stockholders, 
or  to  their  hopeful  selection  of  directors?  1  trust  not.  Therefore,  there  can 
be  no  cause  of  alarm;  no  danger  to  the  fiscal  concerns  of  the  nation.  But,  sir, 
many  of  the  States  have  banks,  and  will  no  doubt  conduct  them  as  honestly 
and  impartially  as  the  United  States'  Bank  has  been  conducted,  and  under  the 
direction  of  men  the  United  States  may  as  safely  trust,  and  on  whom  the  pub- 
lic may  as  confidently  rely  for  accommodation,  unless,  perad venture,  some 
gentlemen  might  repose  more  confidence  in  foreigners,  than  in  their  own  citi- 
zens; but.  I  hope  and  trust  there  are  none  such  within  this  sanctuary  of  the 
liberties  of  the  nation.  We  have  been  told  by  the  gentleman  from  New  York, 
(Mr.  FISE)  that  agriculture,  roimayrce.  and  manufactures,  will  receive  a  vital 


204  BANK   OF  THE   UNITED    STATES. 

stab,  by  suffering  the.  charter  of  this  bank  to  expire.  This  is  a  groundless 
phantom,  produced  by  the  feverish  fancy  of  this  gentleman,  laboring  under 
the  bank  mania;  but,  sir,  if  agriculture,  commerce,  and  manufactures,  were  to 
feel  it,  in  the  extent  suggested  by  the  gentleman,  I  trust  those  classes  of  our 
fellow-citizens  would  bear  it  with  fortitude,  when  they  reflected  that  it  could 
not  be  renewed,  but  by  a  violation  of  the  constitution  of  the  United  States;  a 
violation  of  the  rights  of  the  States,  to  whom  is  guarantied  an  independent 
republican  form  of  government;  and  perhaps  a  violation  of  our  independence, 
for  which  the  best  blood  of  our  heroes  was  shed  on  the  altar  of  liberty.  This 
charter  is  a  cancer  on  the  body  politic,  which  I  hope  we  shall  suffer  the  hand 
of  time  to  eviscerate  and  eradicate,  and  no  longer  suffer  any  foreign  agency  in 
the  regulation  of  the  internal  affairs  of  this  country;  and  that  we  shall  preserve 
our  fiscal  concerns  from  the  influence  of  those,  whose  interest  it  is  to  destroy 
them.  But,  we  are  told  by  the  same  gentleman,  that  the  Secretary  of  the 
Treasury,  whom  he  calls  the  Chancellor  of  the  Exchequer,  has  reported  this 
bank..as  necessary  to  the  fiscal  concerns  of  this  country;  and  I  suppose,  by 
giving  the  Secretary  of  the  Treasury  the  title  of  Chancellor  of  the  Exchequer, 
he  wished  to  impress  this  House  with  the  powers  of  that  officer,  in  England, 
to  give  an  imposing  influence  to  the  Secretary  here:  and  while  he  advocates 
the  interest  of  these  foreign  stockholders,  he  so  far  forgets  himself,  as  to  intro- 
duce into  our  Government,  a  Chancellor  of  the  Exchequer.  But,  I  hope  we 
shall  exercise  our  own  judgment,  and  be  satisfied  with  our  own  Government, 
organized  as  it  is,  disregarding  the  principles  of  foreign  Governments,  and 
the  interest  of  foreign  stockholders.  Sir,  we  are  told  by  the  same  gentleman, 
that  Congress  sold  to  foreigners,  two  hundred  thousand  dollars  of  the  stock  in 
this  bank,  but  a  few  years  ago;  and  therefore  we  ought  to  renew  the  charter. 
Sir,  the  purchasers  knew  the  tenure  by  which  this  charter  was  held,  and  the 
precise  moment  of  its  death;  they  bought  it  as  it  was,  a  perishable  article,  and 
the  selling  of  the  stock  by  the  United  States,  ought  to  have  been  considered 
as  the  tocsin  of  its  dissolution,  at  the  time  appointed  for  it.  The  claim  to  renew 
the  charter  on  that  ground,  is  as  ridiculous,  as  for  a  man  who  had  bought  a 
horse,  on  his  death,  to  demand  another.  We  are  told  of  the  vast  inconvenience 
our  merchants  will  experience,  by  not  having  an  universally  circulating  medi- 
um. How,  say  they/can  money  be  paid  by  a  Bostonian,  at  New  Orleans?  Sir, 
money  is  not  paid  in  large  commercial  transactions;  and  if  it  were,  would  it 
not  be  an  easy  matter,  if  a  merchant  has  Boston  bank  notes,  to  get  the  specie 
for  them,  and  send  that  to  New  Orleans?  How,  J  ask,  would  he  do  if  he 
wanted  the  money  at  the  Havana,  or  any  foreign  port?  And  why  cannot  he 
do  the  same  at  New  Orleans?  Sir,  this  is  the  common  lot  of  merchants;  but, 
sir,  if  the  gentleman  had  Boston  United  States  branch  bank  notes,  could  he 
get  gold  for  them  at  the  New  Orleans  branch  bank?  No,  sir;  and  a  gentleman 
who  had  five  hundred  pounds  in  the  United  States  mother  and  branch  bank 
notes,  might  have  to  travel  to  every  State  having  a  branch,  to  get  the  specie,  as 
neither  will  give  specie  for  the  paper  of  the  other,  and  are  to  that  purpose  fo- 
reign to  each  other.  Indeed,  it  has  been  suggested,  as  a  practice,  to  secure 
the  banks  from  a  pressure  for  specie,  to  circulate  the  Eastern  notes  to  the  West, 
and  so,  vice  versa,  whereby  the  holders,  on  the  fourth  of  March,  will  be  put  to 
great  inconvenience  in  procuring  specie  for  them.  Sir,  the  people  of  England 
had  no  national  bank  till  the  year  sixteen  hundred  and  ninety-seven,  less 
than  a  century  before  the  establishment  of  this  bank,  and  they  were  enabled  to 
conduct  their  great  commercial  concerns,  to  great  advantage;  and  the  United 
States  had  an  extended  commerce,  before  the  establishment  of  this  bank,  and 
I  trust  her  merchants  will  be  able  still,  to  conduct  advantageously,  their  com- 
mercial concerns,  without  our  sacrificing  the  constitution  we  are  sworn  to 
support,  or  being  tributary  to  foreigners,  whose  interests  I  never  can  respect, 
when  in  collision  with  that  of  the  American  People. 

Mr.  BOYD  said  he  was  unwilling  to  give  his  vote  on  the  question  of  indefinite 
postponement,  without  offering  to  the  House,  and  those  that  he  in  part  repre- 
sented, his  sentiments.  I  shall  vote,  said  he,  for  the  postponement;  and, 


ON   THE    BILL   TO  RENEW    THE  CHARTER   OF    1791. 

should  that  vote  not  prevail,  then  against  the  bill,  in  its  present  form,  and  every 
other  in  which  it  may  be  presented  to  me,  for  a  renewal  of  the  charter  of  the 
United  States'  Bank,  predicated  on  the  original  grant:  because,  to  my  mind, 
it  is  unconstitutional.  Arid  here,  Mr.  Speaker,  you  must  allow  me  to  go  back 
and  take  a  look  at  the  time  and  manner  of  its  creation,  and  how  it  originated. 
To  my  mind  it  was  created  in  aid  of  the  funding  system;  and  what  was  that 
debt,  so  created,  not  contracted?  Was  it  for  the  redemption  of  the  bills  of 
credit,  called  Congress  money,  that  paid  your  army  in  the  field,  fed  and 
clothed  them  for  years?  No.  Was  it  to  redeem  said  bills  that  were  paid  to 
the  fanner  for  his  Hour,  beef,  teams,  hay,  and  supplies  to  the  army?  No,  no. 
How,  then?  Why,  after  those  bills  hail  so  far  depreciated  that  the  farmers 
were  unwilling  to  receive  them,  then  certificates  were  given  at  the  compara- 
tive price  of  those  depreciated  bills.  Then  again  it  became  necessary  to  liqui- 
date those  certificates  down  to  specie  value.  Were  they  called  in  then?  No, 
no,  sir;  no  redemption  yet:  and  let  me  tell  you,  sir,  it  was  that  paper  and 
credit  that  placed  you  in  that  chair,  and  me  on  this  floor.  Well,  next  the 
constitution  is  formed,  and  Congress  set  themselves  about  paying  the  debts  of 
the  United  States,  and  some  part  of  the  several  States"  debt.  Mr.  Speaker, 
how  was  it  done?  Runners  go  out,  in  every  direction,  to  purchase  those  liqui- 
dated certificates,  and  they  succeed  at  2s.  Gd.  in  the  pound  value,  up  to  8s. 
All  the  certificates  funded  did  not,  on  an  average,  cost  the  purchaser  more 
than  five  shillings  in  the  pound.  Now,  sir,  the  bills,  called  Congress  money, 
are  all,  or  next  to  all,  sunk  in  the  hands  of  tlu-  holders,  and  fifteen  shillings 
in  the  pound  of  the  residue.  Now,  sir,  an  act  of  general  justice  takes  place! 
The  said  certificates  are  funded  at  'JO.*.,  or  their  nominal  value,  to  the  specu- 
lator! and  an  interest  of  six  per  cent,  per  annum  ^iven  to  him;  to  pay  which 
duties  are  laid,  and  money  borrowed  to  pay  the  interest  in  advance  of  the 
revenue.  A  charter  is  now  granted  for  a  bank  often  millions  of  dollars,  seven 
and  a  half  millions  of  which  was  to  be  this  aforesaid  State  paper,  and  two  mil- 
lions five  hundred  thousand  in  specie:  and  when  a  small  part  of  that  was  paid 
in,  they  were  allowed  to  begin  their  discounts,  and  issue  their  paper  to  double 
the  amount  of  the  whole  capital!  viz..  twenty  millions;  these  certificates 
drawing  six  per  cent,  making  seven  millions  five  hundred  thousand  of  the 
stock.  Now,  this  part  must,  according  to  this  statement,  give  to  the  stock- 
holders eighteen  percent,  for  the  deposite  of  this  State  paper,  and  twelve  for 
the  residue.  Now,  Mr.  Speaker,  I  will  ask  \\hcre  was  the  redemption  for 
these  bank  notes  so  issued?  Surely  not  in  the  bank,  for  that  vyas  seven  and  a 
half  millions  State  paper,  as  above,  drawing  six  per  cent.  Not  in  cash,  for  that 
was  not  supposed  to  be  there.  Therefore,  to  my  mind,  this  was  a  great  decep- 
tion; swindling,  I  will  call  it.  Ah,  but,  say  some,  by  this  means  you  were 
furnished  with  a  capital,  ami  enabled  to  carry  on  comnierce  to  a  great  extent. 
I  deny  the  fact — our  capital  was  the  produce  of  our  soil  and  industry.  Banks 
at  best  are  no  more  than  a  conveniency  to  merchants:  and  I  respect  honest 
merchants;  they  are  useful  and  necessary;  but  I  do  not  include  bank  stock- 
jobbers, or  men  calling  themselves  merchants,  without  a  capital;  mere  drones 
in  the  hive.  No,  sir,  the  latter  is  a  moth  to  the  commonwealth. 

It  appears  to  me,  that  this  scheme  of  banking  is  an  evil  in  its  operation, 
something  like  the  faro  table,  always,  in  its  operations  at  each  round,  deposit- 
ing six  per  cent,  to  the  stockholders — lor  what?  The  exchange  of  a  note  dis- 
counted, and  the  note  so  lodged  the  best  of  the  two!  Ah!  and  is  this  indeed 
the  capital  of  our  country?  Sir,  I  am  lost  in  the  chicanery.  The  banks  enable 
us  to  over-trade  on  a  false  capital:  depreciate  our  property;  demoralise  our 
citizens,  and  take  or  send  the  gold  and  silver  out  of  the  country.  Let  me 
state  this  a  little  further.  I  will  suppose  a  line  drawn  at  a  distance  from  the 
sea  of  fifty  miles,  the  whole  length  of  the  continent.  I  would  ask,  if  the  cul- 
tivation of  that  tract  of  country  would  be  equal  to  the  maintenance  of  them- 
selves and  those  collected  in  the  cities?  I  believe  not.  Then,  again,  let  me 
suppose  that,  on  an  average,  the  whole  length  of  our  country  we  cultivate  to 
the  distance  of  two  hundred  miles  from  the  sea  board.  Then,  it  appears  that 
the  average  distance  that  we  have  to  take  all  our  transportable  produce  is  one 


206  BANK   OF  THE    UNITED    STATES. 

hundred  aixl  twenty-five  miles.  It  is  believed  that  the  cultivated  distance 
is,  on  an  average,  nearly  four  hundred  miles,  which  will  enhance  the  price  of 
transportation,  mostly  by  land,  to  the  cities.  Now,  sir,  at  the  general  price, 
one-third,  and  in  some  cases  one-half,  is  expended  in  getting  the  produce 
there.  But  this  is  kept  out  of  sight,  and  much  said  about  high  and  great 
prices  obtained  by  the  farmer.  K  is  nominal,  not  real.  It  is  paid  them  in 
depreciated  bank  paper.  Sir,  I  do  contend  that  not  only  the  bank  paper  is 
depreciated,  but  that,  by  the  means  of  its  abundance,  the  gold  and  silver  is 
depreciated.  One  dollar,  eight  years  since,  was  worth  more  than  one  dollar 
and  fifty  cents  is  at  this  day.  Besides  all  this,  I  ask,  is  there  cash  in  their 
vaults  to  redeem  their  bills?  No,  no,  sir;  not  for  one-half.  Thus,  sir,  are  the 
People  swindled  out  of  their  proporty  to  support  gambling  and  chicane.  Is 
this  what  enhances  property,  and  gives  a  capital  to  carry  on  commerce?  No, 
for  myself,  I  think  not.  It  is  the  product  of  our  soil  and  our  industry  that  is 
the  capital,  and  on  that  we  do  and  ought  to  trade;  and  that  trade  ought  to  be 
internal,  turned  to  our  own  manufactories  in  a  great  part.  I  do  not  say  that 
banks  are  not  convenient  and  useful,  to  a  certain  degree;  but  I  do  not  think 
the  advantage  is  equal  to  the  disadvantage.  I  am  well  aware  that  such  senti- 
ments will  be  treated  with  ridicule;  but,  sir,  that  does  not  intimidate  me; 
they  are  my  sentiments,  and,  as  such,  I  give  them  without  the  least  fear  of 
intimidation,  having  in  view  the  happiness  of  my  country;  and  I  will  venture 
to  say,  that  the  day  is  not  far  distant,  if  we  progress  as  we  have  done  with 
banks,  that  the  country  will  experience  an  universal  shock  from  this  false 
capital.  Before  you,  sir,  arc  propositions  for  charters  of  incorporation,  within 
this  District,  for  banks,  to  the  amount  of  four  millions!  Can  there  be  a  want 
of  capital?  If  there  is,  how  is  this  stock  to  be  furnished? 

N.  Mr.  Speaker,  we  hear  from  Richmond,  Baltimore,  and  Philadelphia,  much 

^  said  against  the  renewal  of  the  United  States'  Bank  charter,  and  I  agree  with 
them;  but,  I  believe,  from  very  different  principles.  The  profits  of  the  Uni- 
ted States'  Bank  have  been,  from  their  issues,  and  the  deposites  of  the  revenue, 
and  private  individuals,  immense;  arid  they  want  the  cards  in  their  own  hands 
to  play  the  same  game.  I  think  they  are  not  entitled  to  much  credit.  The 
odds  consists  in  this:  the  one  is  against  the  constitution,  the  other  not;  the 
principle  is  the  same  in  both. 

Mr.  Speaker,  if  we  must  have  a  national  bank,  let  it  be  so  in  reality.  I 
shall  not  attempt  to  go  into  the  detail  of  such  an  institution.  It  is  not  my 
h.  purpose;  but  1  think  that  it  might  easily  be  done  by  making  a  portion  of  our 
public  lands  the  foundation  of  such  part  as  the  United  States  should  choose  to 
subscribe  or  hold — the  bank  to  be  created  in  the  Distiict  of  Columbia,  and  to 
extend  branches  into  such  States  as,  by  law,  would  choose  to  accept  them. 
Sir,  I  had  much  more  to  say  on  this  subject,  but  I  perceive  that  the  House  is 
impatient,  and  I  do  not  wish  to  detain  them,  and  shall  add  no  more. 

Mr.  McKEE. — Residing,  as  I  do,  in  a  part  of  this  country  remote  from  the 
scene  of  bank  operations,  I  had  determined  to  say  nothing  on  the  subject,  con- 
tenting myself  by  giving  a  vote  flowing  from  the  honest  convictions  of  my 
heart;  but  the  extraordinary  manner  in  which  this  discussion  has  been  mana- 
ged, on  the  part  of  the  opposers  of  the  bill,  by  attempting  to  make  it  a  party 
question,  has  compelled  me  to  commence  my  defence  of  the  vote  I  expect  to 
give,  on  this  motion.  So*  far  as  I  know,  or  believe,  my  suffrage  in  favor  of  a 
renewal  of  the  charter  of  the  United  States'  Bank  is  in  conformity  with  the 
views  and  wishes  of  the  people  I  have  the  honor  to  represent;  and  any  change 
in  their  sentiments,  which  might  be  effected  by  the  frequent  appeals  to  their 
passions  and  prejudices,  made  in  the  form  of  argument,  it  becomes  my  duty 
to  correct. 

We  are  arrested  in  the  threshold  of  this  discussion  by  a  constitutional  ob- 
jection, by  which  it  is  alleged,  that  Congress  do  not  possess  the  power  of  re- 
newing this  charter.  I  had  thought  this  question  long  since  settled,  not  alone 
by  those  who  originally  granted  the  charter,  but  confirmed  by  Mr.  Jefferson, 
and  the  votes  of  a  republican  Congress.  I  have  been  led  to  this  opinion  by  a 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     207 

recurrence  to  the  act  of  Congress  of  (lie  23d  of  March,  1804,  by  which  the  pre- 
sident and  directors  of  the  Bank  of  the  United  Slates  are  authorized  to  esta- 
blish offices  of  discount  and  deposite  in  any  of  the  territories  or  dependencies 
of  the  United  States.  A  gentleman  has  said,  this  was  a  power  possessed  ori- 

finally  by  the  bank.  If  so,  for  what  end  was  this  law  enacted?  It  must  either 
ave  been  enacted  from  an  opinion  that  the  charter  could  not,  without  this 
aid,  be  extended  to  New  Orleans,  or  that  it  was  proper  and  necessary,  in  order 
to  the  well-management  of  the  fiscal  concerns  of  the  country,  that  this  institu- 
tion should  be  extended  to  New  Orleans.  Either  case  answers  my  purpose: 
for,  if  the  bank  could  not,  without  this  act  of  Congress,  establish  an  office  of 
discount  and  deposite  at  New  Orleans  (which  seems  to  me  to  be  the  better 
opinion)  then  the  passage  of  a  law,  extending  the  influence,  the  power,  and 
the  profit  of  the  bank,  cannot  be  considered  in  any  other  light  than  a  tacit  and 
full  acknowledgment,  on  the  pail  of  Mr.  Jefferson  and  the  republican  Con- 
gress, that  the  charter  was  within  the  pale  of  the  constitution:  for,  sir,  can  it 
Be  supposed  that  Mr.  Jefferson  and  Congress,  who  were  more  republican  in 
1804  than  at  any  other  period,  would  have  extended,  bolstered  up,  supported, 
and  cherished  an  institution,  originally  obtained  by  a  violation  of  the  sacred 
charter  of  our  political  rights?  No,  Surely,  it  is  impossible.  And  if,  sir, 
this  office  of  discount  and  deposite  was  induced  to  go  to  New  Orleans  because 
it  was  necessary  and  proper  to  be  sent  thither  for  the  better  management  of 

J  1  11,'  *•     ,  ,        .  I  »  ,1*  '  1  "   ^  J  I  1  1»  , 


the  collection  of  taxes  at  that  port,  this  circumstance  admits  the  only  fact  ne- 
?ssary  to  be  in  proof  to  establish  the  power  of  Congress  to  pass  the  law. 
If,  sir,  any  additional  proof  could  be  wanting  to  show  that  the  power  of  Con- 


gress, under  the  constitution,  has  been  considered  sufficient  by  this  adminis- 
tration to  authorize  them  to  grant  the  charter  in  question,  it  is  abundantly 
furnished  by  the  act  of  Congress  of  the  -Hh  of  February,  1807,  for  the  punish- 
ment of  frauds  committed  on  the  Bank  of  the  United"  States.  By  this  law, 
Congress  have  subjected  the  citizens  of  the  United  States  to  capital  punish- 
ment for  counterfeiting  the  notes  of  the  United  States'  Hank.  Now,  if  Con- 
gress by  the  constitution  had  not  the  power,  originally,  to  grant  this  charter, 
the  notes  of  the  bank  were  certainly  issued  in  violation  of  the  supreme  law  of 
the  land,  and  Congress  had  no  power  whatsoever  to  pass  a  law  making  that 
criminal  which  was  in  itself  no  crime,  and  could  not,  by  any  conception  what  • 
ever,  be  considered  as  a  violation  of  any  law  of  the  United  States.  It  seems 
to  me  to  be  perfectly  paradoxical  and  absurd  to  say,  that  any  institution,  hav- 
ing no  legitimate  right  to  issue  paper,  nevertheless  has  a  right  to  the  interpo- 
sition of  Congress  in  their  behalf,  making  it  a  crime  against  the  United  States 
to  counterfeit  this  paper,  which  was  issued  in  violation  of  the  supreme  law  of 
the  land,  ruder  this  act  of  Congress,  the  citizens  of  the  United  States  have 
been  deprived  of  their  liberty  as  well  as  subjected  to  heavy  fines,  by  the  deci- 
sions of  your  courts.  A  citizen  of  Kentucky  has  been  doomed  to  confinement 
in  the  jail  and  penitentiary  house  for  a  violation  of  this  act  of  Congress,  and 
he  was  not  relieved  from  the  fangs  of  the  law  by  the  President,  (Mr.  Jeffer- 
son.} How  are  these  things  to  be  reconciled  on  any  other  ground  than  by  ad- 
mitting the  constitutional  validity  of  the  original  act  granting  the  charter? 

But  it  has  been  stated  that  this  charter,  when  originally  granted,  operated 
in  the  nature  of  a  contract;  and  that  Congress  could  not  repeal  the  act  of  a 
former  Congress  granting  a  charter;  and  hence  the  power  to  make,  and  pro- 
priety of  passing  the  act  in  question.  This  idea  is  altogether  fallacious,  be- 
cause it  is  an  indispensable  requisite  to  all  contracts,  that  the  parties  thereto 
shall  be  able  to  contract.  If  the  constitution  vested  no  power  in  Congress  to 
make  the  contract,  it  was  absolutely  void;  and  if  the  Congress  of  1807  were 
thus  impressed,  they  could  not  and  would  not  have  passed  the  law  in  question; 
and,  therefore,  I  infer  that  they  considered  that  the  constitution  had  vested 
Congress  with  the  power  to  grant  the  charter. 

In  addition  to  this,  we  find  that  the  present  Secretary  of  the  Treasury, 
under  the  auspices  of  Mr.  Jefferson,  made  a  report  in  favor  of  the  renewal  of 
the  charter  of  the  United  States'  Bank,  in  pursuance  of  a  resolution  of  the 
Senate,  passed  on  the  subject.  This  report  called  forth  no  animadversions 


208  BANK   OF   THE    UNITED    STATES. 

from  any  section  of  the  country;  and  I  have  ever  understood,  that,  if  this 
question  had  then  been  brought  forward,  it  would  have  passed  by  a  large  ma- 
jority of  Congress.  These  circumstances  have  led  me  to  suppose  this  ques- 
tion had  received  the  ratification  of  every  party,  and  of  every  administration; 
and,  what  is  still  of  more  importance  and  higher  authority,  the  sanction  and 
confirmation  of  the  sovereign  People,  arid  therefore  considered  as  an  adjudged 
case,  tested  by  experience. 

I  shall  not  consume  the  time  of  the  House  by  any  enumeration  of  the  powers 
of  Congress,  arising  from  the  constitution  itself,  with  a  view  to  prove  that 
Congress  originally  had  theTpower  to  pass  the  law  granting  this  charter,  and 
still  possess  it,  because  this  ground  has  already  been  occupied  with  great  abi- 
lity, and  the  power  of  Congress  to  pass  the  bill  clearly  shown,  and  any  remarks 
\vhich  I  might  make  would  only  be  a  repetition  of  the  arguments  of  others.  I 
shall  therefore  content  myself  by  answering  some  objections  made  to  the  bill. 

It  is  said  the  bank  will  be  a  thorn  and  a  viper  in  the  bosom  of  the  United 
States,  which  will  ere  long  sting  the  political  liberty  of  this  country  to  death. 
This  is  a  strong  charge,  and  if  it  is  found  to  be  true,  it  must  be  conclusive 
against  the  bill;  but  let  us  examine  this  bold  assertion  by  the  test  of  reason 
and  experience.  This  charter  was  given  by  Congress  twenty  years  ago.  Since 
that  time  the  constitution,  and  the  political  liberties  of  this  country  have  been 
in  the  hands  of  our  political  opponents,  and  are  now  in  our  hands  unimpaired. 
The  country  has,  in  the  latter  period,  been  prosperous  beyond  example.  Agri- 
culture has  prospered,  commerce  has  flourished,  internal  improvements  have 
increased;  the  People  have  enjoyed  peace,  prosperity,  security,  and  happiness, 
in  a  degree  infinitely  superior  to  that  of  any  other  nation  on  earth.  No  dele- 
terious consequences  have  grown  out  of  this  institution,  affecting  the  security 
or  liberty  of  the  citizen  or  the  country.  It  is  said,  and  truly  too,  that  ours  is 
a  Government  of  experiment,  none  similar  too  it  ever  having  existed  before. 
Here,  then,  is  the  test  of  experience  in  favor  of  this  institution;  and  why  dis- 
continue it  to  try  some  devious  and  unknown  track? 

But,  sir,  suppose  there  is  something  of  truth  in  this  statement,  I  ask  if  State 
banks  are  not  equally  as  dangerous  to  the  political  liberties  of  the  States,  as 
this  bank  can  be  to  the  United  States?  And,  if  the  political  liberties  of  the 
States  are  stung  to  death,  I  ask  where  will  you  find  the  liberties  of  the  United 
States?  I  believe  they  will  sink  with  the  liberties  of  the  States.  But,  if  gen- 
tlemen are  really  serious  on  this  subject;  if  they  believe  that  banking  is  fraught 
with  thorns,  ana  not  with  roses,  and  wish  to  return  to  the  state  of  native  sim- 
plicity which  existed  in  the  pure  ages  of  ancient  Greece  and  Rome,  I  will 
unite  with  them  as  far  as  we  have  power  in  plucking  up  by  the  roots  this  mon- 
ster, and  make  a  common  bonfire  of  the  charters  of  every  bank  in  the  nation. 
To  do  less  would  not  cure  the  evil,  if  any  exists. 

But  it  is  said  that  this  institution  will  destroy  republican  principles,  and 
federalise  the  country.  This  bank,  as  1  have  already  stated,  was  in  opera- 
tion in  federal  times;  and,  notwithstanding  its  influence,  those  times  have 
changed;  experience,  the  best  possible  test  of  human  affairs,  does  not  bear 
gentlemen  out  in  this  assertion.  On  examination  we  find,  that  the  States  of 
Rhode  Island,  Connecticut,  and  Dela\yare,  are  the  only  States  in  the  Union 
who  are  represented  in  the  Senate  and  in  this  House,  exclusively,  by  federal- 
ists; yet  there  is  not  now,  and  never  was,  a  branch  of  this  bank  in  either  of 
those  States;  but  there  is  a  branch  bank  in  Georgia,  South  Carolina,  Virginia, 
Maryland,  New  York,  and  Massachusetts,  and  the  mother  bank  in  Pennsylvania. 
The  two  first  are  exclusively  republican  States,  and  those  parts  of  all  the 
others,  (except  Massachusetts)  where  those  banks  are  seated,  are  represented 
on  this  floor  by  republicans;  whence,  then,  are  found  the  facts  to  prove  this 
assertion?  or  do  gentlemen  pursue  a  recent  example,  set  by  a  certain  great 
man,  of  giving  opinions,  when,  with  the  same  breath,  it  is  acknowledged  there 
exist  no  facts  on  which  they  are  founded? 

The  foreign  capital  employed  in  this  bank  is  a  ground  of  great  alarm  to 
some  gentlemen.  In  answer  to  this  objection,  I  would  ask,  if  it  ever  has 
been,  or  if  it  is  now,  the  interest  or  the  policy  of  the  States,  or  the  United 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     209 

States,  to  exclude  foreign  capital  from  being  received  and  employed  in  your 
country?  Do  you  find  any  provision  in  the  charters  of  the  State  banks,  pro- 
hibiting fereigners  from  becoming  stockholders?  Is  there  any  provision  in 
those  bills  fro  n  the  Senate,  establishing  half  a  dozen  banks  in  the  District  of 
Columbia,  prohibiting  foreigners  from  becoming  stockholders?  To  all  these 
questions  you  are  compelled  to  answer  in  the  negative.  So  long  as  the  pro- 
fits of  agricultural  pursuits,  or  commercial  enterprise,  furnish  the  adventurer 
with  a  good  profit,  over  and  above  the  price  he  nas  to  pay  for  the  use  of  the 
capital  employed,  just  that  long  will  he  continue  to  employ  it;  and,  if  the 
capital  is  not  to  be  found  at  home,  application  will  be  made  for  it  abroad;  and 
whenever  capital  becomes  redundant  at  home,  you  will  then  exclude  foreign 
capital.  Before  that  time,  the  attempt  would  be  unavailing:  for,  capital,  like 
air  or  water,  will  seek  its  level.  I  have  thought  that  foreign  capital,  in  this 
country,  would  have  had  rather  a  salutary  tendency,  inasmuch  as  it  would 
interest  men  of  influence  in  the  preservation  of  the  peace  and  perpetuity  of 
the  Government.  Mr.  Jefferson  must  have  been  thus  impressed,  or  how  could 
he  have  permitted  a  sale  of  the  bank  stock  of  the  United  States  directly  to 
Englishmen;  and  he  was  certainly  not  chargeable  with  a  predilection  in  favor 
of  British  influence.  There  is  in  England  a  class  of  men  favorable  to  the 
prosperity  of  this  country;  and  I  have  always  understood  that  it  is  those  alone 
who  have  interest  in  our  funds.  Besides,  if  this  foreign  capital  is  fraught 
with  all  those  evils  which  gentlemen  picture  to  themselves,  the  argument  holds 
good  against  State  banks,  and  goes  to  prove  the  necessity  of  their  destruction 
also. 

The  gentleman  from  Maryland  (Mr.  WRIGHT")  has  made  some  heavy  charges 
against  the  directors  of  the  United  States'  Bank  and  their  management.  I 
had  thought  it  universally  understood  and  admitted,  that  the  management  of 
this  great  moneyed  institution  had  been  exemplarily  correct,  and  1  have  not 
before  heard  any  thing  of  the  kind  laid  to  their  charge.  But,  even  admitting 
the  charge  to  be  true,  it  only  proves,  what  may.  I  believe,  be  alleged  and 
proved  against  every  human  institution  administered  by  man,  viz:  that  the 
institution,  as  well  as  the  administration  thereof,  is  imperfect.  But  I  ask  if 
the  directors  of  three-fourths  of  the  State  banks  in  the  United  States  are  not 
federalists;  and,  therefore,  why  not  put  them  down  in  mass? 

I  beg  leave  to  notice  an  argument  which  has  been  resorted  to  by  all  the  op- 
posers  of  the  bill,  when  they  have  been  told  that  the  bank  was  both  necessary 
and  proper  to  die  convenient  and  advantageous  management  of  the  public  re- 
venues. The  answer  has  uniformly  been,  that  this  difficulty  could  easily  be 
obviated  by  the  agency  of  State  banks.  This,  sir,  is  certainly  begging  the 
question;  because,  an  admission  that  bank  agency  is  necessary  to  the  collec- 
tion of  your  revenue,  and  proper  to  be  used  in  the  management  of  the  moneyed 
concerns  of  the  Government,  is  an  admission  of  the  only  fact  necessary  to  be 
in  proof  to  show,  conclusively,  the  power  of  Congress  to  pass  the  bill  in  ques- 
tion. Besides,  do  not  all  the  unhappy  consequences,  which,  is  it  said,  await 
this  bank,  attend  the  depositing  your  money  in  State  banks?  Will  you  not, 
thereby,  give  a  circulation  to  the  paper  of  the  bank  where  you  make  your  de- 
posites  greater  than  heretofore?  and,  by  increasing  the  circulation  of  their 
paper,  as  well  as  by  aiding  them  with  your  money  to  make  more  extensive 
discounts,  you  [increase  the  profit  and  value  of  the  stock.  This  circum- 
stance will  create  an  anxiety  with  all  the  State  banks  to  obtain  your  deposites; 
and,  hence,  tha  United  States,  if  they  are  so  disposed,  can  operate  through 
those  favorite  banks  as  effectually  on  the  People  of  the  States,  as  they  could 
by  the  United  States  Bank.  You  have  all  the  evils  of  the  United.  States 
Bank  without  any  of  the  advantages;  you  also  throw  into  circulation  a  hetero- 
geneous masss  of  paper  that  no  body  knows  any  thine  about,  issued  by  esta- 
blishments of  whose  solvency  you  know  nothing.  Will  the  gentlemen  from 
North  Carolina,  or]  the  members  from  Massachusetts,  willingly  receive  their 
per  diem  in  their  own  State  paper?  1  believe  they  would  not — yet  the  effect 
of  using  State  banks,  for  revenue  purposes,  will  be  to  impose  this  paper  on 
the  People  of  the  United  States. 
27 


210  BANK  OF  THE  UNITED  STATES. 

It  is  a  rule,  sir,  which  I  have  prescribed  to  myself,  in  the  management  of 
the  concerns  of  others  which  may  be  committed  to  rny  care,  in  any  character, 
to  conduct  them  in  such  a  manner  as  to  produce  no  individual  distress  or  loss, 
which  may  not  be  fully  compensated  by  an  equivalent  certain  public  good; 
and  I  shall  not  relinquish  the  observance  of  this  rule  on  this  occasion.  We 
are  informed  by  various  gentlemen,  who  are  charged  with  the  representation 
of  the  more  commercial  States,  that  great  individual  distress  will  be  the  cer- 
tain consequence  of  a  refusal  to  renew  the  charter  of  the  United  States  Bank; 
and  that  the  distress  will  fall,  with  accumulated  weight,  on  those  who  have 
poverty  and  the  frowns  of  fortune  to  struggle  with,  is  evident;  and,  when  I 
commiserate  the  woes  felt  by  the  citizens!  of  every  part  of  our  country,  my 
attention,  as  it  ought,  is  particularly  drawn  to  the  losses  and  distress  which 
will  be  felt  by  my  immediate  constituents. 

If  this  charter  is  not  renewed,  it  is  my  deliberate  opinion  that  the  farmers 
of  Kentucky  will  sustain  a  loss  thereby  to  the  amount  of  near  200,000  dollars; 
and  I  will  now  attempt  to  show  that  this  opinion  is  not  altogether  chimerical.. 
I  am  unable  to  state,  with  any  great  certainty,  what  is  the  amount  of  circulat- 
ing medium  of  the  United  States;  nor,' indeed,  is  it  necessary  for  me  to  state, 
with  great  accuracy.,  the  precise  amount.  I  suppose  the  whole  circulating 
medium  of  the  United  States  ,to  be  upwards  of  50,000,000  dollars,  and  that 
of  this  sum  the  Bank  of  the  United  States  circulates  one-third.  It  is  a  fact, 
frequently  stated  in  this  House,  and  which  stands  undenied,  that  money,  or 
circulating  medium,  is  scarcer  in  the  United  States,  at  this  time,  than  it  has 
been  for  several  years  past,  owing,  perhaps,  to  the  unproductiveness  of  com- 
mercial enterprise;  or,  if  you  please,  to  the  natural  increase  of  population, 
and  the  proportionate  increase  of  demand  for  money.  By  refusing  to  renew 
the  charter,  you  throw  out  of  circulation  one-third  of  the  money  of  the  coun- 
try. The  necessary  and  inevitable  consequences  of  this  act  of  the  Govern- 
ment will  be  to  diminish  commercial  enterprise  in  the  same  proportion,  and, 
consequently,  ship  building  and  ship  repairing  will  be  diminished  in  a  like 
proportion,  arid  the  materials,  for  this  service,  will  not  be  wanting.  By  let- 
ters recently  received  from  very  intelligent  merchants  of  Lexington,  Ken- 
tucky?  I  am  informed  that  6,000  tons  of  hemp  will  have  been  raised  in  that 
State  in  the  past  year.  The  ship  owners  are  the  consumers  of  this  article;  for 
not  one  pound  of  it  goes  abroad,  and  from  6  to  9,000  tons  of  hemp  is  the  quan- 
tity consumed  in  prosperous  times  in  the  United  States.  These  6,000  tons  of 
hemp,  together  with  what  will  be  brought  to  the  market  from  other  States, 
will  furnish  an  abundant  supply  for  the  present  year,  even  admitting  it  to  be 
a  prosperous  year.  By  the  refusal  to  renew  the  charter  you  lessen  the  de- 
mand one-third  at  least,  and,  consequently,  you  diminish  the  price  of  the  ar- 
ticle in  the  same  proportion.  But,  sir,  this  is  viewing  the  consequences  aris- 
ing out  of  the  rejection  of  this  act  in  the  most  favorable  light.  If  the  refusal 
to  renew  this  charter  should,  as  some  gentlemen  apprehend  it  will,  bankrupt 
not  only  many  individuals,  but  also  some  of  the  State  banks,  a  general  alarm 
may  take  place,  which  would,  for  a  time,  put  an  end  to  all  credit  and  to  all 
business.  The  consequences  of  such  a  state  of  things  are  much  to  be  feared* 
and  much  to  be  dreaded,  by  every  portion  of  the  community. 

It  has  been  stated  that  the  United  States'  Bank  can  be|dispensed  within  the 
collection  of  your  revenue,  and  in  the  management  of  your  moneyed  con- 
cerns. I  wish  to  know  how  gentlemen  can  malte  this  statement.  I  perceive 
that  General  Hamilton,  the  first  Secretary  of  the  Treasury  appointed  since 
the  adoption  of  the  constitution,  in  his  argument  on  the  subject,  decidedly  de- 
clares that  the  bank  is  necessary  for  the  collection  of  the  taxes,  and  manage- 
ment of  the  fiscal  concerns  of  the  United  States;  and  Mr.  Gallatin,  the  pre- 
sent Secretary  of  the  Treasury,  makes,  substantially,  the  same  declaration  to 
you  in  his  report  on  this  subject 

[Mr.  WRIGHT  observed,  that  Mr.  Gallatin  had,  in  conversation,  said  that 
the  moneyed  concerns  of  the  Government  could  be  well  managed  without 
this  bank.]  If  Mr.  Gallatin  has  so  said,  he  then  says  one  thing  and  reports 
a  different  thing;  and  is  therefore  inconsistent.  But  I  take  his  official  report 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OP  1791. 

as  the  best  evidence  of  his  opinion:  and  these  men,  having  been  charged  with 
the  management  of  the  revenue  for  many  years,  and  having  the  knowledge 
acquired  by  experience,  certainly  should  know  what  is  necessary  and  pro- 
per for  the  convenient  and  well  management  of  the  affairs  of  their  depart- 
ment, and  are  therefore  better  authorities  on  the  subject  than  any  member  of 
this  House. 

As  to  the  remark  made  by  some  gentlemen  that  this  is  a  party  question,  I 
have  only  to  observe,  that,  if  federalists  do  right,  that  can  be  no  sufficient  rea- 
son for  me  to  do  wrong,  merely  to  oppose  them;  and  if  the  suggestion  that 
this  is  a  party  question,  is  to  prevail  against  reason  and  common  sense,  and 
parties  are  thereby  to  be  marshalled  against  each  other,  under  the  banners  of 
some  leader,  then,  indeed,  any  thing  mat  can  say  ay  or  no,  is  perfectly  quali- 
fied to  be  a  member  of  this  House,  and  intelligence  is  laid  aside  as  useless 
and  unnecessary.  Against  doctrine  of  this  sort  Iprotest;  and  perceiving,  as 
I  think  I  do,  great  political  as  well  as  individual  inconvenience  and  distress 
awaiting  a  refusal  to  renew  this  charter,  which  is  not  compensated  by  any  cor- 
respondent public  good;  and  perceiving,  also,  in  the  destruction  of  this  in- 
stitution, a  want  of  stability  in  your  institutions,  which  is  a  partial  verification 
of  the  predictions  of  the  enemies  of  republican  government,  which  we  ought 
to  refute  by  our  acts,  I  shall  therefore  vote  against  the  indefinite  postpone- 
ment'of  this  bill,  reserving,  however,  to  myself,  the  right  of  subsequently 
examining  the  details  thereof. 

Mr.  W.  T.  BARRY.  Mr.  Speaker:  The  measure  now  under  consideration 
is  certainly  important.  It  involves  principles  interesting  both  as  they  relate 
to  the  General  and  State  Governments.  The  solicitude  manifested  for  the  re- 
ne\yal  of  the  charter;  the  deep  concern  that  is  felt  in  some  of  the  States;  the 
serious  and  solemn  manner  in  which  this  subject  has  been  considered  and  act- 
ed upon  by  their  legislative  councils;  the  general  agitation  it  has  occasioned 
in  the  public  mind ;  has  not  failed  to  command  my  most  serious  attention, 
shou  Id ,  nevertheless,  have  been  content  to  have  left  it  to  the  discussion  of  others, 
abler  and  more  experienced  than  myself,  satisfied  with  giving  such  a  vote  as 
would  comport  with  the  honest  conviction  of  mv  understanding;  but  the  de- 
bate has  taken  an  unexpected  course  to-day.  The  remarks  of  my  colleague, 
[Mr.  M'KEE]  will  not  permit  me  longer  to  remain  silent  As  it  is  my  lot  to 
differ  with  him  on  this  great  question,  I  must  claim  the  indulgence  of  the 
House  for  a  few  moments,  whilst  I  endeavor,  in  as  concise  a  manner  as  possi- 
ble, to  state  some  of  the  reasons  by  which  I  am  actuated. 

The  baneful  effects  to  result  from  the  dissolution  of  the  bank;  the  ruin  that 
is  to  follow  in  its  train;  have  been  portrayed  in  the  most  glowing  colors,  in  a 
manner  calculated,  as  it  was  no  doubt  designed,  to  awaken  and  alarm  our 
fears.  I  shall  not  now  enter  upon  this  branch  of  the  subject. 

If,  as  I  am  most  seriously  impressed,  the  constitution  does  not  authorize  us 
to  pass  the  bill,  there  is  at  once  an  end  of  the  question.  It  is,  Mr.  Speaker, 
immaterial  what  consequences  may  result.  No  pressure  of  calamity,  however 
great,  can  warrant  a  departure  from,  or  violation  of,  that  sacred  instrument. 

It  has  been  said  that  this  is  a  party  question.  The  remark  is  just,  so  far  as 
the  principles  which  separate  and  distinguish  the  two  great  political  parties  in 
the  United  States  shall  be  made  to  bear  upon  it;  not  that  the  declaration  of 
any  man  can  make  it  so.  It  is  measures,  not  men,  that  should  govern. 

It  will  be  recollected  that,  early  in  the  history  of  our  Government,  the  coun- 
try was  divided  into  two  great  political  parties;  the  one  endeavoring  to  extend 
and  increase  the  powers  of  the  General  Government;  the  other  attached  to  the 
State  authorities,  and  exceedingly  jealous  of  their  rights.  Under  this  state  of 
things  the  constitution  of  the  United  States  was  framed.  Soon  after  the  Go- 
vernment went  into  operation  under  it,  these  parties  again  displayed  them- 
selves in  the  rules  they  adopted  for  expounding  the  constitution;  the  one  con- 
tending for  that  kind  of  interpretation  which  would  possess  Congress  with  the 
most  ample  powers,  sufficient  to  do  whatever  political  expedience  might  dic- 
tate in  providing  for  the  common  defence  and  general  welfare. 


212  BANK  OF  THE  UNITED  STATES. 

This  latitude  of  construction  was  considered  by  the  other  party  as  danger- 
ous; that  it  would  tend  to  consolidation;  that,  in  this  way,  State  rights  would 
be  encroached  upon  and  their  sovereignty  impaired.  They  contended  that  the 
power  of  Congress  was  limited;  that  it  must  be  confined  to  those  powers  ex 
pressly  delegated,  and  to  such  as  were  necessary  and  proper  to  carry  them  in- 
to execution.  That  this  mode  of  construction  resulted  necessarily  from  the 
nature  of  the  General  Government,  but  was  settled  beyond  all  doubt  by  that 
clause  in  the  constitution  which  provides  i4  That  all  powers  not  delegated  to 
the  United  States  by  the  constitution,  nor  prohibited  by  it  to  the  States,  are  re- 
served to  the  States  or  to  the  People;"  that,  to  step  beyond  the  boundaries  thus 
fixed,  would  be  to  enter  upon  a  field  of  power  no  longer  capable  of  being  de- 
fined. Such  has  been  my  understanding  of  the  views  of  the  two  parties;  the 
one  called/erfera/,  the  other  republican,  or  democratic,  if  you  please.  I  speak 
of  parties  as  they  were  at  the  period  I  allude  to. 

It  is  remarkable,  that,  upon  this  very  subject,  in  the  year  1791,  when  the  bank 
charter  was  granted,  we  find  the  most  distinguished  politicians  of  that  day 
who  were  on  the  republican  side,  opposing  it:  and  they  did  it  under  the  gui- 
dance of  those  sentiments  that  had  originally  given  rise  and  character  to  the 
party.  For,  although  they  did  not  admit  the  utility;  of  the  banking  system, 
yet  the  great  ground  of  opposition — the  strength  of  their  argument—was  direct- 
ed against  the  power  of  Congress  to  pass  such  a  law.  It  was,  sir,  upon  that 
occasion,  that  Mr.  Madison,  then  a  member  of  Congress,  made  that  perspi- 
cuous and  luminous  argument  that  has  been  so  justly  celebrated  as  defining 
and  marking  out  the  proper  limits  of  power  assigned  to  the  General  Govern- 
ment. I  have  thought  proper  to  make  these  preliminary;  remarks,  to  show 
what  was  the  understanding  of  this  measure  at  the  time  of  its  adoption.  That 
it  was  then  protested  against  as  unconstitutional.  Two  articles  of  the  consti- 
tution seem  to  be  mostly  relied  upon  by  those  who  are  in  favor  of  the  renewal. 
That  which  gives  to  Congress  the  power  to  lay  and  collect  taxes,  duties,  im- 
port?, and  excises,  to  pay  the  debts  and  provide  for  the  common  defence  and 
general  welfare  of  the  United  States,  or,  in  other  words,  the  power  by  which 
Congress  is  to  regulate  the  financial  concerns  of  the  nation;  and  that  which 
gives  the  power  to  make  all  laws  necessary  and  proper  for  carrying  into  exe- 
cution the  powers  vested  by  the  constitution  in  the  Government  of  the  United 
States. 

It  has  already  been  shown  by  gentlemen  who  have  preceded  me,  by  a 
course  of  reasoning,  to  my  mind  unanswerable,  that  the  clause  which  enables 
Congress  to  pass  all  laws  necessary  and  proper  to  execute  the  specified  powers, 
must,  according  to  the  natural  force  of  the  terms  and  context,  be  limited  to  the 
means  necessary  to  the  end,  or  incident  to  the  nature  of  the  specified  powers; 
that  this  clause  was  in  fact  merely  declaratory  of  what  would  have  resulted  by 
unavoidable  implication,  as  the  appropriate,  and,  as  it  were*  technical,  means  of 
executing  these  powers.  It  was  further  contended,  that  the  true  exposition 
of  a  necessary;  mean  was,  that  mean  without  which  the  end  could  not  be  pro- 
duced. If  this  doctrine  is  correct,  it  puts  the  question  at  rest;as  it  has  been 
most  clearly  shown  that  a  bank  is  not  a  necessary  mean  according  to  this  ex- 
position. I  shall  not  dwell  longer  on  this  head,  considering  it  as  already  ex- 
hausted by  argument.  The  word  "  proper"  is,  in  my  mind,  an  important  and 
operative  word  in  this  clause  of  the  constitution.  The  incidental  power  to  be 
exercised  must  not  only  be  necessary,  but  proper;  that  is,  it  must  be  appropri- 
ate and  confined  to  the  end  in  view.  If  it  goes  beyond  it,  if  it  involves  the  ex- 
ercise of  a  power  that  tends  to  create  a  distinct  and  substantive  thing,  which,  in 
its  important  operations,  is  entirely  distinct  from,  and  independent  of,  the  pow- 
er to  the  execution  of  which  it  was  designed  as  a  mean,  it  would  most  certain- 
ly be  improper.  Such  an  exercise  of  power  would,  in  truth,  be  usurpation;  and 
the  end  proposed  becomes  a  mere  pretence  for  the  unwarrantable  assumption 
of  power. 

To  enable  Congress  to  collect  taxes,  offices  of  deposite  merely  would  be  suf- 
ficient. But  instead  of  confining  the  incidental  power  to  be  employed  to  the 
object  it  is  designed  to  accomplish,  you  introduce  a  new  system  of  policy,  that 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     213 

has  no  more  connexion  with  the  management  of  the  revenue,  than  it  has  with 
the  power  to  borrow  money  on  the  credit  of  the  United  States;  with  the  power 
to  regulate  commerce  with  foreign  nations,  among  the  States,  and  with  the  In- 
dian tribes;  or  than  it  has  with  the  power  to  raise  and  support  armies  or  to  pro- 
vide and  maintain  a  navy.  The  power  to  establish  a  bank  applies  equally  as 
an  incident  to  all  the  abovenamecl  powers,  and  is  not  strictly  appropriate  to 
either,  nor  is  it  confined  to  all  of  them  collectively.  If,  under  such  pretence, 
you  can  erect  corporations,  our  power  in  this  respect  is  unbounded. 

By  this  act,  you  form  a  society  of  individuals,  invest  them  with  extensive 
and  exclusive  privileges,  who,  instead  ot  being  employed  as  auxiliaries  in  the 
fiscal  arrangements  of  the  Government,  set  up  for  themselves,  and  go  on  upon 
a  system  ot  money  making.  They  issue  notes  that  become  a  circulating  me- 
dium, and  forms  a  new  species  of  capital.  The  institution  carries  with  it  a 
train  of  offices,  influence,  and  patronage.  It  gives  rise  to  an  act  of  sovereign 
power,  that  no  Government  should  ever  be  permitted  to,  or  can  derive  by  just 
implication,  that  of  punishing  those  who  may  counterfeit  the  notes  of  this  bank. 
Thus  introducing  into  our  code  of  laws  a  system  of  criminal  jurisprudence 
never  contemplated  by  the  constitution. 

It  will  be  seen,  as  we  progress  in  this  inquiry,  how  this  measure  is  calcu- 
lated to  affect  the  State  rights,  and  to  infringe  upon  their  sovereignty. 

If  it  is  good  policy  to  establish  banks,  and  I  am  inclined  to  think  it  tends, 
when  properly  regulated,  to  promote  the  interest  of  society,  the  States  will 
surely  have  a  right  to  claim  the  benefits  that  may  result  from  it;  because  this 
right  they  never  have  parted  from.  The  profits  arising  from  discounts,  the 
advantage  to  accrue  from  public  and  private  deposites,  and  the  many  facilities 
this  kind  of  institution  affords  to  society,  belong  to  the  8tates,and  ought  to  be 
exclusively  under  their  control.  The  objects  of  State  policy  are  infinitely 
more  numerous  than  those  of  the  General  Government,  arid  deserve  equally 
to  be  promoted. 

It  is  said  the  States  are  at  liberty,  if  they  choose,  to  establish  banks;  this 
does  not  remove  the  objection;  if  the  right  is  impaired,  it  is  the  same  in  prin- 
ciple as  if  it  was  denied.  A  branch  bank  of  the  United  States  will  always 
have  a  predominant  influence.  They  will  have  the  benefit  of  a  largo  capital; 
but  the  great  source  of  influence  results  from  its  connexion  with  the  mother 
bank,  and  a  confederacy  of  branches  co-extensive  with  the  United  States. 
They  all  move  in  concert;  and,  by  combining  their  influence,  would,  at  any 
time,  be  enabled  to  overwhelm  and  destroy  the  small  State  establishments. 
There  can  be  no  stronger  evidence  of  the  weakness  and  the  dependence  of 
the  State  banks  upon  that  of  the  United  States,  than  the  alarm  that  some  of 
them  now  feel  at  its  expected  dissolution.  It  is  said,  that  no  danger  of  this 
sort  is  to  be  apprehended;  that  those  who  have  had  the  direction  of  the  United 
States'  Bank  have  conducted  it  properly,  and  with  liberality.  This  affords 
no  guarantee  that  they  will  continue  to  do  so.  Bank  directors  have  the  same 
passions  and  prejudices  that  other  men  have;  the  same  feelings  of  jealousy  and 
rivalship  exist  in  corporate  bodies  as  with  individuals;  the  same  struggle  for 
power  and  disposition  to  oppress.  State  rights  require  the  guardianship  of  the 
constitution;  they  are  not,  I  trust,  to  be  left  to  the  mercy  of  a  bank  directory. 

It  would,  sir,  be  less  objectionable,  if  the  Bank  of  the  United  States  diffus- 
ed its  benefits  equally  throughout  the  different  States.  But,  instead  of  this 
equal  and  just  distribution,  it  will  be  found  to  be  confined  and  partial  in  its 
operations;  its  benefits  will  be  principally  confined  to  the  sea  ports;  it  can 
only  be  made  to  operate  indirectly  upon  the  agriculturist  and  manufacturer. 
The  direction  of  this  institution  will  be  entirely  in  the  hands  of  commercial 
men;  all  its  power  and  influence  will  be  lent  to  them.  This,  combined  with 
the  power  their  wealth  naturally  gives  them,  has  heretofore,  and  will  continue 
to  give  them  a  decided  ascendancy  in  the  councils  of  this  nation.  It  is  be- 
lieved that  this  kind  of  influence  has  had  its  effect  in  producing  our  existin0" 
embarrassments  with  foreign  nations.  Sir,  the  slightest  attention  to  our  put? 
he  acts  will  show  that  there  has  been  a  great  predilection  for  commerce;  that 
it  has  met  with  almost  exclusive  protection  and  support;  whilst  litil«  or  n-- 


214  BANK  OF  THE  UNITED  STATES. 

thing  has  been  done  for  the  internal  industry  of  the  country;  large  sums  of 
money  have  been  expended  for  the  promotion  of  commerce,  whilst  our  infant 
manufactures  have  been  suffered  to  pine  and  languish;  me  enterprise  em- 
barked in  this  way,  never  having  experienced  any  kind  of  encouragement 
from  the  General  Government.  It  is  time  to  remove  the  causes  that  gave  rise 
to  this  partial  influence. 

I  The  power  of  the  States  is  affected  by  this  measure,  in  another  important 
respect.  By  its  means,  individuals,  who  are  mostly  foreigner*,  hold  large  es- 
tates in  stock,  without  being,  in  any  way,  subject  to  the  control  of  the  State 
Government,  or  paying  any  tax  for  its  support.  Is  it  just  that  such  exclusive 
privileges  should  be  conferred?  Is  it  proper  that  these  men,  not  the  most 
meritorious,  should  be  entirely  exempt  fromthe  burthen  of  taxation,  whilst  the 
true  citizen  is  bound  to  yield  his  personal  and  pecuniary  aid? 

Another  formidable  objection  that  presents  itself,  is  the  connexion  of  this 
institution  with  the  Government — a  dangerous  source  of  influence  and  power. 
When  the  People  have  to  pay  taxes  for  the  support  of  Government,  they  feel 
and  understand  what  is  going  on.  If  they  should  be  burthened  with  high 
taxes,  unless  a  good  reason  can  be  assigned  for  it,  they  will  remove  their 
agents,  and  appoint  others,  who  will  act  upon  a  better  system  of  economy.  But 
give  to  the  Government  a  bank  with  a  large  capital,  and  you  afford  a  facility 
of  borrowing,  and  a  source  of  supplies,  utterly  incompatible  with  the  genius  of 
republican  institutions.  Loans  may  be  had  to  enable  the  Government  to  pur- 
sue their  projects;  expensive  establishments  may  be  created,  and  kept  up,  in 
this  way,  that  the  people  never  would  have  tolerated,  had  they  been  directly 
called  on  for  their  contributions.  The  ease  it  would  afford  of  getting  money, 
would  be  the  cause  of  repeated  applications  to  this  source;  and  we  may  readily 
perceive  how  a  debt  thus  created  will  be  constantly  accumulating;  upon  this 
subject  we  have  the  light  of  experience  to  guide  us.  The  English  nation  pre- 
sents a  sad  example.  It  is  true,  the  proposed  capital  is  too  small  to  create 
much  clamor  at  present;  but,  renew  this  charter,  and  it  will  be  augmented  as 
convenience  shall  dictate.  The  capital  of  the  Bank  of  England  was  small  at 
its  first  establishment,  but  it  increased  gradually  as  the  exigence  of  the  Go- 
vernment required.  Sir,  whenever  the  Government  shall  have  become  largely 
indebted  to  this  bank,  it  will  have  acquired  an  influence  over  our  counsels,  the 
idea  of  which  is  humiliating;  an  influence  that  would  not  only  be  degrading, 
but  one  that  would  endanger  our  liberties,  by  subjecting  us  to  the  control  of 
a  moneyed  aristocracy.  Permit  me  now,  sir,  to  notice  a  few  of  the  arguments 
that  have  been  advanced  in  favor  of  renewal.  It  is  said,  that  the  practice  of 
this  Government  is  against  the  rule  of  construction  we  contend  for:  as  an  ex- 
ample, the  act  concerning  light  houses,  beacons,  buoys,  and  public  piers,  has 
been  cited.  This  is  referred  to  the  power  of  regulating  trade.  This  act  is, 
in  truth,  only  a  mean  to  carry  into  execution  a  power;  it  is  distinguishable  at 
the  first  glance  from  the  power  to  establish  a  bank.  They  only  tend  to  pro- 
mote commerce;  they  are  strictly,  necessary,  and  properly  confined  to  the  ob- 
ject. They  go  no  further  than  the  end  in  view,  not  at  all  impairing  the  rights 
of  individuals,  or  of  the  States;  besides,  there  is  nothing  in  them  uncongenial 
with  the  nature  of  our  Government. 

It  is  further  contended,  that  the  law  now  attempted  to  be  renewed  has  been 
sanctioned  by  the  States,  and  acquiesced  in  by  the  People-  That,  although  it 
might  not  originally  have  been  necessary,  it  has  now  become  so.  I  can  see 
strong  reasons  why  this  act,  granting  a  charter,  should  not  be  repealed,  al- 
though unconstitutional.  The  system  had  been  introduced;  a  pledge  was 
given  to  the  stockholders;  they  invested  their  funds  upon  the  faith  of  its 
continuance  for  twenty  years;  it  was  a  contract  for  that  period;  to  have 
violated  the  public  faith  would  not,  perhaps,  have  been  consistent  with 
sound  policy.  There  is  a  difference  between  repealing  the  law  and  suf- 
fering it  to  expire.  The  stockholders  have  not  even  the  color  of  a  claim 
upon  us  for  the  continuance  of  the  charter  after  the  expiration  of  the 
twenty  years.  The  contract  has  been  fulfilled  and  completed.  They 
are,  or  should  have  been,  ready  to  close  their  business-  Sir,  if  this  doc- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     215 

trine  of  acquiescence  is  correct,  many  other  obnoxious  laws  that  have  been  the 
cause  of  much  heat  and  ferment  throughout  the  nation,  might,  in  the  same 
way,  be  proven  to  be  constitutional,  andmight, hereafter,  be  received,  for  the 
same  reason.  It  is  one  of  the  first  principles  of  a  representative  government, 
that  a  subsequent  legislature  have  the  power  to  change  the  measures  of  a  pre- 
ceding one;  and  it  often  is  necessary  they  should  do  so.  No  State  has  ever 
sanctioned  this  law  by  a  direct  declaration  to  that  effect.  Their  approbation 
has  been  inferred  from  their  having  passed  laws  to  punish  counterfeiters. 
Sir,  the  States  cannot  repeal  an  act  of  Congress;  they  could  not  prevent  the 
circulation  of  the  notes  of  this  bank.  It  was,  therefore,  essential  to  pass  such 
laws,  in  order  to  secure  and  protect  their  own  citizens  from  fraud  and  impo- 
sition. 

It  seems  clear  to  me,  that  an  act  of  Congress,  not  originally  constitutional, 
cannot  be  made  so  by  any  lapse  of  time.  If,  in  1791,  it  was  unconstitutional, 
it  must  be  so  now.  The  constitution  does  not  change  with  the  times.  A  re- 
publican administration  should  not  be  permitted  to  exercise  a  power  that  they 
would  have  denied  to  the  other  party.  The  love  of  power  is  natural;  man  is 
prone  to  abuse  it.  I  confide  much  in  those  who  are,  at  present,  at  tne  helm, 
but  I  will  not  trust  them  beyond  the  limits  of  the  constitution.  "  With  unre- 
mitting vigilance,  with  undaunted  virtue,  should  a  free  people  watch  against 
the  encroachments  of  power,  and  remove  every  pretext  for  its  extension." 

The  evils  to  result  from  the  dissolution  of  the  bank,  have,  in  my  opinion, 
been  greatly  exaggerated :  but,  sir,  this  alarm,  if  real,  impresses  my  mind 
differently  from  what  it  does  that  of  some  others.  The  deep  interest  excited; 
the  feelings  that  have  been  awakened ;  the  memorials  constantly  flowing  in 
upon  us;  show  the  important  bearing  of  this  institution,  and  the  great  interest 
it  has  already  created. 

If  we  look  forward  to  a  period  when  this  charter  is  to  expire;  if  ever  we 
intend  to  shake  oft*  this  illegitimate  offspring,  now  is  the  lucky  moment;  its 
embrace,  though  strong,  is  not  yet  deadly.  Although  some  of  its  advocates 
threaten,  and  endeavor  to  coerce  us  into  the  measure,  by  the  alarm  they  have 
excited,  the  stockholders  yet  approach  in  the  respectful  attitude  of  momorial- 
ists;  vye  are  yet  at  liberty  to  act  freely;  but,  if  this  charter  is  renewed,  depend 
upon  it  we  shall  not  be  able,  hereafter,  to  stop  its  progress.  Pretences  will 
not  be  wanting  to  extend  its  limits,  and  augment  its  capital.  The  poison, al- 
ready tasted,  would  soon  reach  the  vitals  of  this  Government;  our  efforts, 
hereafter,  for  relief,  will  be  friutless;  they  will  only  serve  to  irritate  and  in- 
flame, until,  at  length,  it  will  be  found  that  we  must  tamely  submit. 

Mr.  FINDLEY. — That  Congress  have  a  right  to  refuse  the  renewal  of  the 
charter  of  the  bank,  or  to  modify  it  as  they  think  proper,  is  admitted  on  all 
sides.  He  himself  wished  the  bill  to  be  much  changed  from  what  it  is  at  pre- 
sent. He  would  be  even  willing  to  join  in  rejecting  it,  for  the  sake  of  trying 
an  experiment,  if  he  was  not  convinced  in  his  own  mind,  that  the  experiment 
would  cost  too  much.  We  know  how  far  and  how  well  the  present  bank  had 
answered  the  intention  and  the  end  for  which  it  was  instituted;  but  suppos- 
ing another  national  bank  to  be  instituted,  which  he  knew  was  the  wisn  of 
some  members  who  were  opposed  to  the  present  one,  very  great  both  public 
and  private  distress  must  take  place  in  the  mean  time,  without  a  certainty  of 
being  better  served  in  the  end. 

Whatever  might  be  said  on  the  ground  of  expediency,  against  renewing  the 
charter,  he  had  been  much  astonished  to  observe  the  bill  so  much  opposed,  as 
being  contrary  to  the  constitution.  When  the  law  for  incorporating  the  bank 
passed,  it  was  opposed  in  the  House  of  Representatives  by  a  minority — about 
one  third  of  the  members  voted  against  it.  Though  he  was  not  then  a  mem- 
ber, yet  he  attended  to  the  discussion,  and  he  knew  that  those  that  led  the 
opposition  were  equally  opposed  to  all  State  banks,  of  which  there  were  then 
but  three  in  the  United  States,  and  none  of  these  were  instituted  to  promote 
the  regular,  permanent,  and  successful  operation  of  the  finances  of  tne  State, 
as  some  of  them  at  least  have  since  expressly  been.  He  was  sure  that  the 


216  BANK  OF  THE  UNITED  STATES. 

Bank  of  North  America,  the  first  that  had  been  incorporated,  was,  perhaps, 
from  the  circumstances  of  the  times,  considered  rather  as  injurious  than  bene- 
ficial to  the  State:  therefore,  that  a  bank  should  be  useful  in  conducting  the 
revenues  of  the  United  States,  was,  at  that  time,  in  the  opinion  of  many,  at 
least  doubtful,  or  a  mere  theory;  but,  no  sooner  was  the  experiment  fully 
made,  than  all  parties  acquiesced  in  its  constitutionality  and  usefulness.  Its 
constitutionality  has  been  recognised  by  all  the  branches  of  the  General  Go- 
vernment, through  all  the  changes  of  parties  and  administrations:  this  could 
be  made  evident  by  numerous  instances. 

It  is  true,  an  honorable  member  from  New  York  (Mr.  PORTER)  has  denied 
this,  and  alleged  that  the  reason  why  it  was  acquiesced  in  or  not  repealed, 
was,  because  it  was  a  contract  which  it  was  necessary  on  the  part  of  the  Go- 
vernment to  fulfil. 

Mr.  F.  said,  that  a  contract  contrary  to  the  constitution  was  void  in  itself, 
especially  where  no  consideration  was  given;  that  our  courts  of  justice,  who 
were  judges  both  under  the  law  and  the  constitution,  would  set  such  contracts 
aside,  much  more  an  act  of  incorporation,  for  which  no  valuable  co^sidera- 
tion  had  been  paid,  as  the  consideration  only  consisted  of  the  services  that 
were  to  be  rendered,  and  which,  if  contrary  to  the  constitution,  ought  not  to 
be  accepted.  So  far,  however,  have  the  courts  of  justice  been  from  setting 
this  law  aside,  that  both  Federal  and  State  courts  have,  under  the  authority 
of  both  the  Federal  and  State  laws,  made  decisions  for  its  protection.  Or,  if 
it  had  been  contrary  to  the  constitution,  Congress  ought  to  have  repealed  the 
law  by  which  it  was  granted;  there  was  a  precedent  to  that  purpose  in  this 
country.  The  Bank  of  North  America  was  incorporated  by  Congress  at  a 
period  of  alarming  pecuniary  distress;  but  knowing  that  it  had  no  authority 
to  give  it  effect,  Congress  recommended  the  incorporation  of  it  to  the  respec- 
tive States.  Pennsylvania  and  Delaware  only  complied  with  the  requisition; 
the  charter  gave  an  exclusive  monopoly  in  perpetuity.  Another  company,  in 
1784,  applied  for  a  charter;  the  Bank  of  North  America  opposed  their  claim 
with  success,  in  right  of  their  charter.  The  succeeding  Legislature  consider- 
ed the  exclusive  right  and  the  perpetuity  to  have  been  granted  in  violation  of 
the  constitution,  and  therefore  repealed  that  charter,  and  afterwards  granted  a 
limited  charter  to  the  company.  Political  parties  have  changed  since  the 
United  States'  Bank  was  incorporated;  those  that  now  prevail  nave  been  the 
majority  about  half  the  time;  yet  so  far  have  they  been  from  repealing  the 
charter,  that  they  have  extended  its  powers,  and  availed  themselves  of  its  ac- 
commodations. It  was  a  mistake  to  consider  the  authority  to  incorporate  the 
bank  to  be  a  separate  and  distinct  power,  and  therefore  not  granted  to  Con- 
gress. It  was  not  even,  as  some  members  have  called  it,  a  constructive 
power,  or  power  by  implication.  It  was  inseparably  included  in  the  powers 
expressly  granted,  as  the  means  to  accomplish  the  end;  for  it  is  in  all  cases 
admitted,  that  where  an  object  or  duty  is  enjoined,  the  means  of  accomplish- 
ing the  object  or  of  performing  the  duty  are  included.  This  is  too  plain  to 
require  proof  or  illustration. 

The  powers  vested  in  Congress,  or  the  duties  enjoined,  are,  to  lay  and  col- 
lect taxes,  duties,  imposts,  &c.  to  pay  the  debts  of  the  United  States,  &c.;  and 
the  object  prescribed  is  the  public  good  and  general  welfare  of  the  United 
States;  they  have  also  the  power  to  provide  for  raising  and  supporting  an 
army  and  navy,  and  for  borrowing  money  on  the  credit  ot  the  United  States. 

Surely,  no  member  will  say  that  the  safe-keeping,  the  most  cheap  and  cer- 
tain manner  of  collecting  the  revenues,  and  the  most  expeditious  and  the  least 
expensive  manner  of  transmitting  them  to  the  destined  places,  and  paying 
them  to  their  appropriate  uses,  are  not  included  in  the  beforementioned  powers; 
if  they  are  not,  the  powers  themselves  are  a  nullity,  because  they  cannot  be  ex 
ecutecl.  Custom  house  bonds  are,  by  law,  lodged  in  the  banks  for  collection. 

It  is  admitted  that  these  powers  included  a  choice  of  means  and  a  discre- 
tion in  the  application  of  them,  as  they  did  in  the  various  objects  of  taxation. 
Congress  might  have  instituted  numerous  offices  of  deposite,  and  paid  high 
salaries,  and  required  sureties  equivalent  to  the  risk,  and  they  might  have 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791,       217 

employed  public  officers,  sufficiently  protected,  to  transmit  the  money  to  the 
various  places  where  it  was  required,  and  to  pay  it  to  the  appropriate  uses. 
To  this  method,  no  doubt,  nations  had  resorted  before  banks  were  introduced; 
but,  surely,  this  method  would  be  more  unsafe,  more  uncertain,  much  more 
expensive,  and  attended  with  much  more  delay,  than  the  agency  of  a  bank, 
whose  capital  gave  sufficient  security,  and  whose  paper  is  in  great  circulation 
and  credit.  Therefore,  whatever  might  have  been  the  different  opinions,  be- 
fore the  experiment  was  made,  yet,  having  been  successfully  made,  it  is  evi- 
tlent  that  it  was  the  best  means  to  accomplish  the  end. 

The  honorable  gentleman  from  New  York,  however,  has  admitted  that 
banks  are  necessary  and  proper  for  collecting,  transmitting,  and  safe  keep- 
ing of  the  revenue,  but  alleges  that  the  State  banks  are  sufficient  for  that  pur- 
pose. Tlii?,  Mr.  F.  said,  as  he  understood  it,  was  giving  up,  in  a  great  mea- 
sure, the  point  If  the  use  of  banks  was  necessary  to  carry  the  revenue  pow- 
ers into  effect  when  this  charter  was  given,  and  when  there  were  not  banks 
south  of  Philadelphia,  and,  it  is  believed,  but  two  east  of  it,  there  not  being 
State  banks  sufficient  at  the  period  when  the  charter  in  question  was  granted, 
in  any  degree  adequate  to  the  purpose,  the  Bank  of  the  United  States  was  a 
necessary  means  or  instrument  lor  executing  the  revenue  powers  vested  in 
Congress,  and  therefore  not  contrary  to  the  constitution.  If,  at  that  time,  it 
was  not,  then,  it  may  be  asked  when  it  became  so? 

The  State  banks  are  not,  by  their  charters,  in  any  degree  responsible  to 
Congress;  they  are  not  obliged  to  inform  it  of  the  amount  of  their  capital,  or 
their  debt,  or  paper  issued,  as  of  their  deposites.  Surely,  no  member  would 
agree  to  deposite  the  revenues  of  the  United  States  with,  or  transmit  them 
through,  institutions,  of  the  solidity  of  whose  credit  they  were  not  well  in- 
formed. He  did  not  mean,  however,  to  say,  that  it  was  not  possible  to  se- 
lect such  a  number  of  State  banks  as  would  be  sufficiently  safe  for  deposites, 
or  that  such  a  connexion  of  these  banks  might  not  be  formed,  as  would  make 
them  responsible  for  the  safe  and  speedy  transmission  of  the  revenue,  and 
give  the  necessary  information  to  Congress  of  the  state  of  their  affairs;  yet, 
supposing  this  was  all  completed,  this  union  of  banks  would  be  in  so  far  a  na- 
tional bank,  subject  to  the  same  objections,  and  to  the  following  defects:  The 
rates  of  all  these  banks  would  not  puss  through  the  whole  of  theTJnited  States, 
and  the  continuance  of  their  charter  would  be  at  their  discretion,  and  on  the 
terms  prescribed  by  the  respective  States.  Indeed,  it  would  occasion  such  a 
competition  between  the  different  States  and  the  United  States,  in  conduct- 
ing their  respective  revenues,  as  might  be  inconvenient. 

He  did  not  mean  to  depreciate  the  State,  banks;  many  of  them  are  worthy 
of  the  highest  confidence,  as  far  as  their  power  and  operations  extend;  but, 
surely,  it  will  not  be  said  that  all  of  them  are  so.  The  paper  of  some  of  them 
is  well  known  to  have  depreciated;  the  paper  of  many  others  are  current  but 
to  a  small  distance;  they  will  not  carry  many  of  the  members  of  this  House 
from  their  homes  to  this  place;  the  paper  of  none  of  them  will  pass  through- 
out the  United  States. 

Mr.  F.  said,  there  had  been  an  unusual  liberty  taken  on  this  Question,  of 
introducing  party  epithets.  He  did  not  really  know  what  that  had  to  do  with 
the  question.  'I  he  parties  connected  with  all  banks,  are  the  men  that  have 
money  to  vest  in  them  for  their  own  profit  and  at  their  own  risk,  and  those 
•who  have  credit,  on  which  they  receive  accommodations  from  the  bank;  and 
there  is  a  third  party,  who  have  neither  money  nor  credit,  and  who  have  no 
interest  in  banks  further  than  the  accommodations  received  from  them  some- 
times enable  their  employers  to  pay  them  their  wages  the  more  promptly. 
You  may  call  these  parties  federalists,  republicans,  aristocrats,  or  what  you 
please:  but  those  who  have  the  most  money,  and  are  the  greatest  stockholders, 
will  eventually  have  the  direction  of  the  banks,  and  those  who  have  the  great- 
est credit  will  obtain  the  largest  accommodations.  We  know  of  some  banks, 
instituted  by  one  political  party,  which  has  come  under  the  direction  of  ano- 
ther; they  purchase  the  stock  in  market.  We  find,  indeed,  great  opposition 
4o  the  renewal  of  the  charter  of  this  bank,  but  not  a  single  charge  of  miscon- 
28 


218  BANK  OF  THE  UMITED  STATES. 

duct,  except  the  alleged  appointment  of  two  improper  directors  in  a  distant 
branch.  Surely,  the  bill  might  be  so  amended  as  to  give  reasonable  security 
against  such  appointments.  He  was  but  little  acquainted  with  the  branches, 
but  he  had  heard  no  complaint  against  the  direction  of  the  mother  bank,  and 
was  well  assured  that  the  republicans  of  Philadelphia  had  as  liberal  accom- 
modations, and  that  as  much  or  more  of  their  paper  was  discounted  there,  than 
in  any  other  bank;  which,  if  the  charter  is  not  renewed,  they  must  then 
redeem. 

Congress  is  vested  with  the  power  of  receiving  money  on  loans,  and,  conse- 
-~-  quently,  of  providing  the  best  method  of  procuring  loans;  and  it  is  univer- 
sally admitted  that  banks  are  the  best  sources  from  which  to  receive  loans, 
without  delay,  without  difficulty,  and  at  moderate  interest,  and  for  no  longer 
time  than  the  loan  is  necessary.  In  the  early  stages  of  our  Government,  our 
revenue  was  small,  and  our  debts  and  expenses  great.  In  addition  to  these,, 
we  soon  became  involved  in  a  tedious,  very  expensive  [ndian  war.  It  con- 
tinued five  years.  During  this  period,  numerous  loans  were  made  from  the 
bank,  till  more  than  three -fifths  of  the  whole  capital  was  loaned  to  the  Go- 
vernment at  common  interest,  payable  at  discretion.  Another  crisis  of  diffi- 
culty and  expense  arrived,  viz.  hostilities  with  France.  Money  was  wanted; 
the  bank  could  advance  no  more,  it  had  already  loaned  too  much.  The  Go- 
vernment was  obliged  to  open  books  fo?  a  loan  at  eight  per  cent,  interest,  ir- 
redeemable frr  ten  years;  but  few  years  had  passed  before  money  could  have 
been  borrowed  at  a  reduced  interest  for  its  discharge.  Nay,  but  a  few  years 
had  passed  till  it  could  have  been  discharged  at  the  treasury,  if  it  had  been 
redeemable;  much  of  it,  as  well  as  bank  and  other  stock,  was  sold  to  pur- 
chasers in  Britain  and  Holland. 

It  is  believed  by  many,  that  a  loan  might  be  made  to  a  large  amount  now,  on 
.*  better  terms;  but  when  he  considered  the  great  drain  of  specie  from  the  coun- 
try during  the  last  year,  the  losses  in  Europe,  and  the  unusually  small  amount 
of  specie  imported,  or  that  was  in  the  vaults  of  the  different  banks^he  thought 
there  was  little  encouragement  to  try  the  experiment.  Such  loans  must  be  of 
a  money  that  would  pass  throughout  the  United  States  for  all  payments. 

Mr.  F.  said,  that,  having  entered  more  largely,  on  a  former  occasion,  into 
this  question,  he  did  not  intend  to  detain  the  House  now.  He  had,  as  much 
as  he  could,  avoided  repeating  what  he  had  said  formerly,  or  what  others  on 
the  same  side  of  the  question  had  expressed.  He  had,  therefore,  avoided 
mentioning  the  public  and  private  distress  that  must  result  from  the  immedi- 
ate dissolution  of  this  bank.  Even  admitting  that  the  specie  stock  purchased 
by  foreigners,  believed  ta  amount  to  87,000,000,  should  not  be  immediately 
removed  from  the  country,  yet  it  would  be  diverted  from  its  accustometl 
uses;  and,  instead  of  giving  relief  as  at  present,  might  speculate  upon  our  dis- 
tresses. He  believed  that  suddenly  calling  $15.000,000  of  current  medium 
out  of  the  usual  circulation,  could  not  avoid,  in  any  country,  being  the  cause 
of  at  least  a  great  proportion  of  public  and  private  distress.  Therefore,  he 
could  riot,  by  his  vote,  support  the  measure.  It  will  have  other  iriconvemen- 
cies,  which  have  not  been  mentioned.  When  the  bank  winds  up  its  busi- 
ness and  makes  a  transfer  to  trustees,  it  is  not,  by  charter,  obliged  to  call  in 
its  notes  from  a  circulation  that  is  widely  extended  throughout  the  United 
States.  The  holders,  indeed,  will  have  their  remedy  at  law  against  the  trust, 
but  this  may  be  a  tedious  and  inconvenient  remedy  for  many  note  holders. 

It  has  been  asserted  by  more  than  one  member,  that  the  institution  of  the 
bank  was  the  foundation  or  source  of  the  party  spirit  that  has  unhappily  pre- 
vailed in  this  country.  He  wished,  before  he  sat  down,  to  correct  this  mis- 
take, passing  what  prevailed  before  the  Government  took  place.  It  was  the 
funding  system,  in  the  mariner  it  was  conducted,  and  the  extent  to  which  it 
was  carried,  and  the  consequent  speculations,  that  was  the  source  of  that  un- 
happy party  spirit;  but,  especially,  the  assumptions  of  the  State  debts  before 
they  were  liquidated  or  the  amount  known,  and  which,  after  having  been  once- 
rejected,  was  carried  by  a  very  small  majority;  as  a  fund  for  this  debt,  the  excise 
and  other  unpopular  internal  taxes  became  necessary-  It  is  well  known  that 


ON   THE  BILL  TO   RENEW   THE   CHARTER  OF  1791.  219 

about  $3,500,000  of  this  assumption  is  yet  due  to  the  United  States  from  the 
States  that  were  paid  that  much  more  than  enough,  and  which  no  method  has 
been,  nor  probably  can  be,  found  to  recover.  Unfortunately,  almost  every 
session,  some  measures  are  so  conducted  as  to  keep  alive,  if  not  promote  that 
ruinous  party  spirit  by  which  our  national  character  is  degraded,  and  our 
measures  embarrassed.  He  questioned  much  if  rejecting  the  bill,  without,  even 
attempting  to  amend  it,  is  calculated  to  allay  that  unhappy  party  spirit. 

JANUARY  22,  1811. 
The  motion  for  indefinite  postponement  under  consideration — 

Mr.  Mc'Km  spoke  in  favor  of  it;  Mr.  GOLD  against  it;  Mr-  JOHNSON  for 
it;  and  Mr.  SHEFFEI  closed  the  debate  for  the  day,  in  a  speech  against  the 
motion. 

Mr.  Mc'KiM. — Mr.  Speaker:  The  subject  now  under  discussion  involves  an 
important  constitutional  principle,  which  presents,  to  my  mind,  an  insupera- 
ble objection  to  the  passage  of  the  bill.  It  is  not,  however,  my  intention  to 
enter  on  it  diccussion  of  the  constitutional  principle  which  has  a  bearing  on 
the  bill.  That  part  of  the  subject  has  been  ably  and  critically  discussed  by 
my  honorable  friend  from  New  York,  (Mr.  PORTER)  and  by  other  gentlemen, 
who  have  spoken  on  the  same  side  of  the  question.  On  this  part  of  the  sub- 
ject, sir,  I  will  only  observe,  that  a  former  Congress  having  decided  the  con- 
stitutional question/or  themselves,  by  passing; the  law  to  incorporate  the  bank; 
the  tribunals  of  the  nation  having  sanctioned  it,  as  it  respected  themselves;  or 
the  several  States  having,  without  rebellion,  but  not  without  mnnnuring  and 
'•i»nplainf,  acquiesced  in  such  decision,  cannot  quiet  my  conscience,  nor  sat- 
isfy my  mind  on  the  subject.  The  question  now  recurs;  I  have  to  act  on  it, 
and  I  must  decide  it  for  myself. 

I  will  now  endeavor,  Mr.  Speaker,  to  submit  to  the  House  a  few  desultory 
observations,  which  have  for  their  object  to  explain  some  of  the  practical 
operations  of  the  banking  business;  to  shew  the  probable  effect  of  the  dissolu- 
tion of  the  bank   charter:  and   to  answer  some  objections  which  have  been 
1  against,  its  being  suffered  to  expire. 

It  has  been  urged  as  a  motive  for  the  renewal  of  the  charter,  that  the  con- 
cerns of  the  bank  have  been  conducted  with  impartiality  to  persons  of  differ- 
ent political  opinions.  In  answer  to  this,  I  beg  leave  to  read  a  part  of  a  speech, 
said  to  be  delivered  on  the  floor  of  this  I  louse,  and  reported  in  one  of  our  pub- 
lic papers:  and  also  a  letter  from  a  gentleman  in  Baltimore,  to  whom  the 
speecn  alluded.  "  It  had  been  asserted  (says  this  speech)  during  the  last 
winter,  that  the  branch  bank  in  Baltimore  had  accommodated  only  one  par- 
ticular class  of  political  gentlemen.  He  (Mr.  STANLKY)  had  it  from  good 
authority,  that  a  distinguished  republican  house  in  Baltimore,  of  which  a 
member  of  the  Senate  was  partner,  had  obtained  a  greater  portion  of  discounts 
than  any  other  merchants  in  that  place.'" 

The  letter  to  which  I  alluded,  is  in  the  following  words:  "Dear  Sir:  Will 
you  have  the  justice  to  state  to  the  House  of  Representatives,  as  early  as 
you  have  an  opportunity,  and  in  direct  contradiction  of  the  unfounded  asser- 
tion contained  in  the  enclosed,  that  the  republican  house  in  Baltimore,  of 
which  a  member  of  the  Senate  is  partner,  has  received  but  two  discounts  from 
the  branch  bank  of  Baltimore,  to  wit:  one  of  nineteen  hundred  and  sixteen 
dollars  and  fifty-five  cents,  and  one  of  eighteen  hundred  dollars;  the  first  on 
the  14th  of  April,  and  the  second  on  the  14th  of  May,  1798;  although  the 
transactions  of  the  House  with  that  bank  amount  to  nine  hundred  and  thirty- 
six  thousand  three  hundred  and  twenty-two  dollars  fifty  cents." 

[Here  Mr.  STANLEY  explained.  Perhaps  it  had  not  been  his  good  fortune 
to  be  understood  in  the  remarks  which  he  presumed  were  alluded  to  by  Mr. 
M's  correspondent.  It  was  his  meaning,  if  not  his  words,  that,  although  par- 
tiality had  been  charged  in  the  distribution  of  the  favors  of  the  branch  bank 


220  BANK  OF  THE  UNITED  STATES. 

of  Baltimore,  he  had  been  informed,  from  good  authority,  that,  of  its  discounts* 
more  than  one  half  had  been  obtained  by  gentlemen  of  politics  opposite  to 
those  of  the  bank;  and  that,  in  the  purchase  of  bills  of  exchange,  this  bank  had 
purchased  a  larger  amount  from  the  house  alluded  to  (Smith  and  Buchanan) 
than  from  any  other  house  in  Baltimore.] 

I  am  satisfied,  said  Mr.  M.  with  the  explanation.  I  have  not  introduced 
the  speech  and  letter  so  much  to  support  my  argument,  as  to  do  justice  to  my 
friend;  nor  can  I  vouch  for  the  correctness  of  the  report. 

It  has  been  stated  that  nineteen  or  twenty  millions  of  dollars  are  due  to 
this  bank,  whose  charter  is  now  about  to  expire;  that,  if  the  charter  is  not  re- 
newed, it  will  produce  great  distress,  ana  general  bankruptcy  will  ensue; 
that  the  bank,  in  winding  up  its  concerns,  can  receive  nothing  but  specie, 
which  will  exhaust  the  resources  of  the  other  banks  and  individuals,  and  there- 
by produce  a  result  the  most  disastrous  to  the  mercantile  interests  of  the 
nation.  This  statement  is  incorrect.  By  the  returns  from  the  treasury,  it 
appears  that  no  more  than  $1,318,024  was  due  to  the  bank:  and  that  the  bank 
is  indebted  to  the  public  and  to  individuals,  in  the  sum  of  $11,542,320;  and 
all  the  offsets  it  had,  against  the  heavy  debt,  are  the  above  sum,  due  from 
different  State  banks,  of  $1,318,024, 

Mr.  M.  illustrated  this  position  by  the  following  detailed  statement  of  the 
account,  which  he  read  in  his  place: 

The  bank  owes  to  Government  for  deposites,  -    $2,493,362 

It  owes  to  individuals  for  deposites,  -      3,891,680 

It  owes  for  its  notes  in  circulation,  -      5,157,378 

Total  amount  of  its  debts,      -  -    11,542,320 

Deduct  from  the  amount  of  debts  due  by  the  bank,  its  only  offset,      1,318,024 

Leaving  a  nett  balance  of  debts  due  from  the  bank,  of  -  -  10,240,296 

This,  sir,  is  the  present  situation  of  the  expiring  bank,  by  its  own  showing. 

Gentlemen  have  involved  this  subject  in  obscurity,  by  supposing  the  fifteen 
millions  of  dollars,  held  by  the  bank  in  discounted  notes,  as  a  debt  due  to  the 
bank.  Sir,  there  is  not  one  cent  of  these  notes  due  except  a  small  sum  that 
is  in  suit.  If  these  notes  were  really  due,  it  would  materially  change  the 
state  of  the  account.  It  would  then  possess  the  means  of  spreading  terror* 
if  it  was  disposed  unnecessarily  so  to  do;  but  we  must  take  the  account  as  it 
is;  and  if  we  would  know  how  it  stands,  at  any  particular  time,  we  must 
udge  of  it  as  we  do  of  a  rftce,  by  viewing  both  sides  at  the  same  point  of  time. 
udging  in  this  way,  we  find  that  this  bank  notv  owes  a  nett  balance  of  up- 
wards of  ten  millions  of  dollars. 

Now,  sir,  I  would  ask.  Can  any  gentleman  believe  that  it  will  be  in  the  power 
of  a  bank,  thus  heavily  indebted,  far  beyond  the  extent  of  its  present  means, 
to  spread  such  terror,  and  produce  such  distress,  as  has  been  stated,  when  it 
is  deprived  of  the  public  and  private  deposites,  of  which  it  will  be  deprived, 
when  it  is  known  that  the  charter  will  not  be  renewed?  It  is  true,  that,  while 
these  funds,  the  debts  it  owes,  and  a  continuance  of  the  public  deposites,  are 
suffered  to  remain  in  its  possession,  it  may  do  much  to  create  distress;  while 
these  funds  are  in  its  hands,  it  can  employ  the  whale  pecuniary  resources  of 
the  nation  to  coerce  other  banks  and  individuals  into  its  measures,  if  it  were 
so  disposed. 

I  wish  it  to  be  clearly  understood,  that  I  do  not  mean  to  say,  or  to  insi- 
nuate, that  this  bank  had  unnecessarily  used  coercion,  to  create  distress,  or 
to  obtain  the  object  of  its  wish  —  a  renewal  of  its  charter.  But.  while  these  funds 
remain  in  its  hands,  they  produce  this  effect.  They  render  it  a  measure  of 
prudence  and  necessary  precaution  in  other  banks,  not  to  issue  their  paper,  to 
aid  the  customers  of  this  bank,  or  others  indebted  to  it,  to  retire  their  notes; 
and  this  operates  powerfully  on  my  mind,  as  a  reason  for  urging  a  speedy  de- 
cision of  the  question.  I  am  of  opinion,  if  this  question  is  settled,  let  it  be 
determined  as  it  may^  that  all  the  difficulty  and  distress  resulting  from  the 


j 
J 


ON  THE  BILL  TO  RENEW   THE  CHARTER  OF  1791. 

probable  dissolution  of  the  charter,  will  soon  be  dissipated,  and  things  resume 
their  usual  course.  It"  the  charter  is  not  renewed,  the  expiring  bank  will  lose 
its  power  of  holding  other  banks  in  check,  by  the  withdrawing  of  public  and 
private  depusites;  which,  being  placed  in  other  banks,  will  increase  their 
means  of  giving  aid  to  those  wlib  nave  paper  to  retire  from  the  expiring  bank. 
This  bank  having  now  no  other  than  its  own  natural  means,  will  no  longer  be 
an  object  of -dread  to  other  similar  institutions;  they  may  now  freely  lend 
their  aid  to  relieve  the  distressed,  and  iheir  increased  means  will  be  adequate 
to  the  object. 

It  has  been  suggested,  that  the  capital  of  this  bank,  owned  in  Europe,  will 
be  remitted  in  specie,  if  the  charter  is  suffered  to  expire;  and  that  such  a 
drain  of  specie  would  be  severely  felt  by  the  banks,  at  this  distressing  time, 
in  our  commercial  concerns.  There  is  no  necessity  for  remitting  this  capital 
in  specie;  and  I  do  not  believe  one  dollar  would  be  so  remitted,  because  it 
will  not  be  the  interest  of  the  proprietors  that  it  should.  Exchange  is  low; 
I  believe  bills  might  be  purchased  at  7.4  a  10  per  cent,  below  par;  and  if  re- 
mitted in  specie,  the  freight  and  insurance  could  not  be  less  than  5  per  cent. 
A  remittance  in  specie  would  then  be  12.4  a  15  per  cent,  less  favorable  than 
to  remit  in  bills.  Men  are  usually  governed  by  their  interest,  in  transactions 
of  this  kind;  and  I  do  believe  that  the  managers  of  this  stock,  if  it  is  to  be 
remitted  to  Europe,  would  remit  it  as  other  gentlemen  do,  in  bills.  But  if  it 
must  be  remitted  in  specie,  it  is  probable  there  is  some  unknown  cause,  ope- 
rating on  remittances  generally,  that  gives  an  advantage  to  remittances  in 
specie;  and  if  this  be  the  case,  the  whole  amount  of  our  imports  from  Europe 
will  probably  be  thus  remitted.  The  amount  of  our  imports  from  Europe, 
annually,  is  probably  not  less  than  eighty  millions  of  dollars;  and  if  specie 
must  be  shipped  olt',  to  pay  for  these  iinports,  it  will  not  add  much  to  our  dis- 
tress, to  let  the  bank  capital  go  with  it;  but,  I  am  of  opinion,j|  that  one  dollar 
will  not  be  shipped  to  pay  this  stock. 

It  has  been  stated  by  my  honorable  colleague,  (Mr.  KEY)  whom  I  do  not 
now  see  in  his  place,  (and  1  regret  tliat  I  do  not,  that  I  might  be  corrected  if 
I  misstated  what  he  said)  that  fourteen  millions  of  dollars  would  be  thrown 
out  of  circulation,  if  the  charter  of  this  bank  was  suffered  to  expire;  that  the 
bank  discounted  fourteen  millions  of  dollars;  and  therefore  must  have  issued 
its  notes  to  that  amount,  in  payment  for  the  discounted  paper.  This  is  incor- 
rect; one  halt  of  the  discounted  paper,  it  might  be  fairly  estimated,  was  of 
what  is  denominated  accommodation  notes;  and  for  this  portion  of  the  dis- 
counted paper,  no  money  g  >es  out  of  the  bank  after  the  first  renewal;  but,  on 
the  contrary,  money  is  brought  into  bank  in  this  part  of  the  business,  to  pay 
the  interest,  or  discount,  on  these  notes.  I  beg  leave  to  explain  to  the  House 
the  nature  of  what  is  termed  accommodation  notes.  They  are  notes  for  which 
no  value  has  passed;  they  are  given  by  the  maker  of  the  note,  to  accommodate 
the  receiver  of  it,  on  an  understanding  between  them,  that,  when  due,  it  will 
be  taken  up  by  the  person  who  received  it;  and  discounts  on  this  kind  of 
paper  are  in  the  nature  of  a  permanent  loan,  so  long  as  the  person  accommo- 
dated requires,  or  as  it  may  be  convenient  for  the  bank  to  continue  it,  the 
note  being  renewed  every  sixty  days,  and  the  interest  paid  thereon.  But.  the 
proposition  is  equally  incorrect,  as  it  relates  to  the  notes  dircounted,  which 
were  given  on  some  actual  transaction  in  business;  notes  are  not  issued  by  the 
bank,  to  the  amount  of  the  real  paper  it  discounts;  money  is  constantly  com- 
ing in  for  notes  that  fall  due;  anJ  in  the  course  of  trade,  it  frequently  happens 
that  the  money  paid,  in  one  'week,  on  discounted  notes,  is,  the  next  week, 
by  various  ivindings  and  changes,  again  in  bank,  to  discount  nearly  a  like 
amount. 

The  real  diminution  of  the  circulating  medium,  that  will  result  from  the 
dissolution  of  the  charter,  will  be  Jive  inilliom  of  dollars.  The  report  from 
the  treasury,  laid  on  our  tables,  states  that  the  bank  has  five  millions  of  dol- 
lars of  its  notes  in  circulation,  and  these  of  course  will  be  paid  oft*  and  des- 
troyed, when  the  bank  ceases  to  act;  and,  as  it  will  then  receive  no  more  de- 
posites,  the  means  of  other  banks  will  be  enlarged;  whereby  they  may  issuo 


BANK  OF  THE  UNITED  STATES. 

an  increased  amount  ot  notes,  perhaps  nearly  equal  to  the  extent  of  the  dimi- 
nution that  will  result  from  the  decease  of  the  charter. 

I  will  repeat,  sir,  what  I  before  said.  When  the  question  of  the  charter  is 
settled,  the  difficulties  and  distress  that  now  exist  will  soon  cease,  and  an 
accommodating  disposition  will  take  place;  the  expiring  bank  will  then  relin- 
quish its  pretensions  to  receive  nothing  but  specie  in  payment;  it  will  see  the 
necessity  of  receiving  payment  in  the  paper  of  other  banks  that  are  in  credit; 
it  will  receive  payment  in  such  bills  as  other  banks  and  individuals  receive 
freely.  And  why  will  it  do  this,  when  it  has  a  right  to  insist  on  specie?  Because 
it  will  be  urged  to  do  so,  from  interest  and  ^necessity.  It  has  a  large  debt, 
that  will  be  shortly  falling  due  from  its  customers,  and  how  will  they  be  able 
to  pay,  il  the  bank  shall  draw  all  the  specie  into  its  vaults,  and  keep  other 
banks  in  check,  so  that  they  can  afford  no  aid  to  its  customers,  to  retire  their 
notes  when  they  fall  due.  The  specie  cannot  be  wanted  by  the  expiring 
bank.  Every  object  of  winding  up,  remitting,  arid  paying  its  capital,  can  be 
managed  to  equal  advantage  without  it.  And  will  this  bank,  without  a  motive, 
and  in  opposition  to  its  own  interest,  endeavor  to  produce  distress,  by  thus 
unnecessarily  drawing  the  specie  into  its  vaults?  Certainly  it  will  not.  But, 
if  it  should  act  so  unadvisedly,  who  is  to  be  the  greatest  sufferer?  Who  has 
a  greater  interest  than  itself,  in  facilitating  the  payment  of  debts?  None  have 
a  greater  stake  at  hazard  than  this  bank;  and  I  venture  to  say,  that  none  will 
be  more  disposed  to  promote  the  general  convenience  and  prosperity,  than  it 
will  be.  I  have  no  fears  of  this  spectre  of  misery  and  distress,  that  has  been 
artfully  conjured  up,  to  alarm  us  into  a  renewal  of  the  charter. 

My  honorable  colleague  (Mr.  KEY)  has  made  an  eloquent  display  of  the 
benefits  of  banking  establishments,  in  our  agricultural  improvements,  our 
manufactures,  and  ship  building;  and  if  this  bank  was  put  down,  the  effects 
would  be  severely  felt,  in  the  reduced  price  of  produce,  and  in  our  improve- 
ments generally. 

I  accord  most  heartily  with  the  honorable  gentleman,  asto>the  benefit  of 
banks,  to  a  reasonable  extent.  No  one  is  more  perfectly  convinced  of  the 
benefits  resulting  from  them  than  myself;  but  I  deny  that  such  injurious 
effects  would  be  produced,  by  suffering  this  charter  to  expire.  Is  there  no 
other  bank  but  this  one,  founded  on  foreign  capital  and  administered,  more 
or  less,  under  foreign  influence,  that  can  produce  and  perpetuate  these  be- 
nefits? Surely  there  are  others  as  capable,  and  as  much  to  be  relied  on,  as  this. 
The  capital  of  this  bank  forms  but  a  small  portion  of  the  aggregate  bank  capi- 
tal of  the  nation;  and  if  its  charter  should  expire,  the  benefits  mentioned  will 
not  be  lost.  No  specie  will  be  destroyed,  or  sent  out  of  the  country,  by  its 
dissolution.  Specie  is  the  basis  of  bank  capital;  and  if  we  have  specie  to 
meet  them,  we  can  easily  make  bank  notes  enough,  without  the  aid  of  this 
bank.  The  bank  notes  that  will  be  thrown  out  of  circulation,  are  all  that 
will  be  lost  by  the  dissolution  of  the  charter;  and  if  we  have  specie,  we  can 
soon  supply  their  place;  there  is  no  scarcity  of  paper  among  us. 

The  charter  of  this  bank  was  gran  ted  for  a  limited  time;  the  privileges  and 
immunities  it  granted  were  great.  The  interest  it  yielded  on  its  capital  and 
its  credit,  are  liberal;  and  the  increased  value  the  charter  gave  to  its  stock  was 
great.  This  stock,  originally  only  ten  millions  of  dollars,  soon  became  worth 
fourteen  millions  under  the  charter.  The  company  have  enjoyed  these  bene- 
fits in  the  fullest  extent,  without  molestation;  their  chartered  rights  have  not 
been  infringed  or  violated;  and  the  charter  is  now  about  to  expire  by  its  own 
limitation.  And  this  valuable  inheritance  of  benefits,  about  to  descend, 
with  the  death  of  the  charter,  to  the  People  of  the  United  States,  will  be- 
come their  joint  property.  About  seven  tenths  of  the  present  stockholders 
are  foreigners;  and  shall  we,  the  guardians  of  the  rights  and  interests  of  the 
American  People,  perpetuate  these  benefits  to  foreigners,  by  a  renewal  of  the 
charter  to  them,  in  preference  to  those  whose  interests  we  have  been  chosen 
to  protect?  Persons  unconnected  with  the  public  business,  might,  perhaps, 
wink  at  such  an  act;  but  if  we,  in  our  representative  capacity,  should  do  it, 
will  it  not  be  to  record  our  infamy? 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.   °V  223 

Under  these  impressions,  Mr.  Speaker,  I  am  prepared  to  give  my  vote  for 
an  indefinite  postponement  of  the  bill.  But,  if  the  section  stricken  out  in 
Committee  of  the  Whole  shall  be  reinstated,  and  the  bill  shall  come  to  a  final 
vote,  I  must  record  my  name  against  its  passage. 

Mr.  GOLD.— Mr.  Speaker:  Although  this  question  has  long  engrossed  the 
consideration  of  the  House,  I  must  ask  the  indulgence  of  the  House  to  the 
observations  I  may  offer;  I  will  not  trespass  on  your  patience. 

The  question  of  expediency,  together  with  various  extrinsic  topics,  I  pass 
by  unnoticed ;  on  these,  let  the  judgment,  and  not  the  feelings,  ol  the  House, 
which  have  been  so  much  addressed  through  ex  parte  statements  and  sugges- 
tions, determine. 

On  the  great  constitutional  question,  involved  by  the  bill  on  your  table,  it 
is  the  fruit  of  my  best  reflections,  it  is  my  deep  conviction,  that  the  agency 
of  a  bank  is  necessary  to  the  administration  of  the  finances  of  this  country; 
that  it  is  eminently  necessary  to  the  great  exigencies  of  war.  Tins  is  the 
test;  on  this  pivot  rests  the  question.  In  coining  to  the  conclusion  I  have, 
sir,  I  disclaim  the  doctrine  of  implication  of  powers;  of  constructive  powers; 
now  rendered  so  odious  and  so  unjustly  imputed  to  those  who  maintain  the 
constitutionality  of  this  bank.  I  ask  only  the  application  of  a  plain  simple 
rule,  which  is  as  old  as  first  principles:  as  extended  in  its  operation  as  the 
empire  of  law:  to  be  found  in  all  codes,  applicable  to  all  instruments,  as  well 
to  conventions  between  Slates  as  to  the  contracts  of  individuals. 

It  is,  that,  with  the  cm/  is  f/n/i,  inseparably  given,  lite  means;  that,  with 
the  express  powers  gi ve n  to  this  Government  is  also  given  the  means  necessary 
to  carry  the  Government  into  sui'ce>sf ul  operation;  not  merely  to  move  the 
wheels,  but  to  give  an  effectual  'un]>ul*>\  nece.-siry  to  the  exigencies  of  the 
country.  When  gentlemen  survey  the  extended  Department  of  the  Treasury, 
the  wide  theatre  of  the  public  expenditure,  commensurate  with  the  United 
States;  the  daily  transmission  of  moneys  (to  satisfy  the -public  demand)  in 
every  direction,  to  the  furthest  limits  of  the  Union;  to  the  frontiers;  to  your 
garrisons;  to  places  with  which  there  is  no  commerce,  on  which  bills  of 
exchange  cannot  be  obtained;  can  they  avoid  seeing  the  treasury  involved  in 
the  utmost  embarrassment  by  withdrawing  the  aid  of  a  banking  institution? 
Such  embarrassment  to  my  mind  is  inevitable. 

But,  sir,  if  doubts  could  exist  as  applicable  to  a  state  of  peace,  in  the  great 
and  trying  emergencies  of  war,  there  is  not,  1  did  hope,  room  for  diversity  of 
opinion;  the  necessity  of  the  institution  in  my  conception  is  eminent,  is  indis- 
pensable. Money  is  the  sinew*  of  war;  for  want  of  it,  to  satisfy  a  needy  dis- 
contented army,  the  most  important  operations  of  a  campaign  have  been 
arrested,  and  the  most  disastrous  iv.-ults  produced. 

Our  own  country,  sir;  the  patriotic  army  of  the  Revolution — and  one  more 
patriotic,  I  fear,  we  shall  never  see — furnished  one,  if  not  more,  instances  of 
discontent  and  actual  mutiny  for  want  of  pay  (for  want  of  that  which  this 
institution  could  so  promptly  furnish)  which  was  not  appeased  without  resort 
to  military  execution. 

However  pacific  in  its  policy,  let  no  nation  promise  itself  continued  exemp- 
tion from  war;  history  gives  no  assurances  of  this  kind;  nowise  Government, 
in  its  policy  and  institutions,  ever  lost  sight  of  a  state  of  war.  In  case  of 
internal  dissensions;  in  public  convulsions,  the  prompt  aid  of  a  bank  may  be 
equally  necessary.  It  is  the  observation  of  a  distinguished  writer  who  had 
well  considered  the  events  of  the  Revolution,  that  the  independence  of  this 
country  was  in  no  small  degree  indebted  to  the  Bank  of  North  America. 

But  it  is  said,  that  the  best  resort  of  Government  is  to  the  purse  of  indi- 
viduals; that  this  source  will  be  found  abundant.  It  is,  Mr.  Speaker,  on 
public  emergencies;  in  times  of  public  convulsion:  under  the  severe  pressure 
of  war,  when  ready  supplies  of  money  become  indispensable  to  Government; 
and  it  is  at  such  a  period  that  alarms  spread  and  distrust  seizes  on  the  com- 
munity; it  is  then  that  the  moneyed  man  withdraws  himself,  places  his  cash  in 
a  strong  box,  and  not  unfrequently  commits  it  to  the  earth,  beyond  the  reach 


224  BANK  OF  THE  UNITED  STATES. 

of  Government.    We  have  no  power  of  drawing  the  Jew's  teeth;  no  resource 
in  &  forced  loan. 

In  the  course  of  debate  on  this  bill,  it  is  not  a  little  amusing  to  observe  the 
desperate  efforts,  the  contradictions  and  inconsistencies,  which  gentlemen,  in 
their  zeal,  fall  into.  At  one  moment  it  is  most  strenuously  insisted  that  no- 
thing short  of  an  express  provision  in  the  constitution  to  create  corporations 
can  warrant  the  establishment  of  a  bank;  the  next  moment  it  is  admitted,  and 
strange  indeed  had  it  been  denied,  that,  if  a  bank  be  a  necessary  mean  for  the 
execution  of  the  delegated  powers  of  the  Government,  then  must  it  be  consti- 
tutional. 

The  most  fruitful  source  of  error,  Mr.  Speaker,  is  in  the  palpable  misinter- 
pretation of  the  term  "  necessary,"  in  the  constitution;  it  has  been  reiterated, 
again  and  again,  under  this  head  of  the  argument,  thata???erm,/o  be  necessary, 
must  be  absolutely,  indispensably  so,  without  which  the  operations  of  the 
Government  would  be  arrested.  Now,  sir,  all  this  is  contrary  to  the  sense 
in  which  that  adjective  is  used  by  the  most  approved  writers,  and  in  direct 
violation  of  the  elementary  principles  of  our  language.  If  gentlemen  will 
take  the  trouble,  and  I  invite  them  to  do  it,  to  recur  to  the  best  writers  and 
philologists,  they^will  find  the  term  used  in  a  .sense  implying  only  what  is 
needful  or  requisite,  and  not  what  is  extremely  so  or  indispensable;  and  why, 
sir,  should  it  be  extended  beyond  the  above  limits?  Is  it  not  an  adjective  of 
comparison^  for  the  argument  has  carried  us  back  to  our  schools.  Is  it  not 
in  every  day's  use,  and  correctly  so,  that  one  thing  is  necessary,  another  more 
so,  and  a  third  indispenably  sop  Have  we  not  seen  here,  upon  this  floor,  a 
member  rise  and  call  for  the  order  of  the  day  on  a  bill  as  necessary  to  be  acted 
on,  another  member  call  for  one  more  necessary,  and  a  third  for  one  absolute- 
ly or  indispensably  necessary?  And  yet,  sir,  gentlemen  continue  to  urge 
upon  us,  that  necessary,  in  its  positive,  uncompared  state,  imports  the 
superlative,  and  means  indispensable.  Such  arguments,  sir,  not  only  pros- 
trate the  bank,  but  subvert  the  very  foundation  of  language.  Again, 
sir,  it  is  said,  that  no  mean  is  given  by  the  constitution,  if  the  opera- 
tions of  Government  can  possibly  be  carried  on  without  it.  Is  this 
dishonor  to  be  done,  sir,  to  the  memories  of  those  wise  men  who  framed 
our  excellent  constitution?  Was  it  the  height  of  their  ambition,  the  fruit 
of  all  their  labors,  to  give  the  country  a  limping,  hailing  Government, 
to  move  with  a  snaWspace;  to  give  to  the  wheels  an  impulse  the  least  possi- 
ble competent  to  move  them?  Upon  this  argument,  sir,  the  Government  itself 
ought  not  to  have  been  established  at  all,  as,  without  it,  the  country  might 
have  subsisted;  we  might  probably  have  defended  our  territory  and  retained 
our  liberties,  at  least,  lor  a  considerable  period;  we  might  have  moved  up  and 
down,  and  consumed  the  acorns  of  our  forests.  A  higher  ambition  moved  the 
worthies  who  laid  the  foundations  of  this  goodly  fabric  of  Government;  and 
I  will  not  hesitate  to  honor  them  so  much  as  to  say,  that  they  intended  to  give 
to  the  Union  a  Government  for  attaining  the  highest  degree  of  political  pros- 
perity, which  the  condition  of  the  States  and  the  nature  of  a  federative  com- 
pact is  susceptible  of.  Such,  sir,  in  my  apprehension,  was  the  object  of  the 
constitution;  and  I  beg  leave  to  add,  that  this  object  may  be  carried  into  effect, 
without  touching  the  rights,  the  interests,  or  happiness  of  those  States.  Nay, 
sir,  the  best  interests  of  each  and  every  State  in  the  Union  imperiously  de- 
mands of  Congress,  in  despite  of  all  the  covert  movements  of  State  banks 
and  State  politicians,  independently,  to  carry  into  effect  the  bill  on  your  table. 
Let  us  not,  sir,  shut  our  eyes  to  the  quarter  from  whence  danger  threatens — to 
the  interests  and  ambition  of  States,  who,  assuming  a  control  or  influence 
over  the  Representatives  of  the  People,  would,  in  effect,  dictate  to  you  what 
course  you  are  to  pursue.  Here,  sir,  at  this  period,  lies  the  danger  to  the  con- 
stitution. We  are  arrived  at  a  crisis,  when  it  is  considered  almost  an  act  of 
hardihood  to  vote,  on  this  question,  in  opposition  to  the  wishes  of  the  State  to 
which  a  member  may  belong,  signified  by  a  resolution  of  the  Legislature.  If 
this  influence,  sir,  is  to  prevail.over  the  councils  of  the  Union,  then,  indeed, 
are  we  degraded,  our  sovereignty  lost,  and  all  the  weaknesses  and  maladies  of 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      225 

the  old  confederation  returned  again  upon  this  body  politic.  I  repeat,  sir,  if 
this  bank  shall  fall,  it  will  owe  its  fate  to  the  baneful  influence  of  individual 
States,  governed  by  their  own  banking  interests,  over  the  counsels  of  the 
Union. 

The  argument,  sir,  in  support  of  the  constitutionality  of  a  banking  institution, 
•as  a  mean  necessary  to  execute  the  Government,  is  greatly  strengthened  by 
the  consideration,  that  the  jurisdiction  of  the  Government  over  the  specified 
subjects  of  its  cognizance  is  sovereign. 

In  the  division  of  power,  certain  subjects  of  legislation  remain  with  tho 
individual  States  for  their  sole  and  sovereign  jurisdiction:  other  specific  sub- 
jects are,  by  the  constitution,  committed  to  the  exclusive  cognizance  of  the 
Government  of  the  Union;  all  Legislative  power  over  those  subjects  is  notonly 
given  to  Congress,  but  expressly  denied  to  the  States.  With  these  plain  land- 
marks before  him,  I  was  not  a  little  surprised  to  hear  my  honorable  colleague 
(Mr.  PORTER,)  in  a  speech  of  so  much  method  and  ingenuity,  contend,  that 
the  Government  of  the  Union  was  not  sovereign  in  any  thing;  that  sove- 
reignty was  to  be  found  alone  with  the  People.  To  the  People,  sir,  we  always 
bow  with  respect;  it  is  among  first  principles,  that  all  power  flows  from  the 
People,  and  is  to  be  exercised  for  their  benefit  arid  welfare;  the  People  are  the 
legitimate  source  of  all  power,  and  it  is  from  them  the  constitution  is  derived; 
but,  sir,  the  moment  the  constitution  is  formed,  and  the  government  establish- 
ed, the  original  sovereign  power  of  the  People  is  parted  with;  it  is  transferred 
to  the  Government,  and  all  interference  with  its  exercise  is  lost,  except  through 
the  medium  of  elections.  Need  I  refer  to  a  host  of  writers  on  civil  society 
and  Government  for  all  this?  The  result  is  inevitable,  that  the  power  of  this 
Government  over  the  objects  specifically  and  exclusively  committed  to  its  ju- 
risdiction, is  full,  entire,  and  sovereign.  The  principle  of  my  colleague  would 
give  us  a  government  of  men,  not  oi'  laws,  the  very  definition  of  despotism. 
This  view,  sir,  repels  the  strict,  the  narrow,  meagre  rules  of  interpretation 
which  have  been  applied  on  this  occasion.  Another  position  of  my  colleague 
is  equally  unfounded.  He  insists  that  the  Governments  of  the  Union  and  the 
respective  States  have  a  mixed  or  combined  jurisdiction  over  the  same  subject 
matter;  and  hence  a  new  restriction  is  created  on  the  power  of  Congress. 
What,  sir,  is  the  power  given  to  Congress,  and  the  means  to  execute  it  reserv- 
ca  to  the  States?  for  such  is  the  application  and  consequence  of  the  argu- 
ment. 

The  very  face  of  this  proposition  involves  contradiction  and  inconsistency; 
it  would  make  the  constitution  a  felo  de  se,  and  annihilate  the  Government. 
We  are  carried  back  again  into  Egypt;  to  the  old  doctrine  of  dependence  arid 
requisition  of  the  confederation  upon  the  States.  Such,  sir,  is  the  extent,  such 
the  desperate  efforts  of  argument  to  cut  down  the  powers  of  this  Government 
and  prostrate  this  institution. 

I  cannot,  sir,  pass  over  another  argument  against  the  bill,  without  notice. 
It  is  said  that  the  banks  of  the  States  may  be  resorted  to  in  the  administration 
of  the  finances.  Here,  sir,  by  this  argument,  the  whole  question  of  constitu- 
tionality is  given  up,  for  the  very  necessity  of  the  resort  to  State  banks  main- 
tains the  agency  of  a  bank  as  necessary  in  administrating  the  Government; 
*t -is  on )this  pivot,  necessity,  that  the  whole  question  turns.  In  steering  clear 
of  Scylla  the  argument  is  lost  in  Chaiybdis.  This  necessity  of  bank  agency 
is  so  indispensable  to  the  Government,  that  gentlemen  look  with  fear  and  trem- 
bling upon  the  intermission  of  a  day  between  the  expiration  of  the  charter  of 
the  present  bank  and  the  new  and  gladdening  reign  of  State  banks.  It  has 
been  stated  on  the  floor  of  the  House,  that  arrangements  are  already  making 
with  State  banks  for  the  accommodation  of  the  Government.  Preparations  are 
in  forwardness  for  celebrating  the  nuptials  of  these  State-damsels,  who,  with 
little  modesty,  attend  in  the  anti-chamber,  eager  to  rush  into  the  arms  of  pa- 
tronage in  the  treasury.  Do  ye  not  discern  the  signs  of  the  times?  Are  the 
policy,  the  co-operation,  and  active  movements,  of  the  State  banks,  not  seen? 
VY  hilethe  tinted  States'  Bank  is  going  down,  do  you  not  observe  the  wreckers 
hovering  on  the  coast? 
29 


BANK  OF  THE  UNITED  STATES. 

But,  sir,  this  great  question  of  constitutionality  does  not  depend  on  the  oc* 
casional  existence  or  non-existence  of  banks,  in  the  States,  but  on  the  intrinsic 
power  given  by  the  constitution,  without  regard  to  the  extrinsic,  contingent, 
and  uncertain  co-operation  of  State  Legislatures. 

What  the  future  policy  of  the  respective  States  would  be;  whether  State 
banks  would  be  established,  able  and  willing  to  aid  this  Government,  and  safe 
depositories  for  the  revenue,  could  not  be  foreseen  by  the  framers  of  the  con- 
stitution. Such  an  argument,  resting  on  snch  contingencies,  would  at  one  pe- 
riod make  a  thing  constitutional,  which  at  another  would  be  unconstitutional. 

To  all  those  who  are  averse  to  a  multiplication  of  banks  and  bank-stock, 
permit  me  to  observe,  that  the  States  stand  ready  to  fill  up,  by  new  banks,  the 
vacuum  or  space  left  on  the  expiration  of  the  United  States' Bank,  as  rapidly 
as  the  motion  of  fluids  under  the  principles  of  hydraulics?  nay?  sir,  some  have 
already  anticipated  the  event  by  a  litter  of  banks,  and  hence,  sir,  we  have  wit- 
nessed the  struggle  of  a  parent's  affection  to  protect  its  offspring. 

It  only  remains,  sir,  for  me  to  call  the  attention  of  the  House  to  the  past. 

It  is  now  twenty  years  that  this  bank  has  been  in  operation,  in  constant  in- 
tercourse and  correspondence  with  the  Government  under  all  the  revolutions 
of  parties;  during  which  period  we  have  the  concurring  testimony  of  all  the 
States  in  the  Union  in  support  of  its  legitimacy,  cleducible  from  their  acqui- 
escence and  satisfaction;  for,  sir,  after  the  agitation  excited  by  its  creation 
had  subsided,  I  have  not  been  able  to  find,  among  all  the  projects  for  amend- 
ing the  constitution,  that  a  single  State  has  touched  the  power  that  created  this 
bank.  No,  sir,  this  viper  in  our  bosom  (to  use  the  impassioned  language  of 
gentlemen  in  opposition  to  this  bill)  has  lain  harmless.  Harmless,  did  I  say? 
Like  a  good  genius,  it  has  administered  to  our  wants,  and  promoted  our 
welfare. 

Can  the  candid  mind  resist  the  conclusion,  that  the  People  are  with  the  bank? 
Shall  I  remind  you,  sir,  that  this  institution  received  its  existence  from  the 
hands  of  the  greatest  and  best  of  men,  and  under  the  presidency  and  with  the 
entire  approbation  of  Washington;  that  the  constitutional  question  was  decid- 
ed at  a  period  auspicious  to  fair  inquiry?  at  a  period  when  party  spirit  was- 
much  less  virulent  and  destructive?  that  some  of  the  most  distinguished  sup- 
porters of  the  present  administration  concurred  jn  its  establishment?  Shall 
this  question  of  constitutionality  never  be  at  rest? 

Mr.  JOHNSON. — Mr.  Speaker:  I  had  determined,  until  yesterday,  to  be 
silent  on  this  occasion,  and  I  extremely  regret  the  necessity  which  has  com- 
pelled me  to  trespass  upon  the  exhausted  patience  of  the  House  upon  an  almost 
exhausted  subject.  I  am  opposed  to  the  renewal  of  the  charter  of  the  Bank  of 
the  United  States  from  the  strongest  sense  of  duty  which  can  be  felt  by  the 
representative  of  a  free  People;!  believe  it  palpably  unconstitutional  to  renew 
the  charter,  and,  if  it  were  constitutional,  it  is  inexpedient  and  improper. 

It  is  absolutely  necessary  that  the  House  and  this  nation  should  understand 
the  real  question  before  us:  for  arguments  have  been  advanced  upon  premises 
•which  do  not  exist,  and  remarks  predicated  upon  a  case  which  is  not  embraced 
by  the  bill.  This  makes  it  my  duty  to  call  attention  to  the  real  question, 
that  we  may  not  dwell  longer  upon  supposed  cases.  This  is  not  a  struggle,, 
on  our  part,  to  repeal  any  act  ot  incorporation,  or  to  deprive  any  citizen  of 
any  vested  rights  claimed  either  by  nature  or  by  any  political  act;  but  an  ex- 
ertion in  favor  of  equal  laws  and  equal  justice  to  all  the  People  of  the  United 
States,  to  prevent  monopolies  from  being  given  to  a  moneyed  aristocracy, 
unknown  to  the  constitution,  and  dangerous  to  the  liberties  ot  the  People,  and 
subversive  of  the  State  sovereignties.  Twenty  years  ago,  Congress,  in  express 
violation  of  the  constitution,  incorporated  a  bank,  called  the  Bank  of  the 
United  States,  to  continue  twenty  years,  which  will  expire  the  3d  of  March. 
It  was  granted  by  those  principally  who  have  assumed  the  name  of  federalists, 
and  who  advocated  the  incorporation  of  the  bank  as  constitutional,  upon  the 
odious  doctrine  of  implied  powers,  and  which  was  opposed  by  those  who  have 
since  supported  the  character  of  republicans;  this  very  measure  was  the  first 


ON  THE  IHLL  TO  RENEW  THE  CHARTER  OF   1791.  227 

that  laid  the  foundation  for  the  two  great  political  parties  who  have,  since  that 
period,  agitated  and  divided  this  country.  The  charter  granted  in  1791  will 
expire  the  3d  of  March,  and  the  stockholders,  and  those  under  their  in- 
fluence, have  petitioned  Congress  to  renew  the  charter  for  the  term  of  twenty 
years  more.  Will  we  encourage  this  moneyed  aristocracy,  and  continue  this 
privileged  order  in  the  bosom  of  our  country  twenty  years  longer?  They  have 
nad  the  exclusive  advantage  of  accumulating  wealth  and  'money  for  twenty 
years,  and  they  are  not  satisfied.  They  wish  a  renewal  of  their  charter  for 
twenty  years  to  come.  Thus,  sir,  the  present  Congress  have  before  them  the 
same  question  which  was  determined  in  1791,  viz.  to  incorporate  the  stock- 
holders of  the  United  States'  Bank  twenty  years  from  the  3d  of  next  March. 
We  are  absolved  from  all  obligations  on  this  subject,  but  those  of  duty  to  the 
People:  the  question  stands  on  its  original  merits  and  demerits:  for  the  lapse 
of  twenty  years  cannot  sanctify  a  breach  in  the  constitution,  nor  the  acquies- 
cence of  the  People  make  that  expedient  and  proper,  which  is  hostile  to  liber- 
ty, equality,  and  justice;  thus  absolved  from  all  obligations  to  promote  this 
institution,  from  such  considerations  as  have  been  urged,  I  am  to  consult  the 
goood  of  the  People. 

First,  to  incorporate  the  stockholders  of  this  bank,  and  thereby  continue  in 
existence  a  moneyed  aristocracy,  and  a  privileged  order  of  men,  is  a  violation 
of  the  constitution  of  the  United  States;  that  constitution  of  union  which  binds 
the  States  together,  and  which  we  are  individually  bound  to  support  by  a 
solemn  appeal  to  heaven. 

It  cannot  be  unpleasant  to  trace  back  to  its  source  the  union  of  the  States. 
It  brings  to  the  patriot's  mind  the  events  of  the  American  Revolution.  It  was 
in  this  glorious  Revolution  that  the  union  of  the  States  had  its  origin;  at  a  time 
when  we  were  distracted  by  domestic  faction,  and  threatened  with  a  foreign 
power,  when,  in  fact  we  were  invaded  by  a  British  army,  and  our  political 
existence  was  threatened.  Thus,  while  General  Washington  was  at  the  head 
of  our  forces  in  the  North,  the  sages  in  Congress  were  planning  articles  of 
confederation  as  early  as  June,  1776.  Before  the  declaration  of  independence, 
a  committee,  composed  of  a  member  from  each  State,  was  appointed,  to  draw 
up  articles  of  confederation  by  which  the  States  should  be  bound  to  each 
other. 

These  articles  of  confederation  were  finally  adopted  by  all  the  States  in 
1781,  until  which  time  Congress  was  the  type  of  union,  and  the  rallying 
point  for  the  States.  So  great  was  the  influence  of  these  men  who  conducted 
us  safe  through  the  Revolution.  This  summary  will  give  us  the  objects  of  the 
union  of  the  States.  It  was  not  for  the  purpose  of  interfering  with  State 
rights,  for  the  purpose  of  regulating  the  laws  of  credence,  ana  the  laws  of 
descents,  of  creating  county  court-houses  and  jails,  opening  State  and  county 
roads;  this  would  have  been  impossible;  it  would  have  been  an  assumption  of 
power  destructive  to  every  principle  of  independence.  It  was,  on  the  other 
hand,  for  the  great  and  mighty  objects  of  common  security  from  foreign  ene- 
mies and  domestic  treason  and  insurrection,  that  the  union  was  formed.  The 
objects  of  the  union  are  confined  to  those  great  matters  of  the  confederacy 
which  could  not  be  effected  by  a  single  State.  We  should,  therefore,  confine 
ourselves  to  these  objects  of  the  confederacy,  that  we  may  not  weaken  the 
bonds  of  union  by  a  usurpation  of  power  not  given  to  us  by  the  confederation; 
a  union  sacred  in  its  origin,  cemented  by  the  sufferings  of  the  States,  strength- 
ened by  habit  and  attection,  and  sacred  in  its  objects  of  common  security 
against  external  danger  and  internal  commotion.  The  articles  of  confede- 
ration being  the  first  written  bond  of  union,  let  us  examine  the  system  and 
point  out  its  defects,  that  we  may  more  easily  see  why  the  articles  of  con- 
federation were  abandoned  for  the  present  federal  constitution.  The  articles 
of  confederation  gave  to  the  old  Congress  the  powers  enumerated  in  the  pre- 
sent constitution.  The  objects  of  both  instruments  were  the  same,  the  pow- 
ers principally  the  same,  but  different  in  the  execution  of  those  powers.  The 
powers  of  confederation  were  federal  in  extent,  and  federal  in  their  operation. 
The  resolves  of  Congress,  therefore,  under  the  articles  of  confederation,  had 


BANK   OF  THE    UNITED    STATES. 

no  other  force  than  recommendations  to  the  different  States.  If  men  were 
wanting,  the  States  were  required  to  furnish  their  quotas.  If  Congress  want- 
ed money  for  the  great  objects  of  union,  they  could  lay  and  collect  no  tax; 
they  could  only  recommend  to  the  States  severally  to  furnish  the  requisition. 
But  Congress  had  no  power  to  force  the  States  to  a  compliance.  And  the 
States  could,  as  many  of  them  did,  refuse  to  furnish  the  requisition  of  men 
and  money  demanded  by  Congress;  thus  the  powers  of  the  United  States 
were  federal  in  extent  and  federal  in  their  operation.  The  old  Congress  had 
no  judiciary,  because  that  would  have  been  unnecessary,  as  their  resolves 
could  not  be  enforced  upon  the  States  in  their  sovereign  capacity,  or  upon  the 
property  or  persons  of  individuals.  In  this  state  of  things,  when  commerce 
languished,  when,  under  British  influence,  we  were  engaged  in  a  bloody  In- 
dian war,  and  our  ports  and  frontiers  in  British  possession,  and  the  States 
refusing  to  furnish  men  and  money,  and  comply  in  all  things  with  the  resolves 
of  Congress,  although  under  constitutional  obligation  to  do  so;  it  was  agreed, 
by  all,  that  the  articles  of  confederation  wanted  revision  and  amendment; 
the  States  sent  their  deputies  for  the  purpose  of  forming  a  more  perfect  instru- 
ment of  union  between  the  States.  This  was  a  great  and  a  delicate  trust. 

Thus  the  present  constitution  originated  from  the  defects  of  the  confedera- 
tion— embracing  the  same  great  objects  of  common  security;  and  the  power 
of  both  instruments  are  limited  and  federal.  In  fact,  they  are  both  a  grant  of 
specified  powers,  and  powers  not  granted  to  Congress  are  reserved  to  the 
States  or  to  the  JPeople.  We  discover  the  same  objects  and  powers  in  the 
two  instruments  of  union;  differing  in  their  operation  upon  the  States  and  the 
People.  Congress  has  the  power  to  lay  and  collect  taxes,  and  to  operate 
upon  the  person  and  the  property  of  every  individual  in  the  United  States,, 
and,  with  that  view,  federal,  judicial,  and  executive  branches  were  establish- 
ed, by  the  present  constitution,  to  carry  the  laws  into  effect,  and  to  appoint 
officers  to  collect  the  revenue.  Congress  has  a  right  to  raise  an  army  from 
the  body  of  the  People,  and  to  force  a  draught  if  necessary,  whereas  the  old 
Congress,  under  the  confederation,  had  the  same  right  to  require  men  and 
money  for  the  objects  of  the  Confederacy;  but  these  requisitions  operated  only 
as  recommendations  to  the  States.  From  this  statement  we  plainly  discover 
the  great  and  only  radical  difference  between  the  confederation  and  the  pre- 
sent constitution.  The  powers  now  exercised  by  Congress  can  be  enforced 
upon  the  persons  and  property  of  the  People.  This  operation,  and  carrying 
into  effect  the  powers  of  Congress,  is  the  national  and  consolidating  princi- 
ple of  the  constitution. 

Although  experience  had  proven  the  want  of  power  in  Congress  to  carry 
into  effect  the  legitimate  objects  of  the  confederation,  this  national  or  consoli- 
dating principle  in  the  federal  constitution,  was  a  subject  of  alarm  and  solici- 
tude to  the  friends  of  liberty.  This  principle  was  the  fruitful  source  of  the 
most  obstinate  and  rational  objections  to  the  adoption  of  the  federal  constitu- 
tion; and  it  was  with  vast  difficulty  that  the  States  adopted  it.  In  fact,  it  was 
adopted  under  a  conviction  and  promise  that  amendments  would  be  made, 
which  would  leave  nothing  to  doubt  or  implication,  and  important  amend- 
ments were  engrafted  accordingly  into  the  constitution,  all  tending  to  demon- 
strate that  we  were  to  assume  no  power  by  implication,  but  confine  ourselves 
to  the  letter  of  the  constitution. 

To  prove  that  the  constitution  should  be  thus  construed,  I  need  only  advert 
to  the  8th  section  of  the  1st  article,  in  which  the  powers  granted  to  Congress 
are  specifically  enumerated,  to  lay  and  collect  taxes,  to  borrow  money,  to 
regulate  commerce,  to  establish  a  uniform  rule  of  naturalization,  to  coin  mo- 
ney, to  constitute  courts  of  justice,  declare  war,  raise  armies,  to  call  forth 
the  militia,  &c.  And  to  the  10th  section  of  the  same  article,  where  certain 
powers  are  prohibited  to  the  States,  which  had  been  previously  vested  in  the 
Congress  of  the  United  States,  viz:  no  State  shall  enter  into  any  treaty,  al- 
liance, or  confederation,  nor  grant  letters  of  marque  and  reprisal,  coin  money, 
emit  bills  of  credit,  or  grant  any  title  of  nobility,  nor  lay  imposts  or  duties  on 
imports  or  exports,  or  lay  duties  on  tonnage,  keep  troops  or  ships  of  war  in 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

time  of  peace,  or  engage  in  war  unless  actually  invaded,  or  in  such  danger  as 
will  not  admit  of  delay,  ^.^-and  the  9th  amendment  in  these  words:    "  the 
enumeration  in  the  constitution  of  certain  rights,  shall   not  be  construed  to 
deny  or  disparage  others  retained  by  the  People;"  which  amendments  refer 
to  the  prohibitions  to  be  found  in  the  9th  section  of  the  1st  article,  and  others 
of  the  same  kind,  viz:    "The  writ  of  habeas  corpus  shall  not  be  suspended 
unless  when,  in  cases  of  rebellion  or  invasion,  the  public  safety  may  require  it. 
No  bill  of  attainder  or  ex  post  facto  law  to  be  passed.     No  tax  or  duty  shall 
be  laid  on  articles  exported  from  any  State.    No  money  shall  be  drawn  from 
the  public  treasury  except  in  cases  of  appropriation  by  law.     No  title  of  no- 
bility shall  be  granted,"  &c.     And.  more  especially,  the  10th  amendment, 
viz:  "The  powers  not  delegated  to  the  United  States  by  the  constitution, 
nor  prohibited  by  it  to  the  States,  are  reserved  to  the  States,  respectively,  or 
to  the  People."    The  parts  of  the  constitution  recited  prove  the  position 
taken,  that  the  constitution  is  a  grant  of  specified  powers;  that  we  can  exer- 
cise no  power  not  expressly  delegated  to  us  by  this  instrument;  that  our  orbit  is 
circumscribed  by  the  grants  of  the  constitution,  and  we  should  be  careful  not 
to  usurp  authority  not  given  to  us.    The  exercise  of  authority  not  delegated, 
but  reserved  to  the  States,  or  to  the  People,  is  the  very  essence  of  consolida- 
tion, which,  if  enforced  by  the  United  States,  would  lead  to   monarchy  or  a 
despotism.      If  not  enforced,  it  would  convulse  the  whole  nation,  and  we 
should  see  the  People  quitting  their  daily  avocations;  the  fanner  his  plough, 
the  mechanic  his  shop,  to  remonstrate  against  a  tyrannical  exercise  of  power. 
This  we  have  seen  on  former  occasions,  not  less  memorable  than  this,  arising 
from  the  same  doctrine  of  implication,  and  arising  from  the  acts  of  the  very 
same  set  of  men.    The  harmony  of  the  States  should  not  be  disturbed.     It 
should  not  be  agitated  by  the  breath  of  discontent.     Its  value  is  more  precious 
than  gold  or  silver.    Tne  spirit  of  union  should  be  cherished  by  us  all  in 
words  and  in  actions.    Nothing  will  produce  more  happy  effects  than  keeping 
in  the  path  of  our  rightful  powers;  otherwise  you  generate  the  most  angry 
passions  of  the  People;  you  start  up  the  most  malignant  invectives— order  will 
be  disturbed,  and  tranquillity  will  be  interrupted.     To  produce  these  unfor- 
tunate effects,  nothing  can  contribute  more  than  to  disregard  the  enumerated 
powers  in  the  constitution,  and  exercise  tyrannical  powers  by  implication,  or 
under  some  general  phrases,  such  as  the  "general    welfare;"  expressions 
which  contain  no  grant  of  power,  but  limited  and  explained  by  enumerated 
authorities;  by  which  construction  the  power  of  Congress  would  be  arbitrary 
and  unlimited,  as  Congress  would  take  upon  themselves  to  judge  \yhat  mea- 
sures would  promote  this  general  welfare.    I  wish,  on  this  occasion,  to  do 
justice  to  the  People  of  Kentucky,  by  asserting  their  inviolable  attachment  to 
the  Union,  more  especially  since,  in  this  House,  its  sacredness  has  been  pro- 
faned in  a  manner  not  to  be  forgotten.     If  the  People  of  the  West,  and  be- 
yond the  mountains,  have  any  political  idol,  it  is  the  union  of  the  States.    As  the 
bible  and  new  testament  are  dear  to  every  Christian  and  true  believer,  as  the 
basis  of  his  happiness  here,  and  the  foundation  of  his  future  hopes;  so  the 
union  of  the  States,  in  a  political  point  of  view,  is  considered,  by  the  People, 
as  the  surest  pledge  for  the  blessing  of  liberty,  and  the  security  we  enjoy,  and 
the  ark  of  our  future  hopes  and  safety.     Their  union  is  never  profaned  by 
conversations  or  speculations  about  disunion.    You  never  hear  disunion  men- 
tioned in  private  circles,  much  less  in  public  bodies.     A  professor  of  religion 
to  deny  the  existence  of  an  over-ruling  Providence,  would  not  be  more  dis- 
graced, in  the  estimation  of  the  real  Christian,  than  a  statesman  would  be  dis- 
graced, politically,  by  even  doubting  the  advantages  of  the  union  of  the  States. 
The  word  disunion,  as  applied  to  the  States,  would  produce  a  heart-rending 
pang  in  the  bosom  of  a  Western  patriot,  and,  I  hope  it  would,  throughout  the 
seventeen  United  States  and  their  territories. 

The  people  are  republican,  and  they  abhor  all  measures  of  a  monarchical 
tendency — they  know  the  United  States  have  been  governed  alternately  by 
the  two  great  political  parties  in  this  country;  they  have  a  regard  for  and  a  con- 
fidence in  the  republican  party;  this  regard  is  not  confined  to  the  western 


230  BANK  OF  THE  UNITED  STATES. 

States,  but  extended  to  every  part  of  the  United  States.  They  believe  that 
truth  and  equal  justice  will  prevail,  where  the  opportunity  is  equal,  and  where 
the  People  do  exercise  the  powers  of  sovereignty.  The  People  represent,  and 
in  fact  the  whole  of  the  States  have  confidence  in  every  part  of  the  United 
States.  As  a  People  they  cherish  and  harbor  no  jealousy  about  large  and  small 
States,  of  commercial  monopolies,  &c.  Nor  are  they  thus  attached  to  the 
Union  from  selfish  and  interested  motives;  no,  sir,  their  attachment  to  the 
Union  arises  from  a  noble  and  generous  affection,  a  magnanimous  and  disin- 
terested display  of  patriotism,  and  love  of  independence;  we  have  given  many 
proofs  of  this.  At  a  time  when  this  People  were  agitated  and  alarmed  at  the 
prospect  of  having  some  of  their  most  essential  rights  interrupted,  and  when 
they  declared  their  determination  to  support  those  rights,  the  gold  and  silver 
of  Spain,  in  the  hands  of  Spanish  emmissaries,  could  not  alienate  the  affec- 
tions of  this  People,  with  all  the  influence  of  arch  intriguers;  and  the  treason 
of  Aaron  Burr  had  as  little  effect  upon  the  minds  of  this  virtuous  and  happy 
People;  and  any  other  attempt  would  be  as  vain,  however  well  matured.  I 
feel  the  consolation  which  arises  from  a  knowledge  that  I  represent  in  part 
such  a  People,  whose  affections  cannot  be  estranged  from  the  great  American 
family,  by  promises  of  future  greatness,  the  hopes  of  golden  harvests,  or  the  ex- 
pectations of  governing  provinces  with  the  silver  mines  of  Mexico.  With 
these  sentiments,  I  am  now  to  examine  for  the  particular  parts  of  the  consti  • 
tution  and  the  arguments  which  have  been  advanced  to  justify  this  measure. 
It  is  not  contended  by  any,  that  the  power  of  incorporation  is  an  express 
power  given  by  the  constitution  to  the  Congress  of  the  United  States,  beyond 
this  ten  miles,  over  which  Congress  has  exclusive  legislation.  If  then  this 
power  is  not  expressly  given,  I  might  here  stop  and  deny  the  right  to  exercise 
it.  So  far  from  finding  any  express  clause  in  the  constitution,  giving  this 
power,  the  word  corporation  or  bank  cannot  be  found  in  any  part  of  this  in- 
strument of  our  Union. 

We  have  seen  the  exercise  of  great  abilities,  and  we  have  been  entertained 
with  great  research  by  those  who  advocate  the  renewal  of  this  charter;  but,  un- 
fortunately, these  gentlemen  cannot  agree  among  themselves.  Is  this  not  the 
strongest  proof  that  the  power  to  incorporate  this  bank  is  not  given  by  the  con- 
stitution, and  does  it  not  demonstrate  the  danger  of  constructive  powers?  One 
has  contended  that  this  power  was  inclusive  in  some  of  the  specified  powers; 
another  has  contended  that  this  power  is  given  by  implication;  and  a  third 
contends,  that  it  is  an  incidental  power  given  to  carry  some  specified  power 
into  operation.  This  is  not  all;  the  advocates  cannot  agree  upon  the  speci- 
fied power  in  the  constitution,  out  of  which  this  power  or  means  arises.  One 
has  contended  that  the  power  to  lay  and  collect  taxes  gives  this  powrer,  as  a 
means  to  execute  the  specified  povyer;  and  to  support  this  position,  it  has  been 
contended  that  this  national  bank  is  necessary  and  proper,  as  a  means  to  lay 
and  collect  taxes,  duties,  &c.  To  strengthen  this  construction,  that  part  of 
the  8th  section  of  the  first  article,  which  says  that  "  Congress  shall  have 
power  to  make  all  laws  which  shall  be  necessary  and  proper  for  earring  into 
execution  the  foregoing  powers,"  &c.  has  been  resorted  to;  another  has  said  that 
this  instrumental  power  grows  put  of  the  express  power  to  borrow  money; 
and  a  third,  that  this  power  was  incident  to  the  power  to  regulate  commerce, 
and  in  fact  these  three  great  objects  are  embraced  by  the  preamble  of  the  bill 
which  piassedin  1791,  which  incorporated  this  moneyed  aristocracy  and  erect- 
ed a  privileged  order  of  men.  With  respect  to  the  declaration  in  the  con- 
stitution, that  Congress  may  make  all  laws  necessary  and  proper  to  carry  the 
express  powers  into  effect,  I  should  state  that  the  framers  of  the  constitution 
intended  by  this  declaration  to  prevent  the  doctrine  of  implication,  and  to 
leave  nothing  to  doubt.  It  was  introduced  through  abundant  caution  against 
the  strides  of  usurpation,  and  it  should  be  the  last  clause  to  which  he  should 
advert,  upon  which  to  build  the  doctrine  of  unlimited  means,  to  carry  the  ex- 
press powers  of  the  constitution  into  effect.  If  our  means  are  unlimited,  our 
powers  need  not  be  defined;  because  one,  as  much  as  the  other,  is  a  destruction 
of  our  freedom  and  independence.  I  shall  contend,  that  the  means  by  which 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791. 

we  are  to  carry  into  effect  any  express  authority  should  be  adapted  to  the 
end  in  view;  that  it  should  not  embrace  other  objects,  not  contemplated  by  the 
constitution,  although  it  may  be  made  instrumental  in  carrying  into  effect  a 
specified  authority.  Under  this  cloak  we  might  conceal  our  usurpation  of 
power. 

I  will  ask  if  this  national  bank  is  necessary  and  proper,  as  a  mean  to  carry 
into  effect  the  power  to  lay  and  collect  taxes,  duties  on  imports  &c.  to  borrow 
money,  or  to  regulate  commerce.  If  necessary  and  proper,  is  this  bank  con- 
fined to  any  one  of  these  objects,  exclusively,  or  to  all  collectively;  or  does  it 
embrace  a  vast  variety  of  other  objects,  which  are  the  primary  ones,  in  fact,  of 
this  institution,  and  only  embracing  these  powers  in  the  constitution,  incident- 
ally and  as  secondary  considerations?  Sir,  it  will  be  difficult  to  convince  the 
People  that  it  is  necessary,  in  the  language  of  the  constitution,  to  create  a 
moneyed  aristocracy  and  a  privileged  order  of  men,  extending  its  branches,  its 
influence,  and  its  strength,  into  the  interior  of  every  State,  to  collect  taxes, 
to  borrow  money,  or  to  regulate  commerce.  The  primary  object  of  this  in- 
corporation was  to  promote  usurpation  of  power,  to  support  the  dangerous 
doctrine  of  implication,  and  to  amass  wealth  fromthe  labor  of  the  People,  and 
not  for  the  exclusive  object  of  carrying  into  effect  any  express  authority  in  the 
constitution.  Thus,  it  is  evident  that  this  moneyed  aristocracy,  embracing 
such  avast  variety  of  objects,  no  ways  connected  with  the  execution  of  any 
specific  grant  of  power,  that  it  departs  from  the  letter  and  meaning  of  that  part 
of  the  constitution  which  gives  the  power  to  carry  into  effect  the  specified 
powers  of  the  constitution.  But  now  let  us  inquire  what  is  the  necessary 
means  to  lay  and  collect  taxes.  If  a  bank  was  not  intended,  I  will  take  du- 
ties upon  imports,  us  in  that  way  we  collect  our  revenue.  First,  a  law  must 
pass  designating  the  articles  upon  which  ii  duty  shall  be  laid,  the  amount  of 
that  duty,  and  the  manner  in  which  it  shall  be  paid,  either  upon  the  delivery 
of  the  goods,  or  upon  a  credit,  by  giving  bond  with  security,  and  last,  to  ap- 
point collectors  of  the  revenue  and  other  ofticers  to  collect  and  receive  this  re- 
venue for  the  United  States,  with  authority  to  bring  suit  upon  failure  of  pay- 
ment. This  is  a  necessary  exercise  of  the  power  to  lay  and  collect  taxes,  &c. 
And  where  is  the  statesman  who  has  denied  the  power  as  unconstitutional? 
Here  these  means  are  confined  to  the  object  in  view,  the  collection  of  reve- 
nue, and  certainly  the  United  States  have  power  sufficient  for  all  the  objects 
of  the  confederacy,  as,  in  the  exercise  of  all  the  specific  grants  of  authority, 
Congress  may  operate  upon  the  person  and  property  of  the  individuals  of  the 
States  to  enforce  that  authority. 

It  is  no  argument  with  me,  that  we  are  in  prosperity  and  health,  and  such 
an  institution  will  not  be  dangerous.  No,  sir,  establish  a  precedent  in  the 
days  of  prosperity,  and  it  will  come  upon  you  in  the  hour  of  adversity.  This 
same  doctrine  of  our  being  unlimited  in  our  means  of  carrying  into  effect  the 
grant  of  powers  in  the  constitution,  has  already  endangered  the  liberty  of  this 
nation.  If  the  doctrine  contended  for  on  this  occasion  be  correct  and  carried 
into  full  force,  Congress  would  be  as  omnipotent  as  the  parliament  of  Great 
Britain— the  constitution  would  no  longer  restrain  us — and  the  independence 
of  this  nation  would  depend  upon  the  caprice  of  Congress — our  constitution 
would  be  like  the  boasted  constitution  of  Englishmen;  and  what  is  that  con- 
stitution? Sir,  it  is  not  lettered  or  defined  like  ours.  It  may  be  changed 
by  parliament,  as  the  crown  party,  or  the  people,  shall  prevail.  1st.  The  great 
charter  of  liberty,  obtained  from  King  John,  violently,  and  in  duress,  declar- 
ing what  should  be  considered  the  fundamental  laws  of  England.  3d.  A  sta- 
tute in  confirmation  of  the  great  charter,  making  provisions  to  read  the  same 
to  the  people  in  their  churches  and  public  places,  semi-annually.  3d.  A  num- 
ber of  statutes,  called  the  conforming  statutes,  from  the  reign  of  Edward  I. 
to  Henry  IV.  4th.  Next  the  petition  of  rights,  a  declaration  by  parlia- 
ment of  the  liberties  of  Englishmen,  extorted  from  Charles  the  first,  before  the 
rupture  with  his  parliament.  The  habeas  corpus  act,  in  the  reign  of  Charles 
II.  6th.  The  bill  of  rights,  and  declaration  of  lords  and  commons  of  Eng- 
land, in  1688.  7th.  The  act  of  settlement  at  the  commencement  of  the  18th 


BANK  OF  THE  UNITED  STATES. 

ceniury,  endeavoring  to  secure  the  English  subject  in  his  personal  liberty,  se- 
curity, and  property.  These,  and  the  like  parliamentary  declarations  and  sta- 
tutory provisions,  constitute  the  constitution  of  England,  which  the  same  par- 
liament has  a  right  to  alter  or  abolish.  I  never  wish  to  see  Congress  invested 
with  a  power  to  change  the^  constitution,  sanctioned  by  the  People  in  their 
highest  sovereign  capacity.  The  constitution  has  vested  us  with  power  enough, 
and  if  we  want  more,  amend  the  constitution  in  a  constitutional  way,  and  not 
tyranically  exercise  power  never  delegated  to  this  body.  The  ground  on 
which  we  stand  is  delicate,  and  the  duty  we  owe  the  People  should  teach  us 
caution,  more  especially  when  we  see  men  in  power  too  apt  to  grasp  at  more, 
and  exercise  it  oppressively.  We  should  never  forget  that  all  power  flows 
from  the  People;  they  are  sovereign — I  hope  they  will  ever  remain  sovereign 
in  this  country.  Our  safety  is  with  them.  They  are  unambitious,  they  are 
virtuous,  and  have  no  temptation  to  overturn  those  liberties  which  they  them- 
selves enjoy.  But  this  measure  is  a  violation  of  the  constitution  in  another  re- 
spect, by  interfering  with  State  rights.  This  corporation  can  send  a  branch 
bank  to  any  part  of  the  United  States,  without  consulting  the  States  or  the 
citizens  of  the  States.  Suppose,  sir,  they  should  send  one  of  these  branches 
to  Frankfort,  Kentucky,  with  a  great  capital,  and  under  the  sanction  of  the 
General  Government,  would  it  not  lessen  the  profits  arising  to  the  State,  and 
to  the  People  of  the  State,  from  the  State  bank  of  Kentucky,  as  established  by 
the  laws  of  that  State?  I  presume  it  would.  It  would  contract  very  mucn 
the  circulation  of  the  State  bank  notes,  and  would,  in  many  other  respects, 
come  in  collision  with  State  rights.  Every  State  has  aright  to  regulate  its  own 
moneyed  concerns;  to  incorporate  banks  or  not,  as  interest  or  inclination  may 
dictate.  But,  in  the  zeal  of  some  gentlemen,  to  continue  this  moneyed  aristoc- 
racy in  the  United  States,  for  twenty  years  to  come,  they  have  denied  the 
right  of  the  States  to  incorporate  banks,  and  that  Congress  alone  has  the  power. 
This  doctrine  is  new  to  me.  When  Mr.  Madison  and  other  patriotic  states- 
men denounced  this  measure,  as  unconstitutional,  in  1791,  it  was  not  contend- 
ed that  the  States  had  no  right.  It  was  admitted,  by  the  lovers  of  implication., 
that  there  was  a  concurrent  right.  Thus  we  behold  the  progress  of  opinion  to 
support  a  favorite  measure. 

If  this  bill  passes,  and  the  States  have  no  right  to  incorporate  banks,  I  sup- 
pose the  State  banks  throughout  the  United  States  must  be  put  down  or  burnt 
up,  to  give  way  to  this  great  engine  of  foreign  influence.  "The  States  shall 
not  emit  bills  of  credit."  This  is  the  prohibition  relied  on  to  take  the  right  of 
incorporation  from  the  States.  Bills  of  credit  is  another  phrase  for  paper 
money.  The  States  shall  not  issue  paper  money  and  make  it  a  legal  tender. 
The  men  of  the  Revolution  know  this.  The  great  calamity  which  individuals 
suffered  by  the  paper  money,  demonstrated  the  necessity.  But  no  man  is 
obliged  to  take  the  bank  notes  of  a  State  bank,  for  the  payment  of  a  debt,  or 
in  common  transactions.  It  is  at  his  option,  and  the  moment  you  get  a  bank 
note,  you  may  present  it  to  the  bank  and  demand  your  money.  Not  so  with 
bills  of  credit  or  paper  money,  issued  and  made  such  by  the  State.  It  would 
be  extremely  difficult,  I  presume,  for  any  gentleman  to  convince  the  States  by 
argunient,  that  they  had  no  right  to  incorporate  banks,  and  it  would  be  equal- 
ly difficult  to  force  the  States  to  destroy  their  local  banks  for  the  United 
States  Bank,  owned  principally  by  foreigners.  Not  only  the  bank,  in  its 
moneyed  operations,  would  interfere  with  State  rights;  but.  the  rules  and  regu- 
lations of  the  bank,  as  heretofore  established  by  Congress,  have  interfered  with 
the  laws  of  the  several  States  in  these  municipal  regulations,  as  to  the  tenure 
of  property,  and  the  liability  of  the  corporation  to  pay  their  debts. 

Mr.  Speaker,  I  have  said  as  much  as  I  conceive  it  my  duty,  upon  the  uncon- 
titutionality  of  the  bank  charter.  I  am  to  ask  your  indulgence,  while  I  endea- 
vor to  prove  its  inexpediency,  and  its  dangerous  tendency  to  the  freedom  of 
this  nation.  In  the  hand  of  a  private  citizen  wealth  will,  at  all  times,  have  its 
influence,  and  may  attach  to  him  an  importance  beyond  his  merits.  But  this 
influence  is  not  so  dangerous  as  to  induce  a  government  to  interpose  and  li- 
mit the  honest  accumulation  of  property  by  any  citizen.  And  though  this 


t)N   THE  BILL  TO  RENEW  THE  CHARTER  OF    1791. 

wealth  may  have  its  influence,  it  is  always  limited.  It  may  frequently  be  in 
the  hands  of  the  benevolent  man:  and,  if  not  of  this  character,  this  vast  wealth 
..seldom  survives  the  death  of  the  individual  proprietor.  It  is  either  divided 
<imong  numerous  relations,  or  squandered  by  his  heir.  But  not  so  vvith  a  body 
corporate,  extended  thoughout  this  vast  empire,  pssesed  of  a  capital  of  ten 
millions  of  dollars,  and  extending'their  credit  and  accommodations  to  double 
that  sum,  notwithstanding  their  limit  to  ten  millions.  It  is  stated  by  an 
advocate  for  this  bank,  that  the  stockholders  commenced  their  discounts  with  - 
-about  G25.000  dollars,  and  that,  upon  this  sum,  they  discounted  to  the  amount 
of  6,000,000  of  dollars  the  first  ten  months  after  it  went  into  operation.  To 
divide  this  10  millions  or  -20  millions  of  capital  in  local  or  state  banks,  no  se- 
rious danger  could  be  apprehended,  because  the  stockholders  of  one  institu- 
tion would  be  strangers  to  all  the  other  stockholders;  so  of  the  directors  of  the 
different  local  institutions,  and  consequently  there  could  be  no  combination 
betwen  the  different  banks.  But  it  is  otherwise,  and  the  danger  is  imminent, 
when  you.  by  act  of  the  General  Government,  give  unity  of  action,  unity  of  will, 
and  unity  of  strength,  to  a  moneyed  arUtocray,  vested  with  a  capital  of  ten 
millions  of  dollars,  with  power  to  increase  their  accommodation  to  twenty 
millions,  and  to  send  their  branch  banks  into  the  bosom  of  every  .State  and  terri- 
tory, Thi.>  i-.  not  all:  your  revenue  bonds,  to  the  amount  of  millions,  are  de- 
posited with  this  bank  for  collection,  and  the  public  money  deposited  in  this 
bank  to  the  amount  of  millions  for  safe  keeping,  and  (heir  notes  made  pay- 
able to  the  United  Slates  the  -ame  as  gold  and  silver.  Sir,  is  there  no  dan- 
ger in  such  a  monster/fbstered  by  the  General  Government,  and  possessing  so 
many  advantages  by  the  laws  oV  CongivsN?  Such  a  bank,  in  its  beginning, 
would  confine  n-  engagements  to  the  m»aiis  of  payment — but  as  their  credit 
increases,  they  engage  beyond  their  means:  then-  vaults  are  empty,  ^and  the 
institution  relies  upon  ite  great  credit  and  exclusive  privileges.  Thus  the. 
character  of  the  bank  is  changed, and  it  becomes  a  system  of  Speculation, and 
a  political  engine  to  destroy  virtuous  individuals,  cr  mould  the  Government  to 
its  notions. 

I  have  no  knowledge  myself  aboul  Hie  political  workings  of  this  United  - 
States'  Hunk.  But  if  I  were  to  believe  the  declarations  of  members  on  this 
floor,  and  complaints  from  every  part  of  this  continent,  I  must  think  that  this 
institution  has  not  been  silent  and  indifferent  spectators  to  the  reform  of  the 
administration  to  republican  principles — but  they  have  endeavored  to  support 
that  party  who  gave  them  a  charter.  I  do  not,  however,  introduce  this  as  a 
conclusive  argument  against  this  bank.  No,  sir,  I  would  equally  object  to  it 
in  the  hands  of  republicans.  It  would  still  be  a  moneyed  aristocracy,  too  vast 
and  too  powerful  not  to  be  dangerous  to  the  freedom  of  the  United  States.  But 
without  these  declarations'of  political  influence  exercised  by  the  stockholders 
and  directors  of  these  banks,  our  own  reason  would  teach  us  to  believe  all  we 
have  heard  of  the  oppression  and  partiality  of  this  bank.  It  is  composed  of 
individuals:  these  individuals  have  their  passions,  their  feelings,  their  preju- 
dices, their  partialities,  and  their  politics,  and  they  will  act  acordingly.  Self- 
rvation  will  always  induce  tnem  to  support  and  keep  in  power  the  party 
who  will  be  most  freindly  to  moneyed  aristocracies  and  their  own  institution. 
The  influence  of  this  bank  is  palpable  and  notorious.  We  have  the  evidence 
from  the  long  roll  of  petitioners  now  imploring  Congress  to  renew  the  charter. 

If  in  twenty  years  this  bank  is  to  be  the  idol  of  some  and  the  alarm  of  others 
—if  the  solvency  of  so  many  individuals  depend  on  it — if  ruin  and  devastation 
will,  in  the  event  of  its  dissolution,  spread  wide  in  the  country — then,  sir,  it  will 
only  require  twenty  years  more  to  make  it  stronger  than  the  Government. 
To  induce  us  to  vote  for  this  institution,  we  have  been  persuaded,  flat-  • 
tered,  alarmed,  petitioned,  and  threatened,  and  we  have  been  amused  with  the 
rise  and  history  of  the  banking  system.  It  originated  in  Italy,  it  has  travelled 
through  Europe,  crossed  the  British  channel  to  Great  Britan,  and  lastly,  it 
crossed  the  wide  Atlantic  to  America.  And  much  has  been  said  of  the  utility 
of  those  institutions.  Without  dwelling  upon  the  utility  of  banks  at  present. 
J  could  only  admit  them  as  a  necessary  evil,  and  not  dangerous,  if  left  to 
SO 


BANK   OF   THE  UNITED    STATES. 

the  control  of  our  State  Governments.  But  the  history  of  those  banks  which 
have  been  quoted,  will  furnish  no  argument  in  favor  of  a  national  bank. 

We  wish  no  political  engine  of  a  moneyed  aristocracy.  We  wish  to  rest 
upon  the  virtue  and  will  of  the  People. 

It  has  been  stated  that  Georgia  is  republican,  notwithstanding  this  mon- 
strous machine  has  extended  a  branch  bank  to  this  State;  and  it  is  stated  that 
Connecticut  is  federal,  and  has  no  Branch  Bank  of  the  United  States.  This 
does  not  prove  that  the  bank  is  not  a  dangerous  engine  against  the  liberties  of 
the  People;  but  it  proves,  that  the  People  of  Georgia  withstood  this  dangerous 
influence,  and  deserve  more  credit.  It  is  a  proof  of  the  virtue  of  that  Peo- 
ple. If  this  institution  is  so  necessary  and  beneficial,  why  do  not  the  repre- 
sentatives of  Georgia,  who  have  been  blessed  with  this  institution,  come  for- 
ward and  advocate  a  renewal  of  the  charter?  But  you  find  the  respectable 
memoers  of  Georgia  opposing  a  continuance  of  this  evil  in  every  form.  In 
fact,  the  State  of  Georgia  taxed  the  paper  of  this  bank,  and  the  State  was 
determined,  by  taxation  or  legislative  prohibition,  to  drive  this  circulating 
medium  from  their  territory.  But  considerations  of  wisdom  induced  a  post- 
ponement of  this  determination,  until  it  should  be  seen  whether  the  charter 
would  again  be  renewed,  in  violation  of  the  constitution,  and  in  defiance  of 
our  liberties.  My  colleague  (Mr.  McKEE)  whose  opinions  I  had  been  in  the 
habit  of  considering  as  my  own,  until  this  unfortunate  question,  which  divides 
us,  has  stated,  that,  in  his  opinion,  the  dissolution  of  this  institution  would 
be  felt  by  the  citizens  of  the  western  country,  and  that  our  surplus  hemp 
would  not  command  as  good  a  price,  1  dift'er  in  opinion  from  my  colleague, 
if  he  supposes  the  western  country  will  feel  any  great  pressure  from  the  dis- 
solution of  this  bank.  I  grant,  the  People  of  Kentucky  may  not  be  entirely 
exempt  from  some  inconveniences  common  on  such  an  event.  But  our  pro- 
duce will  fall  from  other  very  different  causes.  Interruptions  in  commerce* 
stagnation  in  trade,  bankruptcies  throughout  the  commercial  part  of  the  United 
States,  arising  from  the  bankruptcies  in  England,  which  have  occasioned  the 
return  of  many  bills  from  England  protested.  These  are  the  causes  which 
produce  distress,  and  will  continue  to  produce  it,  until  we  are  a  People  less 
dependent  on  foreign  commerce.  But  believing  as  I  do  on  this  subject?, 
viewing  the  effects  of  this  great  political  moneyed  institution  with  abhorrence, 
I  would  not  vote  it,  let  the  temporary  distress  be  what  it  may.  I  would  rather 
see  'the  present  crop  of  hemp  Drought  to  one  deposit e,  which  would  make  a 
bulk  larger  than  this  capitol,  and  consumed  with  a  lighted  torch,  and  ascend 
to  the  heavens  in  smoke  as  a  bonfire,  rather  than  vote  for  the  passage  of  this 
law;  and,  sir,  the  People  I  represent  would  justify  my  vote.  They  would 
bear  the  loss  without  a  murmur;  they  would  act  the  part  of  freemen  worthy 
of  freedom;  they  would  magnanimously  bear  the  calamity  without  complaint, 
if  their  patriotism  required  the  sacrifice.  They  are  a  most  worthy  People — a 
virtuous  People — an  enlightened  People — a  glorious  People — descendants  of 
this  great  American  family;  inheriting  that  spirit  of  independence  which 
equally  sustained  our  cause  under  defeat  and  victory,  upon  all  the  battle 
grounds  of  the  Revolution.  I  will  not  be  alarmed  out  of  my  vote  by  clamor, 
no  matter  from  what  quarter  it  may  assail  me.  I  never  will  be  driven  from 
my  duty  by  alarms  and  fears.  I  will  stand  firm  to  the  cause  I  conceive  to 
be  just,  and  the  People  will  support  me;  they  despise  wavering  and  tempo- 
rising. If  you  continue  this  charter  twenty  years  more,  you  can  never  put 
it  down.  No,  sir;  instead  of  having  petitions  which  would  reach  from  the 
speaker  to  the  seat  of  the  members,  'you  would  have  them  packed  upon  your 
table,  until  they  would  intercept  my  view  in  addressing  you.  Yes,  sir,  they 
would  rise  up  higher,  and  implore  that  goddess  of  liberty  which  presides  over 
the  deliberations  of  this  House.  We  are  told,  that  this  bank  is  necessary  to 
the  collection,  the  sate  keeping,  and  the  transmission  of  the  revenue,  to  dif- 
ferent parts  of  the  United  States.  It  is  stated  that  the  State  banks  are 
strangers  to  us,  and  cannot  be  trusted  with  the  deposite  of  public  money.  I 
am  sorry  to  hear  such  a  sentiment.  It  has  originated  from  a  panic,  an  alarm, 
an  ideal  danger.  That  great  and  good  man,  the  Secretary  of  the  Treasury,  has 


ON  THE   BILL  TO  RENEW   THE    CHARTER   OP   1791.          235 

told  you  otherwise,  by  his  report  now  before  me,  of  date  12th  of  January,  in 
Which  it  appears  that,  of  about  2,460,000  dollars,  upwards  of  800,000  dollars 
ore  deposited  in  the  State  banks,  $75,000  of  which  are  deposited  in  the  State 
Bank  of  Kentucky,  ami  I  should  be  sorry  if  it  was  not  as  safe  there,  as  in  the 
hands  of  the  United  States'  Bank,1  in  the  possession  of  foreigners:  if  tState 
banks  will  not  do,  let  the  United  States  build  vaults  lor  the  safe  keeping  ot 
the  revenue. 

But,  sir,  the  alarming  consequences  which  imi*i  arise  from  a  dissolution  of 
this  corporation.  It  will  deprive  us  of  a  circulating  medium;  it  will  interrupt 
-commerce  ami  produce  bankruptcies.  It  is  to  produce  the  distress  of  farmers 
r.nd  the  ruin  of  merchants;  it  is  to  prevent  emigration ;  and  it  is  to  shake 
the  foundations  of  the  Government,  This  .picture  gives  me  no  alarm.  It  is 
the  picture  of  a  wild  and  distempered  imagination.  If  serious  injury  will  be 
felt  by  many  in  the  power  of  this  moneyed  aristocracy,  I  feel  and  sympathise 
with  the  sufferings  of  those  who  may  be  needy  without  any  fault  of  their  own; 
but  something  is  due  to  posterity;  :ind  even  in  that  point  of  view,  I  am  not 
willing  to  entail  upon  them  the  baneful  effects  of  a  great  moneyed  corporation, 
with  a  capital  of  twenty  millions  of  dollars,  extending  their  arms  of  power  and 
influence  to  every  part  of  the  United  States,  and  having  the  destiny  of  good 
men  within  their  control,  whenever  they  receive  the  nod  to  exercise  their  giant 
power.  No,  sir,  I  am  ready  to  see  ancl  feel  the  sad  crisis  which  has  been  de- 
scribed. If  we  die  with  less  money,  we  shall  live  in  more  honor  and  enjoy 
more  liappiness.  1  wish  to  see  whether  so  much  depends  upon  this  corpora- 
tion. If  so,  it  is  the  greater  reason  why  the  poison  should  be  destroyed.  Like 
the  strong  man  we  read  of  in  h:>ly  writ,  lot  us  see  if  the  violent  death  of  this 
corporate  body  will  pull  down  the*  pillars  of  the  constitution,  that  another  Vol- 
ney  may  sit  upon  the  ruins  of  this  capital,  and  mourn  the  fallen  empire  of  this 
great  and  happy  republic. 

MR.  SHEFFEV.— Mr.  Speaker:  It  was  my  intention  not  to  address  anv  obser- 
vations to  you  on  the  .-ubject  now  before  the  House,  but  reasons  whicn  I  can- 
not disregard  have  induced  me  to  request  your  attention.  I  am  confident, 
when  the  importance  of  the  question  is  considered — a  question  in  which  is 
involved  the  integrity  of  a  constitution  we  all  profess  to  adore,  and  the  pros- 
perity of  a  country  we  all  profess  to  love,  the  House  will  listen  to  every  thing 
that  can  be  said,  not  only  with  patience,  but  with  pleasure. 

I  have  been  led  to  make  the  remarks,  which  I  am  about  to  offer,  by  con- 
siderations distinct  from  the  intrinsic  merits  of  the  question.  In  the  vote 
which  I  shall  give,  I  shall  disagree  with  a  majority  of  my  honorable  colleagues, 
whose  opinions  are  entitled  to  my  respect.  The  sentiments  of  a  great  portion 
of  the  People  of  the  State  which  I  have  the  honor  in  part  to  represent,  so  far  as 
they  can  be  collected  from  the  opinions  of  her  Legislature  and  my  own,  do  not 
correspond  on  this  occasion;  arid  I  must  superadd,  that  no  question  ever  was 
presented  to  my  mind,  in  the  course  of  my  public  duty,  which,  at  first  view, 
appeared  attended  with  more  difficulty.  I  have,  therefore,  thought  it  proper 
to  state  the  reasons  of  my  vote  to  the  House,  to  enable  my  country  to  appre- 
ciate them,  and  my  constituents  to  interpose  their  corrective,  should  they 
deem  them  unsatisfactory. 

I  had  hoped  that  this  question  would  have  been  discussed,  and  determined, 
abstracted  from  all  party  considerations;  that  our  attention  would  have  been 
exclusively  directed  to  the  effects  of  this  measure  upon  the  community,  whose 
interests  are  committed  to  us;  and  our  solicitude  employed  to  keep  within  the 
limits  prescribed  by  the  constitution.  But  we  have  been  invited  to  a  differ- 
ent course.  My  honorable  colleague  (Mu.  EPPES)  told  us  the  other  day,  that 
we  need  not  expect  that  this  question  would  be  determined  on  any  other  than 
party  principles;  that  party  principles  gave  birth  to  the  charter  of  the  bank 
originally,  and  that  that  \vas  the  first  great  question  which  separated  the  two 
parties  in  this  country.  Was  the  fact  ever  conceded,  the  conclusion  does  not 
appear  to  me  inevitable  that  this  must  now  be  a  party  question.  At  that  time 
it  was  a  matter  of  speculation  and  conjecture,  what  means  would  be  "necessa- 


236  BANK  OF  THE  UNITED  STATES. 

ry  and  proper"  to  give  effect  to  the  delegated  powers  confided  to  this  Govern- 
ment. The  light  afforded  us  by  twenty  years'  experience  has  banished  them 
and  substituted  certainty  in  their  stead.  We  have  now  before  us  the  practi- 
cal operations  of  the  Government,  calculated  to  show  the  fallacy  ot 'reasonings 
founded  on  plausible  but  untried  theories.  With  these  means  within  their 
power,  it  does  not  appear  to  rue  that  those  act  inconsistent  with  their  former 
principles,  who  now  conceive  the  necessity  of  a  bank  as  an  instrument  to  car- 
ry on  the  fiscal  concerns  of  the  Government,  though  (unaided  by  the  best  of 
all  human  guides,  experience}  they  might  have  thought  different  in  the  infant 
state  of  an  operation. 

But  my  honorable  colleague  has  committed  an  error  in  point  of  fact  in  giving 
the  statement  to  the  House,  that  this  originally  wa*  a  party  question.  I  had 
taken  it  for  granted  that  the  fact  was  as  stated  by  him,  but,  on  recurring  to 
the  Journal  of  this  House  for  the  year  1791,  (which  I  hope  I  shall  be  par- 
doned in  receiving  as  better  evidence  than  his  declaration,  however  im- 
plicitly I  might  rely  on  him  on  other  occasions)  I  find  that  a  considerable 
portion  of  the  federal  members  voted  against4he  incorporation  of  the  bank,  and 
a  still  greater  portion  of  the  republicans  for  it ;  besides,  as  the  measure  was 
then  contested  on  the  ground  that  there  was  no  constitutional  power  in  Con- 
gress to  adopt  it,  which  always  involves  matter  of  conscience,  I  cannot  submit 
to  the  idea  that  one  political  party  exclusively  entertained  conscientious  scru- 
ples when  violence  was  threatened  the  constitution.  This  would  be  degrading 
one  half  of  the  American  People. 

[Mr.  EPPES  rose  to  explain.  He  said  he  apprehended,  from  the  various 
observations  which  had  been  made,  that  he  had  been  misunderstood  in  what 
he  said  a  few  days  ago.  He  meant  to  say,  that  there  were,  from  the  com- 
mencement of  the  Government,  two  opposite  opinions  entertained,  with  re- 
spect to  its  powers.  One  was,  that  they  were  strictly  conformed  to  the  ob- 
jects delegated ;  the  other  was,  that  there  were  certain  implied  powers  which 
the  Government  might  exercise,  that  did  not  appear  on  the  face  of  the  con 
stitution;  that  the  latter  opinion  gave  birth  to  the  alien  and  sedition  laws,  and 
the  stamp  act,  and  that  this  was  the  party  principle  he  meant,  which  gave 
birth  to  the  bank  charter.  As  to  conscience  being  monopolized  by  one  party, 
he  had  never  entertained  any  such  idea;  he  knew  men  of  the  federal  party, 
who  were  as  conscientious  as  he  was,  and  as  much  attached  to  the  welfare  of 
the  country.] 

Mr.  SHEFFEY  proceeded.  Mr.  Speaker,  I  dp  not  believe  that  my  honora- 
ble colleague  was  actuated  by  any  improper  motive,  in  making  the  declaration 
he  did.  During  the  time  I  have  been  associated  with  him  in  public  life,  I 
have  had  no  cause  to  believe  that  he  was  under  any  such  influence.  That  the 
opinions  stated  by  him,  existed  early  in  this  Government,  cannot  be  denied. 
They  are  attributable  to  very  obvious  causes.  On  the  one  hand,  those  who 
were  the  friends  of  the  constitution,  were  friendly  to  the  exercise  of  all  the 
legitimate  powers  confided  to  the  General  Government,  under  the  impression 
that  it  was  necessary  to  preserve  the  Union;  many,  indeed,  supposed  that  the 
powers  delegated  were  still  tro  feeble  to  secure  that  great  object,  unless  sup- 
ported by  a  very  extensive  and  liberal  construction.  On  the  other  hand,  there 
were  those  who  were  apprehensive  that  the  powers  of  the  General  Government 
were  of  a  character  calculated  to  swallow  up  the  State  authorities,  and  sub- 
vert the  rights  of  the  People.  These,  after  their  efforts  had  been  unsuccess- 
ful in  the  conventions  of  the  States,  on  the  adoption  of  the  constitution, 
brought  with  them  (with  the  best  intentions)  into  the  counsels  of  the  new  Go- 
vernment, their  solicitude  for  popular  rights  and  State  sovereignty,  without 
sufficiently  regarding  the  importance  of  the  Union,  and  the  means  necessary 
to  preserve  it;  and,  while  some  of  their  political  opponents  contended  for  a 
construction  which  produced  some  very  obnoxious  measures,  they,  if  success 
had  attended  their  efforts,  would  have  brought  the  Union  to  the  feeble  state 
in  which  the  old  confederation  had  left  it,  and  I  hesitate  not  to  declare,  by  this 
time,  we  should  have  been  a  divided,  distracted,  and  enslaved  People. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     327 

Much  has  been  said,  in  the  course  of  this  debate,  about  the  State  rights,  and 
the  offence  which  will  be  given  to  the  States,  should  this  measure  be  adopted. 
There  is  certainly  propriety  in  preserving  to  the  States  their  legitimate  au- 
thority, and  in  manifesting  a  jealousy  whenever  it  is  threatened  with  any  in- 
fraction; because  the  rights  of  the  People  are  then  in  jeopardy.  But,  let  it 
not  be  forgotten,  that  every  relaxation  on  the  part  of  this  Government,  weak- 
ens the  Union,  without  which,  the  rights  of  the  People  are  but  an  empty  name. 
8ir,  he  who  impairs  the  powers  properly  belonging  to  us,  is  as  much  the  ene- 
my of  the  People,  as  he  who  subverts  the  State  authorities  possibly  can  be;  he 
is  as  criminal,  who  weakens  in  the  least  degree,  the  bonds  which  unite  us,  as 
he  who  places  upon  our  necks  an  iron  yoke  to  keep  us  together. 

If  we  should  pursue  the  course  which  the  observations  of  some  gentlemen 
seem  to  recommend,  not  to  adopt  the  bill  before  you,  because  it  will  give  of- 
fence to  the  States,  and  bring  us  into  collision  with  them;  to  what  a  misera- 
ble state  must  this  Government,  and  consequently,  this  Union,  be  very  spee- 
dily brought?  It  is  in  the  nature  of  man  to  thirst  for  power,  and  to  employ 
all  his  means  to  obtain  it.  From  this  spirit,  the  State  Governments  are  not 
exempt;  but,  on  the  contrary,  we  have  abundant  reason  to  know  that  it  pre- 
vails there  in  an  eminent  degree.  Let  it  once  be  established  as  a  principle, 
not  to  exercise  any  particular  power,  because  it  is  disagreeable  to  some  of  the 
States,  and  I  pledge  myself,  that,  in  a  very  little  time,  you  will  not  be  able  to 
exercise  any  whatever.  You  will  have  to  recede,  step  by  step,  as  they  advance 
upon  you,  (which  they  will  be  sure  to  do)  until  you  possess  nothing  but  the 
shadow  of  authority;  and  this  Union,  the  last  and  be>t  hope  of  the  friends  of 
liberty,  must  dissolve  in  its  own  weakness.  Sir.  1  fear,  when  that  is  gone, 
there  never  will  be  sufficient  patriotism  and  unanimity,  nor  a  sufficient  por- 
tion of  a  conciliating  spirit,  to  reunite  us  in  any  form  of  government,  which, 
while  it  secures  to  us  the  principles  of  a  free  constitution,  has  sufficient  ener- 
gy to  maintain  itself.  The  consequences  are  easily  foreseen.  We  shall  be 
lo.-sed  about,  divided  and  distracted,  until  we  finally  share  the  destiny  of 
other  nations — seek  repose  from  the  evils  of  anarchy  in  the  arms  of  despotism. 

A  principle,  equally  untenable,  and  equally  productive  of  mischief,  has 
been  advanced  in  debate,  particularly  by  the  honorable  member  from  New 
York,  (Mr.  PORTER)  that  no  power  can  be  exercised  by  this  Government, 
which  interferes  with  the  remaining  powers  of  the  States.  Sir,  sonre  of  the 
pr unary  powers  confided  to  us.  are  concurrent  with  the  powers  of  the  States. 
Such,  for  instance,  is  the  power  of  internal  taxation.  Kvery  cent  which  we 
draw  from  the  citizen  by  virtue  of  that  power,  diminishes  his  ability  to  pay 
his  taxes  to  the  State  ot  which  he  is  an  inhabitant,  and,  consequently,  narrows 
the  circle  of  State  legislation.  And.  indeed,  cases  might  be  supposed,  where 
the  necessities  of  this  Government  required  taxes  commensurate  with  the  ut- 
most ability  of  the  People  to  pay,  which,  in  effect,  would  be  a  total  suspension 
of  the  power  of  the  States  to  lay  and  collect  taxes.  Yet,  can  it  be  pretended, 
that,  in  the  amount  of  public  contributions,  which  it  may  be  necessary  to  re- 
quire, we  are  limited  by  any  other  restriction  than  that  which  a  sound  discre- 
tion and  a  due  regard  to  the  welfare  of  the  community  imposes?  The  same 
principle  applies  to  the  means  which  may  be  necessary  to  carry  the  delegated 
powers  into  effect;  they  may  be  legitimate,  though  they  interfere  with  the  le- 
gislation of  the  States. 

Having  detained  you  thus  long  with  the  preliminary  remarks  which  f  iuid 
to  offer,  permit  me  now,  sir,  to  lead  your  attention  more  directly  to  the  sub- 
ject before  us. 

The  most  important  principle  involved  in  this  question,  is, whether  the  con- 
stitution has  delegated  to  us  the  power  to  legislate  upon  this  subject,  in  the 
manner  proposed.  It  is  admitted  on  all  sides,  that,  unless  that  power  exists, 
let  the  inconveniences,  and  even  calamities  which  will  follow  the  rejection  of 
this  bill,  be  what  they  may,  the  high  duty  which  we  owe  to  the  country,  not  to 
transcend  the  limits  prescribed  to  us,  is  superior  to  every  other,  and  must 
imperiously  lead  us  to  that  result.  In  order,  therefore,  to  approach  the  minor 
question  of  expediency,  it  is  necessary  to  ascertain,  whether,  by  a  rational 


«>38  BANK  OF  THE  UNITED  STATES. 

and  unbiassed  construction  of  the  constitution,  this  power  is  fairly  apparent, 
either  as  directly  or  indirectly  given — either  as  a  power  original  and  express, 
or  derivative  and  implied. 

It  has  never  been  contended  that  the  constitution  expressly  delegates  the 
power  to  create  banks;  but  that  such  institutions  may  be  established  as  instru- 
mental in  giving  effect  to  some  one  or  more  of  the  delegated  powers.  In  the 
course  of  the  observations  which  I  propose  to  submit  on  this  part  of  the  sub- 
ject, I  shall  attempt  to  prove  that  Congress  are  not  restricted  in  the  means 
to  execute  the  delegated  powers,  except  so  far  as  the  constitution  expressly 
restricts  them;  but  that  they  may  employ  any,  which  they  deem  "necessary 
and  proper •,"  without  violating  the  constitution. 

To  enable  us  to  give  correct  constructions  to  the  acts  of  individuals  and 
of  public  bodies,  it  frequently  becomes  important  that  we  should  consider  the 
time  in  which  they  happened,,  and  the  circumstances  under  \yhich  the  persons 
concerned  acted.  Tn  legislation  and  jurisprudence,  this  is  a  very  general 
maxim,  and  seems  to  me  peculiarly  proper  to  be  called  in  aid  on  the  present 
occasion.  It  will  afford  us  the  best  ideas  of  the  evils  under  which  this  coun- 
try labored,  when  the  constitution,  under  whose  authority  we  now  act,  was 
proposed  and  adopted,  and,  consequently,  of  the  extent  of  the  relief  which 
that  remedy  was  intended  to  give. 

Let  us,  then,  see  what  was  the  situation  of  this  country  at  that  period  of  our 
history,  and  what  were  the  causes  which  led  to  that  great  event.  It  was  not 
the  want  of  a  general  government  that  induced  the  People  of  the  United  States 
to  seek  security  in  the  present  constitution,  but  the  want  of  one  with  sufficient 
powers  for  the  purposes  of  union.  That  want  of  efficiency  which  character- 
ized the  confederation,  emphatically  styled  "  a  rope  of  sand,"  was  not  the 
effect  of  the  limited  subjects  confided  to  the  deliberations  of  Congress,  but  the 
limited  means  to  carry  their  determinations  into  effect.  On  recurring  to  that 
instrument,  it  will  be  seen,  as  has  been  stated  by  an  honorable  member  from 
Kentucky,  (Mr.  JOHNSON)  that  the  subjects  embraced  are  little  short  of  those 
vested  in  this  Government.  Congress  was  clothed  with  all  the  great  attri- 
butes of  sovereignty.  They  had  the  power  to  determine  on  peace  or  war;  to 
regulate  commerce  (through  the  medium  of  commercial  treaties)  with  foreign 
nations;  to  regulate  trade  with  the  Indian  tribes;  to  grant  letters  of  marque 
and  reprisal;  to  coin  money,  and  regulate  the  value  thereof;  to  raise  armies 
and  navies;  to  borrow  money  on  the  credit  of  the  United  States;  and  many 
other  powers  of  minor  importance.  Had  they  had  the  means  to  carry  their 
resolutions  into  effect  through  the  agency  of  their  own  executive  and  judicial 
authorities,  and  could  their  acts  have  reached  the  People,  instead  of  being  de- 
pendent for  their  execution  on  the  will  of  the  States,  1  venture  to  say  that  this 
constitution  would  not  have  been  proposed.  It  is  true,  that  the  organization 
of  the  Government,  under  the  confederation,  was  greatly  defective;  yet,  that 
was  not  the  cause  of  its  dissolution.  It  was  the  imbecility,  arising  from  the 
want  of  means,  in  the  old  Congress,  that  assembled  the  general  convention. 
It  was  that  which  produced  the  constitution  of  the  United  States,  the  primary 
object  of  which,  and  of  the  People  who  adopted  it,  was  to  place  into  the  hands 
of  the  new  Government,  means  commensurate  with  the  due  execution  of  all 
the  powers  confided  to  it.  Is  it  rational,  therefore,  to  suppose,  that,  under 
this  impulse,  under  the  pressure  of  the  evil  which  every  one  felt,  and  the 
cause  of  which  every  one  knew,  those  who  framed  and  adopted  this  instru- 
ment could  have  intended  that  we  should  be  circumscribed  in  the  means  deem- 
ed necessary  to  give  effect  to  our  measures,  or  (as  some  gentlemen  strangely 
suppose)  be  dependent  on  the  States  for  them  ?  Is  it  in  the  least  probable, 
that  the  men,  selected  for  their  wisdom,  perfectly  acquainted  with  the  pro- 
gress of  man  in  every  age;  who  foresaw  the  changes  which  the  state  of  society 
must  undergo,  in  this  country,  from  the  increase  of  population,  commerce,  and 
the  arts,  could  act  so  absurdly  as  to  prescribe  a  certain  set  of  means  to  carry 
on  the  operations  of  a  Government,  intended,  not  only  for  the  present,  but 
for  future  generations  ?  There  are,  indeed,  some  express  limitations,  which 
the  circumstances  of  the  times,  and  the  jealousies  of  the  parties,  produced; 


ON   THE    BTLL    TO    RENEW    THE   CHARTER   OF  [1791.          239 

but,  they  being  expressly  stated,  prove  that  the  means,  not  interdicted,  re- 
main entirely  at  our  discretion. 

When  we  examine  the  various  parts  of  the  constitution,  with  a  view  to  this 
question,  we  shall  see  many  reasons  in  support  of  the  principle  for  which  I 
contend.  The  last  clause  of  the  8th  section  of  the  first  article  invests  Con- 
gress with  the  "  power  to  make  all  laws  which  shall  be  necessary  and  proper 
to  carry  into  effect  the  delegated  powers,  and  all  powers  vested  in  the  Go- 
vernment of  the  United  States,  or  in  any  department  or  oflice  thereof."  To 
whom  is  confided  the  right  to  judge  what  shall  be  "  necessary  and  proper?" 
I  presume  it  will  be  admitted  that  this  right  is  exclusively  inherent  in  Con- 
gress. And,  if  Congress  alone  have  the  right  to  judge  of  the  necessity  and 
propriety  of  the  means,  is  it  not  absurd  to  say  that  they  must  judge  rightly, 
or  they  have  no  right  to  judge  at  all  ?  1  have  always  supposed,  when  a  sub- 
ject is  within  the  legitimate  authority  of  any  men,  or  body  of  men,  an  errone- 
ous decision  upon  such  subject  does  not  prove  a  want  of  jurisdiction,  but  of 
correct  judgment.  On  this,  as  on  every  other  subject,  there  will  be  a  vari- 
ety of  opinions  as  to  what  is  "  necessary  and  proper."  The  majority  must 
determine  that  question;  and,  although  there  may,  in  this,  as  in  every  other 
case,  be  flagrant  abuses  of  power,  for  which  we  are  responsible,  there  never 
can  be  any  usurpation.  Ir  must  always  be  a  question  of  sound  discretion, 
guided  by  the  interests  of  the  I'liion,  and  not  a  question  of  power;  unless,  in- 
deed, we  should  fall  in  with  the  fancy  of  my  honorable  colleague,  (Mr.  BUR- 
WELL)  who  opened  this  debate,  and  interpolate  the  word  ki  absolutely,"  so 
that  he  could  adopt  no  means  but  such  as  air  "absolutely  necessary,"  which 
would  leave  us,  as  has  been  ably  demonstrated  by  the  honorable  member  from 
Maryland,  (Mr.  K.KY)  without  any  power  at  all. 

Kverv  subject  which  is  presented  to  us  within  the  acknowledged  sphere  of 
our  authority,  involves  the  question  whether  it  is  "  necessary  and  proper."  If 
a  tax  be  proposed,  which  (as  the  constitution  is  expounded  by  some,  and 
which,  I  believe  to  be  correct)  can  only  be  laid  "  to  pay  the  debts  and  pro- 
vide for  the  common  defence  and  general  welfare/'  it  may  be  objected  that  it 
is  unconstitutional:  because  these  objects  maybe  provided  for  without  any 
lax,  or  without  the  one  proposed.  But  there  can  be  no  doubt  that  this  woulcl 
be  exclusively  a  question  (.t  expediency  and  discretion. 

The  constitution  of  the  Tinted  States  has  universally  been  considered  as  a 
grant  of  particular  and  nor  ot  general  powers:  those  powers  are  the  primary 
or  expre.-sly  delegated,  and  the  derivative  or  implied.  The  character  of  the 
instrument  precluded  the  necessity  of  a  4i  bill  of  rights,"  because  the  question 
never  could  arise,  what  wan  reserved,  buf,  rvhat  was  granted.  The  Cramers 
of  the  constitution  were  well  aware  of  this;  and  so  were  the  People  who  adopt- 
ed it.  it  is,  therefore,  fairly  to  be  inferred,  that,  whenever  there  appears  a 
limitation  or  restriction  in  the  shape  of  a  negative  clause,  Congress  might  have 
exercised  the  power  interdicted,  had  such  clause  not  been  made  part  of  the 
instrument.  By  examining  this  part  of  the  subject,  we  will  be  able  to  deter- 
mine hovy  far  it  was  supposed  derivative  or  implied  powers  would  extend  when 
not  restricted. 

The  first  clause  of  the  9th  section  of  the  first  article,  provides,  that  "  the 
migration  or  importation  of  such  persons  as  any  of  the  States  now  existing  shall 
think  proper  to  admit,  shall  not  be  prohibited  by  the  Congress  prior  to  the 
year  1808,  but  a  tax  or  duty  may  be  imposed  on  such  importation,  not  exceed- 
ing ten  dollars  for  each  person.  ' 

Among  the  delegated  powers,  the  right  to  prohibit  the  migration  or  impor- 
tation of  persons  into  the  States,  is  no  where  to  be  seen;  but  it  was  justlv 
conceived  that  it  was  incidental  to  the  power  "  to  regulate  commerce  with 
foreign  nations." 

The  second  clause  of  the  same  section  restricts  the  suspension  of  the  writ 
of  habeas  corpus  to  certain  circumstances.  There  is  no  express  power  given 
to  any  department  to  grant  it,  in  any  instance.  But  Congress  have  the  pow- 
er to  organize  the  judicial  courts,  to  which  is  incident,  the  power  to  regulate 
V'rits  and  other  processes.  And  as  this  celebrated  writ  was  deemed  the 


240  BANK    OF   THE    UNITED    STATES. 

birth-right  of  the  People  of  the  States,  under  the  State  authorities,  as  the  in- 
strument to  release  them  from  arbitrary  imprisonments,  it  was  taken  for  grant- 
ed that  its  benefits  would  be  extended  to  them  under  this  Government, and  it 
was  conceived  necessary  to  restrict  the  discretion  of  Congress  in  suspending 
its  sal utary  operations. 

In  the  third  clause  of  the  same  section,  Congress  are  prohibited  from  pass- 
ing any  bill  of  attainder,  or  ex  post  facto  law.  Congress  are  no  where  direct- 
ly authorized  thus  to  interfere  with  the  ordinary  course  of  justice,  so  as  to  sub- 
ject an  individual  to  the  consequences  of  an  attainder,  at  their  own  mere  will, 
without  a  trial;  or,  to  make  an  innocent  act  criminal,  by  a  posterior  declara- 
tion. But  they  have  the  power  to  define  and  punish  certain  offences,  which 
would  have  implied  the  power  to  do  it  in  any  manner  they  might  have  thought 
proper:  hence  it  became  necessary  to  interpose  this  restriction. 

The  next  three  clauses  contain  restrictions  on  the  power  to  lay  and  collect 
taxes,  and  appropriate  their  proceeds;  and  shew  that  it  was  considered  as  un- 
limited, unless  expressly  restricted. 

The  last  clause  in  the  same  section  gives  a  more  comprehensive  idea  of  the 
extent  to  which  the  framers  of  the  constitution  conceived  the  implied  powers 
of  this  Government  might  be  exercised,  if  not  restricted.  It  provides,  "  that 
no  title  of  nobility  shall  be  granted  by  the  United  States."  The  whole  context 
of  the  constitution  does  not  afford  the  most  distant  hint,  that  the  creation  of 
an  aristocracy  is  among  the  delegated  powers.  And  yet  the  interdiction  to 
create  such  a  body,  the  very  name  of  which  is  so  justly  abhorrent  in  this  coun- 
try, was  deemed  necessary.  And  why  ?  Because  this  Government  has  the 
power  to  raise  and  support  armies  and  navies.  It  has  various  important  con- 
cerns committed  to  it,  in  which  eminent  men  inay  render  great  and  meritorius 
services.  And,  as  it  would  not  have  been  restricted  in  rewarding  them  accord- 
ing to  its  pleasure,  it  might,  in  conformity  with  the  usage  of  other  nations, 
have  conferred  distinction  upon  them;  which,  tlfough  they  could  give  no  ex- 
clusive right  to  office,  might  be  attended  with  emolument  and  honor. 

If  the  doctrines  which  have  been  advanced  upon  this  floor,  during  the  pre- 
sent debate,  are  truly  genuine  and  constitutional,  then  does  the  history  of  this 
country,  for  the  last  tvventy  years,  present  a  spectacle  the  most  alarming:  then 
have  the  operations  of  our  Government  been  nothing  but  an  uninterrupted 
scene  of  usurpation.  From  its  organization,  under  the  auspices  of  the  first 
of  men  and  of  patriots,  until  the  present  moment,  violation  lias  succeeded  vio- 
lation; the  constitution  has  been  trodden  under  foot  by  all  parties,  and  is  no 
longer  worth  preserving.  Sir,  I  will  go  further.  I  venture  to  say.  that,  if  those 
doctrines  are  adhered  to  and  acted  on  in  every  instance,  this  Government  is 
at  an  end.  It  cannot  adopt  the  simplest  measures  necessary  for  its  own  exist- 
ence and  for  the  welfare  of  this  People,  without  resorting  to  means  not  ex- 
pressly delegated.  If  this  critical  construction  prevails,  we  have  no  right  to 
disband  one  single  man  from  the  army  or  navy.  Congress  are  expressly  au- 
thorized to  raise  and  support  them:  but  the  power  to  lessen  and  destroy  them, 
is  not  to  be  seen  on  the  face  of  the  constitution.  We  are  invested  with  the 
power  to  regulate  commerce  with  foreign  nations;  but  where  is  the  authority 
to  suspend  or  annihilate  it  by  an  embargo  or  non-intercourse,  unless  it  is  im- 
plied? 

To  those  who  are  not  carried  away  by  these  doctrines,  pregnant  with  so  much 
mischief  to  this  community,  it  is  well  worth  the  trouble  to  examine  the  opera- 
tions of  the  Government  under  every  administration.  They  will  be  able  to  as- 
certain the  opinions  of  men  of  every  party  manifested  by  their  public  acts,  as 
lo  the  extent  of  the  means  confided  to  us  to  give  effect  to  the  delegated  pow- 
ers. And  this  inquiry  will,  I  am  persuaded,  tend  to  confirm  the  construc- 
tion which  I  have  attempted  to  give  to  the  constitution. 

By  the  constitution,  a  judicial  department,  with  limited  jurisdiction,  is  es- 
tablished, to  give  effect  to  the  due  administration  of  justice,  so  far  as  it  is  con- 
fided to  the  Government  of  the  United  States.  Congress  have  made  provi- 
sion for  the  punishment  of  perjury,  bribery,  stealing  or  falsifying  records,  res- 
cue, opposition  to  the  execution  of  judicial  process,  and  other  offences.  It 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791, 

does  not  appear  that  the  particular  definition  to  these  crimes  and  the  punish- 
ment designated  are  "  absolutely  necessary."  Some  other  means,  perhaps, 
more  conducive  to  the  end,  might  have  been  employed :  and,  indeed,  it  might 
be  said,  that,  AS  Congress,  by  the  constitution,  are  authorized  to  "  define  and 
punish"  certain  crimes,  it  implied  a  negative  to  define  and  punish  any  other, 
and  consequently  those,  just  mentioned.  But  can  it  be  necessary  to  waste  the 
time,  or  insult  the  good  sense  of  this  House,  to  attempt  to  prove,  that,  in  these 
cases,  Congress  exercised  their  constitutional  power  only? 

The  power  to  borrow  money,  on  the  credit  of  the  United  States,  has  been  ex- 
ercised by  authorizing  the  commissioners  of  the  sinking  fund  to  issue  certifi- 
cates, pledging  the  public  faith  to  pay  so  much  money  as  therein  stated,  to  be 
sold  in  the  market  for  what  they  could  bring. 

To  give  effect  to  the  revenue  system  of  the  United  States,  Congress  have 
employed  means,  which,  instead  of  appearing  "absolutely  necessary,"  have  a 
very  remote  connexion  with  the  object;  besides  the  many  penalties  and  for- 
feitures which  are  created,  the  citizen  is  subjected  to  the  more  arbitrary 
searches  and  seizures  dependent  upon  the  mere  will  of  the  collector;  yet,  the 
authority  to  do  this  has  never  been  questioned.  Under  the  power  to  regulate 
commerce.  Congress  have  erected  light  houses, beacons,  and  buoysj  they  have 
established  rules  for  the  regulation  and  government  of  the  seamen  in  the  mer- 
chant service;  they  have  adopted  measures  for  their  protection  on  the  high 
seas,  and  in  foreign  countries^  they  have  imposed  a  tax  to  be  exacted  from 
them,  even  when  abroad,  to  raise  a  fund  for  the  sick  and  disabled:  they  have 
established  in  this  country,  within  the  jurisdiction  of  the  State  authorities,  and 
without  their  consent,  hospitals  for  their  reception  and  support.  How  remote- 
ly connected  are  all  these  things  with  the  primary  power  "  to  regulate  com- 
merce?" Are  they  "  absolutely  necessary"  to  give  effect  to  that  power?  Or, 
can  it  be  pretended  that  th«  erection  of  a  hospital  is  more  immediately  con- 
nected with  the  regulation  of  commerce  than  a  bank  is  with  the  various  fiscal 
operations  of  the  Government?  After  having  pne  thus  far,  let  me  ask  every 
rational  man,  could  Congress  not  incorporate  the  trustees  of  such  an  hospital, 
with  a  view  to  give  them  individuality,  the  better  to  enable  them  to  preserve 
the  funds,  and  administer  the  concerns  of  the  institution?  Unless  there  is 
something  magical  in  the  word  "  corporation,"  it  appears  to  me  there  can  be 
no  doubt  on  the  subject. 

That  Congress  have  the  right  to  create  corporations,  as  instrumental  to  ef- 
fect objects  confided  to  them,  seems  to  me  susceptible  of  the  clearest  demon- 
stration. For  example:  The  power  "to  regulate  commerce"  includes  the 
power  to  "  promote  it  by  all  possible  means."  Suppose  a  new  branch  of  com- 
merce should  rise  into  view,  which  promised  great  national  advantages,  but 
its  commencement  was  surrounded  with  difficulties,  and  required  resources  to 
which  individual  enterprise  and  capital  were  incompetent — will  it  be  contend- 
ed that  the  power  which  erected  hospitals  to  nurse  seamen,  because  it  may 
have  a  favorable  effect  on  commerce,  cannot  incorporate  a  company  with  cer- 
tain privileges,  so  that,  while  the  means  of  many  are  united,  they  can  act  as 
one.  in  promoting  the  same  object?  As  to  monopolies,  of  which  much  has  been 
said,  though  I  am  not  a  friend  to  them,  yet  circumstances  may  exist  in  which 
the  interests  of  the  community  will  be  promoted  in  granting  some,  if  prudent- 
ly regulated;  and,  therefore,  the  power  ought  to  exist.  Under  the  power 
to  regulate  trade  with  the  Indian  tribes,  Congress  have  adopted  a  system 
which,  though  not  a  monopoly  in  name,  is  one  in  reality.  They  have  esta- 
blished trading  houses  on  their  own  account,  and  under  the  severest  penalties 
prohibited  every  person  from  trading  with  the  Indians  without  a  licence 
from  the  public  superintendent.  What  is  this  but  a  monopoly,  an  exclusive 
privilege,  vested  in  the  Government  and  persons  licenced?  And  in  what  do 
these  licences  differ  in  effect  from  the  privileges  granted  by  the  incorporation 
of  a  commercial  company? 

By  the  laws  establishing  post  offices  and  post  roads,  various  offences  have 
been  created,  and  severe  punishments  directed,  affecting  those  not  in  the  ser- 
vice of  the  Government;  persons  have  been  exempted  from  serving  in  the  mi- 
31 


242  BANK  OF  THE  UNITED  STATES. 

litia  and  on  juries,  who,  by  the  laws  of  the  States,  are  expressly  subject  to  that 
service;  this  is  a  direct  interference  with  the  State  authorities,  yet  its  consti- 
tutionality has  never  been  questioned. 

The  constitution  empowers  Congress  "  to  declare  war,"  but  no  express  au- 
thority is  given  to  preserve  peace;  yet,  can  it  be  doubted  that  the  power  to  ef- 
fect that  object  is  implied?  With  a  view  to  it,  Congress  have  passed  laws 
making  it  criminal  to  set  on  foot  any  enterprise  against  any  foreign  nation  with 
whom  the  United  States  are  in  a  state  of  amity,  or  to  hunt  upon  the  lands  be- 
longing to  the  Indian  tribes. 

Congress  have  power  to  call  out  the  militia  to  repel  invasions.  An  in- 
vasion I  understand  to  mean  a  military  force  actually  in  our  territory;  yet,  an 
authority  has  been  given  to  the  President  to  call  forth  the  mititia  in  case  there 
shall  "  be  imminent  danger  of  invasion*,"  with  a  view  to  prevent  it. 

The  last  instance  which  I  shall  give,  showing  the  extent  to  which  Congress 
have  conceived  their  powers  reached,  is  the  purchase  of  the  public  library.  I 
would  ask  the  sticklers  for  express  powers,  where  they  find  the  authority  for 
this  act?  Sir,  taking  a  detached  view  of  the  subject,  it  might  be  said  that  we 
have  the  same  right  to  purchase  houses  for  our  accommodation.  The  act  can 
only  be  justified  by  reasonings  apparently  remote  from  the  object.  To  us  are 
committed  the  great  concerns  of  this  nation.  It  is  our  duty  to  be  wel  1  inform- 
ed upon  every  subject  that  comes  before  us;  in  order,  therefore,  to  be  able  to 
get  all  requisite  information,  we  think  a  library  necessary  as  one  of  the 
means.  This  course  of  argument  at  once  proves  every  thing  for  which  I  con- 
tend. 

Such,  sir,  has  been  the  uniform  practical  construction  of  the  powers  confi- 
ded to  this  Government,  by  men  of  every  political  description.  Sir,  the  prin- 
ciples upon  which  the  constitutionality  of  this  question  rests,  have  not  only 
been  recognised,  in  every  shape,  but  the  measure  itself  has  received  the 
sanction  of  acquiescence,  if  not  of  approbation,  for  twenty  years.  Although 
I  do  not  feel  precluded  from  thinking  and  acting  for  myself,  yet,  fallible  as  I 
know  myself  to  be,  I  am  induced  to  have  great  respect  for  the  acts  of  eminent 
men,  whose  wisdom  and  patriotism  it  would  be  vain  i1'.  me  to  pretend  to  rival. 
And  believing,  as  I  do,  that,  among  the  greatest  evils  which  attend  republics, 
are  the  instability  of  public  counsels,  and  the  want  of  character  and  consist- 
ency in  public 'measures,  I  feel  it  a  portion  of  my  duty  to  entertain  some 
veneration  for  the  acts  of  my  predecessors,  supportecl  by  time;  at  least  so  far 
as  not  to  dissent  from  them,  unless  they  appear  to  me  palpably  improper. 

When  the  bank  was  incorporated ,  the  People  of  the  United  States,  with  one 
consent,  acquiesced;  not  a  single  murmur  was  heard;  not  a  singje  petition  was 
laid  upon  your  table  alleging  its  unconstitutionally,  and  praying  its  repeal. 
Was  the  patriotism  of  the  community  then  asleep?  Were  ihey  less  sensible, 
then,  of  the  necessity  of  preserving  the  great  charter  of  their  rights  free  from 
violation,  or  less  acute  in  their  perception  of  its  infraction,  than  we  are  now? 
Was  it  left  for  the  Argus  eyes  of  the  present  generation  to  discover  the  deadly 
powers  of  this  Hydra;  and  to  their  prowess  to  rise  and  strangle  it?  Sir,  f 
should  reason  differently.  Believing  that  there  was  as  much  intelligence,  as 
much  vigilance  and  patriotism,  in  the  country,  then,  as  there  are  noY«s  I  am 
inclined  to  think  that,  had  there  been  real  cause  of  alarm,  it  would,  according 
to  the  usual  course  of  things,  have  been  manifested  when  the  subject  was  new; 
and  when  the  public  attention  was  immediately  directed  to  it. 

Since  the  establishment  of  the  bank,  several  laws  have  passed  for  the 
punishment  of  frauds  in  counterfeiting  their  notes — one  of  them  under  tho 
late  administration.  If  the  incorporation  act  was  unconstitutional,  could  any 
person  be  punished  for  counterfeiting  the  notes  of  the.  bank?  A  person  ac- 
cused must  be  indicted  for  having  made  or  counterfeited  a  note  or  notes  pur- 
porting to  be  the  act  of  the  president  and  directors  of  the  bank.  If  the  law  is 
unconstitutional,  then,  in  legal  construction,  there  are  no  sueh  persons;  and 
as  well  might  the  accused  be  convicted  of  forging  a  note  on  some  fictitious 
person,  as  the  note  of  a  bank  when  none  such  existed.  How  has  it  happened 
that,  in  all  the  trials  which  have  taken  place,  this  ingenious  discovery  has 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       243 

never  been  made?  The  counsel,  always  sufficiently  vigilant  in  the  cause  in 
which  they  are  engaged,  have  never  pretended  to  question  the  legal  existence 
of  the  bank,  involved  in  the  constitutionality  of  the  incorporation  act.  The 
courts,  composed  of  the  most  enlightened  men,  and  of  different  political  par- 
ties, sworn  to  support  the  constitution,  have  consigned  the  reputations  of  men 
to  lasting  disgrace,  and  incarcerated  them  within  the  confines  of  loathsome 
prisons,  where  they  have  been  suffered  to  remain  for  years;  when  a  single 
breath  from  the  Executive  would  have  released  them,  which  it  was  his  boun- 
<len  duty  to  do,  had  the  act  been  considered  as  unconstitutional. 

Many  of  the  public  acts  of  the  Government  might  be  cited  to  prove  the 
frequent  and  uniform  recognition  of  the  validity  of  the  incorporation;  out  I  will 
not  fatigue  the  House  with  mentioning  but  one  other.  As  recently  as  the  ex- 
tta  session  in  1809, you  authorized  the  commissioners  of  the  sinking  fund  to 
borrow  money  from  the  Bank  of  the  United  States,  on  the  credit  ot  the  Go- 
vernment. If  the  incorporation  is  invalid,  then  there  is  no  corporate  capacity 
in  the  president  and  directors,  and  they  have  no  power  to  make  a  contract  to 
Joan  the  money  of  the  stockholders. 

The  necesritytfa  bank  to  canyon  the  operations  of  the  Government,  seems 
to  have  been  admitted  by  all  who  have  spoken  in  opposition  to  the  bill  on  your 
table.  But  they  have  insisted  thai  a  Hank  created  by  the  United  Stales  is  not 
necessary,  because  the  State  banks  will  afford  us  the  same  conveniences. 
This  admission,  in  my  humble  conception,  completely  surrenders  the  question. 
If  a  bank  is  nerrssn  >  •  ;•••*  ///.s7/v///f/f/W  to  give  effect  to  our  fiscal  concerns, 
ought  it  not  to  be  completely  under  our  direction?  Is  the  instrument  to  go- 
vern the  hand  that  employs  it,  or  ihe  h:>ud  ihe  instrument?  The  State  banks 
arc  under  the  conirol  of  ihe  Suite  authorities,  who  may  permit  them  to  ac- 
commodate us  or  not,  as  they  please.  Can  it  be  seriously  conceived  that  this  is 
ihekiiid  oi' government  the  People  intended  to  establish  for  the  great  concerns 
of  this  Union,  which  is  to  be  dependent  on  the  States  for  the  execution  of  its 
power?  it  might  as  well  be  contended  that  v\  e  have  no  right  to  appoint  the 
collectors  of  our  revenue,  because  those  appointed  by  the  States  to  collect 
their  taxes  would  answer  all  the  purposes  necessary. 

But  the  honorable  member  from  New  York  ( Mr.  PORTER)  has  said  that  there 
is  nothing  new  in  the  doctrine  that  we  should  be  dependent  on  the  States  for 
the  execution  of  our  measures,  because  the  same  principle  appears  on  the  face 
of  the  constitution,  that  the  agency  of  the  States  is  requisite  in  the  election  of 
senators,  representatives,  and  electors.  Was  this  argument  even  apposite, 
I  should  suppose  it  a  correct  answer  to  say,  that  the  intention  of  those  who  in- 
stituted the  Government  was  to  confine  the  agency  of  the  States  to  the  cases 
expressly  staled;  and  the  present  not  being  one  of  them,  our  own  discretion 
was  alone  to  be  consulted,  and  our  means  employed.  But  the  argument  has 
no  connexion  with  the  subject.  We  are  dependent  upon  the  States  and  the 
people  for  the  organization  of  the  Government;  but  whenever  it  is  organized, 
we  are  dependent  upon  our  own  means  to  give  effect  to  our  powers.  As  well 
might  the  honorable  member  have  contended  that  we  are  dependent  on  the 
sheriffs  of  Virginia,  who  hold  the  elections,  and  make  the  returns,  and  without 
whose  agency  no  representation  could  exist  from  that  State  on  this  floor. 

The  argument  which  admits  the  necessity  of  a  bank  for  the  purposes  of  this  Go- 
vernment, but  which  contests  our  right  to  create  one,  because  that  necessity  is 
supplied  by  the  State  institutions,  leads  to  the  very  extraordinary  conclusion, 
that  what  is  unconstitutional  to  day  may  be  constitutional  to-morrow.  If  the 
States  should  abolish  their  banks,  or  prohibit  them  from  accommodating  us,  we 
would  have  the  right  to  erect  them  ourselves:  butsolongas  that  is  not  the  case,  we 
have  not  the  power.  Can  any  thing  show  in  a  stronger  light  the  untenable  posi- 
tion which  gentlemen  occupy,  than  the  necessity  which  compels  them  to  advance 
arguments  which  will  make  this  constitution  '(intended  as  the  strong  bond  of 
union,  the  same  at  all  times  and  under  all  circumstances)  a  flexible  instrument 
to  be  contracted  or  extended,  to  be  feeble  or  strong,  as  the  caprice  of  State  pow- 
er may  direct?  Call  this  what  you  will,  sir,  it  is  in  reality  nothing  more  than 
the  old  debilitated  miserable  system  of  the  confederation.  That  a  bank  is  ne- 


244  B*NK  OF  THE  UNITED  STATES. 

cessary  for  the  administration  of  the  national  finances,  is  not  only  admitted  by 
the  opponents  of  this  bill,  but  tested  and  confirmed  by  the  experience  of  other 
countries  as  well  as  our  own.  Does  the  Secretary  ot  the  Treasury,  in  his  re- 
ports on  this  subject,  propose  to  manage  our  money  concerns  without  the  aid 
of  any  bank,  in  the  event  of  a  dissolution  of  the  Bank  of  the  United  States? 
Such  an  idea  has  not  entered  into  his  imagination,  or  that  of  any  other  man 
who  has  the  most  distant  pretensions  to  any  practical  knowledge  on  this  sub- 
ject. Sir,  it  is  the  instrumentality  of  the  State  banks  that  must,  and  is  con- 
templated to  be  resorted  to  in  that  event;  and  the  Secretary  speaks  and  write* 
of  the  subject  in  that  way.  That  a  bank  'is"  absolutely  necessary"  I  will  not 
pretend  to  say.  There  is  scarcely  any  thing  effected  by  human  power  where 
there  is  a  physical  impossibility  to  do  it  but  in  one  way,  or  but  by  a  single 
mean.  The  necessity  of  which  1  speak  is  this:  that  it  is  more  convenient, 
more  prompt,  more  certain,  and  less  expensive,  than  any  system  that  can  be 
substituted,  to  collect  our  revenue;  to  safely  keep  our  money;  to  pay  our  debts? 
to  support  our  armies  and  navies;  and,  in  fact,  to  give  effect  to  every  operation 
in  which  money  is  concerned.  Sir,  even  the  inconvenience  arising  from  the 
expense  and  hazard  of  transmitting  large  sums  of  money  to  distant  parts  of 
the  Union,  when  the  military  or  other  concerns  of  the  Government  require  itr 
is  very  considerable.  Through  the  agency  of  the  bank  it  is  done  without  one 
single  cent  expense,  and  without  any  risk  to  the  United  States.  The  instru- 
mentality of  a  bank  was  deemed  proper  at  a  time  when  the  fiscal  concerns  of 
this  Government  were  comparatively  but  very  limited.  Congress,  under  the 
confederation,  found  it  necessary  to  have  the  aid  of  such  an  institution,  not- 
withstanding they  had  not  the  power  to  '*  lay  and  collect  taxes,"  and  that  ne- 
cessity gave  birth  to  the  Bank  of  North  America. 

From  the  principles  for  which  1  contend,  and  the  uniform  practice  of  the 
Government,  this  inference  is  deducible;  that,  wherever  a  power  is  given  to 
do  an  act,  or  to  legislate  upon  a  subject,  all  the  means,  whether  remote  or  di- 
rect, to  accomplish  the  object,  in  any  manner  deemed  best,  accompany  the 
grant.  If  this  be  correct,  have  not  Congress  the  right,  under  the  power  to 
44  borrow  money,"  to  adopt  precautionary  measures,  so  that  the  capacity  to 
7<??it/ may  exist,  when  the  necessity  in  borrow  requires  it?  "To  borrow"  sums 
of  sufficent  magnitude  for  the  exigencies  of  the  Government,  in  a  country 
where  there  is  very  little  capital  free  from  employment  in  the  ordinary  pur- 
suits of  life,  may  be  very  difficult,,  unless  the  small  surplusses,  scattered 
through  every  partr  can  be  united.  This  tendency  banking  institutions  have, 
in  an  eminent  degree.  Under  the  power  to  44  regulate  commerce/'  Congress 
have  cherished  and  protected  those  whose  labor  contributed  to  its  sticcess, 
Under  the  power  to  regulate  trade  with  the  Indian  tribes,  they  have  furnish- 
ed all  the  means  to  carry  on  that  trade;  and  why  not,  under  the  power  to 
"  borrow  money,"  incorporate  a  bank,  which,  while  it  creates  the  ability,  on 
the  part  of  the  institution,  to  loan,  by  uniting  the  funds  of  many,  may  be  so 
modified,  as  the  bill  on  your  table,  as  to  make  it  a  condition  that  they  shall 
do  so,  when  the  necessities  of  the  Government  require  it? 

Sir,  of  the  effects  which  the  dissolution  of  the  Bank  of  the  United  States 
will  have  on  the  community,  I  am,  perhaps,  incapable  of  forming  a  correct 
judgment,  as  I  do  not  profess  to  have  any  very  extensive  practical  knowledge 
ot  banking.  But  it  appears-  to  me,  without  resorting  to  any  artificial  means, 
judging  only  by  the  rules  of  common  sense,,  that  they  must  be  very  serious* 
and  even  calamitous.  In  a  society  like  ours,  comparatively  yet  in  its  infant 
state,  I  presume  it  cannot  be  asserted,  with  the  appearance  of  truth,  that  there 
is  a  greater  floating  capital,  or  a  greater  portion  of  circulating  medium,  than 
its  necessities  require.  Withdrawing,  then,  from  public  use,  fifteen  millions 
of  dollars,,  at  least  one -third  of  the  \yhole  money  capital  of  the  United  States, 
(which  it  matters  not  whether  it  is  in  specie,  or  par;er  answering  the  pur- 
poses of  specie)  must  be  felt  as  a  very  great  inconvenience.  The  products  of 
the  country  must  diminish  in  price,  because  their  value,  according  to  the 
present  standard,  will  be  much  greater  than  the  amount  of  money  to  pur- 
chase. One  of  two  things  seems  to  be  inevitable,  either  that  a  great  portion. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     £45 

of  the  domestic  produce  will  be  inactive  on  our  hands,  or  that  the  whole  will 
sink  in  value  to  a  level  with  the  amount  of  money  to  purchase. 

The  merchants  will  more  immediately  feel  the  baneful  effects  of  the  disso- 
lution of  the  bank.  Their  situation  is,  at  this  time,  peculiarly  embarrassing. 
Their  property,  to  a  very  large  amount,  has  been  confiscated,  sequestered,  or 
detained  tor  adjudication  in  Europe,  in  consequence  of  the  nefarious  measures 
adopted  by  foreign  Powrers  against  our  commerce;  and  a  great  portion  is  lyin^ 
inactive  in  their  warehouses,  for  the  want  of  a  safe  market  to  which  to  send 
it.  Having  failed  in  receiving  their  expected  means  by  remittances  from 
abroad,  to  enable  them  to  comply  with  their  engagements,  they  require,  more 
than  ever,  the  accommodation  which  banks  can  only  afford.  Disappointed  in 
that,  ruin  must  stare  them  in  the  face,  though  they  may  be  abundantly  solvent; 
a  general,  if  not  a  universal  bankruptcy  will  ensue,  which,  while  it  falls  im- 
mediately on  the  mercantile  classes,  ultimately  affects  every  department  of 
society.  For  nothing  is  more  obvious  (I  wish  it  was  better  understood)  than 
that  the  affairs  of  this  community  arc  so  closely  interwoven,  that  no  material 
injury  can  be  done  to  any  one  great  national  pursuit,  without  finally  affecting 
every  other.  From  this  impending  ruin,  some  may  fly  for  shelter  to  the  mo- 
ney capitalists  who  reserve  their  means  to  prey  on  the  misfortunes  and  ca- 
lamities of  their  country,  and  borrow  at  exorbitant  premiums;  but,  though 
this  may  parry  the  evil,  it  is  calculated  to  make  it  the  more  certain. 

But,  we  are  told  that  the  wants  of  the  merchants  can,  and  will  be  supplied 
by  the  other  banks.  It  maybe  so;  but,  reasoning  as  t  must,  without  the  aid 
of  the  mysterious  elements  of  logic,  (for  they  are  perfectly  so  to  me)  resorted 
to  by  those  who  pretend  to  practical  knowledge;  guided  only  by  the  rules  of 
common  sense,  I  should  come  to  a  different  conclusion.  I  should  suppose, 
that,  in  the  present  difficult  and  embarrassed  state  of  eur  commerce,  the 
whole  banking  capital  in  the  United  Sfntes  is  scarcely  competent  to  supply 
the  necessities  of  the  country:  that,  withdrawing  more  than  one-third,  must 
leave  a  great  deficiency,  which  will  not  only  have  the  effect  of  leaving  those, 
accustomed  to  be  accommodated  by  the  Bank  of  the  United  States  and  its 
branches,  without  any  accommodation,  but  tend  to  diminish  the  discounts  of 
the  other  banks.  Sir,  this  result  is  very  obvious.  The  great  capital,  large 
depositcs,  extensive  credit,  and  circulation  of  its  paper,  enabled  the  Bank  of 
the  United  States  and  its  branches,  from  time  to  time,  in  the  usual  course  of 
business,  to  iiave  considerable  claims  on  the  other  banks,  as  balances  arising 
from  the  intercourse  between  them:  which,  in  ordinary  times,  under  the  in- 
fluence oi  an  accommodating  spirit,  ;ire  either  not  rigorously  exacted,  or  re- 
ceived in  paper.  But,  when  the  amirs  of  this  institution  are  to  be  finally 
closed,  those  balances  must  be  paid  in  specie,  and  the  specie  of  the  other 
banks  will,  of  course,  diminish;  they  must,  then,  either  curtail  their  discounts, 
or  hazard  their  credit,  by  leaving  a  surplus  of  paper  in  circulation,  beyond  the 
usual  mean**  to  redeem  it;  even  the  suspicion  of  which,  prudent  and  experien- 
ced men  will  never  encounter. 

Against  the  Bank  of  the  United  States,  prejudices  have  been  excited  and 
clamors  raised,  in  every  shape  and  in  every  tone.  It  has  been  said  to  be  a 
deadly  viper  lodged  in  our  bosom,  which,  at  some  time,  if  suffered  to  live, 
will  sting  us  to  the  heart;  fancy  has  converted  it  into  a  political  engine  which 
will  subvert  our  liberties:  an  association  of  men  who  will  prostrate  our  Go- 
vernment. Sir,  had  I  nothing  to  direct  but  my  imagination,  I  might,  perhaps, 
be  drawn  into  this  vortex  of  terror;  but  there  is  a  much  safer  guide  at  hand. 
These  dreadful  apprehensions  have  already  been  exposed,  by  the  honorable 
member  from  Kentucky,  (Mr.  M'KEE)  who  so  eloquently,  the  other  day,  re- 
ferred to  the  experience  of  the  country,  as  a  conclusive  answer.  It  is  the  best 
test  of  the  effect  of  an  institution.  I  would  not  give  one  single  year's  expe- 
rience for  all  the  speculations  of  all  the  philosophers  and  politicians  that  ever 
existed;  by  its  salutary  precepts. let  the  present  question  be  judged.  It  will 
be  seen  that  this  pretended  viper  is  an  harmless  animal;  that  ourliberties  and 
our  Government  have  been  preserved,  and  ou r  prosperity  has  increased,  amidst 
the  operations  of  this  fancied  dreadful  engine.  Sir,  it  will  be  further  seen, 


246  BANK  OF  THE  UNITED  STATES. 

that  the  bank,  with  all  its  influence  in  favor  of  the  men  formerly  in  power, 
could  not  avert  the  change  which  took  place  in  the  public  councils  of  this 
country.  After  all  this,  let  me  ask  every  rational  man,  what  danger  is  to  be 
apprehended  from  their  opposition  to  the  Government,  when  their  aid  and 
their  friendship  produced  so  little  effect?  The  fact  is,  that,  practically,  the 
bank  must  always  be  friendly  to  the  Government,  whatever  may  be  the  ab- 
stract opinions  of  the  individuals  composing  the  stockholders. 

Some  of  the  arguments  (or  rather  assertions)  which  have  been  uttered  on 
this  floor  arc  strangely  inconsistent.  At  one  time  it  is  said  that  the  capital  of 
this  bank  is  mostly  the  property  of  foreign  stockholders,  who  thus  have  im- 
proper influence  in  this  country,  which  ought  to  be  destroyed  by  putting  down 
the  bank.  When  it  is  stated  by  the  friends  of  this  bill  that  it  will  be  a  great 
public  inconvenience  that  upwards  of  seven  millions  of  dollars  in  specie  should 
be  taken  out  of  the  country  so  suddenly,  the  same  gentlemen  tell  us,  that  that 
will  not  be  the  case,  for  that  the  foreign  stockholders  will  vest  their  money  in 
other  banks  in  the  United  States.  Is  this  the  way  by  which  we  are  to  get 
clear  of  foreign  influence,  by  driving  it  from  its  present  confined  situation,  that 
it  may  be  infused  into  every  concern  in  this  country,  and  corrupt  every  part  of 
the  body  politic?  Foreign  stockholders  either  have  undue  and  improper  in- 
fluence, injurious  to  our  welfare,  or  they  have  not;  if  not,  why  this  clamor,  un- 
supported by  any  real  danger?  If  they  have,  is  it  not  augmenting  the  evil  by 
extending  the  circle  of  its  operations? 

So  much  has  been  said  about  the  improper  influence  which  foreigners  have 
in  our  country,  on  account  of  their  being  stockholders  of  this  bank,  that  it  mer- 
its a  more  minute  inquiry;  directed,  not  by  prejudice,  but  by  common  sense, 
and  governed,  not  by  assertion,  but  by  fact.  On  looking  into  the  act  incorpo- 
rating the  bank,  I  discover  that  no  person  but  a  citizen  of  the  United  States 
can  be  a  director;  that  foreign  stockholders  have  no  right  to  vote,  either  in  per- 


their  interest  committed  to  the  care  and  control  of  our  Government  and  our 
citizens,  and,  so  long  as  men  feel  an  affection  for  their  interest,  so  long  some- 
thing like  influence  arising  from  this  circumstance  may  be  expected. 

The  mere  employment  of  foreign  capital,  instead  of  being  an  injury,  is  a  real 
benefit  to  the  country.  It  implies  a  want  of  a  domestic  capital  co-extensive 
with  pur  necessities,  as  it  is  one  of  the  first  axioms  in  political  economy  that 
sufficiently  extensive  domestic  means  will  exclude  the  employment  of  fo- 
reign; and  therefore  the  existence  of  a  foreign  is  proof  of  the  deficiency  of  the 
domestic  capital.  If  this  idea  is  correct,  the  beneficial  effects  are  alone  ap- 
parent. The  foreign  capitalist  lends  us  his  money,  for  which  he  draws  eight 
per  cent,  as  a  dividend,  which  yields  us  twelve  or  fifteen;  and  the  tendency 


JJVt      V'X'Uli*    Ci.O    Ci    UJ.  V  lULV/llVl}       TV  IUVU      ¥  1  \_-J-VlO     U.O     LVV^lVV^    ^71        IIXIX/V/U*      tlllVl        tilt-     LtllV4.tlIl^  V 

ic  has  to  promote  the  wealth  of  the  nation  may  be  exemplified  by  supposing 

'ividual,;  ' 

coper  obj< 
ence^to  such  an  individual  whether  the  person  loaning  was  a  foreigner  or  a 

•   .  •  1  I  If*  •!  Ijl  !•!  11"  *l  1      •  I  •,!,;! 


y  suppo 

the  case  of  an  individual,  who  borrows  money  at  six  per  cent,  which,  by  ap- 
plying its  use  to  proper  objects,  yields  him  twelve.    It  would  make  no  differ- 


citizen; he  had  furnished  the  means  which  made  him  rich,  while,  without  them, 
he  might  have  remained  poor.  So  it  is  with  this  nation;  we  have  grown 
wealthy  from  a  comparatively  poor  state;  in  this  change  the  employment  of 
foreign  capital  has  had  great  agency. 

It  has  been  alleged  against  mis  bank  that  it  confines  its  selection  of  direc- 
s  to  one  political  party,  as  well  as  its  accommodations.  As  to  the  political 
complexion  of  those  who  manage  the  concerns  of  this  institution,  I  have  no 
personal  knowlege;  the  fact  may  be  as  stated.  Without  approving  of  this 
course,  which  1  by  no  means  do,  I  conceive  that,  in  all  money  associations, 
those  interested  may  safely  be  trusted  to  manage  *'  their  own  affairs  in  their 
own  way."  The  statement  that  the  bank  confines  its  benefits  to  its  own  par- 
ty, if  true,  certainly  shows  intolerance,  and  would  be  with  me  highly  objec- 
tionable. But  I  have  great  reasons  to  doubt  the  fact.  I  have  been  told 
by  one  of  the  directors  of  the  office  of  discount  and  deposite  at  Baltimore, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     £47 

that  more,  than  one  half  of  the  amount  of  discounts  was  granted  there  to  per- 
sons of  opposite  political  sentiments  from  the  direction;  and  as  nothing  but 
suspicion  and  surmise  have  been  offered  in  support  of  the  imputation,  I  am 
induced  to  believe  that,  .as  it  respects  other  places,  it  is  equally  unfounded. 
These  things,  however,  if  even  true,  would  have  no  effect  on  my  vote  on  the 
present  question:  lor,  if  the  objections  are  valid,  they  affect  not  the  principles 
of  the  institution,  but  its  management. 

I  have  detained  you  longerlhan  I  intended;  my  apology  for  occupying  so 
much  of  your  time  must  be  found  in  the  great  interest  which  tins  question  is 
calculated  to  excite;  a  question  on  which  1  confess  my  opinion  heretofore  in- 
clined the  other  way;  it  was,  however,  like  many  opinions,  formed  without  a 
thorough  investigation  of  the  subject. 

Permit  me,  in  conclusion,  once  more  to  direct  your  attention  to  a  subject  of 
the  first  importance,  on  which  1  have  already  made  some  remarks — 1  mean 
the  partialities  which  have  been  manifested  for  State  rights  and  State  preten-t 
sions.  This  subject  has  been  presented  to  us  in  the  most  lively  and  interest- 
ing colors.  To  pass  the  bill  on  your  table,  has  been  deprecated  as  leading  to 
collisions  with  the  State  authorities,  to  discord,  and  civil  war.  Sir,  if  we  have 
armed  at  that  point  when  it  becomes  necessary  to  inquire  what  will  please 
the  States,  and  what  acts  they  will  permit,  instead  of  what  is  right,  then,  in- 
deed, are  our  proceedings  (and  even  is  our  existence)  a  miserable  mockery. 
If  we  cannot  be  permitted  to  think  for  ourselves,  it  is  much  better  to  close 
our  doors  and  go  home'.  IT  we  cannot  act  independently,  but  only  in  the 
diameter  of  humble  instruments,  to  register  the  will  of  others,  let  us  not  act 
at  all.  1  conceive  it  a  duty  equally  imperious,  from  which  I  have  taken  a 
solemn  oath  not  to  depart,  to  oppose  the  encroachments  of  the  States,  as  I  do 
not  to  encroach  on  them.  (I  is  as  essential  that  \ve  should  exercise  the  pow- 
ers confided  io  us.  uninfluenced  by  them,  as  it  is  that  they  should  exercise 
those  reserved  to  them,  without  being  inlluenced by  us. 

If  it  is  seriously  wished  thur  this  (Government  and  this  Union  should  be 
pre<<TVi'd,  it  is  time  that  the  -pint  of  encroachment  and  control,  assumed  by 
some  of  the  States,  should  be  discouraged.  If  it  is  suffered  to  gain  strength 
by  our  compliance  or  acquiescence,  it  will  ultimately  subvert  that  liberty  and 
independence  purchased  by  the  blood  of  our  best  patriots.  Here  is  indeed  a 
viper,  (much  more  deadlyjhan  the  one  fancied  by  the  honorable  member  from 
New  York  Mr.  PORTER)  which,  if  you  do  not  expel  it  from  your  bosom,  will 
surely  sting  you  to  the  heart — sling  you  to  death.  The  experience  of  the  two 
or  three  last  years  sanctions  the  apprehension  that  the  seeds  of  disunion  will 
be  town  by  the  State  authorities.  There  is  no  well  grounded  fear  that  any 
encroachments  by  us  on  the  Slates  can  ever  be  successful;  they  have  many 
means  to  resist  them;  they  who  administer  the  State  Governments  are  com- 
paratively numerous,  and  dispersed  through  every  part  of  the  community; 
hence  they  will  always  be  able  to  collect  to  themselves  and  to  their  measures 
a  greater  portion  of  popularity  than  we  have  in  our  power.  The  distance  of 
many  parts  from  the  operation  of  this  Government,  and  the  nature  of  our  pow- 
ers, create  jealousy.  If  to  these  causesare  added  fear  and  imbecility  on  our 
part,  the  bonds  which  unite  us  must  become  every  day  more  enfeebled, 
until  this  Union  shall  be  destroyed — a  Union  in  which  is  involved  every 
thing  dear  to  freemen,  and  which,  I  had  fondly  hoped,  would  endure  to  the  enri 
of  time. 

JANUARY  22,  1811. 

Mr.  SMILIE  presented  to  the  House  a  resolution  of  the  Legislature  of  the 
State  of  Pennsylvania,  instructing  their  Senators,  and  requesting  their  Re- 
presentatives in  the  Congress  of  the  United  States,  to  use  every  exertion  in 
their  power  to  prevent  the  charter  of  the  Bank  of  the  United  States  from  be- 
ing renewed,  or  any  other  bank  from  being  chartered  bv  Congress,  designed 
to  nave  operation  within  the  jurisdiction  otany  State,  without  nrst  having  ob- 
tained the  consent  of  the  Legislature  of  such  State;  which  was  read,  and  or- 
dered to  lie  on  the  table. 


248  BANK  OF  THE  UNITED  STATES. 

JANUARY  23,  1811. 
Same  question  depending. 

Mr.  GARLAND  said  he  was  sensible  of  the  anxiety  of  the  House  on  all  sides 
to  take  this  question,  and  it  was  with  extreme  reluctance  that  he  now  tres- 
passed on  any  portion  of  their  time;  but,  as  he  should  probably,  on  this  ques- 
tion, give  a  vote  different  from  that  of  most  of  his  colleagues,  and  many  of  his 
political  friends  with  whom  he  had  been  accustomed  to  act,  he  trusted  that  he 
should  stand  excused  for  the  small  portion  of  time  that  he  designed  to  oc- 
cupy. In  the  view  (said  he)  which  I  intend  to  take  of  this  subject,  it  is  not 
my  intention  to  go  into  a  critical  examination  of  the  constitutional  ground  on 
which  it  is  conceived  this  subject  rests-  I  am  willing  to  believe  that  those 
who  made  the  constitution  understood  it  in  all  its  bearings,  and  the  spirit  in 
which  it  was  adopted;  and  as  many  of  the  persons  who  were  members  of  the 
convention  were  in  Congress  in  1791,  when  the  charter  of  the  Bank  of  the 
United  States  was  granted,  I  cannot  be  so  uncharitable  as  to  believe  that  they 
would  have  been  the  first  to  violate  its  sacred  principles.  I  am  willing  to  be- 
lieve that  they  possessed  as  much  understanding  and  patriotism  as  we  do,  and 
therefore  believe  that  they  would  not  have  been  the  first  to  violate  the  sacred 
principles  of  that  instrument.  In  this  opinion  I  am  strongly  supported  by  the 
conduct  of  the  different  States,  the  most  of  whom  have  passed  laws  for  pun- 
ishing, and  have  consigned  to  imprisonment,  the  counterfeiters  of  the  notes  of 
this  bank.  I  presume  it  will  not  now  be  contended  that  all  the  States  have  united 
in  carrying  into  execution  an  unconstitutional  law,  and  that  the.  United  States 
have  at  different  times,  and  under  different  administrations,  recognised  its  le- 
gality and  enforced  its  principles  for  nearly  twenty  years.  It  does  appear  to 
me,  Mr.  Speaker,  that  the  uniform  acquiescence  of  the  country  in  a  measure 
for  such  a  length  of  time  should  put  tin-  constitutional  question  at  rest;  and,  for 
the  sake  of  something  like  stability  in  our  proceedings,  this  should  be  consi- 
dered as  an  adjudicated  case,  in  which  the  law  and  constitution  seem,  to  have 
been  settled  by  universal  consent.  But,  Mr.  Speaker,  I  will  call  your  atten- 
tion for  a  single  moment  to  the  eighth  section  of  the  first  article  of  the  consti- 
tution of  the  United  States.  It  wdl  there  be  found  that  "Congress  shall  have 
power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises,  to  pay  the  debts 
and  provide  for  the  general  welfare  of  the  United  States,  and  to  pass  all  laws 
which  are  necessary  and  proper  for  carrying  the  foregoing  powers  into  execu- 
tion." I  shall  attempt  to  show,  from  this  clause  in  the  constitution,  that  Con- 
gress have  ample  power  to  pass  the  bill  for  extending  the  charter  of  the 
United  States'  Bank,  and  this  I  expect  to  do  without  calling  in  the  aid  of  the 
general  grant  of  powers  as  contained  in  the  constitution,  from  which  some 
gentlemen  seem  to  turn  with  such  disgust;  and  in  discussing  this  point  I  shall 
attempt  to  reason  on  things  as  they  now  exist.  Congress  have  imposed  duties 
and  imposts,  \vhich,  from  their  nature,  must  be  collected  in  the  different  States. 
Then,  connected  with  the  right  of  laying  is  the  right  of  collecting,  and  with 
the  right  of  collecting  is  that  of  deposite  and  transmission,  in  that  manner 
which  is  best  calculated  to  carry  on  the  fiscal  operations  of  the  Government; 
and  the  proper  inquiry  for  this  House  is,  How  can  these  objects  be  best  effect- 
ed? Will  not  a  bank  be  most  desirable,  on  many  accounts,  and  one,  the  paper 
of  which  shall  be  known  and  well  circulated  throughout  the  United  States? 
This  bank  will  receive  your  money,  and  transmit  it  to  any  part  of  the  United 
States  where  it  may  be  wanted,  at  the  risk  and  expense  of  the  bank.  By  this 
means  the  expense  of  collection  will  be  lessened,  and  the  money  transmitted 
to  any  part  of  the  United  States,  so  as  to  enable  the  Government  to  pay  the 
debts  and  provide  for  the  general  welfare.  In  this  point  of  view  I  consider 
the  bank  necessary  and  proper;  and  if  it  be  necessary  and  proper,  then  the 
plain  language  of  the  constitution  is  satisfied,  and  is  not  made  to  depend  on 
being  absolutely  necessary,  as  gentlemen  seem  to  argue.  And  whether  this  is 
done  by  one  individual,  or  by  incorporating  a  number  of  individuals,  is  not 
material  on  the  present  question,  only  as  it  relates  to  effecting  the  object,  and 
that  will  be  best  effected  by  the  incorporation  of  a  number  of  individuals,  ex- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     249 

tending  their  offices  of  discount  and  deposite  from  one  end  of  the  United  States 
to  the  other,  all  linked  together  by  common  interest  and  duty. 

But  some  gentlemen  say  that  this  will  be  a  corporation,  and  that  all  corpo- 
rations are  anti-republican.  This  is  a  naked  assertion,  and  is  unsupported  by 
any  kind  of  evidence;  the  propriety  of  granting  acts  of  incorporation  is  made 
to  depend  on  the  object  to  be  accomplished  thereby;  and,  to  my  view,  repub- 
licanism has  nothing  to  do  with  the  present  question;  this  is  only  the  means 
necessary  to  carry  into  effect  one  of  the  specific  grants  of  power  contained  in 
the  constitution.  But  it  h;is  often  appeared  to  me  that  the  word  republican- 
ism is  used  in  this  House  as  a  kind  of  watch-word,  without  any  appropriate 
meaning  or  application  to  the  subject  under  consideration;  and  in  this  case 
it  seems  to  be  addressed  to  the  feelings  of  members  more  than  to  their  judg- 
ment. But,  sir,  will  it  be  said  that,  to  collect  and  transmit  the  revenue  of  the 
United  States  free  of  expense,  is  an  anti-republican  measure  ?  I  presume 
not.  Is  any  man's  rights  invaded,  or  are  the  great  principles  of  equal  liberty 
destroyed?  I  presume  not.  Then  what  can  republicanism  or  anti-republican- 
ism have  to  do  with  the  piesent  question  ?  It  does  appear  to  me  that  it  can 
have  nothing. 

Bui, gentlemen  say  they  can  furnish  us  with  a  substitute  to  carry  on  the  fis- 
cal operations  of  Government;  and  what  is  that?  One  gentleman  tells  us,  to 
collect  the  revenue  in  specie,  and  ship  it  c»  and  another  tells  us  that 

{he  State  bank  paper  will  answer  all  the  purposes  of  the  Government,  and  that 
the  State  banks  will  b;*  safe  places  of  deposite  for  your  revenue.  But,  have  not 
Hu-s,' '-i.'tiiiemen  furnished  you  with  strong  arguments  against  both  of  these 
plans?  They  tell  you  thai  you  need  not  be  under  any  apprehension  of  the 
specie  being  carried  out  of  the  country;  that  the.  risk  would  be  so  great,  that 
no  man  in  i.  i  would  attempt  it;  and,  notwithstanding,  they  recommend 

it  to  this  House  as  a  course  to  !>e  ;  Qrovernntent.  They  also  tell 

you  that  State  banks  are  not  '  ed:  that  they  carry  on  a  kind  of  licens- 

ed fraud,  and  issue  their  notes  ioa  largi-  am-Hin.',  without  having  any  specie  in 
their  vaults.  If  this  be  true,  then  I  presume  that  they  would  be  very  impro- 
per places  for  tho  reception  and  safe  keeping  of  the  public,  revenue,  and  there- 
tore  should  noi  ben-sorted  :»>.  An;l  ihis  is  not  the  only  objection  to  State 
banks;  their  paper  will  not  circulate  generally  throughout  the  United  States^ 
there  will  be  a  different  value  stamped  upon  it  in  different  parts  of  the  coun- 
try, and  it  mighr  well  b  •  refused  by  the  creditors  of  the  Government.  In  ad- 
dition to  this,  they  do  not  form  and  keep  up  that  chain  ot  connexion  through- 
out the  United  States  that  would  enable  them  to  transmit  the  money  to  such 
places  as  the  demands  on  the  Government  might  require. 

Then,  Mr.  Speaker,  if  the  Bank  of  the  United  States  shall  be  put  down,  (a 
measure  wlikh  I  consider  almost  certain)  your  revenue  will  be  payable  in 
specie,  and  nothing  else  can  bj  received,  agreeable  to  the  existing  laws  of  the 
land.  And  have  gentlemen  given  themselves  time  to  consider  where  this  spe- 
cie is  to  come  from  ?  Have  they  relief  ted  that,  from  the  best  data  on  which  we 
can  form  a  calculation,  there  are  less  than  twenty,  millions  of  dollars  in  actual 
specie  in  the  United  Stales? — a  sum  not  more  than  sufficient  to  meet  the  de- 
mands of  the  Government,  inoneyear  of  commercial  prosperity,  even  if  it  was 
in  your  power  to  unlock  the  chest  of  every  miser,  and  to  bring  into  circulation 
every  cent  of  actual  specie  now  in  the  United  States.  And  this,  you  well 
know,  will  not  be  in  your  power.  And  was  it  in  your  power  to  bring  into  the 
treasury  ot  the  United  States  the  whole  amount  of  specie  now  in  the  country, 
and  in  that  way  were  you  able  to  discharge  the  demands  of  the  Government 
for  one  year,  what  will  then  be  left  to  give  currency  to  the  bank  paper,  as  a 
circulating  medium  in  the  country  ?  To  give  currency  to  bank  paper,  it  must 
carry  with  it  a  belief  (at  least)  that  there  is,  in  the  vaults  of  the  bank  from 
which  the  paper  issues,  a  sufficiency  of  actual  specie  to  render  to  you  a  dollar 
in  specie  for  every  dollar  in  paper  which  you  return  them.  But,  Mr.  Speak- 
er, this  impression  cannot  be  made  in  the  present  state  of  things.  It  will  very 
soon  be  known  that  the  treasury  of  the  United  States  has  gathered  into  its 
vaults  all  the  actual  specie  in  the  country.  This  being  the  case,  there  can  be 


250  HANK    OF   THE    UNITED    STATES. 

no  specie  in  the  vaults  of  the  bank.    Of  course  the  paper  will  cease  to  circulate, 
or ,  it'  it  circulates  at  all,  it  will  beat  a  rate  below  its  nominal  value. 

.But,  sir,  will  those  gentlemen,  who  advocate  the  doctrine  that  State  bank 
paper  shall  be  receivable  in  discharge  of  the  revenue,  tell  mewho  is  to  make 
^  the  selection  from  amongst  the  banks  whose  paper  is  to  be  received  ?  Do  they 
mean  to  throw  the  responsibility  from  their  own  shoulders  on  the  Secretary  of 
the  Treasury,  and  make  him  individually  liable,  in  case  the  bank  should  fail  r 
I  presume  not;  this  would  be  an  unreasonable  responsibility;  and  if  this  is  not 
the  case;  the  public  revenues  will  be  exposed  to  great  risk,  and  frequent  losses 
will  be  the  certain  consequence.  In  addition  to  this  objection,  if  the  Secreta- 
ry of  the  Treasury  is  to  be  left  at  his  own  discretion  to  take  such  State  bank 
paper  as  may  suit  his  mere  will  and  pleasure,  without  any  individual  liability, 
do  you  not  at  once  give  him  a  decided  control  over  all  the  moneyed  institutions 
of  the  country,  and  an  influence  greater  than  what  is  possessed  by  all  the  rest 
of  the  Government  besides,  and  that  at  the  risk  of  the  loss  of  the  revenues  of 
the  United  States?  1  am  willing  to  admit  that  I  have  the  highest  confidence 
in  the  integrity  and  talents  of  the  present  Secretary  of  the  Treasury,, -but  we 
dp  not  know  now  long  he  may  hold  that  office,  and  we  know  not  who  may  be 
his  successor;  and  if  there  was  a  certainty  that  he  would  continue  to  adminis- 
ter the  fiscal  concerns  of  the  Government,  still  I  contend  that  it  would  be  un- 
wise and  unsafe  to  place  so  much  power  and  influence  in  the  hands  of  any  offi- 
cer of  the  Government  that  is  so  far  removed  from  the  People,  and  to  whom 
he  feels  no  kind  of  responsibility. 

But,  sir,  if  the  Government  refuses  to  receive  State  bank  paper,  as  I  pre- 
sume they  will,  then  it  must  depreciate,  and  will  no  longer  be  a  circulating 
—  medium  in  the  country  at  its  nominal  value.  We  shall  then  witness  the 
strange  phenomenon  of  a  country,  with  an  export  trade  worth  upwards  of 
seventy  millions  of  dollars  annually,  without  one  single  cent  in  circulation 
that  will  be  a  tender  in  the  payment  of  debts,  or  receivable  in  the  purchase  of 
produce  at  its  nominal  value.  How  far  this  will  comport  with  the  interest  of 
this  nation  is  for  those  to  determine  who  preside  over  its  concerns.  It  has 
always  been  my  ppinion  that  the  true  interest  of  a  nation  consisted  in  her 
having  a  circulating  medium  at  least  equal  to  h<3r  export  trade  and  one  year's 
revenue;  and,  if  she  did  not  possess  that  in  actual  specie,  it  should  be  the 
wisdom  of  Government  to  create  an  artificial  capital  equal  to  those  objects; 
and  that  it  should  be  so  secured  as  to  possess  the  confidence  of  the  nation. 
Without  this  circulating  medium,  the  spirit  of  industry  will  be  checked — 
agriculture  will  no  longer  flourish — and  a  universal  stoppage  of  payment  must 
take  place.  I  hope  gentlemen  will  at  least  take  time  to  reflect  before  they 
draw  down  on  their  country  those  direful  evils,  and  will  not  suffer  their  minds 
to  be  occupied  too  much  by  party  feelings,  which,  in  my  opinion,  have  nothing 
to  do  with  the  present  question.  But  some  gentlemen  seem  prepared  to 
denounce  every  man  who  does  not  give  his  negative  to  the  bill  under  consi- 
deration. Sir,  considerations  of  this  kind  will  have  but  little  weight  with  me. 
I  know  no  party  but  the  People;  I  know  no  interest  but  the  public  welfare; 
and  I  shall  on  this,  and  on  all  other  questions  which  are  presented  for  my 
decision,  give  such  a  vote  as  in  my  judgment  is  best  calculated  to  promote 
these  great  objects;  and  if  I  err,  I  shall  nave  the  consolation  that  I  have  inde- 
pendently exercised  my  best  understanding,  and  that  I  have  not  been  the 
blind  follower  of  any  political  party. 

But,  Mr.  Speaker,  1  will  take  gentlemen  on  their  own  ground  fora  moment, 
and  see  how  this  measure  will  operate.  They  say  that  the  State  banks  will 
go  on  to  issue  their  paper,  and  it  will  continue  to  circulate  as  usual;  but,  sir, 
let  it  be  recollected  that,  by  the  dissolution  of  the  charter  of  the  Bank  of  tin- 
United  States,  about  seventeen  millions  of  dollars  are  at  once  taken  out  of 
circulation,  which  is  equal  to  one-fifth  of  all  the  floating  capital  of  the  United 
States.  Then,  independent  of  the  individual  distress  which  this  must  produce, 
'"'  it  will  reduce  the  value  of  all  produce  and  property  in  market  in  the  propor- 
tion that  the  sum  taken  out  of  circulation  bears  to  the  whole  sum  now  in  cir- 
culation. I  presume  that  such  a  state  of  things  cannot  be  desirable:  for, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.    251 

although  you  may  by  your  measures  reduce  the  price  of  tobacco,  flour,  hemp, 
&c.  still  you  will  not  be  able  to  procure  a  bushel  of  salt,  or  a  pound  of  sugar, 
for  less  than  what  it  is  now  selling  for.  But  my  honorable  colleague  (Mr. 
BURWELL)  seems  to  think  that  this  would  be  very  desirable.  He  says  it  would, 
reduce  the  price  of  labor,  and,  in  that  way  the  farmer  and  planter  would  be 
forced  to  abandon  his  agricultural  pursuits,  and  become  a  laborer  in  some  manu- 
facturing institution  at  low  wages,  and  thereby  enable  the  manufacturer  of  this 
country  to  undersell  the  manufacturer  of  Europe.  To  my  mind  this  appears  to 
be  a  wild  theory,  at  war  with  the  best  interests  of  the  conn  try,  I  consider  agricul- 
ture as  the  fountain  of  wealth  in  this  country,  and  commerce  and  manufactures 
as  the  hand  maids;  and  I  never  can  consent  to  the  depression  of  the  former 
for  the  benefit  of  the  latter.  It  would  be  with  extreme  regret  that  1  should 
see  the  independent  cultivators  of  the  soil  obliged  to  abandon  their  (arms  and 
take  up  their  residence  in  a  work  shop,  and  become  the  dependant  of  some 
lordly  tyrant,  instead  of  being  the  independent  cultivator  of  the  earth.  In 
addition  to  this,  I  have  always  considered  the  agriculturist  as  the  best  citizen; 
*fc  entertaining  more  rational  ideas  of  liberty,  and  being  more  strongly  attached 
to  the  independence  of  his  country;  and  it  is  on  agriculture  that  we  must  rely 
for  wealth  in  time  of  peace,  and  plenty  in  time  of  war;  and  it,  therefore,  has 
a  primary  claim  on  the  patronage  of  Government. 

The  gentleman  from  New  York,  (Mr.  PORTER)  has  told  us,  that,  inasmuch 
as  the  friends  of  the  bill  under  consideration  have  relied  on  different  parts 
of  the  constitution,  therefore,  no  one  part  gives  us  the  power.  The  singularity 
of  this  idea  is  manifested  to  tin-  weakest  capacity,  and  the  fair  deductions 
very  apparent;  I  presume  that,  if  the  measure  can  be  supported  and  justified 
under  different  views  of  the  constitution,  it  proves  that  the  measure  is  abun- 
dantly justified  oil  constitutional  grounds,  and  that  it  is  in  unision  with  the 
general  principles  of  the  instrument;  and  shall  we  be  told,  because  it  has  the 
support  of  many  parts  of  the  constitution,  it  is  weaker  than  if  it  had' only 
oner  To  exemplify  my  idea,  suppose  a  proposition  in  arithmetic,  that  by 
many  modes  of  calculating  you  could  arrive  at  the  same  result,  would  it  be 
said  that  this  was  less  true  than  where  you  could  only  come  at  the  result  in 
one  particular  way?  I  presume  not.  But,  Mr.  Speaker,  if  any  measure 
could  derive  strength  from  the  inconsistency  of  its  advocates  or  opponents, 
then,  sir,  I  am  persuaded  that  the  opponents  of  the  bill  have  done  as  much  in 
its  favor  as  its  friends  have  against  it.  I  beg  y.ni,  sir,  to  recollect  the  different 
grounds  on  which  the  opposition  have  relied.  Some  gentlemen  are  opposed 
on  constitutional  grounds;  some  gentlemen  are  opp-jsed  because* they  are 
afraid  the  bank  will  coalesce  with  the  Government,  and  overturn  the  liberty 
of  the  Peopl?:  others  are  opposed  because  the  bank  is  hostile  to  the  Govern- 
ment; others  are  opposed  because  they  want  a  national  bank;  and  others  are 
opposed  because  a  part  of  the  capital  stock  is  owned  by  foreigners;  and  here 
they  attempt  to  awaken  all  the  angry  feelings  of  the  nation  against  the  use  of 
foreign  capital,  while  they  carefully  keep  out  of  view  the  fact,  that  a  republi- 
can administration  sold  to  foreigners  all  the  capital  which  they  had  in  this 
bank;  and  thus,  by  uniting  all  those  heterogeneous  objections,  a  majority  is 
formed  in  this  House  opposed  to  the  passage  of  the  bill.  But,  sir,  1  do  not 
expect  to  derive  any  aid  from  these  incoherent  objections  as  giving  any  support 
io  the  bill:  for,  from  the  zeal  that  gentlemen  have  shewn  in  their  opposi- 
tion to  this  bill,  it  was  to  be  expected  that  they  would  touch  every  string  that 
ivas  likely  to  sound  in  unison  with  the  feelings  of  any  part  of  this  House. 

Mr.  Speaker,  I  shall  pass  over  many  of  the  minor  objections  that  are  made  to 
the  passage  of  the  bill  now  under  consideration,  and  come  to  the  conclusions 
of  the  opponents  of  the  measure.  They  are  all  obliged  to  admit  that  the 
establishment  of  such  a  bank  as  is  contemplated  by  the  bill  under  considera- 
tion, would  be  convenient,  and  would  aid  the  fiscal  operations  of  the  Govern- 
ment, and  say  that,  if  it  was  the  only  way  in  which  the  finances  of  the  coun- 
try could  be  administered,  then  it  would  be  justifiable.  And  here,  in  my 
opinion,  the  gentlemen  give  up  the  constitutional  ground:  for,  if  the  measure 
be  necessary  and  proper  to  carry  into  execution  any  of  the  specific  grants  of 


252  BANK    OF    THtt    UNITED    STATES. 

power  contained  in  the  constitution,  then  the  plain  language  and  meaning  of 
that  instrument  is  satisfied,  and  is  not  made  to  depend  upon  the  question, 
whether  there  is  no  other  way  in  which  it  can  be  done. 

I  have  endeavored,  Mr.  Speaker,  to  examine  this  subject  with  candor,  and 
prepare  my  mind  to  decide  on  it  without  taking  into  view  the  ruin  of  thou- 
sands, that  must  be  the  certain  consequence  of  withdrawing  from  circulation 
at  one  time,  so  much  of  the  floating  capital  of  the  country.  And  it  does  appear 
to  me,  in  every  point  of  view  in  which  I  have  been  able  to  examine  it,  that,  at 
this  time,  to  break  in  upon  the  established  order  of  tilings,  under  which  the 
United  States  have  progressed  in  wealth  and  prosperity,  unexampled  in  any 
preceding  twenty  years,  would  be,  to  say  the  least  of  it,  a  dangerous  experi- 
ment. 

Mr.  TALLMADGE  said,  although  the  bill  now  before  the  House  had  under- 
gone a  pretty  ample  discussion;  and  although  he  felt  almost  disqualified  from 
speaking  distinctly,  from  the  pressure  of  a  severe  cold,  yet  he  could  not  re- 
concile it  to  his  sense  of  duty  to  permit  the  question  to  be  taken  on  the  present 
bill,  without  submitting  a  few  remarks  to  the  consideration  of  the  House.  In 
doing  this,  he  would  endeavor  to  place  the  question  on  its  proper  basis,  di- 
vested of  any  extraneous  considerations,  by  the  admission  of  which  some  gen- 
tlemen appeared  to  have  lost  sight  of  the  true  merits  of  the  question. 

Before  1  proceed  to  discuss  the  bill  now  before  the  House,  (said  Mr.  T.)  I 
take  occasion  to  remark,  that  some  gentlemen  appear  to  entertain  very  limit- 
ed, and,  in  my  judgment,  very  incorrect  ideas  of  banking  institutions.  From 
some  observations  which  I  have  listened  to,  T  should  suppose  that  a  bank  was 
considered  nothing  better  than  a  broker's  office,  in  which  Jews  and  money 
brokers  meet  to  prey  upon  the  community.  Others  have  compared  the  in- 
stitution to  Pandortfs  box,  from  which  have  issued  the  principal  evils  which 
have  afflicted  this  country.  Many  similar  remarks,  equally  crude  and  irre- 
levant, have  been  submitted  by  some  gentlemen,  who  wish  the  dissolution  of 
the  Bank  of  the  United  States..  For  the  information  of  such  gentlemen,  I 
take  occasion  to  remark,  that  the  use  of  banks  by  the  principal  commercial 
nations  in  the  civilized  world,  stamps  a  value  upon  the  institution,  too  broad 
and  too  well  attested  to  be  questioned  at  this  time. 

The  Bank  of  the  United  States?  whose  corporate  existence  we  are  called  on 
to  continue,  seems  to  have  been  instituted  principally  for  two  purposes,  viz. 
that  of  discount  and  deposite.  Under  the  first,  loans  and  facilities  are  obtain- 
ed, both  by  the  Government  and  individuals:  and  by  the  last,  corporate  bodies 
and  individuals  are  enabled  to  lodge  their  money,  or  other  precious  treasures, 
in  the  vaults  of  the  bank,  for  safe-keeping,  to  be  withdrawn  at  pleasure. 

It  will  not  be  a  fair  course  of  reasoning  to  infer,  that,  because  some  banks 
hafe  been  used  for  bad  purposes,  therefore  s#must  be  of  pernicious  tendency. 
The  abuse  of  any  blessing  can  never  be  fairly  urged "again&t  its  use.  The  great 
multiplication  of  banks,  by  the  different .States  in  the  Union,  proves  the  sense 
which  the  public  entertain  of  their  utility.  The  Bank  of  North  America, 
which  was  incorporated  in  the  year  1780,  served  greatly  to  invigorate  public 
credit,  and  unquestionably  shed  a  salutary  influence  on  the  measures  of  that 
eventful  epoch  in  our  Revolution.  But  I  will  not  enlarge  on  this  point,  pre 
sinning  that  few  can  be  found  within  the  sound  of  my  voice,  who  will  question 
the  utility  of  the  Bank  of  the  United  States. 

The  remarks  which  I  propose  to  submit,  will  be  comprised  under  the  two 
following  general  heads: 

I.  Has  Congress  a  constitutional  power  to  renew  the  present  charter  of  the 
Bank  of  the  United  States? 

II.  Is  it  expedient,  at  this  time,  to  permit  its  charter  to  expire? 

That  the  field  of  controversy  may  be  narrowed  as  much  as  possible,  it  may 
not  be  improper  to  consider  the  points  in  which  all  agree;  and,  also,  the  most 
prominent  subjects  of  debate.  I,  therefore,  consider  the  three  following 
points  as  agreed  to  by  the  friends,  as  well  as  the  enemies,  of  the  present  bilk 


ON  THE   BILL  TO  RENEW   THE  CHARTER    OF    1791.  253 

1.  That  Congress  have  the  constitutional  power  to  make  all  laws  neci- 
to  carry  into  execution  the  constitution  of  the  United  States. 

2.  That  banks  are  among  the  necessary  means  to  enable  the  Government 
to  carry  on  its  fiscal  arrangements. 

3.  That  no  positive  injustice  can  be  chargeable  upon  the  Government,  even 
if  it  should  refuse  to  renew  the  charter  of  the  bank,  inasmuch  as  it  will  expire 
by  its  own  limitation. 

The  points  in  controversy  between  us  are  the  three  following: 
1.  The  opposes  of  the  bill  on  your  table  as*ert,  that,  to  renew  the  char- 
ter of  the  Bank  of  the  United  States,  Congress  must  assume  a  power  not  war- 
ranted by  the  constitution. 

To  this  doctrine  I  enter  my  solemn  protest. 

2.  They  further  assert,  that  the  State  banks  are  competent  to  answer  all  the 
demands  of  the  General  Government  in  their  fiscal  operations. 

This  doctrine  I  can.  by  no  means,  admit. 

3.  It  has  also  been  asserted,  that  the  Bank  of  the  United  States  originated 
with  a  party;  that  it  has  been  .supported  by  a  party;  and  must  now  be  decided 
on  party  principles. 

The  two  first  parts  of  this  proposition  I  deny,  but  fear  I  shall  be  constrained 
to  submit  to  the  lasl. 

I  come  now  t>  the  consideration  of  the  constitutional  question,  and,  inas- 
much as  it  embraces  consequences  very  momentous,  bath  to  the  General  Go- 
vernment and  to  our  individual  citi/.ens,  1  hope  this  honorable  House  will  hear 
me  with  candor. 

The  ground  taken  by  the  opposerdof  the  present  bill  rests  upon  the  tenth 
article  of  ihe  amendments  ID  the  constitution,  which  declares  that  the  po\\ers 
not  delegated  to  Co'  ;  -ved  to  she  State.-,  cic.  and  hence,  an  infer- 

ence is  drawn,  tlial,  because  no  expre--  power  can  be  found  delegating  the 
authority  to  grant  incorporations,  therefore  Congros  cannot  constitutionally 
exercise  such  p.iwrr.  The  fallacy  of  this  argument  may  be-  shown  in  num- 
berless instances,  and  from  every  day's  experience  in  legislation.  Asu  fami- 
liar instance,  I  beg  leave  to  inquire,  by  what  express  authority  in  the  constitu- 
tion has  the  Government  any  power  to  establish  custom  houses,  or  to  appoint. 
officers  for  the  collection  of  th  •?  And  yet,  the  orderly  management  of 

the  Treasury  Department  so  imperiously  demands  the  exercise  of  this  power, 
that  no  doubt  has  ever  been  entertained  *as  t;>  its  constitutionality. 

In  defining  the  powers  of  Congress,  there  seems  to  be  a  three-fold  rule 
given  in  the  constitution: 

1.  Positive  as  to  tlu>  power  granted. 

2.  Negative  on  the  General  Government. 

3.  Negative  on  the  States. 

If  gentlemen  will  turn  to  the  first  article  of  the  constitution,  under  the  8tli 
section,  they  will  find  the  powers  enumerated  which  Congress  may  exercise. 
Inasmuch  as  Congress  has  the  power  to  lay  and  collect  taxes,  duties,  imposts, 
and  excises,  so  it  is  also  provided,  "That  they  may  make  all  laws  which  may 
be  necessary  and  proper  for  carrying  into  execution  the  foregoing  powers,"  &c. 
Here  is  the  basis  on  which  I  am  willing  to  rest  the  argument,  that  the  Legisla- 
ture of  the  United  States  has  the  right  to  incorporate  a  bank  for  the  purpose 
of  collecting,  in  the  most  safe  and  facile  manner,  the  revenues  of  the  country, 
as  well  as  of  disbursing  the  same  with  the  least  expense  and  inconvenience 
to  the  Government,  in  any  part  of  the  United  States  where  the  same  should 
be  needed.  If  it  should  be  conceded,  that  banking  institutions  are  necessary 
to  the  convenient  and  orderly  management  of  our  fiscal  concerns,  (and  I  flat- 
ter myself  this  will  not  be  contested)  then  shall  1  consider  the  constitutional 
question  nearly  settled,  unless  it  can  be  proved  (hat  State  banks  can  be  a  safe 
substitute  for  the  Bank  of  the  United  States.  On  this  point,  I  shall  have  oc- 
casion to  remark  hereafter. 

In  the  ninth  section,  under  the  first  article  of  the  constitution,  the  exercise 
of  certain  powers  is  prohibited  to  the  General  Government,  but  nothing  can 
there  be  found  touching  the  present  question.  It  must,  therefore,  be  included 


6254  ^BANK    OF    THE    UNITED    STATES. 

in  the  amendment  before  quoted,  the  explanation  already  given  of  which  I  hope 
may  be  satisfactory  to  this  House. 

In  the  tenth  section  of  the  same  article,  the  States  are  prohibited  from  exer- 
cising certain  powers.  Among  other  things,  they  are  not  permitted  "  to  coin 
money,-  emit  bills  of  credit;  make  any  thing  but  gold  and  silver  a  tender  ii 
payment  ot  debts,"  &c.  Although  I  am  not  disposed,  in  this  place,  to  con- 
test the  right  claimed  by  the  several  States  to  incorporate  banks  ad  libitum, 
yet  1  have  no  hesitation  in  saying,  that  there  appears  to  be  a  more  literal  re- 
striction on  the  State  authorities  to  grant  charters  to  banks,  than  on  the  Go- 
vernment ot  the  United  States.  This  contraction  receives  additional  con- 
hrmation,  when  it  is  remembered  that,  in  some  States,  bank  bills  have  so  far 
been  made  a  legal  tender,  as  to  be  receivable  for  State  taxes,  &c.  The  infer- 
ence from  these  remarks  is  simply  this,  that,  as  bank  bills  are  a  species  of  bills 
of  credit,  the  several  States  cannot  constitutionally  authorize  their  emission; 
and  as  they  are  the  best  representative  of  gold  and  silver,  Congress  alone  has 
the  power,  under  the  constitution,  to  regulate  the  same. 

In  the  modern  rage  for  putting  down  former  institutions,  we  seem  to  arro- 
gate to  ourselves  more  wisdom  than  our  predecessors  possessed.  In  the 
preamble  to  the  act  establishing  the  Bank  of  the  United  States,  among  other 
reasons  assigned  for  the  passage  of  the  law,  it  was  deemed  that  such  an  insti- 
tution "would  be  conducive  to  the  successful  conducting  of  the  national  fi- 
nances; would  tend  to  give  facility  to  the  obtaining  of  loans  for  the  use  of  the 
Government,  on  sudden  emergencies,  and  would  be  productive  of  considerable 
advantages  to  trade  and  industry  in  general." 

If  such  an  institution  was  necessary  for  the  operation  of  the  Government 
then,  it  is  riot  easy  to  conceive  that  it  can  be  less  useful  now;  nor  can  it  be 
comprehended  why  a  measure  should  be  deemed  unconstitutional  in  the  year 
1811,  which,  in  the  y^ear  1791,  was  pronounced  by  some  of  the  first  sages  of 
our  country,  with  Washington  at  their  head,  not  only  very  beneficial  to  the 
Government,  but  strictly  constitutional.    This  argument  derives  no  incon- 
siderable weight  from  the  circumstance  that,  under  all  the  successive  adminis- 
trations of  our  Government,  acts  have  been  passed  confirmatory  of  this  prin- 
ciple.    The  law  enacted  for  the  punishment  of  those  who  should  counterfeit 
the^ bills  issued  by  this  bank,  sanctions  the  original  law:  and  the  laws  of  the 
different  States  to  the  same  effect,  prove  that  (hey  had   no  scruples  on  this 
point.     The  loans  which  have  been  repeatedly  made  of  this  bank,  under  the 
sanction  of  law,  greatly  corroborate  the  opinion,  that  the  charter  was  not 
deemed  unconstitutional,  and  I  presume  most  of  the  gentlemen  who  now  ap- 
pear so  scrupulous  about  violating  the  constitution, actually  voted  for  the  passage 
of  the  law  of  the  last  session,  authorizing  the  bank  to  loan  several  millions  of 
dollars  to  the  Government.     Now,  if  the  original  law  was  unconstitutional, 
the  charter  is  void,  and  all  the  operations  of  the  bank  must  have  been  illegal. 
On  the  same  principle,  every  subsequent  law  relative  to  that  incorporation 
must  have  partaken  of  its  original  depravity,  being  equally  unconstitutional. 
In  the  year  1801,  a  law  vvas  passed  authorizing  the  bank  to  establish  offices 
of  discount  and  depositc  in  the  territories  of  the  United  States;  under  which 
law  the  bank  was  established  at  New  Orleans,  for  the  accommodation  of  the 
Government,  and  yet  no  constitutional  objection  was  made  to  this  measure, 
although  the  sas;e  of  Monticello  was  then  President  of  the  United  States. 

I  cannot  dismiss  this  head  of  my  argument  without  adverting  to  the  use 
which  some  gentlemen  have  made  of  the  terms  power  arid  means,  confound- 
ing them  together,  as  of  synonymous  signification,  in  the  present  question.  If 
Congress  possesses  the  power  of  collecting  and  disposing  of  the  revenue,  its 
wisdom  must  devise  the  best  means  of  effecting  the  object.  In  this  view  of 
the  subject,  the  creation  of  a  bank  must  be  considered  among  the  means  ne- 
ces=ary  for  the  "successful  conducting  of  the  national  finances."  My  own 
judgment  has  long  been  settled  on  the  constitutional  question,  and  I  cannot 
but  hope  that  a  candid  consideration  of  the  views  in  which  I  have  presented 
the  subject  to  the  House,  \yill  induce  some  gentlemen  to  hesitate,  who  may 
have  heretofore  been  fixed  in  opposition  to  this  bill. 


ON  THE    BILL  TO  RENEW  THE  CHARTER   OF    1791. 

I  come  now  to  the  consideration  of  the  second  general  head  which  I  pro- 
posed to  discuss,  viz.  the  inexpediency  of  permitting  the  present  charter  to 
expire.  In  doing  this,  I  will  endeavor  briefly  to  state  some  of  the  conse- 
quences which  will  probably  result  from  such  a  measure. 

1st.  A  general  distrust  of  bank  credit  must  be  the  inevitable  consequence. 
As  soon  as  the  bills  issued  from  the  Bank  of  the  United  States  shall  cease 
to  circulate,  the  holders  of  other  bank  paper  will  become  suspicious  of  their 
ultimate  payment,  and,  of  course,  will  either  refuse  to  receive  them  inpay- 
ment of  debts,  or  will  send  them  to  their  proper  banks  to  receive  specie  in 
exchange  for  them.  As  evidence  of  this,  I  will  state  to  the  House  that  the 
mere  conjecture  that  such  an  event  may  happen,  has  already  begun  the  call  for 
gold  and  silver  in  exchange  for  bank  bills. 

'2d.  Such  a  measure  would  be  distressing  if  not  destructive  to  State  banks. 
To  prove  the  truth  of  this  position,  I  call  on  gentlemen  to  examine  the  report 
of  the  Secretary  of  the  Treasury,  in  which  may  be  seen  the  amount  of  notes 
on  hand,  issued  by  the  State  banks.  If  these  should  be  presented  for  pay- 
ment, nearly  the  whole  of  the  specie  in  their  vaults  would  be  drawn  out,  and 
perhaps  some  banks  might  not  be  able  even  to  meet  the  demand.  The  unusual 
export  of  dollars  from  this  country,  for  some  years  past,  and  the  failure  of  the 
accustomed  imports,  have  continued  greatly  to  increase  this  distress. 

3d.  It  would  be  ruinous  to  individuals.  Perhaps  a  more  inauspicious  period 
than  the  present  could  not  have  been  selected  for  thedostruetion  ot  this  moneyed 
institution.  Our  mercantile  brethren  have  more  than  $-20,000,000  locked 
up  at  this  time  in  Europe,  and  unusually  large  importations  ot  East  and  West 
India  produce  are  on  hand  for  exportation.  Accommodations  must  therefore 
be  obtained,  or  their  credit  as  well  as  property  must  be  lost.  I  beg  gentle- 
men to  re-examine  the  Secretary's  report,  where  will  be  seen  the  amount  of 
discounts  in  our  principal  commercial  towns. 

I  then  inquire,  Mr.  Speaker,  whether  all  the  specie  in  the  United  States 
is  sufficient  to  pay  up  the  notes  which  have  been  discounted  by  the  Bank  of 
the  United  States,  and  which  are  now  on  hand.  If  you  should  oblige  them 
to  wind  up  their  concerns  on  the  3d  of  March  next,  they  will  be  constrained 
to  call  in  their  dues,  and  as  no  new  loans  can  be  made  by  this  institution  after 
their  charter  shall  expire,  so  the  State  banks  will  be  constrained  to  shorten 
their  discounts,  lest  their  debt  should  be  increased  to  the  Bank  of  the  United 
States  by  accommodations  to  her  debtors.  In  this  way  the  distress  will  be 
greatly  increased,  and  the  State  banks,  being  crippled  in  their  operation,  will 
be  unable  to  afford  the  needed  relief. 

The  bills  issued  by  the  Bank  of  the  United  States,  and  now  in  circulation, 
exceed  five  millions  of  dollars.  Let  this  sum  be  called  out  of  circulation, 
and  the  merchant,  the  farmer,  and  the  mechanic,  will  sensibly  feel  its  effects. 

4th.  If  this  charter  should  expire,  1  feel  persuaded  it  must  be  injurious  to 
the  operation  of  the  Government.  Of  the  present  regular  collection  of  the 
revenue  I  will  say  nothing;  but,  of  the  distribution  of  this  money,  I  venture  to 
say  that  no  process  through  the  State  banks  can  be  so  safe  or  so  expeditious. 
Suppose  that  the  operations  of  the  Government  should  require  the  payment 
of  a  million  of  dollars  at  New  Orleans.  Through  the  agency  of  the  United 
States'  Bank, "this  deposite  and  payment  could  be  promptly  made;  but  how 
could  this  be  effected  by  any  State  bank?  From  the  very  nature  of  those 
institutions,  the  bills  issued  by  the  State  banks  must  have  a  limited  circula- 
tion, and  could  not  possibly  answer  on  such  an  emergency.  But,  if  the  Go- 
vernment should  suffer  no  inconvenience  from  the  State  bank  emissions,  mer- 
cantile men  arid  private  citizens  must  feel  the  embarrassment  very  severely. 
In  addition  to  these  considerations,  will  it  be  safe  for  the  Government  to  en- 
trust their  funds  to  moneyed  institutions,  over  which  they  not  only  have  no 
control,  but  have  not  even  the  power  to  demand  a  view  of  the  statement  of 
their  business?  On  this  point  1  flatter  myself  there  can  be  but  one  opinion: 
and  inasmuch  as  weekly  reports  are  now  made  to  the  Secretary  of  the  Trea- 
sury, from  the  Bank  ot  the  United  States,  the  safety  of  trusting  the  revonue 
to  this  institution,  rather  than  to  any  other,  must  be  very  apparent. 


256  BANK  OF  THE  UNITED  STATES. 

5th.  It  is  somewhat  questionable,  in  my  mind,  whether  the  honor  of  the 
Government  will  be  unimpeachable  if  the  charter  of  the  bank  should  not  be 
renewed.  I  have  said  before,  that,  in  point  of  strict  justice,  the  Government 
is  not  bound  to  re-charter  this  bank;  but,  when  I  recollect  that,  not  many 
years  ago,  the  Secretary  of  the  Treasury  sold  all  the  bank  stock  belonging  to 
the  United  States  (being  2,220  shares)  to  foreigners,  at  a  premium  of  forty -Eve 
per  cent.  I  cannot  reconcile  it  to  my  ideas  of  honorable  conduct,  to  reduce 
that  stock  at  once  to  par.  By  that  operation  the  Government  raised  the  sum 
of  1,287,600  dollars,  making  a  nett  profit  to  the,,  treasury  of  399,600  dollars. 
Jf  the  average  rate  of  dividends  has  been  about  eight  and  a  third  per  cent,  on 
the  nominal  capital,  it  is  very  manifest  that  the  purchasers  of  this  stock  of  the 
Government  have  not  received  six  per  cent,  on  their  money,  and  all  the  ad- 
vance paid  on  the  principal  must  be  lost.  From  the  remarks  made  by  some 
gentlemen,  this  argument  will  probably  have  but  little  weight;  more  especially 
as  the  purchasers  were  Englishmen,  But  by  me  the  same  rule  shall  be  meted 
out  to  an  Englishman  or  a  Dutchman,  to  a  Frenchman  or  an  American. 

Give  me  leave,  Mr.  Speaker,  in  thisplace  to  notice  a  very  popular  objection 
to  the  renewal  of  this  charter,  because  two-thirds  of  the  stockholders  are  fo- 
reigners. Are  not  the  rights  of  foreigners  in  our  country  to  be  protected  as 
well  as  those  of  our  own  citizens?  Is  it  not  enough  that,  by  the  act  of  incor- 
poration, foreigners  are  not  eligible  as  directors  to  manage  the  funds  of  this  in- 
stitution? I  know  it  has  been  urged  that  foreign  capital  brought  into  this  coun- 
try is  injurious  to  the  community.  With  this  opinion  I  do  not  accord,  more 
especially  when  placed  under  the  direction  and  control  of  our  own  citizens. 
But,  say  some  gentlemen,  in  case  of  a  war  this  influence  might  be  injurious  to 
our  country.  I  should  believe  the  very  reverse  would  be  the  fact.  If  it  be  true 
that,  where  a  man's  treasure  is,  there  will  his  heart  be  also,  then  surely  it  might 
be  useful  for  any  country  to  have  the  funds  of  its  enemies  to  use  and  improve 
in  case  of  a  war.  Not  only  would  this  serve  to  keep  the  true  owners  of  the 
property  from  being  active  against  us,  but  it  would  also  serve  as  the  sinews  of 
war  to  aid  us  in  the  contest.  So  long  as  the  moneyed  capital  of  our  own  citi- 
zens can  be  better  employed,  let  not  the  policy  of  this  Government  be  direct- 
ed against  the  introduction  of  foreign  capital  into  the  United  States. 

I  will  conclude  my  remarks  on  this  subject,  Mr.  Speaker,  by  calling  the  at- 
tention of  this  honorable  House  to  a  few  statements  taken  from  the  report  of 
the  Secretary  of  the  Treasury,  which  has  been  laid  on  all  our  tables.  From 
this  it  appears  that  the  amount  of  bills  and  notes  discounted,  and  now  on  hand, 
exceeds  14,000,000  of  dollars;  of  which  Philadelphia  owes  about  $5,000,000 
and  New  York  $4,000,000.  If  these  sums  should  be  demanded,  is  it  possible 
to  find  the  gold  and  silver  in  our  country  to  pay  them  up?  Certainly  not. 
What  is  then  to  be  done?  Either  the  Bank  of  the  United  States  must  extend 
the  times  of  payment,  or  the  State  banks  must  afford  their  aid.  It  is  question- 
able how  far  it  would  be  safe  for  the  bank  to  proceed  in  the  first  case;  and,  in 
the  last,  it  has  been  shown,  that,  if  the  State  banks  should  afford  the  needed 
accommodation,  their  own  ruin  would  be  sealed.  By  a  report  lately  made  to 
the  Legislature  of  Pennsylvania,  (which  I  hold  in  my  hand)  it  would  seem 
that  the  amount  of  all  the  specie  in  their  State  banks  did  not  much  exceed 
1,000,000  of  dollars. 

What  is  the  state  of  the  specie  capital  in  the  city  of  New  York?  If  pretty 
correct  information  may  be  relied  on,  all  the  State  banks  in  that  city  cannot 
produce  half  a  million  of  dollars.  It  is  then  utterly  impossible,  with  all  the 
specie  in  those  two  large  cities,  to  pay  up  the  demands  of  the  United  States' 
Bank  upon  the  citizens;  and  if  gentlemen  suppose  that  no  distress  would  en- 
sue from  so  sudden  a  pressure  upon  the  citizens,  (hey  must  have  data  on  which 
to  found  an  opinion  with  which  I  am  wholly  unacquainted. 

Asa  further  evidence  of  the  real  diminution  of  specie  in  our  country,  I 
would  state  that,  in  January,  1810,  there  was  in  the  vaults  of  the  bank  of  the 
United  States  and  its  branches,  $9,051,704,  and  in  the  December  following, 
there  was  only  5,482,879;  making  a  diminution,  in  eleven  months,  of  3,568,825. 
In  the  same  month  of  January,  the  State  banks  owed  the  Bank  of  the  United 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      257 

States  $579,653,  and  in  December  following,  the  sum  was  increased  to 
$1,516,027.  If  you  add  the  difference  (which  is  near  1,000,000  of  dollars)  to 
the  amount  in  the  vaults  of  the  United  States'  Bank  and  its  branches,  in  Decem- 
ber, the  diminution  of  specie  in  about  eleven  months  will  be  found  to  be  j;botit. 
$2,600,000.  This  alarming  diminutio ')  of  the  precious  metals  ought  to  have 
some  weight  with  this  House  in  deciding  on  the  present  question,  that  the  pres- 
sure may  not  be  increased  upon  the  community. 

Notwithstanding  my  full  conviction  that  it  will  be  highly  impolitic,  as  well 
as  peculiarly  distressing  to  the  People  of  the  United  States,  to  .reject  the  bill 
now  before  the  House,  and  thereby  permit  the  charter  of  the  bank  to  expire, 
yet.  I  must  confess  I  am  not  without  my  fears,  that  such  is  to  be  the  fate  of  this 
institution.  It  can  never  be  sufficiently  deplored,  that  the  feelings  of  party 
should  have  ever  influenced  the  measures  of  this  Government.  v\  hen  this 
prevails,  we  must  expect  that  rash  and  impolitic  measures  will  be  adopted. 
On  the  present  occasion,  a  leading  member  in  opposition  to  this  bill  (Mr. 
KPPKS)  has  declared  his  belief,  that  the  bill  now  under  consideration  was 
purely  a  parly  question,  and  would  be  decided  accordingly.  If  this  is  the 
case/  the  fate  of  the  bank  is  fixed;  and  on  this  ground  alone  can  I  account 
for  that  peculiar  apathy  and  unconcern  which  is  exhibited,  when  the  evils  to 
be  apprehended  from  a  non-renewal  of  the  charter  have  been  so  forcibly  ex- 
hibited to  Congress,  in  the  numerous  petitions  which  have  been  presented. 
But  when  I  further  reflect,  that  agents  an-  known  to  be  within  these  walls, 
who  are  already  fattening  on  the  prospect  that  the  State  banks  which  they  re- 
pivM-nt  :i iv  to  receive  the  deposites  of  the  (Joxvrnment  arising  from  the  col- 
lection of  the  revenue,  1  fear  my  feeble  attemps  to  arrest  the  progress  of  this 
desolating  spirit  will  be  of  no  avail. 

Mr.  NICHOLS, >v. — Mr.  Speaker:  As  1  shall  vote  against  an  indefinite  post- 
ponement of  this  bill,  because  I  shall  vote  for  the  entire  bill,  when  rendered 
as  little  liable  TO  objections  as  possible,  and,  as  this  vote  will  probably  stand 
at  variance  with  many  of  those  for  whose  opinions  I  entertain  a  high  respect, 
I  deem  it  essential,  as  well  for  my  own  justification,  as  for  the  information  of 
others,  to  state  the  reasons  upon  which  my  vote  is  to  be  given. 

The  system  of  banking  being  an  improvement  upon  the  moneyed  system,  by 
which  commerce,  or  the  exchange  of  commodities,  is  carried  on,  and  therefore 
still  more  complex  in  its  operations,  and  more  difficult  to  be  understood,  has 
excited  the  approbation  of  some,  while  it  has  equally  excited  the  prejudices  of 
others.  Those,  however,  who  have  been  best  acquainted  with  its  operations, 
when  properly  regulated,  have,  in  all  countries,  united  in  a  general  expression 
of  a  conviction  of  its  utility,  not  only  as  it  respects  personal  convenience,  but 
also  as  it  regards  the  facility  with  which  the  financial  affairs  of  nations  can, 
with  its  aid,  be  conducted. 

A-  this  subject  has  become  quite  interesting,  it  becomes  the  duty  of  every 
one  to  assist  in  an  endeavor  to  throw  all  possible  light  on  the  subject,  not  only 
as  to  the  constitutionality  of  this  Government  legislating  upon  it,  but  also  as 
it  regards  its  operations  and  effects;  in  order  that  we  may  have  as  dear  a  view 
of  the  whole  ground  as  possible,  and  thereby  be  better  enabled  to  judge,  with 
more  certainty,  of  the  merits  or  demerits  of  the  bill  now  under  consideration. 
I  shall,  therefore,  endeavor  to  explain  my  views  of  the  subject,  as  concisely 
as  possible;  and  if  I  shall,  in  any  respect,  be  found  groping  in  the  dark,  in 
the  remarks  which  I  shall  offer,  I  trust  that  an  ordinary  degree  of  candor  will 
be  sufficient  to  shield  me  from  the  imputation  of  sinister  design.  First,  then, 
as  to  its  constitutionality.  x 

Perhaps,  sir,  the  doubts  entertained  by  some,  of  the  constitutionality  of  this 
bill,  arise  from  an  extreme,  and,  as  I  conceive,  unfounded  jealousy,  that  this 
Government  is  calculated  gradually-  to  usurp  the  powers  of  the  State  Govern- 
ments. This  jealousy  is  a  foible  with  many  well-meaning  legislators;  I  how- 
ever respect  it,  as  I  am  sensible  that  it  arises  from  a  good  motive;  and  I  be- 
lieve that,  it' it  be  kept  within  reasonable  bounds,  it  may.  at  least,  be  of  no  dis- 
tervice  in  preserving  our  federative  system  of  government.  Probably  we,  in 
33 


258  BANK    OF   THE    UNITED    STATES. 

some  measure,  derive  this  jealousy  of  the  exercise  of  powers  from  our  .ances- 
tors. The  crown,  the  peerage,  and  the  commons  of  Great  Britain,  are  three 
distinct  and  conflicting- interests:  the  crown  to  preserve  its  prerogatives;  the 
peerage  to  preserve  their  privileges,-  and  the  commons  topreserve  their  rights*. 
if  they  can.  But  here,  sir,  we  have  neither  crown,  nor  peerage 5  we  have  no 
interest  but  the  interest  of  the  commons,  or  the  People.  Our  General  Govern  - 
ment,  as  well  as  our  respective  State  Governments,  emanate  directly  from 
the  People;  the  People  have  the  same  control  over  each;  and  why  xve  should 
be  so  jealous  of  the  former,  and  so  partial  to  the  latter,  seems  somewhat  diffi- 
cult to  determine. 

When  our  federal  constitution  was  adopted,  the  knowledge  of  u  federative 
system,  upon  its  present  plan,  was  new,  and  existed  merely  in  theory.  The 
objects,  however,  intended  to  be  effected  by  its  adoption,  are  clearly  and  dis- 
tinctly set  forth  in  its  preamble.  They  are,  "  to  form  a  more  perfect  union^ 
establish  justice,  ensure  domestic  tranquillity,  provide  for  the  common  de- 
fence, promote  the  general  welfare,  and  secure  the  blessings  of  liberty,"  &c. 
Yet,  in  the  eighth  section  of  the  second  article  of  that  instrument,  which  con- 
tains an  enumeration  of  certain  specific  powers,  there  is  not  the  same  clear- 
ness and  precision.  In  the  first  paragraph  of  that  section,  powers  are  given  to 
Congress  to  provide  for  the  common  defence  and  general  tvelfare  of  the  Unit- 
ed States;  and  these  powers,  which  are  necessarily  unsusceptible  of  precise 
definitions,  are  coupled  with  others,  in  the  same  paragraph,  in  such  manner 
as  to  render  their  meaning  doubtful,  especially  in  the  minds  of  those  who  en- 
tertain a  strong  partiality  for  the  powers  of  the  State  Governments.  The 
powers  of  this  Government,  which  arise  from  the  operation  of  common  law,, 
are  still  more  indefinite,  and,  in  the  minds  of  many,  difficult  to  comprehend. 
Perhaps,  sir,  generally  speaking,  it  would  not  be  too  much  to  say,  that  it  must 
remain  for  that  good  sense,  which  is  the  offspring  of  experience  and  mature 
deliberation,  more  than  to  specific  definitions  of  powers,  as  set  forth  in  that 
instrument,  to  ascertain  precisely  what  powers  the  General  Government 
ought  to  possess,  and  what  the  States  ought,  individually,  to  retain.  In  form- 
ing that  instrument,  no  doubt,  sir,  such  powers,  if  not  all  necessary  powers, 
won1!  intended  to  be  given  to  this  Government,  as  should  be  adequate  to  all 
the  purposes  of  national  sovereignty;  that  it  was  not,  for  want  of  these  essen- 
tials, to  hobble  on  crutches,  through  an  imperfect  state  of  existence,  to  pre- 
mature decay.  In  short,  that  it,  being  like  the  State  Governments,  an  emana- 
tion from  the  People,  should  be  so  far  self-existent  as  to  depend  lor  its  sup- 
port on  that  power  only — the  collected  power  of  the  People — which  first  ushered 
it  into  existence.  In  the  federative  system,  which  I  esteem  the  perfection  of 
the  science  of  government,  the  rule  to  be  observed,  in  the  distribution  of  its 
powers,  between  the  confederated  States  and  the  federal  head,  is,  as  I  con- 
ceive, simple  and  plain.  It  is  this:  Can  any  particular  power,  which  is  about 
to  be  vested  somewhere,  be  exeicised  in  local  and  separate  districts  or  States,. 
consistently  with  the  safety  and  good  of  the  whole?  If  it  can,  it  ought  of  course 
to  be  exercised  by  the  respective  State  Governments.  All  other  powers,  which 
cannot  be  thus  confided,  consistently  with  the  safety  and  good  of  the  whole, 
ought  to  belong  to  the  General  Government. 

According  to  this  rule,  it  will  be  seen  that  the  powers  which  belong  to  the 
States  are  much  the  most  numerous,  and  by  far  the  most  important  in  securing 
the  rights  and  privileges  of  the  citizen. 

I  am  not  contending  that  the  federal  constitution  is  exactly  conformable  to 
this  rule;  but  it  does  not,  however,  essentially  vary  from  it.  There  are,  as  I 
conceive,  two  or  three  additional  powers  which  ought  to  be  incorporated  in 
that  instrument,  to  wit:  the  powers  to  provide  for  a  general  systemjof  educa- 
tion, and  to  make  canals  and  roads;  and  it  contains  at  least  one  power,  the, 
"  power  to  establish  an  uniform  system  of  bankruptcy,7'  which,  as  experience 
has  evinced,  ought  to  belong  to  the  States.  But,  sir,  the  power  now  under 
consideration,  the  establishment  of  a  banking  system,  I  am  fully  convinced, 
is  properly  and  strictly  within  the  limits  and  meaning  of  the  constitution,  and 
1  think  I  can  clearly  and  plainly  shew  that  it  is  so. 


'ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      259 

In  the  eighth  section  of  the  second  article  of  that  instrument,  are  contained 
most  of  the  enumerated  powers  which  are  granted  to  Congress;  and  the  last 
there  enumerated  is  the  power  to  make  all  such  laws  as  are  *' necessary  and 
proper  to  cany  the  foregoing  powers,  and  all  others  contained  in  the  consti- 
tution, into  operation,'*  Among  those  enumerated  powers  are  to  be  found, 
powers  to  raise  revenue;  to  borrow  money;  to  regulate  commerce;  and  to  pro- 
vide for  the  general  welfare.  Now,  sir,  such  a  bank  as  is  about  to  be  made  or 
re-established,  by  the  operation  of  the  bill  before  us,  is,  in  my  mind,  a  ki  neces- 
sary*' thing  to  enable  this  Government  to  carry  each  of  the  foregoing  powers 
into  effect.  I  lay  particular  stress  upon  the  word  •*  necessary ,"  because  gen- 
tlemen who  oppose  this  bill  have  relied  much  of  their  arguments  upon  it 

It  is  u  necessary*'*  for  raining  revenue. 

There  is,  generally,  a  profit  of  about  three  or  four  per  cent,  derived  to  the 
owners  of  'bank  capital,  beyond  what  they  could  obtain  for  the  use  of  their 
money,  by  lending  it-out  at  legal  interest.  This  being  a  benefit,  which  can 
only  be  secured  to  them  through  the  interference  and  protection  of  Govern- 
ment, it  is  but  just  that  they  should  pay  the  Government  something  in  return 
for  the  lavor  thus  conferred;  and  the  bill  before  us  contains  a  provision  to  this 
effect.  Twelve  hundred  and  fifty  thousand  dollars  is  the  sum  contemplated 
as  the  least  which  ought  to  be  accepted  by  Government,  for  a  mere  renewal 
of  the,  charter,  with  its  present  capital,  for  the  ensuing  twenty  years.  By 
passing  this  law,  therefore,  wo  >iial!  derive  to  the  Government  that  amount  of 
revenue,  which,  in  these  times,  is.  in  my  mind,  no  contemptible  thing.  If  the. 
capital  of  the  bank  be  eventually  enl;irued  to  thirty  millions,  we  shall  derive 
at  least  four  millions  of  revenue  from  it,  in  addition  to  some  interest  which 
will  at  times  become  due  on  deposits  which  may  be,  made  in  the  bank.  Thus 
the  i'  f  this  bill  becomes  a  mcftnn  of  raising  revenue. 

It  is  4*  ncccxsai  if*  for  the  purpose  of  borrowing  money. 

Governments,  like  individuals,  in  unforeseen  emergencies,  must  frequently 
experience  very  pressing  occasions  tor  more  money  than  they  have  at  com- 
inand;  and  to  supply  this  deficiency,  nnst  resort  to  borrowing  of  others,  A 
prudent  Government,  therefore,  like  a  prudent  individual,  ought  to  have  the 
means  of  borrowing  made  as  certain  as  possible,  in  order  to  avoid  the  de- 
rangement, or  distress,  which  may  ensue,  in  consequence  of  beinp;  unable  sud- 
denly to  procure  a  loan.  The  passing  of  this  bill  goes  to  effect  this  desirable. 
object:  as  it  contains  a  provision  for  borrowing,  with  certainty,  as  large  a  sum 
-as  this  Government  will  probably  at  any  time  suddenly  stand  in  need  of.  It 
is,  therefore,  in  that  point  of  view,  very  "neeeMtfrv,"  and,  in  all  ordinary 
-,  a  great  w-n'enieHce,  for  the  purpose  of  enabling  this  Government  to 
borrow  money. 

It  is  "  nrccmiiry"  for  the  purpose  of  regulating  commerce, 

A  very  essential  regulation  in  commercial  affairs,  is,  to  have  that  which 
serves  as  the  representative  of  all  the  articles  which  are  the  subjects  of  com- 
merce, as  small,  light,  and  portable,  as  possible.  To  travel  any  distance, 
and  cany  with  you  twenty  or  thirty  thousand  dollars,  of  silver  money  espe- 
cially, is  extremely  inconvenient;  but,  if  you  can  carry  in  your  pocket  some- 
thing which  represents  this  sum,  the  inconvenience  is  at  once  removed.  Yet, 
this  representative  must  be  such  as  will  be  received  as  such  in  every  part  of 
the  country,  or  else  it  fails  of  producing  most  of  its  beneficial  effects.  A  man 
residing  in  New  England,  has  occasion  to  go  to  Natchez,,  to  purchase  $20,000 
worth  of  cotton;  but  the  bank  bills  of  his  own  State  will  not  pass  there;  to 
cany  hard  money,  is  incurring  a  great  risk,  and,  at  the  same  time,  expensive 
in  transportation;  hence,  it  becomes  4i  necessary*'  to  provide  a  representative 
of  hard  money,  which  will  be  received  as  such  in  every  part  of  the  country; 
and  that  can  only  be  done  by  the  establishment  of  a  bank,  whose  bills  will 
have  this  general  currency.  Thus,  the  passage  of  this  bill,  or  something  simi- 
lar, is  "  necessary"  for  th'e  purpose  of  regulating  commerce. 

It  is  u  necessary"  for  the  purpose  of  promoting  the  general  welfare. 

This  expression  is  certainly  very  broad,  and  seems,  at  first  view,  to  include 
r,  .great  deal.  For  this  reason,  many  well  meaning  politicians  have  been  startled 


250  BANK  OF  THE  UKITED  STATES. 

at  the  idea  of  a  delegation  of  powers  so  indefinite,  and  so  comprehensive.  I 
imagine,  however,  that  the  expression  is  not  pregnant  with  any  mischief  or 
clanger.  It  certainly  would  not  be  "promoting  the  general  welfare,"  to  place 
any  power  in  the  hands  of  this  Government,  which  could  as  safely,  and  as 
consistently,  with  \\itgood  of  the  whole^  be  exercised  by  the  respective  States. 
It  would  be  upsetting  the  first  and  leading  principle  ot  a  confederated  Repub- 
lican Government.  If  we.  therefore,  invariably  adhere  to  this  leading  prin- 
ciple, we  shall  find  the  expression  not  only  harmless,  but  very  proper  to  be 
placed  in  the  constitution.  What  I  have  already  said  of  this  bill  being  neces- 
sary for  the  purpose  of  raising  revenue,  for  borrowing  money,  and  for  regu- 
lating commerce,  is  perhaps  all  that  is  necessary  to  be  said,  to  shew  that  it 
tends  "  to  promote  tne  general  welfare;"  because,  in  this  case,  the  one  is  ne- 
cessarily included  in  the  others. 

Permit  me  now  further  to  add,  sir,  that  this  liank,,  and  its  branches,  are 
also  essentially  "necfsaiwy"  for  the  collection  ut  your  revenue,  for  its  safe- 
keeping,  and  tor  the  purpose  of  transmitting  it  from  one  part  of  the  Union  to 
another,  as  occasions  may  frequently  require. 

^+.  We  are  indeed  told,  sir,  that  our  revenue  can  as  well  be  collected  by,  and 
deposited  in,  the  State  banks.  What,  all  the  revenue  collected  itj  any  one 
State,  to  be  deposited  in  one  State  bank?  No,  we  arc  told,  we  will  put  five 
or  six  hundred  thousand  dollars  in  one  bank,  as  much  more  in  another,  and 
so  on,  until  we  get  it  all  stowed  away  in  some  way  or  other.  Indeed!  What 
an  admirable  pi  aril  And  which  banks  will  you  select  for  this  purpose?  Will 
riot  the  selection  of  one,  excite  the  envy  and  opposition  of  others,  so  as  to  in- 
duce them  to  unite  in  endeavors,  and  perhaps  successfully,  to  ruin  such  se- 
lected bank?  Will  these  selected  banks  pay  the  United  States  as  large  a 
sum  as  is  contemplated  in  this  bill,  for  the  privilege  of  having  the  revenue  de-' 
posited  in  their  vaults?  No,,  they  contemplate  nothing  of  the  kind,  it  would 
l3e  a  bribe,  we  are  told,  sirl  Besides,  it  is  even  said  by  some,  that  three  or 
four  millions  dollars  ia  but  a  paltry  sum,,  unworthy  the  notice  of  this  Govern- 
ment! Can  you  contrive  any  method  to  compel  the  directors  of  such  selected 
banks  to  render  you,  at  stated  times,  a  true  statement  of  their  situation,  oi' 
their  discounts,  of  the  sums  due  them,  of  their  deposited,  in  order  that  you 
may  be  convinced  that  it  is  safe  to  trust  so  much  money  with  them?  No, 
Suppose  you  want  to  borrow  money,  how  will  you  manage  matters  then?  Why, 
we  will  borrow  a  hundred  thousand  dollars  of  one  bank,  a  like  sum  of  another, 
just  as  a  needy  man  borrows  a  dollar  of  one,  two  of  another,  and  so  on,  till 
his  wants  are  satisfied.  Better  still — this  is  really  excellent!  Well,  suppose 
you  wish,  and  have  made  out  to  borrow,  as  much,  as  you  have  ta  send  the  mo- 
ney to  a  different,  and  perhaps  distant,  quarter  of  the  Union,  are  you  certain 
you  can  make  it  pass  cur  vent  there?  Will  not  those  banks,  which  have  not 
been  so  fortunate  as  to  have  received  a  share  of  governmental  favors,  take 
measures  for  counteracting  any  such  currency?  And  would  it  be  just  to  pay 
off  a  poor  old  soldier  his  hard-earned  pittance  in  bills  on  which  he  would 
probably  be  obliged  to  make  a  discount  of  five,  ten.  or  perhaps  twenty  per 
cent,  before  he  could  get  them  oft'  his  hands? 

Gentlemen,  sir,  who  oppose  this-  bill,  have  got  into  a  dilemma,  in  opposing 
it  on  the  ground  that  the  State  banks  can  be  made  to-ai>s\rer  the  purposes  of 
this  Government;  as  they  thereby  virtually  admit  that  banks  of  some  kind  are 
"•  necessary"  in  managing  its  concerns.  The  point  of  difference  then  becomes 
resolved  into  this:  what  sort  o£  banks  are  necessary?  We  all  understand 
that  the  stockholders  of  State  banks  would  be  glad  of  a  slice  of  the  "  loaves 
and  fishes.""  My  neighbor,  who  keeps  a  horse  to  let,  might  say  to  me,  it  is 
nut" necessary"  that  you  should  keep  a  horse,  for  1  keep  one,  which  1  should 
be  glad  to  have  you  make  use  of.  In  such  case,  the  arrogance  ol'  m-y  neighbor 
would  be  so  manifest,  that  all  would  commend  me  in  telling  him  that  his  horse 
was  but  a  sorry  animal,  which  he  might  keep  to  himself;  and  that  I  knew  best 
what  kind  of  horse  suited  my  purpose.  Sir,  State  banks  are  the  creatures  of 
States;  this  Government  cannot  control  them,  and,  therefore,  ought  to  have 
no  concern  with  them.  If.  however,  particular  States  will  be  so  arrogant  as 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       261 

to  insist  that  this  Government  shall  make  use  of  their  creatures,  why  can  they 
not,  on  the  same  principle,  go  a  little  further,  and  say  to  this  Government, 
"  here  is  a  collector,  a  district  judge,  or  a  district  attorney,  which  we  have 
created  ready  to  your  hands;  it  is  not "'  necessary,"  therefore,  that  you  should 
create  these  officers  within  our  jurisdiction,  because  those  which  we  have  cre- 
ated will  fully  answer  your  purpose?"  We  are  not  quite  ripe  for  this  mode 
of  doing  business,  sir:  but  I  believe  wre  arc  in  a  fair  way  for  its  accomplish- 
ment. 

I  perfectly  understand,  sir.  that  this  preposterous  plan  of  substituting  State 
bank?,  has  been  suggested,  and.  in  some  measure,  urged,  through  the  influence  - 
of  some  of  those  banks.  I  see  runners  out  from  different  quarters,  endeavor- 
ing to  convert  people  to  this  new  doctrine.  I  see  presses  prostituted  to  the 
purpose  of  endeavoring  to  raise  a  popular  ferment  against  the  passage  of  this 
bill,  or  any  other  of  a  similar  nature;  but,  that  any  disinterested  man  can  se- 
riously think,  that  this  miserable  quackery  with  which  it  is  proposed  to  ad- 
minister to  the  wants  of  the  body  politic,  is  really  worth  a  moment's  attention, 
is  more  than  I  am  willing  <o  behove.  Should  it.  however,  prove  too  true,  that 
a  measure  which,  during  the  last  session,  could  hive  been  carried  by  a  ma- 
jority of  nearly  thirty,  shall  now  be  lost,  although  I  shall  deplore  that  insta- 
bility of  opinion  which  shall  have  produced  this  sudden  change,  or  that  dere- 
liction of  independence  wliirh  should  yield  to  temporary  clamors,  artificially 
raised,  i  shall,  nevertheless,  console  iny-elf  with  the  conviction,  that  time 
and  experience  will  correct  the  error,  and  that  the  merits  of  this  measure  will 
hereafter  be  decided  up:m  wilh  more  correctness  of  judgment. 

But,  sir,  I  have  thus  far  merely  shown  that  this  bank,  or  some  other  of  a 
similar  nature,  is  "nece$9aryj9  in  several  distinct  points  of  view,  to  the  pur- 
JK.M-S  for  which  this  Government  was  established.  I  have  not,  however, 
shown,  nor  can  1  show,  that  it  is  indispensably  4*  necessary."  But  here,  sir, 
lies  the  error  of  those  who  have  contended  against  the  constitutionality  of  the 
measure.  It  will  be  recollected,  sir,  that,  when  this  bank  was  first  establish- 
ed, those  who  opposed  it  on  constitutional  grounds,  and  for  their  opinions  I 
have  the  hig'iesi  respect,  contended  that,  although  the  measure  might  be 
useful,  lit.  and  expedient,  yet,  if  it  was  not  intHiptntabhj  "necessary,"  it 
must,  of  course,  be  unconstitutional.  Lot  anyone  examine  the  debates  of 
that  time,  and  they  will  perceive  that  this  was  the  strong  ground  of  opposition 
that  was  then  taken,  and  the  same  ground  is  now  taken;  but  to  this  I  reply — 
If  the  words  of  the  constitution  were,  that  ki  Congress  shall  have  power  to 
uiake  all  such  laws,  only,  as  are  indispensably  necessary  to  carry  the  forego- 
ing powers  into  eftect."  then,  indeed,  the  opponents  of  this  bill  would,  on 
constitutional  grounds,  be  correct;  because,  that,  although  the  Bank  of  the 
United  States,  or  a  national  bank,  if  you  please,  maybe  a  "  necessary  ap- 
pendage to  this  Government,  still  are  neither  of  them  indispensably  '*  neces- 
sary :'"  this  Government  can  do  without  them  in  the  same  manner  that  a 
fanner  can  do  without  a  hoe,  by  substituting  a  spade,  or  that  a  carpenter  could 
do  without  a  plane,  by  substituting  his  broad  axe. 

The  word  "necessary"  is  of  the  class  of  adjectives,  and  admits,  though 
irregularly,  of  the  degrees  ot  comparison  incident  to  words  composing  that, 
part  of  speech;  the  positive,  necessary;  the  comparative,  wore  necessary;  arid 
the  superlative,  indttpensably  necessary.  We  mean  by  the  first,  nceJfuLfit, 
or  proper;  by  the  second,  more  needful,  fit,  or  proper;  and, by  the  third,  that 
ii'kich  we  cannot  do  rrithout.  If  the  words  of  the  constitution  were,  "  Con- 
gress shall  have  power  to  make  all  laws  which  shall  be  needful,  fit,  and  pro- 
per,  for  (he  purpose  of  carrying  the  foregoing  powers  into  effect,"  the  diffi- 
culty would,  probably,  vanish  at  once;  as  I  trust  we  could  soon  determine 
whether  a  Bank  of  the  United  States,  or  a  national  bank,  is  a  needful,  fit, 
and  proper  appendage  to  this  Government.  But,  sir,  we  have  first  given  to  a 
harmless  expression  a  most  formidable  meaning;  we  have  made  the  word 
necessary  mean  indispensably  necessary.  And,  having  thus  raised  a  moun- 
taid  out  of  a  molehill,  we  are  now  about  to  resolve,  very  wisely,  no  doubt, 
that  we  cannot  get  over  the  mountain. 


262  BANK  OF  THE  UNITED  STATES. 

Tf  I  were  to  agree  to  provide  a  farmer  with  such  tools  and  implements  as 
are  necessary  for  carrying  on  the  business  of  fanning,  I  should  suppose  that  I 
was  bound  to  provide  all  such  tools  and  implements  as  are  commonly  used 
in  that  business.  I  could  not  say  to  him,  here  is  a  sled,  which  must  answer 
the  treble  purpose  of  sled,  cart,  and  wagon;  or  here  is  a  spade*  which  must 
answer  both  for  digging  and  hoeing;  I  could  not  avoid  my  engagement  by 
telling  him  the  cart,  the  wagon,  and  the  hoe,  were  not 'indispensably  neces- 
sary; because  he  could  make  the  sled  answer  the  place  of  the  two  former,  and 
the  spade  the  place  of  the  latter.  No,  sir,  this  would  not  be  complying  with 
the  terms  of  my  engagement.  Now,  sir,  it  is  a  poor  rule  that  ought  not  to 
work  both  ways  alike.  The  People  of  the  United  States  have  granted  to  Con- 
gress certain  specified  powers;  and  have  further  granted  the  means,  that  is  to 
say,  the  necessary  tools  and  implements,  for  carrying  those  powers  into  effect. 
By  this  grant,  then,  it  becomes  proper  tor  us  to  make  use  of  all  or  any  of  the 
means  that  arc  needful,  fit,  and  proper,  for  effecting  these  purposes;  but,  sir, 
we  are  about  to  determine  that  we  will  not  make  use  of  some  of  them  as  long 
as  we  can  possibly  do  without  them;  we  will  reject  the  car/,  and  the  tvagon, 
because  they  are  not  indispensably  necessary;  we  will  mount  ourselves  upon 
the  sled!  and  thus  we  will  heavily  drag  along  the  concerns  of  this  Government. 

Sir,  in  the  estimation  of  some,  this  may  be  wisdom;  it  may  be  patriotism; 
but,  in  my  estimation,  it  is  neither:  it  is  folly;  it  is  destructive  to  the  best  in- 
terests of  this  country. 

I  shall  further  here  observe,  that,  if  we  are  determined  to  test  the  constitu- 
tionality of  all  laws  which  are  passed  by  Congress,  by  their  being,  indispensa- 
bly necessary,  we  shall  find  that  a  great  many  unconstitutional  laws  have 
been  passed.  During  the  last  session,  we  passed  a  law  for  creating  three  new 
officers  in  the  post  office  department;  yet  no  one  will  pretend  that  the  passage 
of  this  law  w:is  indispensably  necessary;  because  that  department  had  been, 
and  could  still  have  been,  conducted  without  them.  Indeed,  sir,  if  you  look 
at  your  statute  books,  you  will  see  that  many  laws  have  been  passed  that  were 
not  indispensably  necessary,  but  were  merely  needful,  fit,  and  proper.  Even 
this  splendid  hall  must  stand  in  judgment  against  you,  if  such  a  narrow  con- 
struction of  that  part  of  the  constitution  is  to  prevail;  these  pillars,  of  costly 
workmanship,  which  surround  us,  and  the  elegant  dome  which  they  support, 
were  made  in  conformity  to  the  laws  passed  for  the  purpose.  And  are  they 
indispensably  necessary?  Could  we  not  do  the  business  of  this  nation  in  a 
room  that  should  not  have  cost  one  tenth  of  the  money  that  has  been  expended 
on  this?  Instead  of  these  easy  arid  expensive  seats,  with  which  every  member 
is  accommodated,  could  we  not  sit  on  such  as  that  on  which  "•  the  immortal 
Alfred  sat?"  Again,  sir:  laws  providing  for  the  erection  of  lii'ht  houses  and 
for  the  establishment  of  a  military  academy,  have  been  passed  by  Congress. 
These  laws  must  spring  out  of  the  power  given  by  the  constitution  to  **  pro- 


to  those  who  are  not  soldiers,  "  raising  and  supporting  armies:"  but  each  are 
means  of  "'  promoting  the  general  welfare,"  by  the  usefulness  of  the  former 
to  commercial  business,  and  of  the  latter  to  armies,  when  they  shall  have  been 
raised.  But  are  either  of  these  indispensably  necessary?  Certainly  not. 
But,  perhaps,  1  have  said  enough  on  this  subject.  Believing,  as  I  do,  that 
the  General  Government  ought  to  possess  all  such  powers  as  necessarily  con 
cern  the  best  interest  and  good  of  the  whole,  and  believing,  too,  that  the 
constitution,  however  indefinite  it  may  in  some  instances  be  found,  was  in- 
tended to  contain  a  grant  of  such  powers,  with  the  exceptions  which  I  have 
before  mentioned,  it  must  remain  for  others,  and  not  for  me,  to  gauge  and  limit, 
it  to  such  narrow  constructions  as  are  equally  incompatible  with  the  purposes 
of  national  sovereignty,  and  the  obvious  meaning  of  words  in  our  mother 
tongue. 

There  can  be  no  doubt,  sir,  that  our  written  constitutions  are  of  excellent 
use  in  designating  the  form,  and  drawing  the  outlines  of  Government,  in  such 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.  263 

manner  as  renders  them  but  little  liable  to  capricious  variations.  While,  in 
this  way,  they  serve  as  durable  landmarks  to  those  in  power,  they  will,  also, 
be  of  essential  benefit  to  posterity,  if  they  should  incline  to  a  degeneracy  of 
political  principles,  by  exciting  their  emulation,  in  holding  up  to  view  those 
principles  by  which  their  nobler  ancestors  were  governed.  Having  been  the 
originals,  however,  in  the  adoption  of  written  constitutions  of  Government, 
we  have  made  them  quite  a  hobby-horse;  and  seem  to  imagine  them  adequate 
to  all  the  purposes  of  preserving  our  liberties  forever.  For  myself,  I  am  not 
quite  so  strong  in  this  belief.  I  tear  that,  if  we  place  too  much  reliance  on  this 
specific,  without  providing  some  other  means  for  guarding  and  preserving  our 
liberties,  they  may  depart  from  us  whije  \ye  are  in  full  possession  of  our 
written  constitutions.  Instead,  then,  of  being  over  scrupulous  about  giving 
to  particular  expressions,  in  our  constitutions,  a  narrower  meaning  than  they 
obviously  import,  let  us  try  to  investigate  the  principles  by  which  powers  must 
necessarily  be  regulated  in  a  free  confederated  republic,  if  regulated  as  they 
ought  to  be;  and,  having  ascertained  this  point,  having  ascertained  what 
powers  necessarily  concern  the  ichole  united*  and  what  powers  may  be  locally 
exercised,  without  injury  or  danger  to  the  whole,  we  can  then  easily  perceive 
what  ought  to  be,  and  what  is  the  real  meaning  and  intent  of  words  in  our 
written  constitutions.  And,  above  all,  let  us  not  be  terrified  by  those  who, 
for  want  of  better  arguments,  appeal  to  our  fears;  who  tell  us  of  the  danger 
there  is  in  adopting  this  or  that  construction,  or  this  or  that  measure:  that,  if 
you  admit  of  powers  by  implication,  you  open  a  wide  \ortex,  in  which  will 
certainly  be  swallowed  up  all  the  powers  of  the  State.-:  or  that,  if  you  adopt 
one  measure,  you  will,  therefore*  adopt  another,  and  another,  until  you  have 
absorbed  all  powers  \\lntever.  Sir,  this  kind  of  argument,  if  argument  it 
may  be  called,  has  become  stale  with  me:  it  has  no  weiiihi  on  my  mind;  and, 
tor  this  simple  reason,  that  demonstration  and  prophesying  are  tu.>  very  dif- 
ferent things.  \Vhatever  may  have  been  the  case  in  ancient  times,  1  have 
always  observed,  in  my  own  day,  that  weak  arguments,  and  a  spirit  for  pro- 
phesyinif,  are  usually  coupled  together.  In  my  mind,  thrre  is  mere  danger 
that  tin.1  State  Governments  may,  from  the  selfish  motives  or  the  ambitious 
views  of  some,  eventually  reduce  this  Government  to  a  inert'  skeleton  of 
i ,  than  that  this  is  ever  essentially  to  weaken  the  powers  of  the  States. 
1  trust,  however,  that  the  danger  of  the  one  absorbing  the  other  is  not  very 
great  on  either  side.  As  all  our  Governments  emanate  from  the  same  source, 
the  People — this  for  national*  and  the  others  for  local  purposes — as  longas  we 
retain  our  present  equality  of  condition,  and  of  rights,  and  our  consequent 
independence  of  sentiment.  1  should  suppose  that  even  a  sense  of  convenience 
alone  would  always  correctly  dictate  where  the  different  governmental  pow- 
ers  ought  to  be  placed.  The  danger  to  civil  liberty,  therefore,  lies,  pot  in 
the  formation  of  our  different  Governments,  but  in  the  foundations  of  civil 
society.  If  our  descendants  should  lose  sight  of  those  principles  of  civil  liberty 
which  we  have  learned,  or  if  the  condition  of  men  should  become  so  unequal, 
as  to  produce  a  state  of  abject  dependence  of  the  many  upon  the/ew,  then, 
anil  I  trust  not  till  then,  will  our  present  civil  institutions  be  in  danger  of 
being  overturned. 

As  i  proceed  1  shall  here  briefly  notice  an  amendment  to  the  constitution, 
under  which  my  worthy  colleague,  (MR.  POUTI:R)  and  an  honorable  gentle- 
man from  Pennsylvania, (MR,  SKYBKIIT)  have  taken  refuge,  in  order  to  fortify 
themselves  with  an  argument  against  the  constitutionality  of  this  bill.  It  is  in 
these  words — 4'The  powers  not  delegated  to  the  United  States  by  the  consti- 
tution, nor  prohibited  by  it  to  the  States,  are  reserved  to  the  States,  respective- 
ly, or  to  the  People." 

If  gentlemen  really  imagine  that  they  have  discovered  any  thing  in  this 
amendment,  which  goes  to  render  the  passage  of  this  bill  unconstitutional,  I 
<luill  merely  observe,  that 

"  Optics  sharp  it  needs,  I  ween, 

"  To  see  what  is  not  to  be  seen." 


264  BANK   Or  THE    UNITED    STATES. 

If  any  thing  be  absolutely  passed  from  one  to  another  by  grant,  as  is  the 
case  before  us,  the  grantor  becomes  divested  of  that  thing,  and  it  becomes  im- 
mediately vested  in  the  grantee.  All  then  that  is  necessary,  in  the  present 
case,  is  iirst  to  ascertain  what  powers  are  granted  by  the  constitution:  for  it 
is  very  certain  that  what  are  not  granted  are  still  vested  in  the  grantor.  A 
has  granted  to  13  certain  things;  noyv,  says  A  to  B  if  my  hat  is  not  included 
iu  this  grant,  the  hat  shall  still  be  mine.  Agreed,  saysB.  This  is  a  very  plain 
case,  sir,  and  how  such  intelligent  gentlemen  could  think  of  entrenching  them- 
selves behind  this  amendatory  article,  which,  in  fact,  means  nothing,  is  really 
more  than  I  can  conceive. 

But,  my  worthy  colleague,  to  whom  I  have  just  referred,  has  taken  another 
ground,  on  which  he  has  attempted  to  rest  much  of  his  argument  against  the 
constitutionality  of  this  bill,  and  which  is  therefore  worthy  of  some  notice — 
that  is,  that,  by  the  constitution,  this  Government  derives  no  powers  by  implica- 
tion. Sir,  tins  appears  to  me  the  most  absurd  doctrine  that  I  have  yet  heard 
advanced  on  this  subject.  It  would  be  a  vvaste  of  time  to  go  into  lengthy  de- 
tails to  show  the  absurdity  of  this  proposition;  but  let  me  ask  that  gentleman 
wherein  could  have  existed  the  necessity  of  those  amendments  to  the  consti- 
tution, which  are  almost  wholly  restrictive,  if  it  was  not  admitted  that,  without 
these  amendments,  Corgress  would  have  had  an  uncontrolled  power  to  legis- 
late on  the  subjects' to  which  they  refer;  and  yet  many  of  these  subjects  of  le- 
gislation are  not  even  mentioned  in  the  constitution.  The  first  of  these  re- 
strictive amendments  is,  that  "  Congress  shall  make  no  law  respecting  an  es- 
tablishment of  religion  or  prohibiting  the  free  exercise  thereof;  or  abridging  the 
freedom  of  speech  or  of  the  press:  or  of  the  right  of  the  People  peacebly  to  assem- 
ble, and  to  petition  Government  fora  redress  of  grievances."  Now  the  constitu- 
tion is  silent  on  all  these  subjects;  yet,  if  Congress  possess  no  powers  to  legis- 
late upon  them,  where  could  have  existed  the  necessity  of  restricting  them  by 
this  amendment,  to  certain  bounds,  if  they  should  at  any  time  deem  it  proper 
to  make  them  the  subjects  of  ^legislation?  Again,  sir,  the  constitution  makes 
provision  for  the  establishment  of  a  judiciary,  but  says  nothing  about  the  sys- 
tem of  law,  whether  the  civil  or  common  law,  by  which  the  courts,  thus  es- 
tablished, are  to  be  regulated;  how  was  it  then  understood  that  the  common 
law  was  to  be  adopted?  By  implication,  undoubtedly. 

But,  sir,  in  showing  that  this  Government  derives  many  pow^rs  by  implica- 
tion, I  am  sensible  that  I  am  travelling  somewhat  out  of  my  way.  It  is  suffi- 
cient to  say,  that  the  power  of  passing  this  bill  is  not  derived  to  this  Govern- 
ment by  implication;  the  power  accrues  by  express  terms  in  the  constitution — 
the  power  of  providing  the  best  means  for  carrying  other  governmental  powers 
into  effect. 

There  is  one  other  ground  which  iny  worthy  colleague  has  taken,  in  his  en- 
deavor to  show  the  unconstitutionally  of  this  bill,  which  I  also  deem  worthy 
of  some  slight  notice:  that  is,  that  the  constituted  powers  of  this  Government 
are'mere  delegated  powers,  not  from  the  sovereign  People,  but  from  the  States, 
as  States!  And  how  does  he  prove  this  strange  doctrine?  Why,  says  he,  if 
the  States  should  neglect  or  refuse  to  elect  the  Senators  which  compose  one 
branch  of  this  Legislature,  this  Government  would  be  dissolved.  Therefore, 
this  Government  depends  upon  the  will  of  the  States  for  its  organization;  and, 
therefore,  it  is  a  creature  of  the  States!  Really,  sir,  this  is  very  profound 
reasoning!  Let  us  just  look  at  the  other  side  of  the  question,  sir,  and  we  shall 
then  be  enabled  to  see  what  a  very  convenient  methqd  of  reasoning  this  is.  I 
am  going  to  prove,  in  the  same  way,  the  very  reverse  of  this  proposition;  that 
is,  that  the  constituted  powers  of  this  Government  are  mere  delegations  of 
powers,  not  from  the  States,  as  Stales ,  but  from  the  sovereign  People.  I  prove  it 
thus,  sir:  If  the  sovereign  People  should  neglect  or  refuse  to  elect  the  Represen- 
tatives, which  compose  one  branch  of  this  Legislature,  this  Government  would 
be  dissolved:  Therefore*  this  Government  depends  upon  the  will  of  the  People 
lor  its  organization;  and,  therefore,  it  is  a  creature  ot  the  People.  In  the.  same 
way,  sir,  you  can  prove  that  the  State  Governments  owe  their  existence  to  the 
will  of  the  returniug  officers  of  the  different  counties;  because,  if  those  ofii- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       265 

cers  should  neglect  or  refuse  to  make  the  returns  of  the  elections,  there  could 
be  no  State  Legislatures,  and  thus  the  State  Governments  would  be  dissolved- 
Therefore*  a  State  Government  depends  upon  the  will  of  the  returning  offi- 
cers: and,  therefore,  it  is  a  creature  of  those  officers. 

Admitting,  for  argument  sake,  that  we  could  not  go  to  elections  unless  our 
horses  would  carry  ua  there,  we  can,  in  the  same  manner,  prove  that  all  our 
Governments  are  creatures  of  those  animals:  because,  if  our  horses  should  re- 
fuse to  carry  us  to  the  election  polls,  there  could  be  no  elections;  if  there  were 
no  elections,  there  could  be  no  Representatives  chosen:  and,  if  none  wore  cho- 
sen, there  could  be  no  Legislatures;  and  thus  the  Governments  would  be  dis- 
solved. Therefore,  all  Governments  would  depend  upon  the  uriHof  our  horses; 
and  therefore,  they  would  be  mere  creature.-;  of  those  animals. 

We  arc  vepy  apt  to  run  a  wild  goose  chase,  sir,  when  we  attempt  to  demon- 
strate, by  reasoning,  facts  which  are  obvious  to  the  senses.  Thus,  if  you 
would  prove  that  there  is  heat  in  fire,  don't  go  to  reasoning  about  it,  but  put 
your  finger  into  it,  and  the  fact  will  bo  ascertained  at  once.  In  the  same  man- 
ner, when  we  want  to  ascertain  whether  this  Government  is  a  creature  of  the 
States,  as  States,  w  whether  it  is  a  creature  of  the  People,  let  us  just  look  at 
'ution  itself — the  text  book,  as  an  honorable  gentleman  from  North 
iina  calls  it — and  there  we  can  ascertain  the  fact  precisely.  Its  preamble 
determines  the  point.  The  words  of  that  preamble  «re,  *•  We,  the  People  of 
the  L'nited  States,"  &c.  Not  k' We  the  Knited  i  S/atcs,"  &c. 

But,  sir,  evrn  if  ;  ;-:!:nen't  w,;r,  a  creature  of  the  States,  as  Stales, 

what  bearing  could  it  have  on  the  question  before  us?  Ought  we,  on  that  ac- 
'•nuist,  to  give  *o  words  in  that  constitution  a  different  meaning?  Would 
the  words,  '•  Congress  shall  have  power  to  make  all  laws  which  are  necessary 
and  proper  to  carry  the  forcgoisi;;  powers  into  effect,"  i.-«'  L-,b!e  to  different 
infer,  .  r.ccoiding  us  a  should  lined  that  this  Government  is 

a  creature  of  the  States,  as  Staff!:?,  or  of  the  People?  Certainly  not. 

I  have  thought  proper,  thus  far.  t;>  notice  some  of  the  principal  grounds  on 
which  my  worthy  colleague  has  rested  his  arguments  against  the  constitution- 
ality of  this  bill:  because,  if  i!  :;dsare  not  tenable,  his  arguments  must 
fall  of  course;  and  thus  would  be  Justified  the  as.-ertion  of  the  honorable  gen- 
tleman from  Massachusetts,  (Mr.  PICKMAN)  that  the  whole  argument,  taken 
together,  is  "  an  ingenious  piece  of  sophistry."'  It  is  so,  indeed;  and  it  is 
nothing  more.  Another  inducement  which  I  have  had  for  this,  is,  to  enable 
myself  with  propriety,  and  at  the  same  time  with  pleasure,  to  observe,  that 
the  grounds  taken  by  my  colleague,  have  been  the  principal  reliance  of  the 
opponents  of  this  bill:  as  many  gentlemen  on  that  side  have,  probably  with 
a  very  hewming  diffidence  in  the  strengh  of  their  own  views  of  the  subject, 
pointed  to  him  as  OIK;  amongst  them  whom  they  seemed  to  imagine  had  sus- 
tained the  argument — a  tribute  of  applause  which  1  think  those  gentlemen 
were  bound  in  conscience  thus  justly  to  bestow. 

Having,  as  I  trust,  obviated  the  constitutional  difficulties  which  have  been 
urged  against  the  passage  of  this  bill,  i;  remains  to  say  something  about  its 
merits;  and  in  doing  this,  I  shall  be  as  concise  as  possible. 

It  would  be  arrogance  in  me,  sir,  to  go  into  a  lengthy  and  minute  detail  of 
the  operations  of  banking,  as  it  is  proper  to  presume  that  every  member  has 
made  himself  acquainted  with  the  subject.  I  might,  however,  be  permitted 
generally  to  observe,  that,  from  the  constant  depreciation  of  gold  and  silver 
money  for  centuries  past,  and  the  probability  of  their  still  continuing  to  de- 
preciate, the  necessity  of  a  well  established  banking  system  becomes,  every 
day,  more  and  more  obvious.  Ten  thousand  dollars,  which  in  these  days  is 
but  a  moderate  fortune,  is  nearly  a  cart  load  in  silver.  Thirty  years  ago,  half 
that  sum  would  purchase  as  much  as  the  whole  will  now.  Possibly,  in  the 
course  of  a  century,  a  pound  weight  of  gold  will  not  be  more  valuable  than 
a  pound  weight  of  silver  is  at  present.  Gold,  as  a  currency,  will  then  have 
become  very  cumbersome;  and  silver,  as  a  currency,  will  then  be  scarcely 
portable.  What  then  is  to  be  done?  Why,  put  these  metals  into  the  vaults  of 
bunks,  and  issue,  in  paper,  that  which  represent  a  them:  or  rather,  that  which 
34 


BANK  OF  THE  UMTKI)  STATES. 

jointly  represents  them,  and  the  promissory  notes,  or  rather  lieus  on  property 
which  are  deposited  there.  This,  sir,  is  the  only  remedy  of  which  I  can  have 
any  conception;  and  therefore  it  appears  to  me  highly  important,  that  the 
best  possible  plan  of  banking  should  be  devised  and  adopted  by  this  Govern- 
ment. 

It  has  been  .my  opinion,  sir,   that,  instead  of  the  present  United  States' 

nk,  a  National  Bank  ought  to  be  established,  upon  a  general  plan,  and  be 
so  organized  as  to  invite,  and  eventually  draw  into  it,  much  of  the  other  bank- 
ing capitals,  in  order  that  the  business  of  banking  might  be  reduced  more  to- 
one  entire  system;  that  it  should  not  be  under  the  control  of  Government,  but 
nevertheless  under  their  inspection;  that,  for  this  purpose,  Government  should 
appoint  a  small  proportion  of  the  directors  in  every  branch,  and  in  the  mother 
bank,  whose  business  it  should  be  to  render,  at  proper  intervals,  stated  ac- 
counts of  its  debts,  discounts,  and  dcposites,  in  order  that  it  should  always 
appear  that  it  was  properly  conducted,  and  kept  within  due  bounds;  and 
finally,  that  Government  should  share  such  part  of  the  profits  of  the  establish- 
ment, as  might  be  deemed  reasonable.  Proper  provisions  ought  also  to  be 
made  to  prevent  its  being  rendered  subservient  to  political  or  party  purposes, 
which  I  imagine  would  be  no  very  difficult  thing. 

The  principal  advantage  to  be  derived  from  a  general  system  of  this  kind, 
in  addition  to  some  which  I  have  before  mentioned,  would  be,  first,  its  afford- 
ing a  permanent  revenue;  secondly,  its  greater  security  and  stability;  and 
thirdly,  the  uniformity  of  its  currency,  and  the  better  means  of  providing 
against  losses  by  counterfeiting. 

I  am,  however,  sensible,  sir,  of  the  great  difficulty  of  convincing  every  one, 
by  whose  vote  it  must  pass,  of  the  practicability  of  any  new  plan  of  this  kind, 
however  perfect,  and  well  matured  it  might  be  when  offered.  I  am  also  sen- 
sible of  the  inconvenience  of  pulling  down  one  system,  in  order  to  build  up 
another,  and  of  the  distress  and  ruin  of  individuals  it  would  occasion,  if  it 
should  be  done  suddenly.  I  am,  therefore,  willing  to  adopt  such  plan,  as,  if 
not  the  best,  shall  be  thought,  by  a  majority,  the  most  expedient  at  present, 
and  leave  to  futurity  the  building  up  of  a  different  system.  I  shall  therefore 
vote  for  a  mere  re-incorporation  of  the  present  bank,  if  nothing  better  can  at 
present  be  had;  and  if  any  thing  can  be  added  to  it,  by  way  of  improvement, 
so  as  to  render  it  less  exceptionable,  [  will  also  vote  for  that. 

Perhaps,  sir,  it  might  be  as  well  to  re -incorporate  the  present  bank  for  eight 
or  ten  years  only,  and,  in  the  mean  time,  be  making  provision  for  building  up 
another,  upon  a  more  approved  plan. 

I  conceive,  sir,  that  the  ad  vantages  of  banking  depend  much  upon  the  man- 
ner in  which  the  system  is  organized .  If  properly  organized,  they  are  un- 
doubtedly a  great  national  benefit;  if  badly  organized,  they  become  a  nuisance 
to  the  community;  and  some  of  the  banks  which  were  established  in  the  East- 
ern States,  are  striking  instances  to  illustrate  the  truth  of  this  remark. 
Generally  speaking,  it  may  be  said,  that  all  petty  banks  are  in  danger  of  be- 
coming such  nuisances;  because  they  are  but  too  apt,  in  the  first  instance,  to 
be  established,  and  sometimes  managed,  upon  improper,  or  even  dishonest 
principles.  In  some  instances  they  have  proved  mischievous,  from  the  mere 
ignorance  of  those  by  whom  they  have  been  managed,  of  the  only  true  prin- 
ciples on  which  banks  can  be  safely  conducted. 

When  properly  organized,  the  great  and  most  essential  benefit  derived, 
consists  in  the  saving  of  labor,  if  I  may  so  express  myself,  in  procuring  the 
requisite  quantity  of  gold  and  silver,  to  represent  all  the  various  articles  of 
wealth  in  a  nation.  Suppose,  for  instance,  that  a  million  of  inhabitants  were 
to  be  placed  by  themselves,  without  any  gold  and  silver  amongst  them,  but, 
at  the  same  time,  with  a  sufficiency  of  all  the  other  articles  which  constitute 
wealth;  they  would  then  require,  say  five  millions  of  dollars  fora  circulating 
medium,  to  represent  those  articles,  in  order  to  be  enabled  to  carry  on  com- 
merce or  exchange,  amongst  themselves;  of  course  five  millions'  worth  of  their 
articles  of  wealth,  or,  in  other  words,  five  millions'  worth  of  their  labor,  must 
be  sent  abroad  to  purchase  and  bring  back  this  necessary  quantity  of  gold  and 


t>N  THE  BILL  TO  RENEW  THE  CHARTER  T)F   1791.  267 

silver.  Now,  by  the  establishment  of  a  banking  system,  on  proper  principles, 
one  half  of  this  hard  money  would  answer  their  purpose,  and  thus  they  would 
save  to  themselves  two  and  a  half  millions'  worth  of  their  labor,  or  its  pro- 
ducts, which  they  could  apply  to  other  purposes. 

Now,  the  territory  of  the  United  States  will,  according  to  their  present 
ratio  of  increasing  population,  in  the  course  of  a  century,  be  tilled  with  a  hun- 
dred millions  of  inhabitants.  They  will  therefore  require,  say  live  hundred 
millions  dollars  for  the  necessary  circulating  medium;  at  present,  there  is,  say 
forty  millions  in  circulation;  ot  course  four  hundred  and  sixty  millions'  worth 
of  the  products  of  their  labor  must,  in  the  course  of  a  century,  go  abroad,  to 
bring  back  its  value  in  gold  and  silver,  to  provide  this  necessary  circulating 
medium.  Rut,  if  we  can  establish  and  perpetuaie  a  safe  and  durable  banking 
system,  only  one  half  of  this  value  in  the  products  of  labor  need  go  abroad  to 
bring  back  the  requisite -quantity  of  gold  and  silver;  and  thus  a  gain  is,  in  that 
time,  inatle,  to  the  amotsntof  two  hundred  and  forty  millions'  worth  of  labor, 
whic!i  would  probably  be  nearly  sufficient,  to  make  all  the  canals  that  may 
become  requisite  within  our  territory.  1  have  made  this  statement  in  genera! 
terms,  to  show  how  immensely  important  it  must  be  to  the  United  States  to 
establish  a  banking  system,  upon  the  most  durable  and  best  possible  plan. 

An  honorable  gentleman  from  Virginia  on  my  left,  (Mr.  BURWELL)  has  in- 
formed us,  if  I  understood  him  rightly,  that  he  is,  on  the  whole,  opposed  to 
the  banking  system  entirely,  because  it  tends  too  much  to  encourage  com- 
merce; that  we  are  already  too  commercial.  I  am  sensible,  sir,  that,  in  the 
Southern  States,  a  prejudice  has  existed  against  commerce;  and  this  very 
prejudice  has  served  to  build  up  a  great  many  houses  in  our  Northern  towns, 
at  the  expense  of  the  Southern  States,  because,  if  those  States,  particularly 
Virginia,  had  exerted  themselves  in  encouraging  commerce  to  be  carried  on 
within  their  own  limits,  much  of  the  wealth,  so  rapidly  acquired  in  commer- 
cial pursuits,  which  is  now  to  be  found  in  those  towns,  might  have  been  amass- 
ed in  those  States.  But  does  that  honorable  gentleman  really  believe  that, 
by  putting  down  this  bank,  there  will  be  less  banking  business  done  in  the 
United  States?  No,  sir,  the  capital  that  is  now  employed  in  this  bank,  will 
soon  find  its  way  into  State  banks.  Permit  me  also  to  say,  sir,  that  the  notion 
of  trying  to  make  ourselves  less  commercial,  is  idle  and  visionary;  it  is  the 
"stulf  that  dreams  aiv  made  of."  I  admit,  sir,  that,  for  the  purpose  of  ren- 
dering ourselves  less  dependent  on  other  nations,  it  might  be  well  to  encourage 
manufactures  to  a  certain  degree.  But  suppose  we  should,  would  we  be 
essentially  the  less  commercial  on  that  account?  I  trust  net.  Commerce 
seems  to  be  congenial  to  the  disposninn*  of  a  large  portion  of  our  countrymen, 
and  it  is  in  vain  to  attempt  to  change  their  habits  and  pursuits.  Indeed,  sir, 
if  we  will  but  look  at  the  nations  of  the  world,  both  of  ancient  and  modern 
days,  we  shall  find  that  those  who  have  been  most  commercial,  have  ever  been 
the  most  active,  enterprising,  intelligent,  and  free.  I  consider  commerce  as 
one  of  the  great  levers  by  which  the  world  has  been  raised  from  darkness  into 
light;  from  barbarism  into  civilization  and  refinement. 

An  honorable  gentleman  from  Maryland,  (Mr.  M4K.iM)  has  given  us  a 
statement  of  the  situation  of  the  Bank  of  the  United  States,  which  [  will 
just  notice.  That  gentleman  made  this  bank  indebted  to  somebody,  I  dont 
know  whom,  in  the  sum  of  about  ten  millions  dollars. 

The  gentleman  also  informed  us  that  he  had  been  a  bank  director  in  his 
time — of  course,  that  he  must  understand  the  business. 

Presently,  however,  the  worthy  intelligent  gentleman  began  to  say  some- 
thing about  notes  deposited  in  the  bank  for  discount,  to  the  amount  of  fifteen 
millions  dollars.  But  these  notes,  he  strenuously  contended,  were  not  due  to 
the  bank.  So  much  knowledge  must,  I  suppose,  have  resulted  from  having 
been  a  bank  director.  \  think  the  gentleman  afterwards  admitted,  that,  if 
these  notes  were  really  due  to  the  bank,  it  would  then,  indeed,  possess  the 
means  of  producing  a  general  state  of  distress,  if  we  should  compel  it  sud- 
denly to  wind  up  its  concerns.  Exactly  so,  sir.  So  far  the  gentleman  was 
correct. 


9(58  BANK  OF  THE  UNITED  STATES. 

But,  with  respect  to  the  rest  of  thlj  statement,  I  shall  merely  observe,  that, 
if  a  gentleman  could  make  a  mistake  at'  fifteen  millions  dollars  in  half  a  minute, 
how  far  would  he  probably  travel  out  of  the  way  in  half  an  hour?  Why,  sir. 
he  would  be  in  danger  of  becoming  one  of  tire  antipodes. 
„  Another  objection  urged  against  the  renewal  of  the  present  bank  charter  is, 
that  a  large  part  of  the  stockholders  are  subjects  of  Great  Britain;  and  that, 
if  we  should  happen  to  be  at  war  with  that  nation,  these  capitalists  would 
have  it  in  their  power  to  injure  the  best  interests  of  this?  country. 

On  the  first  impression,  it  struck  me  that  this  might  possibly  be  the  case? 
but,  on  more  mature  reflection,  I  cannot  see  how  this  could  be  done,  even  if 
those  capitalists  were  so  base  and  so  regardless  of  their  own  interests,  as  to 
attempt  any  thing  of  the  kind.  They  have  no  direct  control  over  the  con- 
cerns of  the  bank ;  it  is  managed  by  directors,  who  are  citizens  of  the  United 
States.  If  any  one  can,  h  nvever,  point  out  any  effectual  method  which  could 
betaken  by  these  capitalists,  and  which  it  is  even  remotely  probable  would  be 
taken,  I  will  then  admit  that  this  may  be  a  greater  or  less  objection,  not 
against  the  re-incorporation  of  the  bank,  but  against  the  policy  of  suffering 
European  capitalists  to  hold  much  property  in  the  bank. 

Another  objection  which  has  been  urged  is,  that  this  bank  is  under  the 
management  of  those  who  are,  for  the  most  part,  opposed  in  political  senti- 
ment to  the  present  administration. 

If  I  believed  that  those  who  manage  the  concerns  of  this  bank  could  wield 
it  as  a  political  engine,  as  was  formerly  the  case,  I  should  be  induced  to  vote 
against  the  bill  entirely.  But,  sir,  the  fact  is,  this  is  not  the  case  at  present, 
nor  do  I  conceive  it  can  ever  be  the  case  again.  So  many  State  banks  have 
been  treated,  that  men  of  all  political  descriptions  can  now  be  accommodated 
at  one  bank  or  at  another:  so  that  the  idea  of  bestowing  bank  favors,  as  a 
reward  for  political  professions,  has  been  long  since  abandoned.  As  the  En- 
glish mastiff  has,  therefore,  lost  his  teeth,  he  can  no  longer  bite  those  who  are 
not  of  his  household — and  knowing  this,  his  fierceness  has  abated;  he  has  be- 
come more  civil  to  strangers,  and  more  fit  and  willing  to  be  made  subservient 
to  the  wishes  of  all. 

Sir,  there  is  another  string  which  is  yet  necessary  to  be  touched,  and  I 
shall  touch  it  but  lightly;  for  it  is  a  tender  one.  It  is  the  distress  and  ruin 
„  which  must  ensue  upon  the  vote  that  is  about  to  be  given,  if  that  vote  shall,  as 
1  believe  it  will,  be  against  the  re-incorporation  of  this  bank,  in  some  shape  or 
other.  From  this  distress,  sir,  probably  all  of  us  will  be  exempt;  the  storm 
will  pass  over  us,  and  we  shall  only  hear  it  at  a  distance;  yet,  the  individuals 
on  whom  it  shall  most  heavily  fall,  will  not,  on  that  account,  feel  it  the  less 
sensibly.  When  I  speak  of  individuals,  I  mean  to  express  myself  emphati- 
cally. There  are  incorporated  individuals,  whose  favorite  dwellings  may  yet, 
by  this  vote,  be  shook  to  pieces  over  their  heads.  But,  as  far  as  any  of  these 
may  have  been  instrumental  in  producing  the  present  state  of  things,  so  far 
will  their  labors  have  obtained  their  just  reward.  I  hope,  however,  that  none 
of  this  description,  in  my  own  State,  have  had  any  agency  in  this  business. 
But,  sir,  for  those  unincorporated  individuals  who  are  to  be  sacrificed  by  this 
measure,  I  feel  some  commiseration;  because,  I  have  some  idea  of  the  feelings 
that  a  ruined  man  must  experience,  particularly  if  he  has  a  family  to  be  sup- 
ported by  his  exertions.  It  would  be  easy,  because  it  would  be  natural,  to 
draw  a  picture  of  this  kind  of  distress.  But  this  is  not  the  only  dark  side 
which  might  be  presented;  its  demoralizing  effects  ought  also  to  be  noticed. 
By  too  frequently,  and,  in  this  case,  I  may  add,  wantonly.,  deranging  and 
prostrating  the  aftairs  of  individuals,  particularly  of  mercantile  men,  you  na- 
turally encourage  in  them,  from  mere  motives  of  self-defence,  principles  which 
tend  to  render  them  a  set  of  sharpers. 

I  have  heretofore  mentioned  that  there  were,  at  the  last  session,  nearly 

thirty  of  a  majority  for  re -incorporating  this  bank.    And  among  those   were 

two  of  my  honorable  colleagues,  whom  I  now  find   on  the  other  side  of  the 

question.     It  would  now  seem  that  tthere  is,  probably,  a  majority  against  ^it. 

'How  does  this  happen?    I  can  account  for  it  in  part,  but  not  wholly.    The 


ON  THE   BILL  TO   RENEW    THE  CHARTER  OF   1791.  269 

Legislatures  of  some  States  have  undertaken  to  "  instruct9-  or  "  request" 
their  several  delegations  to  vote  according  to  their  views  ot  the  subject.  It  is 
generally  understood,  I  believe,  sir,  that  those  who  may  not  think  proper  to 
listen  to  this  monitory  warning,  are  to  be  denounced,  cast  off',  and  thrown,  not 
into  a  den  of  lions— tor  those  animals,  though  tierce,  are  somewhat  noble  in 
their  nature— but  into  a  den  with  one  or  two  ugly  wild  beasts,  exotics,  I  believe, 
sir,  who  seem  to  be  kept  on  account  of  the  peculiar  facility  they  possess  of  be- 
smirching others  with  their  own  tilth.  But  I  would  ask  those  who  have  thus 
undertaken  to  instruct  arid  direct  members  here,  how,  in  God's  name,  did 
they  become  invested  with  this  controlling  power?  Were  they  elected  to  man- 
age the  affairs  of  this  Government?  As  well  might  the  State  delegations  to 
this  Government  assume  to  thvm-i -Ivrs  the  right  of  instructing  and  directing 
their  several  State  Legislatures  how  they  should  act.  No  dictatorship  in  this 
free  country,  sir !  I,  for  one,  protest  against  it.  I  hold  myself  responsible  to  my 
constituents  only,  for  the  vote  I  may  give  on  any  question j  and  that  vote 
which  my  conscience  tells  me  I  ought  to  give,  shall  never  be  controlled  by 
the  imposing  frowns  of  any  man  or  set  of  men,  whatever. 

Sir,  if  this  doctrine  is  to  prevail,  that  the  State  delegations  are  to  direct  us 
how  we  must  act,  then  we  shall  be  in  danger  of  becoming  a  fallen  People!  It 
will  go  to  subvert  the  purposes  for  which  this  Government  was  established. 
It  will  be  reducing  us  to  a  state  which  may  even  prove  worse  than  the  old  con- 
federation: for,  even  under  that  system  ot  government,  the  State  Legislatures 
did  not  attempt  to  dictate  to  ('on.mvss,  but,  on  the  contrary,  Congress  used  to 
recommend  measures  for  them  to  adopt. 

My  idea,  sir,  of  the  best  method  of  getting  along  with  our  various  concerns 
is,  for  each  to  mind  their  own  business.  1  am  not  so  arrogant  as  to  have  any 
wish  to  control  the  opinions  or  the  votes  of  others:  and  all  that  I  require  in 
return  is,  that  the  same  measure  of  courtesy  be  dealt  out  to  m»-. 

Sir,  1  have  thought  proper,  in  order  to  vindicate  my  own  sentiments  and 
my  own  independence  of  feeling,  to  say  thus  much;  I  have  little  more  to  say, 
further  than  to  repeal,  that  I  am  Opposed  to  putting  down  this  bank  suddenly 
and  unexpectedly  j  and  in  noway,  whatever,  unless  it  be  done  gradually,  while 
another,  less  exceptionable,  is  rearing  up  to  fill  its  place.  Permit  me  to  add, 
sir,  that  it  requires  so  much  less  capacity  to  pull  down  than  to  build  up,  that 
1  am  afraid  that  some  who  never  can  distinguish  themselves  in  the  one  way, 
may,  in  their  love  of  fame,  aim  at  an  acquirement  of  some  distinction  in  the 
other.  I  confess  I  have  some  little  fears  on  this  subject:  for  I  am  fully  con- 
vinced, sir,  that,  if  ever  this  Government  shall  be  prostrated,  which  God  for- 
bid, the  work  will  be  accomplished,  not  by  Romans,  but  by  hands  such  as 
those  under  which  Rome  sunk  and  perished. 

Mr.  CRAWJ  OHD. — Mr.  Speaker:  A  solemn  impression  of  the  duty  which  I 
owe  to  the  public,  and  more  particularly  to  that  portion  which  I  more  imme- 
diately represent,  can  alone  induce  me,  awkwardly  circumstanced  as  1  am 
from  habit,  to  come  forward  on  the  present  occasion;  or  support  me  under  the 
embarrassment  1  feel,  in  presuming,  for  the  first  time,  to  deliver  my  sentiments 
on  a  question  of  great  national  importance,  before  a  deliberate  assembly.  The 
subject  having  been  already  very  amply  examined,  I  shall  confine  my  remarks 
to  a  very  few  of  the  most  prominent  principles  connected  with  the  bill.  In 
so  doing,  I  shall  manifest  my  inclination  rather  than  my  ability  to  perform 
my  duty. 

Indeed,  after  the  very  eloquent  and  conclusive  argument  of  the  gentleman 
from  New  York  (Mr.  PORTER)  on  the  constitutionally  of  the  bill  for  the 
renewal  of  the  charter  of  the  Bank  of  the  United  States,  any  farther  attempt  to 
elucidate  that  part  of  the  subject  may  appear  equally  unnecessary  and  imper- 
tinent. But  as  some  very  partial  and  indirect  attempts  have  been  made  to 
set  aside  his  argument,  1  request  your  indulgence,  whilst  I  endeavor  to  investi- 
gate the  positions,  relied  on  by  his  antagonists,  as  a  means  of  palming  this 
counterfeit  again  upon  the  nation  for  twenty  years  longer.  If,  in  this  discus- 
sion, I  depart  from  the  usual  form  of  addressing  you,  by 'giving  it  somewhat 


270  BANK  OF  THE   UNITED   STATES. 

of  a  colloquial  form,  I  must  rely  upon  the  liberality  of  the  Mouse  for  indulg- 
ing so  unusual  a  claim  upon  their  attention, 

As  a  Representative  of  the  People,  then,  I  assume  what  has  been  called  an 
inclusive  po  .ver  to  establish  a  bank,  as  incidental  to  the  power  granted  to  lay 
and  collect  taxes,  duties,  imposts,  and  excises,  by  the  constitution,  in  section 
8th,  article  1st.  as  incontrovertible.  In  granting  this  power  it  necessarily  fol- 
lows, that  I  possess  all  the  means  necessary  to  carry  such  power  into  eft'ect. 
It  is  left  to  my;  discretion  to  employ  the  best  means  which  offer  for  that  purpose. 
This  opinion  is  supported  by  article  17th  of  the  same  section,  which  empowers 
me  to  make  all  laws  which  shall  be  necessary  and  proper  for  carrying  into 
execution  the  foregoing  powers,  and  all  other  powers  vested  by  this  consti- 
tution in  the  Government  of  the  United  States,  or  in  any  department  thereof. 
If,  therefore,  I  consider  a  bank  as  necessary  and  proper  to  carry  into  effect 
the  power  to  lay  and  collect  taxes,  it  thence  becomes  a  power  growing  out 
of  constitutional  authority,  and  it  is  my  duty  to  carry  it  into  execution. 

Here  lam  interrupted  by  my  constituent,  who  objects,  that  I  have  failed  in  the 
establishment  of  my  premises,  and  in  proving  that  a  bank  is  the  most  suitable 
means  to  accomplish  the  end  in  view.  That  many  other  measures,  more  ade- 
quate, present  themselves  to  his  mind;  and  if  taxes  may  be  collected  by 
safer  and  better  means,  banks  become,  agreeably  to  your  own  doctrine, 
unnecessary,  and  therefore  unconstitutional. 

This  objection  I  endeavor  to  surmount,  by  alleging  that  banks,  by  furnish- 
ing.money,  provide  the  means  of  purchasing  the  fruits  of  my  industry;  and  thus, 
bringing  more  competitors  into  the  market,  I  am  enabled  to  dispose  of  my 
productions  with  greater  certainty,  and  at  a  better  price.  Hence  I  am  qualified 
to  comply  with  the  demands  of  Government,  without  seriously  suffering  from 
the  pressure  occasioned  by  such  demand.  Banks,  therefore,  affording  more 
convenient  means  of  paying  taxes,  become  necessary  and  proper  to  their  col- 
lection, and  are  therefore  constitutional. 

Here  again  my  constituent  objects,  that  those  who  hold  bank  paper  will  not 
part  with  it  without  adequate  value,  in  produce  or  other  property.  If  it  should 
so  happen  that  there  shall  be  little  or  no  demend  for  such  produce  or  pro- 
perty, the  paper  holder  will  either  refuse  to  exchange  his  paper  therefor,  or 
reduce  the  price,  in  proportion  to  the  unsaleable  or  perishable  nature  of  the 
commodities  offered.  Nay,  having,  by  his  fictitious  representative,  nearly  ba- 
nished gold  and  silver  from  the  market,  he  may  feel  disposed  to  take  an  undue 
advantage  of  this  withdivwn  competition;  and  thus  lather  diminish  or  destroy 
the  capacity  to  comply  with  the  public  demands.  Banks,  therefore,  afford 
only  a  problematical  resource  on  which  to  rely  for  the  payment  of  taxes. 
They  are  themselves  the  effect,  and  not  the  cause,  of  increased  commercial 
prosperity.  The  consumption  of,  and  demand  for,  the  articles  produced,  fur- 
nish the  true  means  of  meeting  all  demands,  by  the  equivalent  given  for  such 
productions.  Bank  paper  stands,  by  agreement,  as  the  sign  only  of  such 
equivalent,  and  not  as  the  thing  signified,  and  possessed  of  intrinsic  value. 
The  thing  signified  is  therefore  alone  essential  to  the  payment  of  taxes.  This 
is  the  result  of  my  labor,  or  of  such  articles  as  that  labor  has  been  exchanged 
for.  Whilst  there  is  a  demand  for  the  products  of  my  labor,  there  will  be  no 
deficiency  of  means  to  pay  taxes.  If  this  demand  cease,  bank  paper  will  not 
relieve  my  distress.  Banks  afford,  therefore,  only  a  conditional,  and  not  an 
absolute  means  to  favor  the  laying  and  collecting  of  taxes.  They  are  not  the 
best  which  offer  as  necessary  and  proper;  and  are,  consequently,  not  consti- 
tutional. This  argument  may  be  strongly  enforced,  by  tracing  it  through  its 
various  relations  and  tendencies.  The  constitution  prohibits  the  State  Legis- 
latures from  making  any  thing,  save  gold  or  silver,  a  legal  tender.  Hence, 
you  may  infer,  that  Congress  possesses  the  power  to  establish  a  bank,  and 
make  its  paper  a  legal  tender:  for,  if  they  possess  a  power  to  establish  a  bank, 
as  a  means  for  the  laying  and  collecting  taxes,  they  must  also  possess  the 
means  of  making  such  bank  paper  efficient.  If  they  possess  a  power  to  make 
bank  paper  a  legal  tender,  to  support  the  institution  of  a  bank,  they  possess, 
likewise,  the  means  of  enforcing  this  power.  The  best  means  of  enforcing 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     271 

this  power  is  a  standing  army.  Congress,  therefore,  according  to  your  doc- 
trine, possess  the  power,  in  the  last  resort,  to  compel  us,  at  the  point  of  the 
bayonet,  to  receive  their  bank  paper  as  a  legal  tender,  that  they  may  give  fa- 
cility to  the  laying  and  collecting  of  taxes.  Such  are  the  dangerous  conclu- 
sions to  which  the  admission  of  such  arbitrary  doctrines  necessarily  leads — 
doctrines  to  which,  I  trust,  we  will  neither  of  us  submit  while  life  remains. 
But  I  will  now  endeavor  to  show,  that  you  possess  no  constitutional  authority 
to  enforce  such  tyrannical  doctrines.  In  article  10th,  amendments  to  the 
constitution,  the  doctrine  is  expressly  laid  down,  that  "  the  powers  not  dele- 

fited  by  the  constitution  to  the  United  States,  nor  prohibited  by  it  to  the 
tates,  are  reserved  to  the  States,  respectively,  or  to  the  People."  But 
the  power  to  erect  banks  is  no  where  prohibited,  by  the  constitution,  to 
the  States;  it  is  therefore  reserved  by  it  to  the  States,  respectively,  or  to  the 
People.  Congress,  therefore,  cannot  usurp  this  power  over  the  States,  so  ex- 
plicitly and  expressly  reserved,  without  a  flagrant  violation  of  this <  (not  an 
interpolation,  as  it  has  been  jesuitically  styled,  but}  integral  part  of  the  con- 
stitution. This  opinion  is  confirmed  by  article  9th,  amendments  to  the  con- 
stitution, which  declares,  that  the  enumeration  in  the  constitution  of  certain 
rights,  shall  not  be  construed  to  deny,  or  disparage  others  retained  by  thePeo- 
pte.  But  the  People  have  retained  the  right  to  establish  banks:  for  all  powers 
not  delegated  to  the  United  States,  or  prohibited  to  the  States,  are  reserved  to 
the  States,  respectively,  or  to  the  People.  The  States  and  the  People  have  ex- 
ercised this  right.  Their  power  to  do  so  has  never  been  questioned.  Every 
attempt  to  exercise  this  power,  on  the  part  of  Congress,  is  an  encroachment 
on  this  right,  is  a  denial  or  disparagement  thereof,  and  becomes  thence  a  vio- 
lation of  the  constitution*  The  Elates  are  prohibited  from  making  any  thing 
but  gold  or  silver  a  legal  tender.  They  possess  an  unquestionable  right  to 
erect  banks,  but  they  cannot  make  their  paper  a  legal  tender.  If  Congress 
possess  ilie  jnwer  to  create  a  national  bank,  they  are  not  prohibited  from 
making  its  paper  a  legal  tender.  This  silence  may  be  construed  into  a  power 
of  giving  legality  to  their  paper,  by  making  it  a  tender.  It  may  thus  be  exer- 
cised so  as  to  construe  their  right  into  a  denial  or  disparagement  of  the  rights 
retained  by  the  People. 

If  any  doubts  still  remain,  respecting  your  want  of  constitutional  authority 
to  create  a  national  bank,  I  will  proceed  to  satisfy  you  that  you  are  clothed 
with  no  such  dangerous  power. 

By  the  constitution  you  are  merely  the  servants  of  the  People,  acting  under 
a  specific  power  of  delegated  trust.  You  are  strictly  limited  to  the  powers 
therein  delegated,  or  to  such  incidental  powers  as  are  Necessary  and  proper 
to  carry  into  execution  the  foregoing  powers,  and  all  other  powers  vested  by 
this  constitution  in  the  Government  of  the  United  States,  or  in  any  department 
or  officer  thereof;  that  is,  you  shall  possess  all  the  means  necessary  and  proper, 
provided  the  powers  vested  in  you  by  the  constitution  cannot  be  carried  into 
eftecr  without  such  means;  or  where  your  power  to  use  such  means  is  not 
doubtful  or  limited.  In  art  5th  of  the  constitution  we  are  instructed,  that 
44  The  Congress,  whenever  two  thirds  of  both  Houses  shall  deem  it  necessary, 
shall  propose  amendments  to  this  constitution,  01%  on  the  application  of  the 
legislatures  of  two  thirds  of  the  several  States,  shall  call  a  convention  for  pro- 
posing amendments,  which,  in  either  case,  shall  be  valid  to  all  intents  and  pur- 
poses, as  part  of  this  constitution,  when  ratified  by  three  fourths  of  the  several 
States,  or  by  conventions  in  three-fourths  thereof,  as  the  one  or  the  other  mode 
of  ratification  may  be  proposed  by  the  Congress,  provided  that  no  amendment 
which  may  be  made,  prior  to  the  year  one  thousand  eight  hundred  and  eight, 
shall  in  any  manner  aftect  the  first  and  fourth  clauses  in  the  ninth  section  of 
the  first  article,  and  that  no  State,  without  its  consent,  shall  be  deprived  of  its 
equal  suffrage  in  the  Senate."  If  the  States  arid  the  People  were  so  extremely 
cautious  and  guaided  in  procuring  any  amendment  to  the  constitution,  will 
they  calmly  witness  a  sacrilegious  infraction  of  its  most  sacred  principles? 
Will  they  permit  you,  by  a  constructive  power,  to  create  rights  which  deny 
or  disparage  those  which  they  have  expressly  reserved  to  themselves?  Have 


272  BANK  OF  THE  UNITED  STATES. 

they  not  ordered  you,  whenever  your  powers  are  doubtful,  defective,  or  limited, 
to  apply  to  them  for  the  remedy?  Have  they  not  explicitly  provided  the  man- 
ner in  which  such  remedy  shall  be  applied?  They  nave  not  permitted  you  to 
cut  and  carve  for  yourselves.  A  power  is  given  to  lay  and  collect  taxes,  du- 
ties, imposts,  and  excises.  You  shall  have  collectors  and  excise  officers  as 
incidental  to  their  execution;  you  are  to  provide  the  safest  deposites  for  them 
within  your  constitutional  reach;  you  must  preserve  them  under  your  per- 
petual control,  by  contract;  you  will  be  allowed  stationary,  store  room,  and 
house  rent,  with  every  other  essential  accommodation;  but  as  we  have  reserved 
the  power  of  creating  banks  to  the  States  or  to  ourselves,  you  can  claim  no 
constitutional  power  over  them,  unless  within  the  district  over  which  we  have 
given  you  exclusive  legislation:  and  this  power  you  are  invested  with,  merely 
as  Legislators  for  that  district,  and  not  in  your  capacity  of  Representatives  of 
the  States,  respectively,  or  of  the  People. 

But  you  conclude  that  the  question  of  constitutionality  is  settled  by  prece- 
dent, acquiesced  in  by  all  the  constituted  authorities  for  twenty  years.  Such 
a  conclusion  facts  will  not  justify.  It  is  a  most  dangerous  doctrine;  it  is  an 
abandonment  of  the  State  sovereignties,  who  have  lor  tvyenty  years  practi- 
cally opposed  and  denied  such  doctrine.  More  than  three-fourths  of  the  States 
have,  for  a  large  portion  of  that  period,  been  in  the  practice  of  establishing 
banks  within  their  respective  State  sovereignties.  If  they  had  divested  them- 
selves of  this  sovereignty,  by  a  delegation  of  such  power  to  the  United  States, 
they  would  never  have  dared  to  exercise  such  a  flagrant  ursupation  of  power. 
Congress  could  not,  without  violating  their  oaths,  have  permitted  this  usurpa- 
tion of  their  delegated  authorities.  Upon  all  other  occasions  they  have  been 
sufficiently  jealous  of  the  encroachments  of  State  authorities.  Can  it  be  im- 
agined that  they  would  have  witnessed  such  a  daring  and  dangerous  innovation, 
if  such  powers  had  been  unequivocally  delegated?  On  a  subject  of  such  mag- 
nitude, no  one  can  believe  such  improbable  suppositions.  But  it  is  all  impor- 
tant to  the  peace,  safety,  and  happiness  of  the  union,  that  this  subject  be  fully 
and  fairly  met;  that  it  may  be  set  for  ever  at  rest.  It  is  a  subject  on  which 
we  cannot  suppose  the  constitution  was  intentionally  silent;  provided  the 
povyer  was  intended  to  be  given  by  the  States.  It  is  one  in  the  exercise  of 
which  collision  would  most  frequently^  occur.  The  power  would  therefore  be 
expressly  given,  expressly  reserved;  or  an  agreement  made  to  share  it  mutu- 
ally. If  any -such  agreement  exists,  it  must,  from  the  necessity  of  the  case, 
be  specific,  express,  and  accurately  defined  and  limited.  No  such  compact 
exists  in  the  constitution  of  the  United  States.  Upon  this  subject  there  is 
therefore  only  one  alternative.  The  power  is  either  expressly  given  or  reserv- 
ed. It  is  of  too  imperiousa  nature  to  be  sought  for  by  implication,  inclusion,  or 
as  an  incidental  means  to  carry  any  other  power  into  effect-  It  has  never  been 
contended  that  any  such  power  is  expressly  given  by  the  constitution.  If  it 
had  ever  been  parted  with,  it  was  all-important  that  it  should  have  been  parted 
with  expressly.  If  it  has  been  parted  with,  it  can  be  shown.  If  it  can  be 
shown,  it  requires  no  casuistry  to  support  it.  Casuistry  may  involve  and  ob- 
scure— it  can  but  seldom  enlighten  its  subject.  The  sole  power  given  to  the 
United  States,  to  coin  money,  regulate  commerce,  or  make  war,  has  never  been 
questioned.  Upon  these  subjects  no  State  has  ever  shown  a  disposition  to 
interfere,  either  with  the  powers,  or  the  nieans  necessary  to  carry  these  pow- 
ers into  eftect-  No  similar  delegation  of  power  on  the  subject  of  banking  can 
be  shown.  It  is  therefore  expressly  reserved.  For  if  it  has  not  been  so  reserv- 
ed, the  individual  States  have,  most  of  them,  been  in  the  daily  usurpation  of  a 
power  which  did  not  of  right  belong  to  them,  which  of  right  belonged  to  ano- 
ther, for  nearly  twenty  years.  But,  if  they  have  been  in  the  exercise  of  a  legi- 
timate authority,  then  have  the  United  States  been  exercising  a  dangerous  and 
arbitrary  usurpation  of  power,  never  delegated,  expressly  reserved,  and  prac- 
tically denied  and  opposed  by  the  States,  during  the  whole  of  that  period. 
Those  who  advocate  the  power  of  the  United  States  over  this  subject  must 
yield  the  sovereignty  of  the  individual  States.  They  must  show  this  yielding 
of  sovereignty,  otherwise  their  power  is  a  usurpation.  They  have  not  shown 


ON  THE  BILL  TO  RENEW   THE   CHARTER  OF   1791. 

any  such  delegation  of  sovereignty  by  the  States.  They  never  can  shew  it,  in 
this  constitutional  instrument.  *It  is  therein  expressly  reserved:  for,  "the 
powers  not  delegated  to  the  United  States  by  the  constitution,  nor  prohibited 
by  it  to  the  States,  are  reserved  to  the  States,  respectively,  or  to  the  People." 

Obliged  thus  to  abandon  my  constitutional  position,  I  endeavored  to  rally 
my  scattered  forces,  on  the  extensive  field  of  expediency.  I  expatiated  on  th«» 
immense  advantages  resulting  from  a  common  circulating  medium,  the  facili- 
ties afforded  thereby  to  our  fiscal  and  commercial  relations,  and  the  stimulus 
given  to  industry  by  a  large  foreign  capital.  My  constituent  suddenly  arrest- 
ed my  progress,  by  observing,  that  it  appeared  idle  to  consume  our  time  in 
castle- building,  while  we  possessed  neither  the  power  nor  the  materials  to 
erect  them:  tor,  when  the  constitutional  authority  is  denied,  no  expediency 
can  justify  such  an  assumption  of  power.  Such  an  assumption  would,  if  ac- 
quiesced in,  break  down  all  the|mounds  raised  by  the  People  for  their  protection 
against  the  lawless  encroachments  of  power.  It  would  remove  those  land- 
marks, set  up  by  them  for  their  guide;  and,  whenever  such  encroachments 
would  be  attempted,  exposed  them  a  defenceless  prey  to  their  enemies.  I 
will,  however,  otter  a  few  observations  on  the  subject  of  expediency,  and  hope 
to  shew  you  that,  even  on  that  ground,  you  are  exposed  to  defeat.  As  to  the 
fiscal  operations  of  the  country,  they  may  be  readily  and  safely  conducted 
through  less  dangerous  channels — by  a  differentmodification  of  means,  with- 
in constitutional  reach.  A  large  foreign  capital  is  equally  susceptible  of  being 
injuriously  as  of  being  beneficially  employed.  We  had  better  remain  unem- 
ployed, than  use  means  to  promote  industry  which  may  only  place  us  more 
completely  at  the  discretion  of  foreign  Powers,  by  giving  them  the  discretion 
of,  and  command  over,  our  industry.  It  cannot  be  questioned,  that  the  large 
foreign  capital  in  our  country  has  been  highly  instrumental  in  deluging  our 
country  with  unnecessary  and  extravagant  articles  of  foreign  growth  and  ma- 
nufacture. These  foreign  gewgaws  have  nearly  destroyed  our  economical 
and  simple  habits,  as  an  agricultural  People,  and  rendered  us  tributary  to 
those  foreign  Powers,  whose  meretricious  arts  have  inveigled  us  into  such  pro- 
digal consumption  of  their  commodities.  The  same  funds  have  been  employed 
to  retard  our  progress  in  manufacturing  for  ourselves,  lest  we  should  become 
in  reality  independent,  and  disobedient  to  our  task-masters;  whose  artful 
policy  has  nearly  banished  gold  and  silver,  by  the  introduction  of  their  ficti- 
tious capital,  that  they  might  thus  disarm  our  energies — if  the  expiring  em- 
bers of  personal  liberty  or  national  independence  should  again  rekindle,  and 
nerve  our  arms  and  animate  our  hearts  against  every  insidious  or  perfidious 
encroachment  upon  the  dearest  rights  of  freemen. 

Again  I  endeavored  to  arrest  the  glowing  progress  of  my  constituent,  by 
directing  his  attention  to  the  numerous  memorials  on  our  table:  painting,  in 
fascinating  colors,  the  beneficial  operations  of  this  institution  on  our  country, 
and  its  Government,  and  shading  the  back  ground  of  the  picture  in  sombre 
colors,  with  the  ruin  which  a  refusal  to  re-charter  the  bank  of  the  United 
States  must  bring  down  on  the  devoted  heads  of  our  State  banks,  and  our  com- 
mercial cities,  and  which  threatens  to  extend  its  desolations  to  every  de- 
scription of  our  citizens. 

What,  my  friend,  exclaimed  my  constituent,  have  these  basilisks  so  fasci- 
nated you,  by  their  legerdemain  artifices,  as  to  deprive  you  of  the  evidence  of 
your  senses?  Have  you  not,  from  the  same  description  of  people,  numer- 
ous representations  which  boast  a  redundant  capital?  So  redundant  as  to 
induce  them  to  vest  their  superfluity  of  wealth  in  speculations  upon  British  ma- 
nufactures, and  other  articles  of  British  commerce,  by  anticipated  remittances? 
Is  it  unreasonable  to  trace  these  contradictory  statements  to  the  same  impure 
source?  May  not  this  redundant  wealth  consist  of  national  or  mercantile  depo- 
sites,  in  the  national  bank,  granted  to  such  special  friends  as  trade  in  British 
commodities,  to  favor  their  immense  importations,  and  destroy  our  infant  ma- 
nufactures, that  they  may  shackle  our  commerce  in  foreign  fetters?  May  not 
the  fictitious  capital  of  the  same  institution  be  employed  to  coerce  American 
citizens— the  friends  of  American  prosperity  and  independence — into  a  re- 
35 


274  BANK  OF  THE  UNITED  STATES. 

newal  of  their  favorite  bank  charter?  To  this  rational  solution  of  memorials, 
so  contradictory  in  their  nature,  I  could  offer  no  satisfactory  reply— I  gave  up- 
the  cause  as  hopeless,  on  American  ground.  As  an  American  citizen,  I  can 
never  yield  my  assent  to  a  measure,  so  apparently  pregnant  with  mischief  to- 
the  rights  and  liberties  of  my  constituents.  I  cannot  thus  betray  the  confidence 
reposed  in  me  as  a  Representative  of  the  American  People,  or  violate  the  oath 
which  I  have  taken  to  support  the  constitution  of  the  United  States. 

JANUARY  24,  1811. 

The  House  resumed  the  consideration  of  the  motion  to  postpone,  indefinite- 
ly, the  further  consideration  of  the  said  bill. 

And  the  question  being  taken,  it  passed  in  the  affirmative — ayes  65,  noes  64> 

Those  who  voted  in  the  affirmative,  are, 
Messrs.  L.  J.  Alston,        Me 


Anderson, 

Bacon, 

Bard, 

Barry, 

Basset, 

Bibb, 

Boyd, 

Brown, 

Butler, 

Calhoun, 

Cheves, 

Clay, 
Cochran, 

Crawford, 

Cutts, 

Dawson, 

Desha, 

Eppes, 
Franklin, 

Gannet, 

Gardner, 

Gholson, 

Messrs.  Rhea,  of  Pemu 

Goodwyn, 

Rhea,  of  Tenn., 

Gray, 

Richards, 

Holland, 

Ringgold, 

Johnson, 

Roane, 

Jones, 

Sage, 

Kenan, 

Sawyer, 

Kennedy, 

Seaver, 

Love, 

Seybert, 

Lyle, 

Smilie, 

Macon, 

G.  Smith, 

McKim, 

S.  Smith, 

McKinley, 
Mitchell, 

Southard, 
Troup, 

Montgomery, 

,              Turner, 

N.  R.  Moore, 

Van  Horn, 

T.  Moore, 
Morrow, 

Weakley, 
Whitemll, 

Mum  ford, 

Winn, 

Newton, 
J.  Porter, 

.Witherspoon. 
Wright—  65.  ' 

P.  B.  Porter, 

Those  who  votetl'in  the  negative,  are, 
Messrs.  Allen,  Messrs.  Helms, 


W.  Alston, 

Bigelow. 

Blaisdell, 

Breckenridge, 

Campbell, 

J.  C.  Chamberlin, 

W.  Chamberlin, 

Champion, 

Chittenden, 

Davenport, 

Ely, 

Emott, 

Findley, 

Fisk. 

Garaenier, 

Garland, 

Goldsborough, 

Gold, 

Hale,     , 

Haven, 

Heister, 


Hubbard, 

Hufty, 

Huntingtori, 

Jackson, 

Jenkins, 

Key, 

Knickerbacker, 

Lewis, 

Livingston, 

Matthews, 

M'Bryde, 

M'Kee, 

Miller, 

Milnor, 

Moseley, 

Newborn , 

Nicholson, 

Pearson, 

Pickman, 

Pitkin, 


Messrs.  Pottor, 


Quincy, 
Ran 


indolph, 
Sammons, 
Scudder, 
Shaw, 
•Sheffey, 
Smelt, 
J.  Smith, 
Stanford, 
Stanley, 
Stephenson, 
Sturges, 
Swoope, 
Taggart, 
Tallmadge, 
Thompson, 
Van  Dyke, 
Van  Rensselaer, 
Wheaton,  and 
Wilson— 64. 


ON  THE  BILL*  TO  RENEW  THE  CHARTER  OF  1  «91.     275 

[There  were  absent  on  this  vote  eleven  members,  viz: 
Messrs.  Burwell,  Messrs.  Cobb,  Messrs.  Ross, 

Crist,  Livermoore,  Tracy,  and 

Cook,  Lyon,  Whitman. 

Clopton,  Root, 

Of  whom  Messrs.  Harwell,  Crist,  Cook,  Livermoore,  Lyon,  Ross,  and 
Whitman,  were  absent  from  the  city,  and  Messrs.  Clopton,  Cobb,  Root,  and 
Tracy,  were  absent  from  indisposition  and  other  causes,] 

On  this  day,  Messrs.  RHEA,  of  Tennessee,  SMXLIE,  MACON,  and  EPPES* 
spoke  in  favor  of  the  postponement,  and  Messrs.  QUINCY,  STANLEY,}  and 
McKEE,  against  it;  whose  speeches,  so  far  as  they  are  found  reported,  follow 
in  the  order  above  named. 

Mr.  RHEA,  (of  Tennessee.)  If,  in  the  course  of  this  debate,  observations 
had  not  been  made  which  appear  to  deprive  the  constitution  of  the  United 
States  of  its  innate  virtue  ami  honor,  to  destroy  its  beauty  and  simplicity,  and 
to  transform  it  into  a  deformed  and  distorted  something,  the  debate  on  this 
bill  to  renew  the  charter  of  the  Bank  of  the  United  States  would  have  pro- 
gressed to  the  end,  undisturbed  by  any  intervention  of  mine.  If  a  train  of 
reasoning  be  adopted,  that  tends  to  disturb  this  constitution,  and  to  give  to  it 
a  construction  and  interpretation  that  it  will  not  bear,it  then  becomes  a  duty 
to  state  opinions  respecting  it,  and  to  vindicate  the  true  intent  and  express 
understanding  thereof. 

The  constitution  was  solemnly  and  deliberately  made,  by  wise  men,  who 
composed  the  convention,  in  the  name  of  the  People  of  the  United  States,  and 
it  was  solemnly  and  deliberately  ratified,  by  conventions  of  the  States,  re- 
spectively. It  is  simple,  and  easy  to  be  understood,  by  anyone  who,  knowing 
the  objects  and  ends  for  which  it  was  ordained,  will  candidly  examine  it.  A 
defence  of  the  constitution,  is  a  defence  of  the  %reat  and  good  men  who  made 
it  what  it  is:  for,  if  the  constitution  be  dark,  of  obscure  intent,  and  dubious 
meaning,  it  is  not  what  it  ought  to  have  been.  If  it  be  dark,  obscure,  and  du- 
bious, it  it  be  capable  of  inconsistent  or  contrary  interpretation,  the  conven- 
tions of  the  ratifying  States  have  not  examined  it  with  that  careful  attention 
which  it  required.  Vain  and  empty  surmises  will  evaporate,  the  characters 
of  the  men  who  made  it  being  considered;  the  scrutinizing  inquiries  of  the  seve- 
ral ratifying  conventions  being  contemplated,  and  by  a  candid  examination, 
without  prejudice  of  the  constitution  itself. 

The  constitution  is  a  compact  between  the  individual  States  and  the  Unit- 
ed States.  It  is  the  great  charter  and  bill  of  rights,  delegated  and  given  by 
the  several  States  composing  the  Union,  to  the  United  States;  it  contains 
rights,  powers,  and  principles,  to  be  acted  on  by  the  United  States,  in  order  to 
form  a  more  perfect  union,  establish  justice,  ensure  domestic  tranquillity,  pro- 
vide tor  the  common  defence,  promote  the  general  welfare,  and  secure  the 
blessings  of  liberty;  and  we,  "  the  People  of  the  United  States,"  have  or- 
dained and  established  it  the  constitution  of  the  United  States  of  America. 

I  he  rights,  powers,  and  principles,  enumerated  in  the  constitution,  are  void 
of  elasticity;  they  are  firm,  fixed,  and  unbending;  they  will  not  yield  to  dis- 
cretion, on  various  assumed  constructions;  unchangeable  in  their  nature,  in- 
tent, and  object,  they  are  mutable  only  by  the  constitutional  authorities. 

Ihe  enumeration,  in  the  constitution,  of  certain  rights,  shall  not  be  con- 
strued to  deny,  or  disparage  others,  retained  by  the  People."— Article  eleventh 
of  the  amendments  to  the  constitution.  This  article  manifests,  that  all 
the  rights  delegated  to  the  United  States  are  enumerated  in  the  constitution, 
and  the  enumerated  rights  shall  not  be  construed  to  deny  or  disparage,  to 
bring  into  disrepute,  or  diminish,  other  rights,  retained  by  the  People;  and  to 
that  end  it  is  absolutely  necessary  that  the  rights  delegated  be  expressly  and 
distinctly  enumerated,  otherwise  it  would  be  impossible  to  ascertain  and 
distinguish  the  rights  delegated  to  the  United  States,  and  the  rights  reserved 
to  the  People.  •'  The  powers  not  delegated  to  the  United  States  by  the  con- 


276  BANK  OF  THE  UNITED  STATES. 

stitution,  nor  prohibited  by  it  to  the  States,  are  reserved  to  the  States,  respec- 
tively, or  to  the  People. " — Article  twelfth,  amendments  to  the  constitution.  By 
this  article,  it  is  manifest  that  a  power,  not  distinctly  and  expressly  delegated 
to  the  United  States,  by  the  constitution,  nor  expressly  and  distinctly  pro- 
hibited by  it  to  the  States,  is  reserved  to  the  States,  respectively,  or  to  the 
People.  These  amendatory  articles  exclude,  and  prohibit  an  assumption  of 
discretionary  powers;  of  constructive  powers;  and  of  all  powers  and  rights 
not  expressly  and  distinctly  enumerated  in  the  constitution.  By  the  word 
"power,"  or  the  word  "right,"  is  understood  a  fundamental  principle  of  the 
constitution;  the  Congress  cannot  change,  alter,  vary,  or  destroy  it;  it  assume* 
form  when  it  is  clothed  with  a  legislative  act  of  the  Congress,  and.  ordered  to 
operate. 

It  may  be  proper  to  notice  some  observations,  made  in  the  course  of  this  de- 
bate, which  appeared  to  evidence  a  disposition  to  show  that  the  Congress  was- 
vested  with  discretionary,  or  constructive  powers,  in  matter  of  principle.  It 
has  been  intimated  that  Congress  had  not  power  to  disband  an  army,  if  the 
power  was  not  assumed.  If  the  constitution  had  been  well  considered,  this 
and  other  similar  intimations  would  have  been  omitted.  An  arniy  is  raised  in 
consequence  of  a  law,  bottomed  on  the  clause  in  the  eighth  section  of  the  said 
article,  which  empowers  Congress  to  raise  and  support  armies.  By  the  eighth 
section,  the  Congress  is  empowered  to  "make  rules  for  the  government  and 
regulation  of  the  land  and  naval  forces."  And  the  Congress  is  prohibited  to 
make  an  appropriation  of  money  to  support  an  army,  for  a  longer  term  than 
two  years.  The  Congress,  acting  on  these  powers,,  will  disband  an  army.  A 
law  may  be  made  to  expire  by  limitation  in  itself;  if  not,  the  Congress  will 
make  a  law  to  repeal  it.  A  law  may  be  enacted  to  repeal  the  law  whereby 
an  army  is  raised,  and  then  that  army  will  be  disbanded.  The  writ  of  ha- 
beas corpus  is  a  prerogative  writ  of  the  United  States,  and  was  in  use  previ- 
ous to  the  existence  of  the  constitution;  it  is  not  prohibited  by  the  constitution 
to  the  People;  it  is  a  duty  of  the  judiciary  to  issue  writs  of  habeas  corpus, 
proper  cause  being  shewn.  The  privilege  of  that  writ  does  not  depend  oi>. 
the  clause  in  the  ninth  section  of  the  first  article  of  the  constitution;  that 
clause  only  contains  an  express  condition  or  reservation,  that  the  Congress 
shall  not  suspend  the  privilege  of  the  writ  of  habeas  corpus,  except  when,  in 
cases  of  rebellion  or  invasion,  the  public  safety  may  require  it.  Writs  of  ha- 
beas corpus  being  issued  by  the  judiciary,  a  law  suspending  the  privilege  of 
that  writ  is  a  law  regulating  the  proceedings  of  the  judiciary,  and  is  bottomed 
on  the  powers  vested  in  the  Congress,  by  force  of  the  third  article  of  the  con- 
stitution. "  No  bill  of  attainder  or  ex  post  facto  law  shall  be  passed.*'  This  is 
an  express  prohibition,  and  requires  no  illustration.  "  No  title  of  nobility 
shall  be  granted  by  the  United  States."  This,  also,  is  an  express  prohibition. 
The  Congress  hatn  power  4"  to  provide  and  maintain  a  navy,"  and  to  make 
rules  for  the  government  and  regulation  thereof;  and,  "  to  define  and  punish 
piracies  and  felonies,  committed  on  the  high  seas,  and  offences  against  the 
laws  of  nations;"  and  consequently,  to  make  rules  and  regulations  for  the  go- 
vernment of  seamen  of  every  description.  It  has  been  asked,  by  what  dele- 
gated power  does  Congress  make  laws  to  prevent  settlers  on  lands,  the  In- 
dian title  whereof  hath  not  been  extinguished?  If  the  gentleman  woo  made 
the  inquiry  had  considered  that  land,  the  Indian  title  whereof  was  not  extin- 
guished, remained,  by  treaty,  for  the  use  of  the  Indian  tribe,  until  the  extin- 
guishment of  title,  and  that,  a  treaty  being  a  supreme  law  of  the  land,  the 
Congress  is  empowered  to  give  it  complete  effect,  the  inquiry,  probably,  would 
not  have  been  made. 

It  is  urged,  that  a  discretionary  power  is  necessary  to  carry  the  enumerat- 
ed powers  into  effect.  If  the  discretionary  power  alluded  to  intends  only  a 
power  to  legislate  on  the  delegated  right  or  power,  in  a  proper  time  and  ade- 
quate manner,  this  is  no  more  than  a  power  to  make  laws  to  cany  the  dele- 
gated power  into  execution;  but,  if,  by  "discretionary  power,"  is  intended  a 
power  to  assume,  at  discretion,  a  right,  or  principle,  not  enumerated  in  the 
constitution,  under  pretence  of  carrying  a  delegated  power  into  execution,  it 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791.  077 

is  denied  that  the  Congress  hath  that  power:  for,  if  a  delegated  power  cannot 
be  carried  into  execution  without  assuming,  at  discretion,  a  right  not  delegat- 
ed, it  will  only  prove  that  the  constitution,  in  this  respect,  is  deficient,  and 
requires  amendment,  and  will  not  prove  that  Congress,  to  effect  a  measure, 
may,  at  discretion,  do  an  unconstitutional  act. 

It  hath  been  argued,  that  the  convention  left  Congress  to  adopt  the  means, 
as  circumstances  might  admit,  to  carry  the  delegated  powers  into  effect. 
What  is  intended  by  the  word  means,  ought  to  have  been  explained  in  a  con- 
stitutional, not  a  discretionary  manner.  To  produce  an  effect  of  a  general 
nature,  the  means  ought  to  be  commensurate  and  co-extensive.  Water  is  a 
means  to  allay  the  thirst  of  all  mankind,  and  there  is  no  substitute.  Ships 
and  sea  vessels  are  a  means  of  carrying  on  commerce  between  nations  sepa- 
rated by  the  ocean,  and  there  is  no  substitute.  The  constitution  vests  Con- 
gress with  power  to  regulate  commerce  with  foreign  nations;  but  no  man  will 
believe  that,  in  virtue  of  that  power  alone,  the  Congress  would  attempt,  by  a 
discretionary,  or  a  constructive  power,  to  adopt  another  principle;  that  is,  to 
provide  and  maintain  a  navy  to  protect  commerce. 

The  last  clause  of  the  eighth  section  is  in  the  following  words:  "And  to 
make  all  laws  (that  is,  Congress  shall  have  power  to  make  all  laws)  which 
shall  be  necessary  and  proper  for  carrying  into  execution  the  foregoing  pow- 
ers, and  all  other  powers  vested  by  the  constitution  in  the  Government  of  the 
United  States,  or  in  any  department  or  officer  thereof." 

This  is  the  clause  \\hich  is  called  the  sweeping  clause,  pretending  to  u>.-a 
all  powers  and  authorities,  although  not  expressly  enumerated.  It  may  be 
proper  here  to  inquire  what  is  intended  by  the  words,  "  and  all  other  p;>\\ers 
vested  by  this  constitution  in  the  Government  of  the  United  States,  or  in  any 
department  or  officer  thereof,"  or  what  are  the  powers  intended  by.the  words 
"  all  other  powers,"  inasmuch  as  it  is  probable  that  an  opinion  may  have  ob- 
tained, that,  by  these  words  air  understood  some  hidden  occult  powers,  not 
expressly  enumerated  in  the  constitution;  that  these  powers  are  for  the  pecu- 
liar exercise  of  discretion,  and  that  they  are  certain  discretionary  powers,  to 
be  discovered  and  assumed  in  extraordinary  cases,  If  any  such  opinions  are. 
entertained,  a  careful  examination  of  the  constitution  will  dissipate  them. 
Powers,  other  than  those  enumerated  in  the  eighth  section  of  the  first  article 
of  the  constitution:  these  powers  mighl  all  be  mentioned,  but  that  is  unneces- 
sary; some  of  them  will  be  noticed.  "  Congress  have  power  to  provide  by  law- 
Tor  taking  a  census  of  all  the  People  of  the  United  States,  every  ten  years.*' 
Congress  hath  power  to  appoint,  by  law,  a  day  to  convene,  other  than  the  first 
Monday  of  December.  To  determine,  bv  law,  the  time  for  choosing  electors 
of  President  and  Vice  President  of  the  United  States. 

Section  ith,  of  first  article:  *'  The  times,  places,  and  manner,  of  holding 
elections  for  Senators  and  Representatives,  shall  be  prescribed  in  each  State, 
by  the  Legislature  thereof;  but  the  Congress  may,  at  any  time,  by  law,  make 
or  alter  such  regulations,  except  as  to  the  places  of  choosing  Senators." 

"To  make  laws  respecting  the  District  of  Columbia."  "  To  declare  the 
punishment  of  treason."  Several  of  those  powers,  denominated  *'  other  pow- 
ers," are  enumerated  in  the  9th  and  10th  sections  of  the  1st  article  of  the 
constitution.  Congress  have  power,  by  law,  to  establish  courts,  inferior  to 
the  supreme  court.  Congress  have  power  to  make  all  needful  rules  and  re- 
gulations respecting  the  territory  and  other  property  of  the  United  States. 
This  enumeration  may  at  present  be  sufficient  to  show  what  powers  are  in- 
tended by  the  words  "*  other  powers,"  and,  also,  to  manifest,  incontrovcrti- 
bly,  that  the  words  t;  and  all  other  powers  vested  by  this  constitution  in  the 
Government  of  the  United  States,  or  in  any  department  or  officer  thereof," 
refer  only  to  powers  expressly  and  positively  enumerated  in  the  constitution, 
and  by  it  vested  in  the  Government  of  the  United  States;  that,  by  these 
words  are  not  understood,  as  some  may  have  fondly  imagined,  any  powers  of 
discretion,  fitted,  when  discovered,  to  fill  chasms  in  the  constitution  of  the 
United  States;  and  that,  by  these  words  are  not  to  be  understood  some  con- 
cealed occult  powers,  waiting  to  be  revealed  by  superior  wisdom,  to  meet  par- 
ticular purposes,  for  instance,  the  creation  of  the  Bank  of  the  United  States, 


278  BANK  OF  THE  UNITED  STATES. 

or  to  be  dragged  out,  by  main  force,  to  support  unconstitutional  pretensions. 
In  the  constitution  are  clearly  expressed  and  enumerated,  all  the  powers, 
rights,  and  principles,  which  have  been  vested  in  the  Government  of  the  Unit- 
ed States,  or  in  any  department  or  officer  thereof,  by  the  individual  States 
ratifying  the  constitution;  nothing  is  left  in  obscurity,  or  difficulty^  and  this 
constitution  is  not  elastic — it  will  not  bend  to  discretionary  opinions. 

I  will  now,  said  Mr.  Rhea,  with  all  due  respect,  approach  the  main  ques- 
tio  n  of  inquiry,  viz.:  Is  a  power  or  right  to  create  the  Bank  of  the  United 
States,  expressly  enumerated,  to  be  vested,  or  intended  to  be  vested  in  Con- 
gress, by  the  eighth  section  of  the  first  article  of  the  constitution?  It  may  be 
previously  observed,  that  if,  in  the  ninth  section  ot  the  first  article,  there 
had  been  even  a  negative  expression  or  enumeration  of  power  or  right,  in- 
serted, empowering  Congress  to  create  the  Bank  of  the  United  States,  as  if 
it  had  been  stated  in  the  words  following,  or  words  to  the  same  effect:  u  Con- 
gress shall  not  create  the  Bank  of  the  United  States  prior  to  the  year  one  thou- 
sand eight  hundred,"  there  might  have  been  some  reason  to  presume  upon. 
But  a  negative  expression  of  a  power  or  right  of  that  import,  is  riot  in  the  ninth 
section  enumerated,  nor  in  any  other  section  of  the  constitution.  The  words 
in  the  eighth  section  of  the  first  article  of  the  constitution,  which  have  caused 
such  amazing  solicitude  and  inquiring  anxiety,  to  discover  some  obscure  oc- 
cult power  or  right  to  create  the  Bank  of  the  United  States,  are  the  fol- 
lowing: "  Congress  shall  have  power  to  lay  and  collect  taxes,  duties,  imposts, 
and  excises,  to  pay  the  debts,  and  provide  for  the  common  defence  and  gene- 
ral welfare  of  the  United  States,'"  "  and  (as  expressed  in  the  last  clause  of 
the  section)  to  make  all  laws  which  shall  be  necessary  and  proper  for  carry- 
ing into  execution  the  foregoing  powers,  (that  is,  the  powers  enumerated  in 
the  eighth  section)  and  all  other  powers  (that  is,  powers  enumerated  in  other 
sections  of  the  first  article,  and  enumerated  in  other  articles  of  the  constitu- 
tion) vested  by  this  constitution  in  the  Government  of  the  United  States,  or  in 
any  department  or  officer  thereof."  Let  these  words  be  carefully  and  atten- 
tively examined,  and  all  obscurity  and  difficulty  will  be  removed ;  let  them 
be  connected  in  the  manner  they  were  intended  to  be  connected,  and  there  will 
be  no  reason  to  presume  some  unknown  occult  power,  on  which  a  pretension 
to  create  the  Bank  of  the  United  States  can  exist.  "  Congress  shall  have 
power  to  lay  and  collect  taxes."  Let  the  words  be  connected,  so  that  they  shall 
read, kt  Congress  shall  have  power  to  make  all  laws  necessary  and  proper  to 
lay  and  collect  taxes,  duties,  imposts,  and  excises."  Here,  said  Mr.  Rhea,  a 
question  presents  itself,  that  is  to  say,  for  what  purpose  shall  Congress  have 
power  to  make  all  laws  which  shall  be  necessary  and  proper  to  lay  and  col- 
lect taxes,  duties,  imposts,  and  excises?  The  first  clause  gives  the  answer: 
"•  To  pay  the  debts,  and  provide  for  the  common  defence  and  general  welfare  of 
the  United  States."  The  expression  of  the  delegated  power  or  right  will  then, 
in  plain  and  intelligible  language,  be,  "  Congress  shall  have  power  to  make 
all  laws  which  shall  be  necessary  arid  proper  to  lay  and  collect  taxes,  duties, 
imposts,  and  excises,  to  pay  the  debts,  and  provide  for  the  common  defence 
and  general  welfare  of  the  United  States."  This  reading  presents  to  the 
mind  clear  and  distinct  ideas,  removes  doubtful  interpretation,  and  establish- 
es the  truth  contained  in  this  section  of  the  constitution.  Let  this  reading  be 
prefixed  to  every  clause  in  the  eighth  section,  the  propriety  thereof  will  be 
more  apparent:  for  instance,  Congress  shall  have  power  to  make  all  laws 
which  shall  be  necessary  and  proper  to  borrow  money  on  the  credit  of  the 
United  States,  to  pay  the  debts  and  provide  for  the  common  defence  and  gen- 
eral welfare  of  the  United  States.  And  here  let  it  be  observed,  that  the 
words  "  for  the  common  defence  and  general  welfare  of  the  United  States," 
are  words  of  limitation  and  restriction,  and  not  of  amplification  of  powers; 
these  words  direct  to  the  end  for  which  all  taxes,  duties,  imposts,  and  ex- 
cises, shall  be  laid  and  collected,  and  it  follows,  that  taxes,  duties,  imposts, 
and  excises,  shall  not  be  laid  and  collected  for  any  purpose  whatever,  other 
than  to  pay  the  debts  and  provide  for  the  common  defence  and  general  wel- 
fare of  me  United  States. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      279 

The  rights,  powers,  and  principles,  delegated  by  the  individual  States  to 
the  United  States,  and  enumerated  in  the  constitution,  are  substantial,  not 
formal;  and,  beine  substance,  are  unchangeable  in  their  nature,  and  must  con- 
tinue until  altered  by  the  constitutional  authorities.  An  institution  or  princi- 
ple, which  has  power  to  put  bank  paper  in  the  place  of  gold  and  silver,  is  sub- 
stantial, not  formal;  and  never  can  be  fixed  as  a  form,  by  way  of  appendage  to 
the  business  of  collecting  taxes,  duties,  imposts,  or  excises;  or  by  way  of  ap- 
pendage to  aid  commerce,  or  to  borrow  money;  with  as  much  propriety  may 
it  be  said  to  aid  in  establishing  an  uniform  rule  of  naturalization,  or  in  mak- 
ing uniform  laws  on  the  subject  of  bankruptcy  throughout  the  United  States. 
A  principle,  or  a  right  or  power  to  create  the  Bank  of  the  United  States,  is 
not  inserted  or  enumerated  among  the  rights  and  powers  enumerated  in  the 
eighth  section  of  the  first  article,  nor  in  any  other  section  of  the  constitution. 
Let  it  not,  then,  be  presumed,  that  the  convention  who  made  the  constitution, 
or  the  ratifying  States,  did,  in  an  occult  and  obscure  manner,  vest  the  Go- 
vernment of  the  United  States  with  a  right  or  power  to  create  the  Bank  of  the 
United  States,  in  the  manner  and  form  belonging  to  the  bank,  the  charter  of 
which  labors  to  be  renewed.  The  constitution  contains  no  enumeration  of  a 
principle  which  can  give  any  pretence  for  such  presumption. 

In  the  eighth  section  of  the  first  article  are  enumerated  rights  and  powers 
of  minor  importance  than  a  right  to  establish  the  Bank  of  the  United  States. 
The  right  to  establish  uniform  laws  on  the  subject  of  bankruptcies  throughout 
the  United  States,  is  of  minor  importance:  that  right  is  enumerated.  Cer- 
tainly, then,  if  the  convention,  or  the  ratifying  States,  had  designed  to  ve^t 
Congress  with  the  right  to  create  the  Bank  of  the  United  States,  that,  right 
would  have  been  expressly  enumerated  in  the  constitution. 

By  virtue  of  the  eighth  section  of  thelfirst  article  of  the  constitution,  "  Con- 
gress shall  have  power  to  make  all  laws  which  shall  be  necessary  and  proper 
to  promote  the  progress  of  science  and  useful  arts,  by  securing,  for  limited 
times,  to  authors  and  inventors,  the  exclusive  right  to  their  respective  writ- 
ings and  discoveries."  The  insertion  of  that  right  or  power  affords  sufficient 
reason  to  conclude,  that,  if  the  convention  had  intended  to  delegate  to  the 


shall  not  be  construed  to  deny  or  disparage  others,  retained  by  the  People." 
Eleventh  article  of  amendments  to  the  constitution.  Here,  then,  it  may  pro- 
perly be  observed,  that  the  rights  enumerated  in  the  constitution  are  certain, 
that  is,  identically  and  distinctly  enumerated  rights;  and  that  those  rights  shall 
not  be,  by  discretion,  construed  to  deny  or  disparage  other  rights  reserved  to 
the  People.  A  right  or  power  to  establish  the  Bank  of  the  United  States  is 
not  enumerated  in  the  constitution;  that  right  or  power,  therefore,  is  not  de- 
nied to  the  People,  and  the  certain  rights  enumerated  in  the  constitution  shall 
not  be  construed  to  deny  that  right  to  the  People;  that  is,  to  the  People  in 
their  individual  State  capacities.  "  The  powers  not  delegated  to  the  United 
States,  by  the  constitution,  nor  prohibited  by  it  to  the  States,  are  reserved  to 
the  States,  respectively,  or  to  the  People." — Twelfth  article  of  amendments  to 
the  constitution.  The  eighth  section  of  the  first  article  of  the  constitution 
enumerates  certain  powers  or  rights  delegated  to  the  United  States;  the  tenth 
section  of  the  first  article  enumerates  certain  rights  prohibited  expressly,  or 
conditionally,  to  the  respective  States;  but,  in  the  tenth  section,  orinany  other 
section  of  the  constitution,  a  right  to  create  bank  institutions  is  not  prohibited, 
absolutely  or  conditionally,  to  the  respective  States  or  to  the  People;  that 
right,  therefore,  is  not  delegated  to  the  United  States,  but  is  reserved  to  the 
respective  States  or  to  the  People.  The  States,  respectively,  have  legislated 
on  that  power  and  right  reserved,  and  have  established  bank  institutions,  and 
the  United  States  have  not  interfered  to  prevent  them. 

In  the  eighth  section  of  the  first  article  of  the  constitution^  right  is  enume- 
rated :  "  The  Congress  shall  have  power  to  exercise  exclusive  legislation  in  all 
cases  whatsoever,  over  such  district  (not  exceeding  ten  miles  square)  as  may. 


BANK  OF  THE  UNITED  STATES. 

by  cession  of  particular  States,  and  the  acceptance  of  Congress,  become  the 
seat  of  Government  of  the  United  States."  The  power  delegated  to  the  Con- 
gress by  virtue  and  force  of  this  clause,  is  eminently  great,  and  requires  no  il- 
lustration to  prove  that  Congress  hath  power  to  create  bank  institutions  in  the 
District  of  Columbia. 

In  favor  of  a  renewal  of  the  charter  of  the  Bank  of  the  United  States,  it  is 
argued,  that  the  Congress,  having  power  to  lay  and  collect  taxes,  duties,  itn 
posts,  and  excises,  hath  also  power  to  establish  the  Bank  of  the  United  States, 
as  a  mean  to  aid  in  collecting  taxes,  duties,  imposts,  and  excises.  It  vyill  not  be 
said  that  the  Bank  of  the  United  States  is  an  essential  necessary  means  in  collect- 
ing taxes,  duties,  imposts,  and  excises:  for,  experience  hath  proved,  that  taxes 
have  been  collected  without  the  aid  of  that  bank.  But,  if  it  be  a  means  essen- 
tially necc  ssary  to  collect  taxes,  it  ought  to  be  as  extensive  in  operation  as  the 
law  for  collecting  taxes:  the  nature  of  the  bank  institution  proves  that  it  can- 
not be  co-extensive  witn  the  law  for  collecting  taxes.  Ten  dollars  being  the 
lowest  sum  for  which  a  bill  of  that  bank  is  issued,  it  is  manifest  that  bills  of 
ten  dollars,  twenty  dollars,  fifty  dollars  and  upwards,  cannot  aid  generally  in 
collecting  and  paying  taxes;  admitting  the  circulation  of  these  bills  to  be  co- 
extensive with  the  operation  of  the  law.  The  tenth  section  of  the  act,  entitled 
An  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States,  pro- 
vides, "  that  the  bills  or  notes  of  the  said  corporation,  originally  made  payable, 
or  which  shall  have  become  payable  on  demand,  in  gold  or  silver  com,  shall 
be  receivable  in  all  payments  to  the  United  States."  But.  notwithstanding 
the  bills  or  notes  of  that  corporation  shall  be  receivable  in  all  payments  to  the 
United  States,  as  is  provided  for  in  that  section,  the  act  alluded  to  doth  not 
provide  that  the  bills  or  notes  of  that  bank  shall  be  receivable  in  all  payments 
to  citizens  of  the  United  States.  The  Bank  of  the  United  States,  therefore, 
cannot  be  an  adequate  means  to  collect  taxes  from  all  the  citizens  of  the  Unit- 
ed States;  and,  if  not  from  all  the  citizens  of  the  United  States,  the  operation 
of  the  bank  will  be  partial,  and,  consequently,  injurious  to  the  People. 

By  the  tenth  section  of  the  law  alluded  to,  the  bills  and  notes  of  the  corpo- 
ration, established  by  that  law,  are  made  receivable  in  all  payments  to  the 
United  States.  The  bonds  for  payment  of  duties  and  imposts  on  foreign  mer- 
chandise, imported  into  the  United  States,  are  generally  deposited  in  the  bank 
of  that  corporation,  or  in  the  respective  branches  thereof;  whatever  benefit  or 
advantage,  if  any,  arises  by  collection  of  those  duties  and  imposts,  accrues  to 
that  corporation;  whatever  gold  and  silver  is  paid  on  account  of  those  duties 
and  imposts,  it  remains  at  the  disposition  of  the  corporation,  by  reason  that 
the  corporation,  by  the  law,  are  enabled  to  pay  the  amount  of  all  the  duties 
and  imposts  to  the  United  States  in  bills  and  notes;  these  bills  and  notes 
afterwards  come  into  the  hands  of  the  agents  and  public  functionaries  of  the 
United  States,  and  by  them  are  paid  to  the  citizens,  and  by  this  operation  the 
bills  and  notes  of  the  corporation  obtain  a  circulation,  to  a  certain  extent, 
among  the  People,  and,  notwithstanding  they  may  not  be  a  legal  tender  in 
payment  of  debts  by  one  citizen  to  another,  they  do,  nevertheless,  acquire  a 
degree  of  currency,  by  being,  in  the  first  instance,  made  payable  to  the  Unit- 
ed States;  by  this  operation,  bottomed  on  the  tenth  section  of  the  law,  the 
corporation  have  the  advantage  of  retaining  the  precious  metals  in  their  vaults 
until  an  opportunity  offers  to  dispose  of  them  to  the  best  advantage,  or  to  ex- 
port them  to  foreign  countries.  Other  observations  might  be  made  respecting 
the  operation  of  the  law  incorporating  the  subscribers  to  the  Bank  of  the 
United  States;  but,  what  alreacly  hath  been  observed  may  be  sufficient  to  ex- 
cite reflection  on  the  machinery  and  influence  of  the  mighty  engine  which  the 
stockholders  of  the  Bank  of  the  United  States  have  in  their  power,  at  any 
time,  for  any  purpose,  to  set  in  motion.  The  instrumentality  of  this  engine 
pervades  the.  United  States  in  all  elections;  it  can  raise  up  and  put  down;  it 
may  say,  "  I  can  raise  you  to  a  conspicuous  and  exalted  station,  if  you  obey 
my  directions,  and  if  you  do  not,  I  can  put  you  down."  If  an  institution  of 
this  magnitude  is  good  for  the  People  ot  the  United  States,  if  its  influence  is 
for  their  benefit,  let  it  be  demonstrated.  Suppose  the  citizens  would  refuse 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     281 

to  receive  the  bills  ami  notes  of  that  corporation  in  payment  of  debts,  what 
would  be  the  consequence?  Why,  let  us  not  say  ruin  to  all  would  follow;  but 
certainly  many  would  be  injured. 

It  has  been  said,  that  the  Bank  of  the  United  States  aids  commerce.  If  it 
does,  it  must  be  in  a  manner  very  unimportant  to  the  People  of  the  United 
States  in  general.  The  bank  may  be  a  convenience  to  all  who  have  to  pay,  in 
the  first  instance,  duties  and  imposts  on  merchandise  imported  into  the  United 
States,  and  that  benefit  to  them  operates  to  throw  on  all  the  other  people  of 
the  United  States  a  prodigious  mass  of  paper  in  place  of  gold  and  silver:  the 
evident  effect  of  which  is  to  substitute  the  bills  and  notes  of  that  bank  in 
place  of  the  precious  metals,  and  to  give  that  bank  the  power  of  commanding 
the  medium  of  trade  in  the  United  Strtes. 

The  action  of  the  bank  is  within  the  United  States  and  territories  thereof: 
the  bills  and  notes  thereof,  as  has  been  observed,  are  made  receivable  in  all 
payments  to  the  United  States;  but  the  assumed  position,  "  that  the  bank  aids 
commerce,"  not  satisfied  with  what  has  been  said,  relative  to  the  manner  in 
which  it  aids  commerce,  returns,  and  requires  further  explanation,  and  it  is 
proper  to  give  that  explanation.  The  annual  reports  of  the  Secretary  of  the 
Treasury  show  the  prodigious  amount  of  goods,  wares,  and  merchandise,  every 
year  imported  into  the  United  States  from  foreign  countries,  and  particularly 
from  Great  Britain,  and  the  dependencies  and  colonies  thereof.  Will  any  of 
the  gentlemen  who  favor  a  renewal  of  the  charter  of  the  Bank  of  the  United 
States,  as  it  is  called,  inform  this  House,  whether  any  part,  and,  if  any,  what 
.part,  or  to  what  .amount  of  the  cost  of  the  goods,  wares,  and  merchandise,  im- 
<!  into  the  United  States,  is  actually  paid  for,  to  the  merchants  in  foreign 
countries,  to  whom  the  orders  are  sent,  in  bills  and  notes  of  that  bank,  such 
as  are  passing  among  the  People  of  the  United  States?  If  such  payments  are 
made  in  such  bills  and  notes,  then,  indeed,  there  will  be  reason  to  contend, 
that  that  bank  aids  commerce  in  its  operations.  If  that  information  is  not  ob- 
tained, it  will  be  taken  for  granted  that  no  such  payments  are  made  in  the 
bills  or  notes  of  fhat  bank.  The  fact,  then,  appears  to  be,  that  the  bills  and 
notes  of  that  bank  do  not  pass  out  of  the  United  States  and  territories  thereof, 
to  any  foreign  nation,  in  payment  lor  the  merchandise  imported  from  that  na- 
tion, and  that  no  merchant  of  any  foreign  nation  will  receive  bills  and  notes  in 
payment  for  the  merchandise  ordered.  The  effect  of  all  this  is,  that  gold  and 
silver  is  exported  to  foreign  countries  to  pay  for  the  goods,  wares,  and  mer- 
chandise, imported,  after  deducting  from  the  gross  amount  of  the  value  thereof 
that  part  which  may  have  been  paid  for  in  produce  of  the  United  States.  The 
consequence  of  which  is,  that  the  precious  metals  are  drained  from  the  United 
States,  and  the  paper  of  the  bank  circulates  among  the  People,  in  the  place  of 
£old  and  silver.  If  that  cause  is  suffered  to  continue  to  operate,  a  time  may 
«ot,be  far  distant  when  the  paper  of  that  bank  will  be  the  only  visible  medium 
<>f  trade  among  the  People;  and  a  piece  of  gold  or  silver  coin  (notwithstanding 
the  mint  hath  issued  great  quantities  thereof)  will  be  rare  to  be  seen.  It  is 
said,  that  the  bank  hath  been  aiding  to  agricwlture.  If  it  be  so,  it  is  strange 
that  the  agricultural  part  of  the  community  have  sent  no  petitions  «r  memorials 


•  c   •  \  i  i         i  •  —  * —  —    j-~.  WWW*M    »•»    M«fc<   wavuuwcfc 

tion  of  that  bank  charter,  and  a  portion  of  the  merchants. 

It  has  been  urged,  that,  if  the  bank  charter  is  not  renewed,  ruin  and  destruc- 
tion almost  universally  will  fall  on  the  People  of  the  United  States.  These 
declarations,  said  Mr.  R.  affect  me  not,  because  I  place  no  confidence  in  them 
An  agricultural  people  cannot  be  ruined,  until  it  shall  please  the  Almighty  to 
prohibit  the  return  of  the  seasons  in  their  regular  time,  until  it  shall  please 
him  to  dry  up  the  fountains  of  rain,  and  say  that  there  shall  be  no  more  seed 
time  nor  harvest.  But,  if  this  bank  is  of  such  mighty  force,  that  its  fall  will 
produce  these  direful  effects,  it  is  more  prudent  to  meet  them  now,  than  to 
<lelay  them  to  a  future  period.  This  nation  is  as  well  prepared  to  meet  them 
now,  as  it  will  be  hereafter. 


BANK  OF  THE  UNITED  STATES-. 

t  It  hath  been  said,  and  insisted  on,  that  the  bank  hath  aided  the  Government 
in  its  fiscal  operations,  and  that  the  Government  cannot  well  do,  or  do  well, 
without  it.  Let  it  rather  be  said,  that  the  Government  hath  aided  (he  bank, 
raised  it  into  existence,  and  afforded  it  every  support,  by  placing  in  its  hands 
the  collection  and  deposition  of  the  revenues  of  the  Government  for  twenty 
years;  bv  receiving  trom  the  bank  its  paper,  in  place  of  gold  and  silver,  and 
thereby  leaving  gold  and  silver  to  be  used  to  the  benefit  of  the  bank  corpora- 
tion. The  bank  may  have  been,  to  a  certain  extent,  convenient  in  carrying 
on  the  fiscal  operations  of  the  Government,  but  it  will  not  be  said  to  be  an  in- 
stitution profitable  to  the  great  mass  of  the  People  of  the  United  States,  neither 
will  it  be  believed  to  be  an  institution  aiding,  in  its  action  and  influence,  the 
republican  institutions  of  the  People  of  the  United  States. 

The  law  creating  the  Bank  of  the  United  States,  or,  in  other  words,  the 
bank  called  the  Bank  of  the  United  States,  is  not  bottomed  on  the  constitu- 
tion; it  is  inconsistent  with,  and  repugnant  to,  the  constitution.  A  constitu- 
tional Government  requires  no  aid;  can  have  no  aid  from  an  unconstitutional 
principle.  The  great  men  who  made  the  constitution,  and  the  ratifying  States, 
have  declared,  that,  as  it  is,  they  made  and  ratified  it,  and  the  People  of  the 
United  States  adopted  it  for  the  purposes  therein  enumerated  and  delegated; 
and  if  the  Government  cannot  exist  in  virtue  and  by  force  of  the  powers, 
rights,  and  principles,  expressly  enumerated  and  delegated  in  the  constitution, 
without  the  aid  of  a  principle  violating  the  constitution*  it  is  time  that  there 
should  be  another  grand  convention,  with  powers  to  make  another  constitu- 
tion. But,  in  my  opinion,  said  Mr.  R  ,  the  rights,  powers,  and  principles, 
expressly  enumerated  and  delegated  in  the  constitution,  are  completely  ade- 
quate, to  all  intents  and  purposes,  for  the  existence  of  the  Government,  with- 
out the  aid  of  any  principle,  inconsistent  with,  and  repugnant  to,  the  consti- 
tution. 

Mr.  EPPES  said  that  he  apprehended  the  few  remarks  he  had  to  offer  to  the 
House,  would  not  be  considered  as  well  timed,  after  the  funeral  oration  had 
been  pronounced  over  the  expiring  charter  of  the  United  States'  Bank.  Pie 
would  trespass  but  a  short  time  on  the  patience  of  the  House,  and  confine  his 
remarks  to  the  policy  of  renewing  the  charter,  viewed  only  as  a  national  mea- 
sure, lie  considered  it  unnecessary  to  say  any  thing  on  the  constitutional 
question.  If  ever  the  theory  of  persons  who  believe  that  political  principles 
may  be  demonstrated  with  mathematical  certainty,  shall  be  realised,  and  a  po- 
litical Euclid  be  published,  I  would  put,  for  the  first  proposition,  these  prin- 
ciples: 

1.  That  all  power  not  delegated,  is  reserved  to  the  States,  or  to  the  People. 

2.  That  the  power  to  incorporate  a  bank  is  neither  delegated,  or  essentially 
necessary  for  carrying  into  eft'ect  any  delegated  power.    For  the  demonstra- 
tion, I  would  insert  the  speech  of  a  gentleman  from  New  York,  (Mr.  PORTER) 
who  has  combined  in  a  masterly  manner  on  this  subject,  the  purest  principles, 
and  most  luminous  elucidation.    Passing  over,  therefore,  this  part  of  the  ques  • 
tion,  I  shall  confine  myself  to  such  observations  as  will  tend  to  show  that  the 
renewal  of  the  charter  is  not  necessary  for  the  prosperity  of  agriculture  and 
commerce,  as  has  been  stated;  that  the  union  of  a  moneyed  institution  with  a 
Government,  possessing  the  powers  of  war  and  peace,  is  dangerous  to  lepub- 
lican  institutions;  that  the  dissolution  of  the  charter  will  produce  no  injury 
to  the  public,  or  to  individuals;  that  the  same  principles  which  induced  the 
republican  party,   in  the  year  1790,  to  oppose  the  incorporation  of  this  bank, 
ought  to  prevent  a  renewal  of  the  charter  at  the  present  time.    In  examining 
the  first  of  these  questions,  viz.  the  operation  of  the  dissolution  of  the  char- 
ter on  agriculture  and  commerce,  I  will  not  trouble  the  House  with  any  gene- 
ral observations  on  the  subject  of  banks.    Their  tendency  to  facilitate  com- 
merce, so  long  as  their  circulation  of  paper  rests  on  specie,  or  floating  capital, 


ON  THE  BILL  TO  RENEW  THE  CHARTER    OF  1791.  <£83 

dangerous  to  the  community.  A  particular  specified  object,  say  agriculture 
or  commerce,  can  only  employ  a  certain  capital.  An  increase  of  circulating 
medium,  above  the  sum  necessary  for  a  particular  object,  must  produce  one 
of  two  effects— either  to  depreciate  the  medium,  be  it  specie  or  paper,  or  to 
drive  it  into  new  channels.  These  are  plain,  obvious  principles,  which  no 
gentleman  will,  I  presume,  deny.  Let  me  ask,  then,  1st.  \\  hat  amount  of 
paper  medium  can  with  safety  be  employed  in  the  commerce  of  the  United 
States?  2.  What  amount  can  be>  put  into  circulation  by  the  present  existing 
banks,  independent  of  the  United  States'  Bank?  The  real  basis  of  a  srfe  paper 
circulation,  so  far  as  it  respects  commerce,  is  the  productive  labor  of  a  com- 
munity above  its  consumption.  What  a  nation  does  not  consume,  it  exports. 
No  paper  circulation,  therefore,  can  with  safety  be  extended  beyond  the 
amount  of  the  exports  of  a  nation.  Indeed,  it  ought  not  to  exceed  in  amount 
the  domestic  exports  which  constitute,  the  only  certain  part  of  the  .productive 
labor  of  the  community,  so  far  as  respects  commerce.  The  export  of  foreign 
articles  depends  so  much  on  circumstances  over  which  we  have  no  control, 
that  a  paper  currency  which  rested  for  redemption  on  that,  would  be  liable, 
whenever  commerce  wns  interrupted,  to  produce  general  ruin  and  bankrupt- 
cy. The  domestic  exports  of  the  United  States  may  be  considered  in  value 
as  equal  to  $40,000,000.  The  export  of  foreign  articles,  in  the  year  1807,  was 
near  860,000,000.  This  great  export  of  foreign  articles  was  produced  by  par- 
ticular circumstances,  which  no  hiiisi'r  exist  During  favorable  years,  viz. 
1803,  1804,  1805,  the  export  of  foreign  and  domestic  articles  averaged 
§76,000,000;  so  that  it  would  appear,  taking  the  domestic  and  foreign  exports 


circulation,  in  credit  and  mte.s,  $19,000,000;  14,000.000  in  accommodation 
credit,  exclusive  of  mortgages  :-.nd  bonds,  and  constituting  active  circulating 
medium,  and  five  millions  in  note..  A^  a  moneyed  institution,  it  is  admitted 
that  their  affairs  have  been  well  managed.  Other  banks,  therefore,  may  cir- 
culate to  the  same  amount,  in  proportion  to  tht;ir  capital. 

The  bank  capital  of  the  I  'nitcd  States,  exclusive  of  the  United  States'  Bank, 
is  $50,000,000—  five  times  the  capital  of  the  United  States'  Bank;  of  course, 
supposing  them  to  manage  their  affairs  as  well,  they  can  put  into  circulation, 
in  credit  and  notes,  five  times  the  amount  put  into  circulation  by  the  United 
States'  Bank:  five  t!ni"s  19.000,000  is  $95,000,000.  This  sum,  sir,  is  fifty-five 
millions  above  our  domestic  exports:  forty-five  millions  above  our  consump 
tion:  nineteen  millions  above  our  whole  export,  domestic  and  foreign,  in  favor- 
able years:  twenty  six  millions  above  the  present  export  of  domestic  and  fo- 
reign articles. 

Can  any  gentleman,  on  this  statement,  believe  we  want  ability  to  circulate 
paper  medium  for  commercial  purposes?  Our  export  of  foreign  articles,  from 
the  peculiar  situation  of  the  world,  has  almost  disappeared.  Our  merchants 
are  more  in  want  of  a  field  to  exercise  their  capital  man  of  capital  itself.  It 
is  a  fact,  which  cannot  be  denied,  that  we  have  at  present  a  surplus  capital 
which  cannot  be  employed  in  commerce,  and  that  the  paper  circulation  is  in- 
creasing in  a  ratio  neither  proportioned  to  our  population,  consumption,  or 
wealth.  1  have  confined  my  observations  entirely  to  the  view  of  a  capital, 
such  as  is  necessary  for  commerce.  No  gentleman  has  advocated  the  renewal 
of  the  charter  for  the  purpose  of  creating  a  capital  for  internal  improvement. 
This  appears  by  general  consent  to  have  been  considered  as  more  properly 
within  the  sphere  of  the  several  State  Legislatures.  At  the  time  this  charter 
was  originally  granted,  the  situation  of  the  United  States  was  very  different 
from  what  it  now  is;  but  three  banks  existed,  with  a  capital  of  less  than  three 
millions  of  dollars;  our  exports  amounted  to  less  than  19,000,000.  Our  com- 
merce languished  for  want  of  circulating  medium;  we  are  now  in  danger  of 
suffering  from  a  paper  currency,  resting  on  no  solid  basis,  and  liable,  with  a 
reverse  of  fortune,  to  recoil  on  ourselves.  I  cannot,  therefore,  consider  the 


284  BANK  OF  THE  UNITED  STATES. 

renewal  of  the  charter,  viewed  only  as  a  measure  of  general  policy,  necessary 
for  the  creating  capital,  for  purposes  of  commerce, 

But,  sir,  said  Mr.  E,,  I  object  to  the  union  of  a  moneyed  institution  with  a 
government,  as  dangerous  to  republican  principles.  Next  to  frequent  elec- 
tions, the  great  security  in  every  country,  against  arbitrary  power,  is  the  de- 
pendence of  the  Government  on  the  great  body  of  the  People  for  supplies. 
Hence,  the  objections  to  a  revenue  dependent  on  loans,  indirect  taxes,  &c. 
Money  has  been  aptly  termed  the  sinews  of  war.  It  may,  with  equal  propri- 
ety, be  termed  the  sinews  of  oppression  and  usurpation.  The  facility  of  com- 
manding large  sums  by  means  of  a  moneyed  capital,  dependent  on  the  Govern- 
ment, is  calculated  to  destroy  the  dependence  of  the  Government  on  the  Peo- 
ple. If  we  look  at  the  history  of  England,  we  shall  find  that  their  short  pe- 
riod of  liberty  was  while  the  king  was  dependent  on  the  commons  for  supplies. 
The  creation  of  a  great  moneyed  capital  in  that  country,  under  the  control  of 
the  Government,  has  totally  destroyed  that  valuable  feature  in  the  English 
constitution.  It  has  created  a  body  of  men  who  contribute  to  the  prodigality 
of  the  Government;  who  furnish  the  means  and  share  in  the  spoils  of  the  na- 
tion. The  history  of  the  Bank  of  England  and  of  its  paper  system  is  one 
which  ought  to  warn  the  friends  of  freedom  against  the  danger  of  a  union  be- 
tween a  Government  and  paper  capitalists.  This  species  of  capital,  which 
scarcely  knows  a  limit,  is  dangerous  to  the  freedom  ot  a  country,  without  be- 
ing nourished  by  the  fostering  hand  of  Government.  Unite  the  two,  give  to 
a  Government,  by  means  of  a  paper  system,  a  power  to  supply  its  wants  with- 
out a  recurrence  to  the  People,  and  you  unite  the  most  formidable  en- 
gines of  oppression,  power  and  means.  It  is  this  system  which  has  caused 
the  British  Government,  after  mortgaging  from  year  to  year  its  revenues  to 
the  bank,  to  accumulate  a  national  debt  to  the  enormous  amount  of  six  hun- 
dred and  seventy  millions  of  pounds  sterling.  The  average  quarterly  advan- 
ces of  the  Bank  of  England  to  the  Government,  in  the  year  1797,  was  four 
times  the  whole  amount  discounted  for  individuals.  From  these  extraordi- 
nary advances,  produced  by  the  union  of  the  Government  and  the  bank,  it 
must  have  failed  in  the  year  1797,  but  for  the  interposition  of  Parliament.  On 
the  26th  day  of  February,  1797,  the  cash  and  bullion  in  the  bank  amounted  to 
£1,272,000;  average  notes  in  circulation,  to  £8,640,250;  bills  discounted,  to 
£2,905,000;  advances  to  Government,  to  £10,672,490.  From  the  report  of 
the  committee  appointed  by  Parliament  in  February,  1797,  to  examine  into 
the  state  of  the  bank,  it  appeared  that  the  debts  of  the  bank  amounted  to 
£13,770,390;  that  its  assets,  exclusive  of  the  permanent  debt  from  the  Govern- 
ment (and  what  these  assets  were  does  not  appear)  amounted  to  £17,597,298; 
leaving  in  favor  of  the  bank  £3,826,903.  This  sum  of  £17,597,298,  consist- 
ing of  debts  and  assets,  was  not  sufficient  to  meet  their  cash  debts,  amounting 
to  £13,770,390.  At  tnis  time  the  permanent  debt  due  from  the  Government 
to  the  bank  amounted  to  £11,686,800— almost  four  times  the  whole  sum  left 
in  the  bank  after  payment  of  its  debts.  The  funds  of  the  bank  being  in  the 
hands  of  the  Government,  the  Government,  unable  to  pay,  kindlyinterposed 
to  save  the  bank  from  ruin,  and  made  their  paper  a  tender.  This,  sir,  was 
one  of  the  blessings  produced  by  a  union  between  the  Government  and  the 
bank. 

But,  sir,  many  gentlemen  have  exercised  their  ingenuity  in  portraying  the 
ruin  which  must  tall  on  individuals,  and  the  injury  which  must  be  sustained 
by  the  public,  from  a  dissolution  of  the  charter.  From  the  statement  just  laid 
on  our  table  from  the  Treasury  Department,  it  appears  that  the  stockholders 
of  the  bank  are  in  more  danger  than  the  community. 

From  that  statement  we  find  that  the  debts  due  by  the  bank, 
and  payable  on  demand,  amount  to    -  -   $13,673,369 

To  meet  this  debt,  the  bank  has  on  hand,  in  cash,       -  -       5,009,567 

Notes  and  debts  due  from  other  banks,  1,313,350 


Making,  in  all,  their  cash  funds  amount  to  $6,332,512 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

Deducting  this  sum  of  $6,332,512,  vyhich  may  be  considered  their  cash  fund, 
from  the  $13,673,369,  the  amount  of  their  debts,  and  it  will  be  $7,350,51-2, 
for  the  payment  of  which  they  must  depend  on  their  debtors,  and  make  this 
payment  out  of  the  $14,609,537,  due  from  individuals.  So  far,  therefore,  from 
pressing  the  community,  it  appears  they  must  collect  $7,350,512,  and  apply, 
in  addition  to  it,  their  whole  cash  (Vnds,  or  fail  in  their  engagements.  But, 
sir,  I  will  state  it  in  another  way.  According  to  the  principles  of  banking,  the 
profit  is  annually  or  quarterly  divided;  of  course  the  company,  on  winding  up 
its  affairs,  can  only  withdraw  its  capital,  vix:  $10,000,000. 

Of  this  capital,  they  have  in  hand,  in  cash.  $5,009,567 

In  notes  and  debts  due  by  other  banks,  1,313,857 

In  a  debt  from  the  United  States,  2,750,000 

In  houses,  500,000 

In  debts  in  suit,       -  154,164 

In  bonds  and  mortgages,     -  221,000 

In  stock  of  the  United  States,         •  20,000 

Total,  $9,968,588 

This,  sir,  amounts  very  nearly  to  their  stock,  and  if  they  reserve  their  cash 
on  hand  as  part  of  that  stock,  and  meet  the  payment  of  their  debts  with  the 
debts  due  to  them,  they  have  nothing  to  draw  from  the  community,  which  can 
produce  the  slightest  pressure.  They  may  find  difficulty  in  collecting  a  suf- 
ficient sum  to  meet  their  own  engagements,  as,  from  the  moment  of  the  disso- 
lution of  their  charter,  their  debts  will  stand  on  the  same  footing  with  the  debts 
of  any  other  company  winding  up  its  attain- ,  and  .r.ust  be  collected  in  the  saint* 
manner. 

Much  stress,  sir,  ha*  also  been  laid  on  the  necessity  of  the  bank  for  the  ma- 
nagement of  the  finances  of  the  United  States.  We  are  told  that  a  complete 
control  is  given,  by  the  constitution,  over  the  finances,  and  that  a  bank  is  ne- 
cessary for  their  management.  The  term  finance  is  not  to  be  found  in  the 
constitution.  The  bank  is  not  necessary  for  the  collection  of  taxes,  or  imposts, 
or  for  paying  the  debts,  to  use  the  language  of  the  constitution.  It  has  never 
been  used  for  the  collection  of  taxes.  For  the  collection  of  duties,  it  is  used 
only  in  a  limited  way.  We  have  upwards  of  eighty-five  places  for  the  collect- 
ing duties,  and  only  nine  branch  banks.  It  is  used  for  the  payment  of  the  in- 
terest of  the  debt  only,  in  consequence  of  a  treasury  regulation.  Commission- 
ers of  loans,  within  the  several  States,  are  even  at  this  time  established  by  law 
for  paying  the  interest  on  the  debt.  The  bank,  therefore,  is  not  essential  for 
this  object.  The  great  payments  for  the  army  and  navy  are  not  at  present 
made  at  bank;  paymasters  and  pursers  discharge  this  duty.  All  payments  on 
account  of  the  civil  list  are  made  at  bank,  but  the  greater  portion  of  these  are 
at  the  seat  of  Government.  A  bank  is,  therefore,  not  essential  for  making  these 
payments.  Until  new  arrangements  are  made,  temporary  inconvenience  may 
be  sustained  by  the  Government.  The  mere  change  of  agents  generally  in  ex- 
tensive moneyed  transactions,  must  produce  inconvenience.  The  inconveni- 
ence, however,  will  be  temporary,  and  does  not  deserve  consideration  in  a  case 
involving  the  constitution. 

I  will  close  my  remarks  with  a  few  observations  tending  to  show  that  (he 
same  principles  which  induced  the  republican  party,  in  1790,  to  oppose  the  in- 
corporation of  the  bank,  ought  to  prevent  a  renewal  of  the  charter.  In  a  free 
country  there  is  nothing  more  important  than  a  frequent  recurrence  to  those 
fundamental  principles  which  unite  in  one  common  bond,  those  who  grant 
power,  and  those  who  exercise  it.  The  peculiar  organization  of  the  Govern- 
ment of  the  United  States  combines,  in  a  single  charter,  powers  administered 
by  men  deriving  their  authority  from  two  separate  and  distinct  sources,  the 
People  and  the  States.  The  weakness  of  the  old  confederation,  which,  al- 
though armed  with  general  powers,  was  found  unequal  to  giving  a  practical 
operation  to  those  powers,  produced  the  federal  constitution.  This  charter, 
the  offspring  of  compromise,  was  considered  in  the  convention,  by  one  purty, 


286  BANK   OF  THE    UNITED    STATES. 

as  loo  weak  to  accomplish  its  objects;  by  the  other,  as  sufficiently  strong  to 
endanger  the  liberty  of  the  citizen.    These  two  principles  were  soon  manifest- 
ed in  the  administration  of  the  present  federal  constitution.    Those  who 
thought  it  too  strong  gave  to  the  constitution  a  rigid  construction,  and  opposed 
constructive  powers.  These  were  termed  anti-federalists.  Those  who  thought 
it  too  weak,  were  disposed  to  engraft  vigor  on  it  by  construction,  and  contend- 
ed  for  constructive   powers.     These  were  termed   federalists-     The  eclat 
which  attended  the  adoption  of  the  constitution,  threw  the  Government  ex- 
clusively, for  years,  into  the  hands  of  the  federalists.     Thegreat  popularity  of 
General  Washington,  on  whose  brow  grew,  in  full  vigor,  the  laureis  of  the  Re- 
volution, balanced  for  a  time  these  two  contending  parties.     With  the  same 
manly  firmness,  as,  during  the  Revolution,  he  stemmed  the  torrent,  and  attach- 
ing himself  exclusively  to  what  he  deemed  the  interests  of  his  country,    he  ad- 
ministered the  constitution  according  to  its  true  principles.     He  commenced 
his  career  as  President,  on  the  30th  of  August,  1789.     In  1791,  the  charter  of 
the  bank  was  granted.     On  this  great  measure,  the  two  great  parties  were  for 
__— ihe  first  time  arrayed  against  each  other.     It  was  at  that  time  considered  a 
party  question,  inasmuch  as  it  involved  the  very  principles  on  which  the  par- 
ties divided,  viz:  "delegated"  powers  and  ''  constructive"  powers.     Unfortu- 
nately for  his  country,  General  Washington,  on  this  occasion,  took  side  with 
the  federalists.    The  creation  of  a  moneyed  interest,  connected  with  the  Go- 
vernment, was  a  favorite  measure  of  those  who  were  willing  to  engraft  energy 
on  the  constitution,  and  was  warmly  opposed  by  the  party,  unwilling  to  add, 
by  construction,  the   extraneous  weight  of  a  moneyed  capital  to  a  charter 
considered,  on  a  fair  construction,  sufficiently  energetic.    The  defeat  of  Ge- 
neral St.  Clair  took  place  in  the  November  following  the  establishment  of  the 
bank,  and  the  subsequent  disasters  of  the  Indian  war,  by  increasing  the  wants 
of  the  Government,  drew  more  closely  the  ties  of  connexion   between  the  fe- 
deral party  and  the  bank.     Through  all  the  periods  of  the  federal  administra- 
tion, this  moneyed  capital    was  their  shield  and  their  sword.    It  extended 
their  influence  and  secured  the  approbation  of  most  of  the  large  commercial 
cities  in  the  Union.    When  this  bank  was  established,  but  three  banks  existed 
in  the  United  States,  with  a  capital  of  $2, 100,000  dollars.    The  creation  of  a 
bank  with  a  capital  of  $10,000,000,  almost  five  times  the  capital  of  all  the  ex- 
isting banks  of  the  Union,  under  the  patronage  of  the  General  Government, 
was  calculated  to  produce  and  did  produce  a  subserviency  on  the  part  of  the 
stockholders,  to  the   views  of  their  party.     The  influence  of  this   powerful 
moneyed  capital  was  long  felt.  Nothing  but  the  multiplication  of  State  banks, 
and  the  increase  of  capital   from  the  peculiar  and  fortunate  circumstances 
under  which  the  United  States  were  placed,  could  have  emancipated  us  from 
the  shackles  imposed  on  us  by  a  moneyed  interest  wielded  by  foreigners.     I 
rejoice  that  the  period  has  arrived,  when  this  privileged  class  must  surrender 
its  charter;  when  the  moneyed  capital  of  our  country  shall  no  longer  be  wield- 
ed as  an  engine  of  party ;  when  the  republican  party  shall  have  an  opportunity 
of  testing  the  truth  of  the  principles  for  which  they  contended  in  the  year 
1790,  and  of  giving,  on  the  present,  as  on  the  former  occasion,  their  support  to 
the  principle — "That  power  not  delegated  is  reserved  to  the  States  or  to  the 
People." 

Mr.  STANLEY. — Mr.  Speaker:  After  the  able  discussion  which  this  subject 
has  already  undergone,  I  should  not  have  asked  your  attention,  but  for  the 
observations  of  the  gentleman  from  Virginia,  (Mr.  EPPES)  who  has  last  ad- 
dressed you.  That  gentleman,  with  a  view  to  justify  such  decision  of  the 
question  as  he  desires,  has  advanced  propositions  which  are  in  themselves  so 
incorrect,  and  supported  them  by  arguments  so  palpably  unreasonable,  that  I 
shall  trouble  the  House  a  short  time  in  reply. 

The  gentleman  tells  us  it  is  as  true  as  any  mathematical  axiom,  that  a  power 
not  expressly  granted  by  the  constitution  to  the  federal  Government,  cannot  be 
exercised  by  that  Government;  that,  whenever  a  political  Euclid  shall  be  com- 
posed, this  principle  should  be  placed  as  first,  in  clearness  and  importance,  and 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     287 

the  speech  of  the  gentleman  from  New  York,  (Mr.  PORTER)  on  the  bill  before 
us,  should  be  added  as  an  appendix  or  commentary,  proving  its  truth.  In 
terms,  sir,  the  gentleman's  proposition  is  true,  but  the  gentleman  has  not 
avoided  the  error  of  those  who  have  preceded  him  on  that  side  ot  the  question; 
he  confounds  the  powers  of  the  federal  Government  with  the  mean*  of  execut- 
ing such  powers;  he  does  not  distinguish  between  the  objects  of  the  federal 
compact  and  the  means  of  ejecting  these  objects.  And  upon  this  hinge  ot 
error  did  the  argument  of  the  gentleman  from  New  York  turn.  This  confu- 
sion of  terms,  this  indistinctness  of  perception,  as  I  shall  endeavor  to  show, 
has  led  gentlemen  astray  on  this  question.  If,  sir,  the  political  errors  ot  the 
statesmen  of  this  day  shall  ever  be  collected  into  a  volume,  as  the  first,  the 
most  glaringly  wrong,  and  flagrantly  unjust, should  be  placed  the  axiom  of  the 
gentleman  from  Virginia,  which  cannot  in  substance  be  other  than  this:  ;*  that 
no  means  of  executing  a  power  granted  to  the  federal  Government,  can  be 
employed  by  that  Government,  unless  such  means  be  found  expressly  point- 
ed out  in  the  constitution.  And,  sir,  to  shew  how  truth  may  be  obscured, 
and  error  supported,  by  ingenuity — my  respect  for  the  gentleman  from  New 
York  forbids  my  saying  by  sophistry — I  will  append  as  a  commentary  the 
speech  of  that  gentleman  on  this  question. 

With  respect  to  the  constitutional  right  of  Congress  to  incorporate  a  bank 
for  the  prosperous  administration  of  its  finance?,  the  very  able  arguments  al- 
ready made,  and,  in  my  apprehension,  very  imperfectly  met,  require  little  to 
be  said  in  its  support.  My  view  of  this  part  of  the  subject  shall  therefore  be 
brief,  and  1  may  be  pardoned  for  offering  it.  To  incorporate  a  company,  in 
other  words  to  grant  to  certain  persons  a  legal  or  artificial  capacity;,  distinct 
from  their  natural,  is  an  act  of  sovereignty;  a  delegation  of  which,  it  is  true, 
can  only  emanate  from  the  sovereign  power.  If  the  Federal  Government  be 
not  sovereign  as  to  any  of  its  object-,  tk-y  cannot  incorporate  a  company  for 
the  attainment  of  any  of  its  objects.  But,  if,  on  the  other  hand,  the  Govern- 
ment is  sovereign  as  to  any  object,  the  power  to  incorporate  companies,  the 
fit  and  necessary  means  for  the  attainment  of  that  object,  must  regularly  re- 
sult from,  and  be  appurtenant  to,  this  sovereignty.  This  power  is  not  left  to 
inference;  the  constitution  expressly  declares  that  Congress  shall  have  power 
to  make  all  laws  necessary  and  proper  to  carry  into  e fleet  the  powers  delegat- 
ed, and  that  such  laws  shall  be  the  supreme  law  of  the  land. 

The  constitution,  it  is  true,  does  not,  in  terms,  give  the  power  to  incorpo- 
rate a  bank;  that  instrument  details  only  the  objects  of  the  Government,  and 
delegates  certain  general  authorities  to  effectuate  the  ends  for  which  it  was 
formed.  In  every  case  it  is  silent  as  to  the  particular  means  to  be  employed, 
or  the  mode  to  be  observed  in  the  attainment  of  the  object  or  end.  Instead  of 
attempting  to  specify,  in  any  case,  the  means  of  executing  a  power,  it  is  silent 
in  that  particular  in  every  case,  granting  to  Congress  the  general  power  I 
have  just  stated,  to  make  all  laws  necessary  and  proper  to  carry  into  effect  the 
delegated  powers.  Among  the  general  powers  expressly  granted,  is  this:  "To 
lay  and  collect  taxes,  to  borrow  money,  to  pay  the  debts,  and  provide  for  the 
general  welfare  of  the  Union/'  What  wisdom  first  suggested,  the  experience 
of  twenty  years  has  confirmed,  that  a  bank  is  not  only  a  fit,  but  the  most  use- 
ful means  of  collecting  the  revenue  of  the  United  States.  It  has  been  found 
the  readiest  and  most  certain  resource  from  which  to  obtain,  and  on  which  to 
rely  for  loans  to  Government;  and,  through  its  aid,  moneys  for  the  public  ne- 
cessities have  been  safely,  speedily,  and  without  charge,  placed  at  the  com- 
mand of  Government  in  every  part  of  the  Union.  The  agency  of  this  institu- 
tion, thus  continually  employed,  places  its  utility  and  expediency  beyond 
question.  I  consider  it,  therefore,  as  "  proper/'  because  it  is  well  adapted  to 
its  object;  as  "  necessary,"  because,  if  not  the  only,  it  is  certainly  the  best 
means  that  can  be  devised  to  obtain  its  ends.  And,  being  both  "  necessary 
and  proper"  to  carry  into  effect  the  power  expressly  granted  to  Congress,  ki  to 
collect  taxes,  to  borrow  money,  and  pay  the  debts,"  it  must  be  constitutional. 
But,  sir,  the  gentleman  from  New  York  says,  the  United  States  are  not 
sovereign,  and  cannot  exercise  a  right  of  sovereignty,  because  they  depend 


288  BANK  OF  THE  UNITED  STATES. 

on  the  will  of  the  States  for  existence:  for,  said  he,  should  the  States  ne- 
glect or  refuse  to  elect  Senators,  or  to  make  the  laws  necessary  for  electing 
representatives,  the  Federal  Government  would  die  of  its  own  imbecility. 
This  may  be  true;  the  Government  may  cease  to  exist;  yet,  while  it  does  ex- 
ist, there  are  powers  which  it  alone  can  exercise  without  the  control  or  inter- 
ference of  any  other  authority.  To  these  purposes,  assuredly,  then,  it  must 
be  supreme,  or  sovereign.  For  example:  the  Federal  Government  has  power 
to  lay  and  collect  taxes,  and  to  regulate  commerce.  Is  there  any  power  in 
this  country  (I  speak  of  moral  not  physical  power)  which  can  prevent  them 
laying  such  taxes,  and  making  such  regulations  of  commerce,  as  they  think 
(it?  The  constitution  of  the  United  States  is  the  act  of  "  We,  the  People  of 
the  United  States;"  so  are  the  State  constitutions;  both  are  derived  from  the 
same  source;  each  is  independent  of  the  other,  and  only  dependent  on  the 
sovereign  will  of  the  People,  constitutionally  expressed.  The  States  have 
certain  powers  exclusively  confided  to  them;  they  may  prescribe  the  de- 
scents of  estates,  and  regulate  distribution  of  property  and  other  objects  of 
internal  police;  they  are  sovereign  as  to  these  objects;  the  Federal  Govern- 
ment is  as  much  so,  as  to  the  objects  within  the  sphere  of  its  jurisdiction. 
Yet,  Mr.  Speaker,  obvious,  indeed  indispensable,  as  is  the  inference  and  de- 
duction of  the  right  to  incorporate  a  bank  for  the  management  of  the  financial 
concerns  of  the  United  States,  from  these  premises,  gentlemen  say  it  is  only 
an  implied  power;  that  no  power  can  be  used  unless  expressly  granted  in  the 
constitution;  and  the  exercise  of  implied  powers  is  deprecated  as  unknown  to 
the  constitution,  and  abhorrent  to  republicanism,  and  dangerous  to  our  liber- 
ties. Let  me  ask  gentlemen,  arid  I  pray  they  will  inform  me,  whether  they 
do  not  daily  act  upon  implied  powers?  If  not,  let  them  speak,  in  what  part  of 
the  constitution  do  they  find  power  to  build  light  houses?  Where  is  the  power 
which  their  President,  doubtless  with  the  feelings  of  a  man,  and  the  firmness 
of  a  magistrate,  so  freely  exercises,  of  removing,  at  pleasure,  from  office,  men 
who  were  appointed  with  the  consent  of  the  Senate?  You  have  committees 
now  sitting,  who,  under  your  authority,  but  without  law,  compel  citizens  to 
attend  at  their  summons,  without  consulting  their  will  or  convenience;  you 
have  conferred  on  certain  individuals,  the  sole  privilege  of  trading  with  the 
Indian  tribes.  By  what  authority  are  all  these,  and  many  other  acts,  which 
have  been  mentioned  in  this  debate,  exercised?  If  I  am  answered  at  all, 
truth  will  dictate  this  reply:  the  power  to  do  these  acts  is  no  where  expressly 
granted  in  the  constitution;  the  authority  results  from  the  powers  grantecl, 
and  are  necessarily  implied  as  the  fit  and  necessary  means  of  executing  the 
powers  which  are  expressly  granted.  Yes,  sir,  whether  I  am  answered  or  not, 
the  fact  is  manifest,  that  the  implied  powers  of  the  Government  are  not  only 
fairly  deducible  from  the  spirit  and  letter  of  the  constitution,  but  are  essential 
to  the  most  familiar  operations  of  Congress.  And,  sir,  it  is  in  proof,  that 
gentlemen  are  in  the  daily  habit  of  exercising,  without  scruple  or  reserve, 
those  implied  powers,  which,  when  urged  in  support  of  the  bank,  they  turn 
from  with  affected  abhorrence,  as  if  a  single  glance,  like  a  look  at  Medusa's 
head,  would  turn  them  into  stone!  They  have  repeatedly  acted  under  them, 
still  grasp  them  with  the  love  of  power  and  the  ardor  of  ambition,  and  will 
only  quit  their  hold  to  that  force  which  shall  deprive  them  of  the  reins  of  em- 
pire. 

The  gentleman  from  Virginia  deprecates  a  bank  which  shall  be  connected 
with  the  Government;  he  calls  this  a  dangerous  union  of  the  sword  and  the. 
purse;  reminds  us  of  the  abuse,  by  the  British  Government,  of  the  Bank  of 
England  in  obtaining  loans,  and  of  the  public  debt  of  that  kingdom.  None 
of  those  objections  apply  to  the  Bank  of  the  United  States.  The  charter  of 
the  present  bank  places  the  institution  beyond  the  control  of  the  Government. 
It  is  bound  to  accommodate  the  Government  with  loans  to  a  limited  amount, 
when  required;  but  this  obligation  on  the  bank,  although  its  performance  may, 
at  times,  chance  to  be  unfavorable  to  the  institution,  is  yet  connected  with  no 
danger  to  the  country,  since  the  one  cannot  lend,  until  we,  the  Representatives 
of  the  People,  have  authorized  the  other  to  borrow.  The  Executive  of  the 


ON    THE    BILL    TO    RENEW    THE  CHARTER   OP    1791.          289 

United  States  is  said  to  bear  the  sword,  but,  sir,  Congress  holds  the  purse, 
and  it  has  not  been  explained  to  us  how  the  existence  of  a  bank  is  to  render 
one  subservient  to  the  other,  or  to  convey  the  sword  and  purse  into  the  same 
hand.  I  can,  however,  conceive  a  plan  of  a  bank  which  would  sharpen  the 
sword  of  the  Executive,  and  give  a  power  to  his  arm  that  might  be  used  to  the 
ruin  or  degradation  of  our  citizens.  Adopt  the  plan  which  has  been  recom- 
mended, and  which  is  to  rise  upon  the  ruins  of  the  present  institution;  erect 
one  great  bank,  who&e  branches  snail  embrace  all  the  States,  and  whose  capital 
shall  swallow  all  the  State  banks;  give  to  the  administration  the  enormous  pa- 
tronage of  the  appointment  of  directors  to  this  institution,  and  place  the  credit 
and  business  of  every  man  connected,  of  necessity,  with  banks,  at  the  mercy 
or  pleasure  of  an  Executive,  or  his  minions;  the  commercial  and  the  enter- 
prising must  decide  either  to  become  flatterers  and  be  favored,  or  to  retain 
their  independence  and  be  ruined.  It  is  this  system  which  would  give  a  dan- 
gerous—a  detestable  power.  Your  administration,  styling  themselves  repub- 
lican, have  professed  to  desire  no  patronage:  I  will  take  them  at  their  word. 
My  vote  shall  never  increase  their  patronage,  to  multiply  their  dependents. 
The  crown  which  they  profess  to  put  away,  1  will  not  force  upon  their  brow. 

As  to  the  Bank  of  England  and  the  British  debt,  I  perceive  not  the  bearing 
their  connexion  can  have  on  the  question  before  us.  That  the  British  Go- 
vernment have  made  too  free  use  of  the  ability  of  the  bank  to  lend,  cannot 
expose  us  to  like  mischiefs,  because  our  bank  cannot  lend,  nor  our  administra- 
tion borrow,  but  by  the  express  authority  of  Congress.  Of  the  British  debt, 
I  know  its  amount  is  enormous.  Yet,  sir,  how,  and  for  what  purpose,  has  that 
debt  been  thus  swollen?  Perhaps  the  People  of  Great  Britain  owe  to  that  debt 
the  preservation  and  enjoyment  of  rights  dearer  to  freemen  than  their  purse. 
It  is,  sir,  at  the  cost  of  that  debt  that  Great  Britain  maintains  her  existence 
and  independence  as  a  nation.  She  might  have  submitted  without  an  effort, 
without  expense;  and,  free  from  debt,  have  sunk  under  the  chains  which  the 
tyrant  of  France,  the  enemy  of  the  human  race,  has  fastened  upon  all  the 
kingdoms  of  continental  Europe.  Rather  than  see  my  country  bow  in  sub- 
jection to  that  direst  of  despotisms  against  which  Great  Britain  has  struggled, 
I  would,  in  the  spirit  of  an  American,  cheerfully  bear  my  share  of  a  debt  as 
large  as  that  which  has  been  the  subject  of  remark. 

The  gentleman  tells  us.  that  we  have  sufficient  banking  capital  without  that 
of  the  Bank  of  the  United  States;  that  the  capital  of  the  State  banks  are  equal 
to  the  wants  of  the  United  States;  and  that,  if  this  institution  is  continued, 
there  will  be  danger  of  an  excess  of  paper  and  the  consequent  mischiefs  to 
the  country.  Sir,  gentlemen  need  not  feel  alarm  on  this  point:  there  is  no 
more  danger  of  a  surplus  capital  being  employed  in  banks,  than  of  such  sur- 
plus being  employed  in  any  other  business — the  thing  regulates  itself.  Bank 
notes  may  be  emitted  beyond  the  uses  of  the  country,  but  you  can  no  more 
force  them  into  circulation  beyond  this  necessity,  tnan  you  can  force  pur- 
chases and  sales  of  tobacco  ana  flour  beyond  the  consumption  of  a  country. 
The  commerce  of  every  country  requires  a  certain  sum  of  circulating  medium; 
the  amount  must  be  ascertained  by  experience,  which  alone  can  show  how 
much  it  will  absorb  and  employ.  "If  you  emit  paper  beyond  this  amount,  it 
will  of  necessity  return  upon  the  banks.  This  discovery  is  not  modern;  it  is 
as  old  as  the  science  of  banking;  and  of  the  errors  of  a  bank  no  one  is  more 
unfavorable  to  them  than  the  issues  of  paper  beyond  the  necessity  of  the 
country:  for,  so  long  as  they  keep  within  proper  limits,  it  is  found  tnat  they 
may  emit  one  and  two-thirds  or  two  dollars  of  paper  for  each  dollar  of  specie 
in  their  vaults;  but  when  their  issues  of  paper  exceed  these  limits,  the  excess 
continually  returns,  and  instead  of  one  dollar  in  specie  meeting  two  of  paper, 
a  dollar  in  specie  is  required  to  redeem  each  dollar  of  the  surplus  emission 
of  notes.  With  this  restraint  upon  their  issues,  banks  are  kept  m  due  check; 
and,  sir,  when  the  prudent  and  safe  issues*  viz.  to  the  amount  required  by 
the  country,  do  not  yield  employment  for  the  capital,  the  business  ceases  to 
be  profitable,  the  capital  is  directed  to  other  objects,  and  the  banking  fund  is 
kept  at  its  just  level.  This,  sir,  is  the  necessary  and  just  result  of  fair  bank- 


290  BANK  OF  THE  UNITED  STATES. 


mean  not  their  nominal  but  their  specie  capital)  of  their  debts, and  their 
resources,  we  are,  and  must  remain,  entirely  ignorant;  and  we  have  seen  that, 
some  of  these  institutions  dishonestly  emitting  paper  beyond  the  sum  authorized 
by  their  capital,  and  beyond  the  necessities  of  the  country,  their  notes  have 
returned  upon  them,  they  have  been  unprepared  to  pay,  their  paper  has  de- 
preciated, and  individuals  have  been  defrauded  to  a  vast  amount  And  such 
again  may  be  the  case,  if  we  remove  the  check,  the  restraining  influence, 
which  the  large  and  solid  capital  of  the  Bank  of  the  United  States,  and  its 
prudent  direction,  has  enabled  it  to  exercise  over  the  State  banks — these 
"  mushrooms,"  as  the  gentleman  has  called  them,  which,  like  Jonah's  gourd, 
have  sprung  up  in  one  night  and  withered  in  the  next. 

The  gentleman  informs  us  that  our  exports  of  domestic  products  amount 
only  to  forty-five  millions  of  dollars;  that  the  capital  of  the  different  banks 
in  the  United  States,  at  the  rate  of  issues  of  the  United  States'  Bank,  may 
emit  ninety  millions  of  dollars;  and  he  infers  that  a  paper  medium  beyond 
the  amount  of  domestic  exports  cannot  be  necessary.  This  opinion,  sir, 
needs  an  elucidation  which  the  gentleman  did  not  give  it.  Why  the  amount 
of  produce  purchased  for  exportation  should  form  the  measure  of  circulating 
medium,  is,  to  say  the  least,  not  self  evident.  Nor  can  I  conceive  why,  in 
calculating  the  medium  necessary  or  useful  for  the  concerns  of  the  country, 
we  should  exclude  from  view  the  purchases  for  internal  use  as  well  as  for 
external  sale,  or  lose  sight  of  the  repeated  use  made  of  the  same  note  or  piece 
of  metal,  in  its  continued  circulation.  The  circulating  medium  of  a  country, 
whether  paper  or  specie,  represents^  because  it  commands,  the  articles  we 
need  and  get  in  exchange  for  it.  What  the  sum  should  be,  my  political 
arithmetic  does  not  teach  me,  nor  does  the  rule  of  the  gentleman  from  Vir- 
ginia. In  my  opinion,  experience  alone  can  shew  it,  as  I  have  before  said, 
viz.  that  amount  which  the  commercial,  agricultural,  and  manufacturing  con- 
cerns of  the  country  will  require  and  can  employ,  to  be  ascertained  from  the 
amount  of  silver  and  gold  in  circulation,  bank  credit,  and  bank  notes  issued,  and 
not  returning  upon  the  banks.  It  is,  I  admit,  a  fact, a  proud  fact,  that  the  ex- 
ports of  our  country  have  increased  from  eighteen  to  forty-live  millions.  New 
fields  have  been  opened,  produce  increased,  means  of  conveyance  multiplied, 
and  new  markets  sought  and  resorted  to.  Agriculture,  commerce,  and  ma- 
nufactures, have  advanced,  as  they  necessarily  must,  hand  in  hand ;  and  to  the 
beneficial  influence  of  banks,  increasing  the  capital,  encouraging  enterprise, 
stimulating  arid  rewarding  the  industry  of  the  country,  are  indebted  for  much 
of  this  increase. 

The  testimony  which  the  gentleman  has  borne  to  the  correct  management 
of  the  Bank  of  the  United  States,  was  to  have  been  expected  from  his  infor- 
mation and  liberality.  The  fact  previously  stated  and  repeated  by  him,  as  u 
defect  in  arrangement,  that  the  notes  of  the  bank,  and  its  branches,  are  not 
paid  but  at  the  office  from  which  they  issue,  and  at  which  they  are  made  paya- 
ble, is  not  ground  of  complaint.  The  bank  and  its  branches  have  each  but  a 
portion  of  the  capital.  Of  the  branches,  the  largest  portion  (at  New  York) 
only  $1,800,000;  and  it  is  absurd  to  expect  that  either  the  branch  with  this 
capital,  or  the  others,  with  less,  should  redeem  at  all  times  the  notes  emitted 
upon  a  capital  of  ten  millions:  the  thing  is  impossible. 

From  the  opinion  advanced  by  the  gentleman,  that  the  state  of  the  bank 
should  rather  excite  the  fears  of  the  institution  for  its  own  safety  or  solvency, 
than  awaken  the  apprehensions  of  the  community  for  the  effects  of  its  disso- 
lution upon  them,  1  beg  leave  to  dissent.  We  have  had  in  debate  various 
statements  of  the  affairs  of  the  bank,  drawn  either  from  former  reports  or 
conjecture.  The  report  of  the  Secretary  of  the  Treasury,  this  day  laid  on 
our  tables,  shows  the  present  state  of  the  bank;  to  this  I  shall  refer  for 
facts. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     291 

There  is  due  to  the  bank  from  individuals,  upon  notes  dis- 
counted, -  $14,578,294  25 
Other  banks  owe  them  for  notes  and  in  account,        -  -       1,287,485  92 
The  Government  owe,  including  the  late  loan,  funded  debt, 

and  treasury  drafts,  -  -       2,807,046  49 

18,672,826  66 

They  have,  in  gold  and  silver.  -  -       5,009,567  10 

And  in  real  estate,  -          500,652  77 

Making  a  property  to  face  the  demands  on  them  of  -  $24,183,046  53 

On  the  other  hand,  what  do  they  owe? 

To  the  holders  of  their  notes  in  circulation,  -     $5,037,  25  23 

To  the  Government,  for  deposites,        -  -     1,929,99960 

To  other  banks,  due  in  account,  634,348  01 

To  individuals,  for  deposites,    -  -     5,900,422  83 

_J_I__        8,464,770  44 

To  balances  on  outstanding  drafts,  171,473  17 

Making  the  total  amount  of  their  debts,  -  $13,673,368  83 

Thus,  sir,  with  a  property  of  twenty -four  millions  of  dollars,  they  owe  less 
than  fourteen  millions,  leaving  the  stockholders  the  original  stock  of  ten  mil- 
lions and  a  surplus  of  more  than  hull" a  million  to  meet  bad  debts.  But,  were 
it  otherwise — were  it  possible,  that,  of  the  debts  due  them,  ten  millions 
should  never  be  collected,  the  hiss  would  affect  (he  stockholders,  whose  origi- 
nal advance  would  be  lost,  but  the  interest  of  the  community  would  not  even 
then  be  affected;  at  least,  not  as  creditors  of  the  institution;  because,  even  it 
ten  millions,  the  capital  stock,  were  by  any  means  sunk,  the  bank  would  still 
be  solvent;  it  would  even  then  pay  its  debts,  and,  consequently,  must  be  per- 
fectly safe  as  regards  the  community. 

Such,  sir,  is  tne  state  of  the  account  on  the  side  of  the  bank. 

How  stands  the  account  with  the  debtors  of  the  bank,  or  rather  with  the 
public? 

The  bank  can  demand  the  debts  due  it,  -  $18,672,826  66 

Admit  the  demands   upon  it  are  applied  as  sets  off  to  their 

full  amount,   -  -     13,673,368  83 

The  balance  still  to  be  raised  by  the  country  is  $4,999,457  83 

within  a  trifle  of  five  millions  of  dollars. 

Whence  is  this  sum  to  comer  Not  from  the  vaults  ot  the  other  banks;  they 
tip  not  possess  it.  It  is  stated,  in  the  able  speech  of  the  representative  of  the 
city  of  Philadelphia,  in  the  Legislature  of  Pennsylvania,  upon  the  resolution 
respecting  the  bank,  that  the  report  of  the  state  of  all  the  banks  of  that  State, 
recently  made  to  the  Legislature,  shows  that  all  the  banks  in  Philadelphia, 
(excepting  that  of  the  United  States)  have,  together^  but  a  little  more  than  one 
million  of  dollars  in  specie:  those  who  have  the  best  means  of  information, 
declare  the  specie  in  the  banks  of  New  York  is  not  greater,  and  in  those  of 
other  cities  unquestionably  less.  The  State  banks  then  have  not  the  money, 
and  cannot  produce  it.  Will  the  notes  of  these  banks  pay  the  debt?  No, 
sir,  because  their  notes  will  be  returned  upon  them  for  payments  which  they 
cannot  make.  These  banks  know  their  own  strength  or  weakness,  and,  that 
they  dread  this  crisis,  is  manifest  from  the  course  they  have  already  adopted; 
they  have  curtailed  discounts,  and  commenced  calling  in  their  debts.  The 
consequences  you  learn  from  the  moans  of  your  correspondents,  and  from  the 
petitions  which  daily  press  your  table;  the  want  of  money  has  produced  a 
want  of  punctuality;  confidence  is  destroyed;  the  life,  the  animating  spark  of 
business  is,  at  it  were,  suspended,  and  deep  distress  is  fast  spreading  over  the 
commercial  world.  Sir,  my  deductions  are  supported  by  facts.  They  prove 


292  BANK  OF  THE  UNITED  STATES. 

the  solvency,  indeed  the  strength,  of  the  Bank  of  the  United  States  is  such 
as  to  merit  the  confidence  of  the  People,  which  it  enjoys,  while  the  situation 
of  the  State  banks,  and  the  deficiency  of  the  precious  metals,  gives  a  fatal  as- 
surance of  the  inability  of  the  country  to  submit  without  great  distress  to  the 
operation  of  having  extracted  from  it  the  large  debt  due  the  bank, 

The  gentleman  from  Virginia  say  s  it  is  no  argument  in  favor  of  a  continuance 
of  the  bank  that  it  is  necessary  for  the  management  of  the  financial  concerns 
of  the  United  States;  for  that  the  word  b*  finance"  is  not  to  be  iound  in  the 
constitution.  Sir,  were  I  called  upon  by  one  of  the  yeomanry  of  this  coun- 
try: one  whose  days  had  been  spent  at  the  plough,  remote  from  courts,  and 
without  concern  in  affairs  of  state,  to  define  to  him  what  were  the  financial 
concerns  of  the  United  States,  I  should,  as  an  explanation  adapted  to  the 
simplest  understanding,  inform  him,  that  the  laying  ami  collecting  taxes,  bor- 
rowing money,  and  paying  the  debts  of  the  Union,  were  its  financial  concerns. 
And,  as  these  powers  are  expressly  granted  to  Congress,  although  the  word 
44  finances"  may  not  be  found  in  the  constitution,  Congress  are  thus  required 
of  necessity  to  provide  for  the  management  of  the  "financial  concerns"  of  the 
United  States. 

Permit  me  now,  sir,  to  notice  objections  urged  against  the  bank  from  other 
quarters,  and  of  a  different  nature  —  objections  not  calculated,  probably  not  in- 
tended, to  influence  this  House,  but  which  may  have  arr  influence  abroad- 
Gentlemen  have  objected  to  what  they  term  the  foreign  influence  in  our  af- 
fairs, from  the  portion  of  this  bank  held  by  foreigners;  and  the  gentleman  from 
Maryland  [Mr.  WRIGHT]  has  alledged  that  aliens,  traitors,  and  old  tories* 
are  entrusted  with  its  direction;  others,  with  him,  have  said  that  the  bank  and 
the  funding  system  are  twins  of  the  same  progenitor,  Alexander  Hamilton, 
and  that  the  question  of  creating  this  bank  was  the  ground  on  which  the  par- 
ties of  the  United  States  first  divided, 

The  charter  of  the  bank  did  not  exclude  foreigners  from  purchasing  shares; 

.^because,  at  the  period  of  its  establishment,  our  country  was  without  capital  , 

and  it  was  an  object  rather  to  invite  foreign  capital  to  the  United  States,  than  to 

repel  it;  their  large  funds  and  low  rates  of  interest  have  enabled  them  to  give 

more  in  the  market  than  our  citizens  could  afford  to  pay,  and  they  have  conse- 


1801, all  the  stock  in  the  bank  which  the  United  States  owned. 

This  charter  denies  to  any  stockholder,  not  a  resident,  of  the  United  States, 
the  right  either  of  a  vote  in  the  choice  of  directors,  or  a  seat  at  the  board  of 
directors.  And,  thus  divested  of  any  power  to  interfere  in  the  concerns  of 
the  bank,  it  requires  more  than  human  penetration  to  discover,  or  more  than 
ordinary  jealousy  to  suspect,.  how  foreigners  can  influence  even  the  affairs  of 
the  bank,  much  less,  through  its  agency,  the  concerns  of  the  country* 

This  cry  of  foreign  influence  from  the  use  of  foreign  capital  is  a  modern 
bugbeaiv  During  our  Revolutionary  struggle,  our  soldiers  were  clothed  and 
armed  with  funds  borrowed  in  Europe:  our  nerves  were  hardened,  our  sinews 
stiffened,  and  our  independence  achieved,  with  the  assistance  offoreign  capital. 
Yet  the  heroes  and  sages  of  that  day  suspected  not  any  improper  foreign  in- 
fluence; they  were  brave  and  wise,  but.  not  as  cunning  as  our  present  statesmen 
who  have  made  the  discovery. 

As  to  the  aliens^  traitors,  and  old  lories*  who  are  concerned  in  the  direction 
of  the  bank,  the  gentleman  is  too  general  in  his  charge.  So  far  as  he  will  be 
particular,  he  can  be  met.  Ho  named  but  two  persons  as  meriting  his  de- 
nunciation —  Evan  Jones  and  Daniel  Clark,  both  of  New  Orleans.  I,  sir, 
know  not  personally  either  of  these  gentlemen.  Mr.  Jones  I  understand  to 
be  a  native  of  Pennsylvania,  who,  at  the  peace  of  1763,  when  Great  Britain 
acquired  Florida,  settled  in  that  country,  and  has  resided  there  and  at  New 
Orleans  ever  since;  he  is  declared  to  be  a  man  of  high  character  for  integrity 
and  honor.  Mr.  Clark  has  had  a  seat  as  a  delegate  on  this  floor;  though  not  a 
native  of  tho  United  States,-  he  is  as  much  a  citizen  as  any  of  the  inhabitant* 


ON  THE  BILL  TO  REI^VV   THE  CHARTER  OF  1791.  295 

of  Louisiana,  made  so  by  treaty,  and  as  much  so  as  will  be  the  representa- 
tives of  the  State  of  Orleans  "  that  is  to  be,"  in  the  next  Congress.  Against 
his  character  nothing  has  been  alleged,  other  than  that  imputation  which  the 
People  of  the  United  States  have  fixed  upon  the  character  of  every  man  who 
has  been  the  friend  or  associate  of  Wilkinson  and  Burr.  Let  me  not  be  un- 
derstood as  committing  myself  to  the  opinion  of  the  guilt  of  these  gentlemen. 
I  was  not  of  Burr's  jury — lie  may  be  guilty;  nor  am  I  of  Wilkinson's  com- 
mittee—he may  be  innocent:  yet  suspicion  deeply  stains  his  character;  it  will 
take  much  labor  of  the  file  to  rub  it  off. 

But,  sir,  let  it  be  supposed  that  an  individual  vvho  was  unfriendly  to  our 
Revolution  should  have  been  chosen  by  those  who  are  proprietors  of  the  bank 
to  a  seat  iu  its  direction.  Would  the  choice  be  either  new  or  criminal?  Sir,  a 
person  whose  name  is  recorded  in  the  proscription  statute  of  a  State,  as  an 
fctold  tory,"  was  appointed,  by  Mr.  Jefferson,  a  district  judge  of  the  United 
States.  In  other  States,  but  particularly  in  New  York  ami  Pennsylvania, 
persons  who  bore  arms  against  us,  and  adhered  to  our  enemy  in  the  Revolu- 
tionary war,  have  also  been  appointed,  by  a  republican  President,  to  offices  of 
high  trust.  Why  were  these  "qW  tories"  thus  honored  and  trusted?  Because 
they  possessed  integrity  and  abilitj;  to  qualify  them  for  their  stations.  And. 
why  might  not  a  tory  be  chosen  a  director  of  a  bank,  if  his  virtues  and  talents 
had  gained  him  the  confidence  of  the  stockholders?  The  choice  seems  to  me  to 
be  as  pardonable  in  a  stockholder  as  in  a  President;  or,  is  it.  sir,  that  the  re- 
publican President  has  been  converted  into  a  political  Pope,  and  has,  alone, 
the  power  to  pardon  and  absolve  from  political  sins? 

Of  the  origin  of  the  Bank  of  the  United  States,  the  honor  is  certainly  due  to 
the  first  Secretary  of  the  Treasury.  In  justice  to  his  memory,  the  fact  ought 
frequently  to  be  mentioned,  and  never  to  be  forgotten.  But,  sir,  the  merit  of 
obtaining  the  adoption  of  the  plan  is  not  entirely  his.  The  original  bill,  in 
every  stage,  received  the  support  of  gentlemen  of  the  republican  partyj 
among  those  who  were  its  earliest  supporters,  one  most  distinguished  for  abili- 
ty, the  present  Secretary  of  the  Treasury,  continues  its  advocate  to  the  present 
hour. 

In  support  of  the  claim  of  the  bank  for  a  renewal  of  its  charter,  and  to  the 
credit  of  Mr.  Gallatin.  I  will  here  read  extracts  from  his  report  to  the  Senate, 
March,  1809. 

kt  The  advantages  derived  bj*  Government  from  the  bank,  are  nearly  ol  the 
same  nature  with  those  obtained  by  individuals  who  transact  business  with 
similar  institutions,  and  may  be  reduced  to  the  following  heads: 

1.  *4  Safe  keeping  of  public  moneys.   This  applies  not  only  to  money  in  the 
Treasury,  but  that  in  the  hands  ot  collectors,  and  alVordsone  of  the  best  secu- 
rities against  delinquencies. 

2.  "  Transmission  of  public  moneys,  from  one  quarter  of  the  Union  to  ano- 
ther.   This  is  done  by  the  bank,  at  its  own  risk  and  expense. 

3.  "  Collection  oft/ie  revenue.    The  punctuality  of  payments  introduced  by 
the  banking  system,  and  the  facilities  offered  by  the  bank,  to  importers  indebt- 
ed for  revenue  bonds,  are  amongst  the  causes  which  have  enabled  the  United 
States  to  collect,  with  so  great  facility  and  with  so  few  losses,  the  large  reve- 
nue derived  from  impost. 

4.  '*  Loans.    The  bank  has  been  eminently  useful  in  making  the  advances, 
which,  under  different  circumstances,  were  necessary.    At  one  time,  Govern- 
ment owed  it  $6,200,000,  exclusively  of  six  per  cent,  stock,  original  subscrip- 
tion; and  a  similar  disposition  to  accommodate  has  been  repeatedly  evinced, 
whenever  the  aspect  of  public  affairs  has  rendered  it  proper  to  ascertain 
whether  new  loans  might,  if  wanted,  be  obtained." 

The  report  then  states,  that,  although  the  banks  established  under  the  autho- 
rity of  the  States,  might  afford  considerable  assistance  to  the  Government  in 
its  fiscal  operations,  there  is  none  which  can  transmit  moneys  with  the  same 
facility  or  to  the  same  extent;  none  which  can  afford  so  great  security  against 
any  possible  losses,  or  greater  resources  in  relation  to  loans.  "  Nor  is  it  eligi- 
ble tnat  the  General  Government  should,  in  respect  to  its  own  operations,  oe 


294  BANK  OF  THE  UNITED  STATES. 

entirely  dependent  on  institutions  over  which  it  has  no  control  whatever."  He 
also  notices  the  objection  of  foreigners  holding  stock;  but  this,  he  declares, 
"does  not,  at  all  events,  appear  sufficient  to  outweigh  the  manifest  public  ad- 
vantages derived  from  a  renewal  of  the  charter. " 

Mr.  Speaker,  gentlemen  may  disregard,  but  they  cannot  despise,  nor  can 
they  destroy,  this  high  testimony,  which,  while  it  establishes  the  utility  of  the 
bank,  bears  honorable  testimony  to  the  upright  and  patriotic  spirit  in  which 
its  operations  have  been  conducted.  This  testimonial  outweighs  all  that  the 
bickerings  of  interest,  the  suggestions  of  jealousy,  or  the  apprehensions  of  the 
uninformed  can  assert  against  the  institution.  For  myself,  sir,  had  I  no  other 
knowledge  of  the  subject,  I  should  feel  no  hesitation,  upon  the  question  of  con- 
stitutionality and  necessity  of  a  bank,  which  Hamilton  recommended,  Wash- 
ington approved,  and  Gal  latin,  after  twenty  years'  experience,  continues  to 
advocate.  The  shade  which  has  been  attempted  to  be  cast  upon  the  fame  of 
Hamilton,  as  the  "  progenitor  of  the  bank,"  must,  when  examined,  like  every 
other  attack  upon  it,  but  add  to  its  lustre.  Sir,  I  shall  not  attempt  to  eulogise  the 
name  of  that  great  man;  were  my  feeble  powers  equal  to  the  task,  I  should 
deem  it  unnecessary.  Party  rancor,  which  impotently  followed  him  to  the 
grave,  cannot  now  obscure  one  ray  of  that  sun  of  glory  which  shines  upon  the 
tomb  of  the  illustrious  dead. 

As  if  satisfied,  or  fearful,  that  no  argument  against  the  bill  could  be  urged 
which  would  plausibly  destroy  its  claims  to  support,  the  question  has  been 
called  a  party  question.  To  rally  a  party  round  its  standard,  to  excite  the 
pertinacity  and  awaken  the  severity  of  party  feeling,  it  has  been  declared, 
that,  upon  the  question  of  incorporating  mis  bank,  in  1791,  originated  the  di- 
vision of  parties,  which  have  since  existed  in  this  nation.  Until  this  time,  sir, 
this  discovery  has  not  been  made.  I  had  understood  a  very  different  history 
of  the  origin  of  party.  1  have  heard,  I  have  read — for  my  youth  did  not  permit 
me  to  ^yitness — that,  at  the  formation  of  our  present  constitution,  many  persons, 
with  different  vievys,  were  opposed  to  its  formation  and  adoption,  preferring 
that 'shadow  of  Union,  in  which  the  States,  as  with  a  rope  of  sand,  were  at- 
tempted to  be  bound  under  the  confederation,  to  the  strength,  firmness,  and 
unity,  in  which  we  are  knit  by  the  Federal  Constitution.  The  good  sense  and 
good  fortune  of  our  country  prevailed;  the  constitution  was  adopted,  and  those 
who,  as  anti-federalists,  had  opposed  the  adoption  of  the  constitution,  were 
organized,  with  very  tew  exceptions,  under  the  name  of  republicans,  in  oppo- 
sition and  decided  uniform  hostility  to  the  measures  of  the  Federal  Govern- 
ment. 

The  charter  to  the  bank,  thus,  indeed,  became,  with  some  of  its  opponents, 
a  question  of  party,  although  it  received  the  support  of  others  who  were  anti- 
feueral.  In  this  party  opposition,  it  only  met  the  fate  of  every  other  measure, 
however  wise  and  salutary,  originated  and  perfected  at  that  period. 

Let  us  hope,  sir,  that  the  blindness  and  injustice  of  such  rule  of  action,  is 
not  again  to  be  revived. 

Let  me  now,  sir,  rapidly  glance  at  the  consequences  which  are  to  attend 
the  rejection  of  this  bill.  The  intercourse  between  the  States,  and  the  deal- 
ings of  the  citizens  of  a  State  with  those  of  different  parts  of  the  same  State, 
require  a  circulating  medium,  far  above  the  quantity  of  gold  and  silver  which 
exists  among  us.  No  man  contends  that  the  demands  of  commerce,  or  even 
the  ordinary  transactions  of  individuals,  can,  in  the  present  scarcity  of  gold 
and  silver,  he  carried  on  without  the  intervention  of  bank  notes.  Hitherto, 
sir,  the  notes  issued  in  each  State  have  answered  some  of  the  domestic  uses; 
but,  for  the  purpose  of  remitting  to,  or  receiving  payment  from,  other  States, 
no  reliance  has  ever  been  placed  upon  the  notes  of  State  banks.  It  has  fre- 
quently happened,  that  notes  have  got  into  circulation,  purporting  to  be  issued 
by  a  bank  which,  in  fact,  never  existed;  and  others,  issued  by  banks  which 
had  failed.  The  difficulty  of  knowing  the  real  from  the  spurious,  and  the  sol- 
vent from  the  insolvent,  has  so  far  restrained  the  circulation  of  the  notes  of 
State  banks  within  the  limits  of  their  own  State,  as  to  have  prevented  any  late 
frauds  and  losses,  except  among  the  very  uninformed  part  of  the  community.  In 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF    1791.  295 

these  circumstanceSy  the  known  ability  of  the  Bank  of  the  United  States,  the 
receipt  of  its  paper  in  payment  of  debts  to  the  United  States,  has  given  it  a 
currency  and  credit  equal  to  gold  and  silver,  in  every  purpose  of  domestic  or 
f9reign  use;  and  its  frequency  among  us  has  so  far  familiarized  all  men  of  bu- 
siness with  the  notes,  as,  if  not  entirely  to  prevent  frauds  from  counterfeits,  at 
least,  greatly  to  diminish  the  injury.  In  destroying  this  bank,  you  are  about, 
sir,  to  strike  all  this  most  valued  paper  medium  out  of  existence;  to  dissolve 
an  artificial  capital  of  the  Bank  of  the  United  States,  of  ten  millions  of  dollars; 
and  not  merely  this  capital  of  the  Bank  of  the  United  States,  but,  by  with- 
drawing from  the  other  banks  the  very  large  portion,  if  not  the  whole  of  their 
specie  capital,  with  which  they  must  part,  to  pay  the  Bank  of  the  United 
States  the  debts  daily  increasing  against  them,  by  the  receipt  of  their  notes  in 
discharge  of  individual  debts  to  the  Bank  of  the  United  States,  you  inevitably 
render  the  State  banks  less  able  to  accommodate,  and  diminish,  greatly,  that 
portion  of  the  circulating  medium  emitted  by  these  banks. 

Of  the  distress  which  this  measure  will  occasion,  I  need  say  nothing;  the 
evidence  of  its  existence  and  magnitude  surround  you,  and  have  been  already 
repeatedly  pressed  upon  your  attention.  You  are,  in  fact,  todestroy  all  con- 
fidence in  bank  paper.  Can  my  constituents  know  whether  the  bank  note  of 
New  Hampshire  or  Georgia,  which  is  offered  them,  is  genuine  or  spurious? 
Can  they  know  whether  a  bank  is  in  credit  or  insolvent,  of  which  they  have 
never  before  heard?  Yet,  sir.  as  gold  and  silver  is  not  to  be  had,  and  the  Unit- 
ed States'  Bank  notes  will  no  longer  exist,  you  reduce  the  People  to  this  di- 
lemma: either  they  must  receive  the  notes  of  State  banks,  ignorant,  as  they 
must  be,  of  their  genuineness  or  credit,  encounter  the  daily  risk  of  being  de- 
frauded, or  keep  on  hand  their  produce.  In  this  state  of  uncertainty,  bank 
-  must  lose  their  credit;  will  rea.sii  to  circulate;  must  soon  depreciate; and 
a  scene  of  speculation  and  embarrassment  will  ensue,  not  unlike  those  which 
have  heretofore  nearly  ruined  our  country. 

Mr.  Speaker,  the  present  is  not  a  time  for  dangerous  experiments  upon  the 
prosperity  of  our  country.  With  foreign  nations,  our  relations  are  more,  than 
at  any  other  period,  perplexed.  In  my  apprehension,  the  nations  of  Europe, 
with  more  than  one  of  whom  we  have  advanced  in  a  warlike  attitude,  will 
have  more  forbearance  and  less  temper  than  is  usual  with  them,  if  they  do  not 
meet  us  with  decided,  not  secret  hostility.  And  in  this  time  of  danger  from 
abroad,  while,  with  a  non-intercourse  law  in  one  hand,  you  fetter  all  external 
commerce,  sink  your  revenue, and  reduce  the  value  of  property;  with  the 
other,  destroying  the  bank,  deranging  the  finances  of  the  Government,  over- 
turning private  credit,  destroying  commercial  confidence,  you  press,  with  the 
deadly  weight  of  an  incubus,*upon  the  exertions  of  domestic  industry  and  en- 
terprise. The  inevitable  effect  of  these  measures  must  be,  to  turn  lose  a  tor- 
rent of  overwhelming  calamity,  the  extent  of  which  you  cannot  estimate,  anil 
the  force  of  which  you  cannot  stay.  The  consequences  are  awful;  the  respon- 
sibility serious.  Let  gentlemen  look  to  it. 

Mr.  M'KEE.—  Mr.  Speaker:  Having  once  troubled  the  House  on  this  sub- 
ject, it  is  not  without  much  regret  that  task  the  attention  of  gentlemen  to  a 
few  more  remarks,  before  the  question  is  taken 

The  opposers  of  this  bill  have  uniformly  contended  against  the  exercise  of  a 
power  under  the  constitution,  which  is  not  expressly  delegated  to  Congress  by 
the  letter  of  the  constitution.  This  position  cannot  be  maintained  by  the  ex- 
perience of  what  is  past;  nor  can  it  be  adhered  to  in  future,  in  the  management 
of  the  affairs  of  this  Government.  And  I  conjure  gentlemen  to  pause,  before 
they  give  a  construction  to  the  constitution  which  they  themselves  have,  on 
other  occasions,  [violated $  and  which  they  will  be  compelled  again  to  violate, 
or  desert  the  best  and  clearest  interests  of  their  country. 

Sir,  the  territory  of  Louisiana  has  been  purchased  since  the  commence- 
ment of  the  republican  administration;  and  this  act  constitutes  one  of  their 
strongest  titles  to  the  fair  fame  with  vvhich  they  are  surrounded.  And  yet  I 
ask,  where  (according  to  the  construction  contended  for)  is  the  power,  under 


296  BANK    OF  THE    UNITED    STATES. 

the  constitution,  which  could  authorize  the  mode  of  this  acquisition?  Will  any 
gentleman  point  it  out  to  me?  For  I  confess  I  cannot  perceive  it.  1  know 
Congress  are  expressly  empowered  by  the  constitution  to  declare  war;  and 
the  power  to  declare  war  includes  the  power  to  acquire  territory  by  the  suc- 
cessful result  of  that  war.  And  hence  it  would  seem  to  follow  that  the  Go- 
vernment may,  with  propriety,  attain  the  same  end  by  treaty  or  purchase, 
which  they  could  effect  by  force.  But  this  power  is  certainly  a  constructive 
one,  to  be  collected  from  the  reason  and  not  the  letter  of  the  constitution.  And 
therefore,  according  to  the  doctrine  inculcated,  it  cannot  be  used. 

Congress  have  also  laid  a  general  embargo;  and  whence,  I  ask,  is  the  pow- 
er authorizing  this  act,  derived?  It  certainly  cannot  be  justified  under  the 
general  power,  delegated  by  the  constitution*  to  Congress,  to  regulate  com- 
merce: because  a  general  embargo,  during  its  continuance,  puts  an  end  to  all 
commerce.  And  it  is  perfectly  absurd  to  say  that  a  general  delegation  of 
power  to  regulate  commerce  includes  the  power  to  suspend  it  altogether.  But 
the  constitution  has  delegated  to  Congress  the  power  to  provide  for  the  gen- 
eral welfare  and  common* defence;  and  a  withdrawal  of  the  property  as  well 
as  the  persons  of  our  citizens  from  the  ocean,  in  times  of  difficulty  and  danger, 
by  means  of  a  general  embargo,  thereby  reserving  to  the  country  the  resources 
as  well  as  physical  force  of  the  People,  unimpaired,  is,  in  fact,  providing  for  the 
general  welfare  and  common  defence.  And  hence  results  the  power  exercis- 
ed by  Congress  of  laying  an  embargo.  But,  sir,  this  is  also  a  constructive 
power,  not  expressly  delegated  to  Congress  by  the  constitution;  and  therefore, 
by  the  doctrine  contended  for  by  the  opposersof  this  bill,  cannot  be  exercised. 

Congress  have  built  a  house  for  the  President  of  the  United  States,  that 
would,  in  point  of  size  and  magnificence,  beggar  any  thing  to  be  found  at  St. 
James's  or  elsewhere.  They  have  established  post  offices  in  all  the  States  of 
the  Union,  and  by  law  exempted  the  post  masters  from  serving  on  juries  as  well 
as  performing  military  du'y:  by  this  mean  creating  an  influence  in  the  interior 
of  the  States,  without  any  express  delegation  ot  power  authorizing  the  act j 
and  therefore  (according  to  the  construction  contended  for  on  this  occasion) 
unauthorized  and  unconstitutional. 

I  might  proceed  to  enumerate  a  long  catalogue  of  cases,  in  which  Congress 
have  exercised  powers  under  the  constitution  which  were  not  expressly  dele- 
gated, but  drawn  entirely  from  the  reason,  spirit,  and  essence  of  the  instrument; 
and  justified  alone,  in  their  fitness  and  efficacy  to  carry  into  effect  some  of  the 
great  class  of  powers  delegated  to  Congress  by  the  constitution.  The  People  of 
the  United  States  have  experienced  the  most  happy  consequences,  arising 
solely  from  the  exercise  of  those  constructive  powers,  against  which  some 
gentlemen  now  declaim  with  so  much  apparent  zeal;  and  which  are  certainly 
less  tortured  and  far-fetched,  than  the  construction  for  which  those  gentlemen 
so  pertinaciously  contend. 

When  we  view  the  past,  we  find  that  all  parties  have  uniformly  given  the 
same  practical  construction  to  the  constitution. 

Washington,  the  great  father  of  his  country,  Mr.  Jefferson,  Mr.  Gallatin, 
and  all  the  magistracy  of  the  United  States,  including  both  Houses  of  Congress, 
have  given,  directly  or  indirectly,  the  same  contraction  to  the  constitution; 
and  with  these  illustrious  examples  and  precedents  before  me,  I  cannot  arro- 
gate to  myself  the  self-sufficiency  to  disregard  or  distrust  them,  and  make  out 
some  new  Utopian  untried  theory,  sanctioned  neither  by  reason,  experience, 
nor  policy;  believing  it  to  be  more  safe  to  pursue  the  old  and  beaten  track, 
than  to  adopt  untried  expedients;  particularly  in  a  case  of  a  doubtful  nature. 
I  admit  that  Congress  ought  not  to  look  for  the  constitution  in  your  statute 
book,  or  in  the  fugitive  pages  of  your  journal,  but  to  the  instrument  itself. 
But,  sir,  where  a  construction  has  been  given  to  this  instrument  by  its  great 
father,  and  where  that  construction  has  been  ratified  by  the  sovereign  voice 
of  the  People,  it  should  remain  unchanged. 

,.^The  gentleman  from  Pennsylvania,  (Mr.  SMILIE)  has  endeavored  to  assi- 
milate the  power  now  attempted  to  be  exercised  to  that  exercised  in  the  adop- 
tionofthe  odious  alien  and  sedition  laws,  (as  they  have  generally  been  called.) 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

And  if,  sir,  the  gentleman  had  forgotten  (as  he  seems  to  have  done)  the  first 
article  in  the  amendments  to  the  constitution  of  the  United  States,  then,  indeed, 
his  parable  would  have  been  an  appropriate  one,  differing  from  the  construction 
now  contended  for  only  in  the  signal  circumstance,  that  the  alien  and  sedi- 
tion laws,  in  their  practical  operation,  tended  to  abridge  the  liberty  of  the  citi- 
zen, whilst  the  bank  is  a  matter  of  policy  alone. 

But  these  alien  and  sedition  laws  were  in  direct  hostility  to  the  first  article  in 
the  amendment  to  the  constitution,  which  is  in  the  following  words:  "Con- 
gress shall  make  no  law  respecting  the  establishment  of  religion,  or  prohibiting 
the  free  exercise  thereof,  or  abridging  the  freedom  of  speech  or  of  the  press." 
This  prohibitory  article  shows  the  real  difference  between  the  two  cases. 

Much  sensibility  has  been  manifested  in  relation  to  State  rights,  which,  it  is 
apprehended,  will  be  prostrated  by  the  resuscitation  of  this  charter.  Sir,  I  am 
a  friend  to  State  rights;  in  the  safe  and  inviolable  preservation  of  which  we 
have  the  surest  guarantee  for  the  perpetuity  of  this  Government.  But,  sir, 
I  ask  if  there  are  not  extremes  on  this  subject?  And  whilst  we  are  guarding 
against  Scylla,  with  care  and  solicitude,  is  there  no  danger  of  falling  on  C/ia- 
rybdis?  Are  not  the  power  and  influence  of  some  of  the  States  now  almost 
paramount  to  the  power  and  influence  of  the  General  Government?  By  your 
refusal  to  renew  the  charter  of  the  United  States'  Bank,  you  considerably  en- 
hance this  power  in  the  hands  of  the  great  States.  Your  revenue  is  then  to  be 
collected  and  deposited  in  State  banks.  About  one-third  of  it  will  be  collect- 
ed by  the  State  of  Pennsylvania,  and  will  be  deposited  in  her  banks.  And 
those  banks  are,  as  they  relate  to  you,  entirely  foreign  banks.  You  have  no 
control  whatsoever  over  them  or  any  of  them.  But  the  State  of  Pennsylvania 
has  a  control  over  them;  and  consequently,  Pennsylvania  (if  you  destroy  the 
charter)  has  in  her  fangs  the  purse  of  the  nation!  which,  as  the  gentleman 
from  Virginia,  (Mr.  EPPES)  says,  constitutes  the  sinews  of  war.  Pennsylva- 
nia possesses  within  herselt  the  physical  force;  a  force  that  would  be  formida- 
ble to  the  whole  United  States,  were  it  arrayed  against  them.  And  is  it  en- 
tirely without  precedent,  for  the  destinies  of  ORe  State  to  be  wielded  by  a 
single  individual?  If  it  is  not,  then  the  destiniei  of  Pennsylvania,  holding  as 
she  will,  both  the  purse  and  the  sword,  might  be  wielded  by  some  ambitious 
and  assuming  man.  And  if  such  an  event  should  happen,  which  God  forbid! 
where  then  .ire  your  political  liberties?  Precisely  as  safe  and  secure  as  if  they 
were  lodged  in  the  hands  of  Napoleon  the  Great! 

"What  constitutes  the  power  and  influence  of  a  State?  Certainly,  money  and 
physical  force  are  the  principal  and  most  requisite  ingredients;  and  by  refusing 
to  renew  the  charter,  you  throw  into  the  hands  of  the  great  States,  all  the  addi- 
tional influence,  arising  from  the  resources  of  the  nation  being  confided  to 
their  hands.  And  at  the  same  time,  you  reduce  to  the  condition  of  mere 
cyphers  the^  States  of  North  Carolina,  Tennessee,  Ohio,  Kentucky,  and  all 
the  New  England  States,  except  Massachusetts,  by  withdrawing  entirely 
from  their  control  and  management,  the  public  purse  of  the  nation. 

I  do  not  wish,  Mr.  Speaker,  to  be  understood  to  entertain  or  insinuate  any 
distrust  whatsoever  of  the  integrity  or  loyalty  of  the  great  and  respectable 
State  of  Pennsylvania. 

If,  sir,  the  destinies  of  this  nation  are  to  become  dependent  on  any  one  State 
in  the  Union,  I  have  no  predilection  for  any  State:  I  have  no  unwillingness 
that  Pennsylvania  should  be  that  State.  But,  sir,  I  protest,  solemnly,  against 
holding,  by  so  feeble  and  precarious  a  tenure,  the  great  and  inestimable  privi- 
leges of  self  government. 

But,  it  is  said  we  may  console  ourselves  with  the  improbability  of  the  great 
States  making  any  improper  use  of  the  powers  vested  in  their  hands,  by  a  re- 
fusal to  renew  this  charter.  Sir,  when  at  peace  with  foreign  nations:  vVhilst 
harmony  prevails  at  home,  no  immediate  danger  is  to  be  apprehended;  but 
when  your  political  horizon  is  black  with  internal  tumult,  wnen  you  are  me- 
naced with  external  danger,  and  treason  stalks  abroad  with  gigantic  strides, 
it  is  then  that  the  colossal  power  of  the  great  States  becomes  most  eminently 
clanger  nis:  it  is  then  that  it  may  be  exercised  to  the  utter  humiliation  of  the 
38 


298  RANK  OF  THE  UNITED  STATES. 

little  States,  and  the  subversion  of  your  federal  government,  by  withholding 
from  your  hands  the  fiscal  resources  of  the  nation.  To  guard,  when  it  may 
be  practicable,  against  possible  events  so  disastrous,  becomes  the  imperious 
duty  of  every  sound  and  honest  politician. 

There  is  a  view  of  this  question,  which  strikes  me  with  great  force,  and  to 
mention  which  was  my  principal  motive  in  rising  at  this  time.  It  has  been 
repeatedly  stated  by  the  opposers  of  this  bill,  that  the  revenue  could,  with 
equal  facility,  be  collected,  through  the  agency  of  the  State  banks.  Is  it, 
then,  their  object  todeposite  the  public  money  in  State  banks?  I  pause  for  a 
reply.  The  silence  which  pervades  this  hall,  solemnly  answers  this  question 
in  the  affirmative.  It  is,  then,  intended  to  deposite  the  revenue  and  resource:* 
of  the  United  States  of  Jjmerica^  in  the  coffers  of  State  banks!  I  say  this  is 
dangerous,  unjust,  and  manifestly  partial. 

The  president,  directors,  and  company,  of  the  United  States'  Bank,  offer  you 
$1,500,000  to  renew  their  charter:  and  in  the  bill,  now  before  you,  a  privi- 
lege is  reserved  to  the  United  States,  of  increasing  this  stock,  by  a  contribu- 
tion of  $5,000,000  on  the  part,  and  for  the  benefit  of  the  United  States.  The 
profit  arising  from  the  sale  of  this  stock,  if  you  are  disposed  to  sell  it,  would 
be  more  than  $1,000,000.  Suppose,  then,  that  the  United  States'  Bank  would 
be  willing  to  give  $1,000,000  tor  the  banking  privilege  alone,  (which  seems  to 
me  a  very  large  allowance)  the  remaining  one  million  two  hundred  and  fifty 
thousand  dollars  are  given  to  the  United  States,  tor  the  benefit  arising  to  the 
bank,  from  the  deposites  of  the  public  money. 

This  sum  will  be  increased  to  at  least  $2,000,000,  or  perhaps  $3,000,000,  or 
$4,000,000,  by  that  part  of  the  bill  before  you,  requiring  the  Bank  of  the  United 
.States  to  pay  interest,  at  the  rate  of  three  per  centum,  on  all  sums  which  may 
remain  in  the  hands  of  the  bank  longer  than  one  year.  This  increased  sum, 
arising  out  of  the  use  of  public  money,  is  as  much  the  bonajidc  property  of  the 
People  of  the  United  States,  as  any  other  portion  of  their  revenue.  The  pro- 
portion of  this  sum,  to  which  my  constituents  (the  people  of  Kentucky)  are 
entitled,  is  about  $1,000,000.  And  it  is  now  gravely  proposed  to  wrest  this 
sum  from  their  hands,  not  for  the  public  service,  or  public  good,  but  for  the 
Express  purpose  of  putting  it  into  the  pockets  of  the  wealthy  capitalists  of 
Pennsylvania!  the  State  bank  stockholders  of  Massachusetts,  Maryland, 
and  Virginia!  Will  the  People  cheerfully  acquiesce  in  this  unjust  prostitu- 
tion of  their  honest  earnings?  If  they  do,  I  have  mistaken  their  character. 

When  these  are  some  of  the  consequences  which  are  seen  to  result  from  a 
refusal  to  renew  the  charter  of  the  United  States'  Bank,  no  man  can  be  much 
at  a  loss  to  account  for  the  instructions  given  by  Virginia,  Massachusetts, 
and  Pennsylvania,  to  their  Senators  and  Representatives  in  Congress. 

My  friend  (Mr.  JOHNSON)  has  informed  you,  that  a  renewal  of  this  charter 
would  be  granting  an  exclusive  privilege  to  a  few  stockholders,  and  exclusive 
privileges  are  odious.  It  my  worthy  friend  would  only  examine  the  bill  now 
before  you,  he  would  find  that  it  is  not  an  exclusive  privilege:  for  Congress 
have  therein  reserved  to  themselves  the  power  to  establish  a  new  bank,  when- 
ever policy  or  prudence  shall  dictate  its  necessity  or  expediency;  and  this 
power,  reserved  by  Congress,  of  establishing  a  new  bank,  will  ensure  to  the 
United  States  a  prudent  and  faithful  management  of  the  money,  which  it  is 
proposed  to  confide  to  the  direction  of  the  president,  directors,  and  company, 
of  the  United  States'  Bank;  which  it  is  acknowleged  by  the  gentleman  from 
Virginia,  (Mr.  EPPES)  has  hitherto  been  managed  with  great  propriety. 

The  gentleman  from  Virginia,  (Mr.  EPPES)  stated  that  this  question  was 
originally  decided  as  a  party  question,,  In  this  the  gentleman  is  certainly 
mistaken.  It  was  not  originally  considered  a  party  question.  In  order  to 
satisfy  my  own  mind  on  this  subject,  I  have  examined  the  journal  of  Con 
gress,  for  the  year  1791;  which  has  been  explained  to  me  by  the  gentleman 
from  North  Carolina,  (Mr.  MACON)  the  oldest  member  in  this  House.  And 
I  find  there  were  thirty-nine  votes  in  favor  of  the  bank  originally;  of  which 
eleven  were  republican;  and  of  the  nineteen  who  voted  against  it,  six  were 
federal.  This  fact  proves,  without  doubt,  that  this  question  was  not  decided 


ON  THE    P.ILL  TO  RENEW   THE   CHARTER   OF   1791.  299 

by  parly  principles.  But  why,  I  ask,  are  such  unceasing  efforts  made  to  prove 
this  a  party  question?  Is  the  gentleman  from  Virginia,  (Mr.  EPPES)  whose 
argument  on  this  subject  was  directed  principally  to  this  point,  fearful  of  a 
diminution  of  his  customary  weight  in  the  rcale  of  discussion,  or  of  the  in- 
sufficiency of  his  reasoning  and  argumentative  powers,  to  draw  his  friends 
with  him  on  this  question?  And  is  he,  therefore,  compelled  to  resort  to  this 
argument,  as  a  mean  of  whipping  into  the  track  those  vyho  are  disposed  to 
obey  the  honest  convictions  of  their  own  judgments?  If  Mich  be  his  object, 
I  can  only  say  for  myself,  that  I  am  drawn  along  with  that  gentleman  by  the 
cords  of  reason,  policy,  and  common  sense,  alone.  And  where  these  are  too 
weak,  [  cannot  be  seduced  from  my  own  opinion,  by  the  fascinating  eloquence 
of  any  man,  or  any  system  of  proscription  or  denunciation,  however  formidable 
it  may  be,  either  in  plan  or  ojK'raiion. 

It  has  been  fashionable  for  gentlemen  on  this  floor,  wh?n  speaking  of  party, 
to  declare  they  were  not  pariy  men.  But,  sir,  I  acknowledge  1  am  a  party 
man.  And  1  have  no  hesitation  in  declaring,  that  1  belong  to  the  People's 
party.  It  is  lor  the  promotion  of  the  happiness  and  prosperity  of  the  People 
of  Kentucky,  in  particular,  and  of  the  whole  United  States  in  general,  that 
my  services  are  rendered  in  this  [louse.  And  if,  on  this,  or  any  other  occasion, 
the  true  interests  of  the  People  of  Kentucky  have  been  misunderstood  by  me, 
they  will,  as  I  know  they  can,  -elect,  from  among  themselves,  some  individual, 
possessing  more  wisdom  to  perre'ive,  and  an  inclination  to  pursue,  the  means 
best  calculated  to  promote  the  interest,  happiness,  and  increasing  prosperity 
of  my  country.  And  should  they  adopt  Mich  a  measure  a-;  salulai  \ or  ex- 
pedient, their  decision  would  receive  my  most  ^inc-iv  rr-pert  and  acquies- 
cence. 

It  is  for  the  protection  and  promotion  of  the  be>.t  in'.ere-fs  !,-f  my  country 
and  of  my  constituent*  that  1  have  again  presented  uiy-ell  before  this  House, 
to  give  a  last,  and  perhaps  a  feeble  vieu  .  of  the  impolicy  and  the  deleterious 
consequence*  of  the  act,  which  I  fear  is  now  about  to  be  done. 

Before  1  sit  down,  permit  me  to  advise  my  political  friends,  who  vote  with 
me  on  this  occasion,  (for  I  have  no  right  to  administer  advice  to  others)  to 
sutler  the  (lecisive  vote  now  to  be  taken  on  this  great  and  much  agitated  ques- 
tion. We  have  given  this  bill  all  the  support  constitutionally  within  our 
power;  let  the  majority,  if  against  us,  now  decide,  and  take  on  themselves 
that  awful  weight  of  responsibility  which  awaits  their  decision.  Ami  if  the 
affections  of  the  People  should,  on  account  of  the  frequent  appeals  made  to 
their  passions  and  prejudices,  recede  for  a  moment  from  us,  it  cannot  but  be, 
to  us,  a  consolatory  reflection,  that  we  have  discharged,  with  honesty  and  fide- 
lity, our  duty  to  our  country.  And  that,  when  reason  and  reflection  may 
have  resumed,  once  more,  their  empire,  we  will  again  be  surrounded  with  the 
confidence  and  gratitude  of  the  People. 

JANUARY  26,  1811. 


and  ordered  to  lie  on  the  table. 


300  BANK  OF  THE  UNITED  STATES. 


IN  SENATE. 


HTH  CoiroRKSs,  ?  T-» 

adSksrion.      5  DECEMBER  18,  1810. 

Mr.  LEIB  presented  the  petition  of  the  Bank  of  the  United  States,  praying 
a  renewal  of  their  charter,  which  was  referred  to  a  select  committee,  consist- 
ing of  Messrs.  Crawford,  Leib,  Lloyd,  Pope,  and  Anderson. 

FEBRUARY  5,  1811. 

Mr.  CRAWFORD  reported  a  bill  to  amend,  and  continue  in  force,  an  act,  en- 
titled "  An  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States,"  which  was  read  the  first  time;  and  also  communicated  a  letter  from 
the  chairman  of  the  committee  to  the  Secretary  of  the  Treasury,  together 
with  the  answer  of  the  Secretary  thereto.  Mr.  Crawford's  note  to  the  Secre- 
tary of  the  Treasury,  and  his  answer  thereto,  are  as  follows: 

SENATE  CHAMBER.  January  29,  1811. 
SIR: 

The  Committee  of  the  Senate,  to  whom  has  been  referred  the  memorial 
of  the  President  and  Directors  of  the  Bank  of  the  United  States,  praying  for 
a  renewal  of  their  charter,  have  directed  me  to  request  you  to  state  to  the 
committee,  whether,  in  your  opinion,  the  renewal  of  the  said  charter  will  not 
greatly  facilitate  the  collection  of  the  revenue,  and  promote  the  public  wel- 
fare. In  complying  with  this  request,  it  is  expected  that  you  will  furnish  the 
committee  with  the  facts  and  reasoning  upon  which  your  opinion  has  been 
formed,  together  with  such  other  information  upon  the  subject,  as  may  be  in 
your  possession. 

I  am,  sir,  respectfully,  your  obedient  and  very  humble  servant, 

WM.  H.  CRAWFORD. 

The  Hon.  ALBERT  GALLATIX. 


TREASURY  DEPARTMENT,  January  30,  1811. 
SIR: 

Having  already,  in  a  report  to  the  Senate,  of  2d  March,  1809,  expressed 
my  opinion  in  favor  of  a  renewal  of  the  charter  of  the  Bank  of  the  United 
States,  an  opinion  which  remains  unchanged,  I  can  only  add  a  few  explana- 
tory remarks  in  answer  to  the  inquiries  of  the  committee,  as  stated  in  your 
letter  of  yesterday. 

The  banking  system  is  now  firmly  established;  and.  in  its  ramifications, 
extends  to  every  part  of  the  United  States.  Under  that  system,  the  assist- 
ance of  banks  appears  to  me  necessary  for  the  punctual  collection  of  the  re- 
venue, and  for  the  safe  keeping  and  transmission  of  public  moneys.  That 
the  punctuality  of  payments  is  principally  due  to  banks,  is  a  fact  generally 
acknowledged.  It  is,  to  a  certain  degree,  enforced  by  the  refusal  of  credit 
at  the  custom  house,  so  long  as  a  former  revenue  bond,  actually  due,  remains 
unpaid.  But  I  think?  nevertheless,  that,  in  order  to  ensure  that  precision  in 
the  collection,  on  which  depends  a  corresponding  discharge  of  the  public  en- 
gagements, it  would,  if  no  use  was  made  of  banks,  be  found  necessary  to 
abolish,  altogether,  the  credit  now  given  on  the  payment  of  duties — a  measure 
-which  would  affect  the  commercial  capital,  and  tall  heavily  on  the  consumers. 
That  the  public  moneys  are  safer,  by  being  weekly  deposited  in  banks?  instead 
of  accumulating  in  the  hands  of  collectors,  is  self-evident.  And  their  trans- 
mission, whenever  this  may  be  wanted,  for  the  purpose  of  making  payments 
in  other  places  than  those  of  collection,  cannot,  with  any  convenience,  be 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OP  1T91, 

effected,  on  a  large  scale,  in  an  extensive  country,  except  through  the  medium 
of  banks,  or  of  persons  acting  as  bankers. 

The  question,  therefore,  is,  whether  a  bank,  incorporated  by  the  United 
States,  or  a  number  of  banks,  incorporated  by  the  several  States,  be  most 
convenient  for  those  purposes. 

State  banks  may  be  used,  amLmust,  in  case  of  a  non-renewal  of  the  charter, 
be  used  by  the  treasury.  Preparatory  arrangements  have  already  been  made 
to  that  effect;  and  it  is  believed  that  the  ordinary  business  will  be  transacted, 
through  their  medium,  with  less  convenience,  and,  in  some  respects,  perhaps 
with  less  safety,  than  at  present,  but  without  any  insuperable  difficulty.  The 
difference,  with  respect  to  safety,  results  from  the  organization  of  the  Bank  of 
the  United  States,  by  which  it  is  responsible  for  the  money  deposited  in 
any  of  its  branches,  whilst  each  of  the  State  banks,  which  may  be  employed, 
will  be  responsible  only  for  the  sums  in  its  own  hands.  Thus,  the  Bank  of 
the  United  States  is  now  answerable  for  the  moneys  collected  at  New  Or- 
leans, and  deposited  there,  in  its  branches — a  security  which  will  be  lost  un- 
der a  different  arrangement.  Nor  will  the  United  States  have  any  other  con- 
trol over  the  manner  in  which  the  business  of  the  banks  may  be  conducted, 
than  what  may  result  from  the  power  of  withdrawing  the  public  deposites, 
and  they  will  lose  that  which  a  charter,  or  a  dependence  on  the  General  Go- 
vernment for  a  charter,  now  gives  over  the  Bank  of  the  United  States.  The 
facility  of  obtaining  such  accommodations  as  may,  at  times,  be  wanted,  will, 
for  the  same  reason,  be  lessened,  and  the  national  power  will,  to  (hat  extent, 
be  impaired.  It  may  be  added,  that,  even  for  the  ordinary  business  of  re- 
ceiving and  transmitting  public  moneys,  the  ilse  of  a  State  bank  may  be  for- 
bidden by  the  State;  and  that  loans  to  the  United  States  are,  by  many  of  the 
charters,  forbidden,  without  a  special  permission  from  the  State. 

As  it  is  not  perceived,  on  the  other  hand,  that  a  single  advantage  will  ac- 
crue to  the  public  from  the  change,  no  reason  presents  itself,  on  the  ground 
of  expediency,  why  an  untried  system  should  be  substituted  to  one  under 
which  the  treasury  business  has  so  long  been  conducted  with  perfect  security 
to  the  United  States,  and  great  convenience,  not  only  to  the  officers,  but  also 
to  all  those  who  have  had  payments  of  a  public  nature  to  make  or  to  receive. 

It  does  not  seem  necessary  to  advert  to  the  particnlar  objections  made 
against  the  present  charter,  as  these  may  be  easily  obviated  by  proper  altera- 
tions. What  has  been  called  a  National  Bank,  or,  in  other  words,  a  new 
Bank  of  the  United  States,  instead  of  the  existing  one,  may  be  obtained  by 
such  alterations.  The  capital  may  be  extended,  and  more  equally  distributed ; 
new  stockholders  may  be  substituted  to  the  foreigners,  as  had  been  suggested 
in  the  report  of  3d  March,  1809;  and  any  other  modifications  which  may  be 
thought  expedient,  may  be  introduced,  without  interrupting  the  operations  of 
the  institution  now  in  force,  and  without  disturbing  all  the  commercial  con- 
cerns of  the  country. 

If,  indeed,  the  Bank  of  the  United  States  could  be  removed  without  affecting 
either  its  numerous  debtors,  the  other  moneyed  institutions,  or  the  circulation 
of  the  country,  the  ordinary  fiscal  operations  of  Government  would  not  be 
materialy  deranged,  and  might  be  carried  on  by  means  of  another  general 
bank,  or  of  State  banks.  But  the  transition  will  be  attended  with  much  in- 
dividual, and  probably  with  no  inconsiderable  public  injury.  It  is  impossible 
that  an  institution,  which  circulates  thirteen  millions  of  dollars,  and  to  whom 
the  merchants  owe  fourteen,  should  terminate  its  operations,  particularly  in 
the  present  unfavorable  state  of  the  American  commerce,  and  after  the  great, 
losses  lately  experienced  abroad,  without  giving  a  serious  shock  to  commercial, 
banking,  and  national  credit.  It  is  not  intended  to  overrate  the  extent  of  an 
evil  which  there  are  no  certain  data  to  appreciate.  And,  without  expatiating 
on  the  fatal  and  unavoidable  effects  on  individuals;  without  dwelling  on  the 
inconvenience  of  repaying,  at  this  time,  to  Europe,  a  capital  of  seven  millions; 
and,  without  adverting  to  other  possible  dangers,  of  a  more  general  nature,  it 
appears  sufficient  to  state,  that  the  same  body  of  men  who  owe  fourteen  mil- 
lions of  dollars  to  the  bank,  owe,  also,  ten  or  twelve  to  the  United  States,  on 


302  BANK   OF  THE   UNITED    STATES. 

which  the  receipts  into  the  treasury,  for  this  year,  altogether  depend ;  and 
that,  exclusively  of  absolute  failures,  it  is  improbable  that  both  debts  can  be 
punctually  paid  at  the  same  time.  Nor  must  it  be  forgotten  that  the  approach- 
ing non-importation  will  considerably  lessen  the  efficiency  of  the  provision, 
by  which  subsequent  credits  are  refused  to  importers  who  have  not  discharged 
former  revenue  bonds.  Upon  the  whole,  a  perfect  conviction  is  felt  that,  in 
the  critical  situation  of  the  country,  new  evils  ought  not  to  be  superadded, 
and  a  perilous  experiment  be  attempted,  unless  required  by  an  imperious  ne- 
cessity. 

In  these  hasty  remarks,  I  have  not  adverted  to  the  question  of  constitu- 
tionality, which  is  not  a  subject  of  discussion  for  the  Secretary  of  the  Trea- 
sury. Permit  me,  however,  for  my  own  sake,  simply  to  state,  that  the  bank 
charter  having,  for  a  number  of  years,  been  acted  upon,  or  acquiesced  in,  as  if 
constitutional,  by  all  the  constituted  authorities  of  the  nation,  and  thinking, 
myself,  the  use  of  the  banks  to  be  at  present  necessary  for  the  exercise  of  the 
legitimate  powers  of  the  General  Government;  the  continuation  of  a  bank  of 
the  United  States  has  not,  in  the  view  which  1  have  been  able  to  take  of  the 
subject,  appeared  to  me  to  be  unconstitutional. 

I  have  the  honor  to  be,  respectfully,  sir,  your  obedient  servant, 

ALBERT  GALL  ATI  N. 

Hon.  WM.  H.  CRAWFORD,  Chairman  in  Senate. 


FEBRUARY  11,  1811. 

The  Senate  proceeded  to  consider  the  bill  reported  on  the  5th  instant,  and 
having  amended  the  same,  a  motion  was  made  by  Mr.  ANDERSON  to  strike 
out  the  first  section  of  the  bill. 

On  motion  of  Mr.  CLAY,  the  Yeas  and  Nays  were  ordered. 

On  motion  of  Mr.  BRENT,  the  further  consideration  of  the  bill  was  post- 
poned till  to  morrow. 

Mr.  ANDERSON  said,  that,  having  been  a  member  of  the  committee  who  re- 
ported the  bill  before  the  Senate,  and  not  feeling  himself  at  liberty  to  oppose 
the  introduction  of  the  report,  yet,  thinking  it  might  be  advisable  to  try  the 
principle  before  they  proceeded  to  discuss  the  details,  he  should  move  to 
strike  out  the  first  section  of  the  bill.  He  would  barely  observe,  that,  was 
this  not  a  question  which  was  generally  understood,  on  which  not  only  every 
member  of  this  House,  but  every  citizen  of  the  United  States,  had  made  up 
his  mind,  he  should  feel  himself  bound  to  offer  reasons  in  support  of  the  mo- 
tion; but,  inasmuch  as  it  was  a  question  which  every  gentleman  had  doubt- 
less decided  in  his  own  mind,  he  felt  unwilling  to  take  up  any  more  of  the  at- 
tention of  the  Senate,  especially  so  late  in  the  session,  when  there  was  so 
much  business  of  importance  before  them,  which  required  to  be  acted  on. 

Mr.  CRAWFORD  said,  this  was  a  way  of  disposing  of  business  which  struck 
him  as  somewhat  astonishing.  A  bill  was  proposed  to  the  Senate  to  continue 
in  operation  an  institution  ot  twenty  years' standing,  the  good  effects  of  which 
had  been  universally  experienced,  whose  influence  on  the  public  prosperity 
was  admitted  by  all;  and,  without  assigning  any  reason  why  it  should  not  be 
continued,  they  were  told  that  the  public  sentiment  had  decided  the  question, 
and  every  gentleman  must  have  made  up  his  mind.  He  appealed  to  the  gen- 
tleman who  made  the  motion,  whether  this  vyas  a  lair  and  magnanimous  mode 
of  procedure.  How  was  it  possible  for  the  friends  of  this  bill  to  meet  objec- 
tions never  made?  To  foresee  the  grounds  on  which  gentlemen  would  have 
made  up  their  minds?  Surely,  when  a  question  of  magnitude  was  to  be  de- 
cided, it  ought  to  be  expected  (hat  yomc  reasons  should  be  offered  why  the  bill 


ON  THE  BILL  TO  KENEW  1  HE  CHARTER  OF  1791.  393 

should  be  rejected.  Mr.  C.  said  he  hoped,  if  the  honorable  gentleman  from 
Tennessee.1  chose  to  veil  himself  and  argument  from  discussion,  on  the  ground 
that  he  had  made  up  his  mind,  that  some  gentleman  would  condescend  to  give 
reasons  in  favor  of  the  motion. 

Mr.  SMITH  (Mil.)  said,  there  was  certainly  nothing  novel  in  the  course  ta- 
ken by  the  gentleman  from  Tennessee.  The  gentleman  from  Georgia  could 
not  be  ignorant  that  some  of  the  State  Legislatures  had  taken  the  .subject  up. 
It  therefore  became  the  duty,  with  all  respect  to  his  friend  from  Georgia,  of 
the  introducer  of  the  bill,  to  give  some  reason  to  induce  the  Senate  to  give 
their  votes  for  a  renewal  of  the  charter. 

PHr.  ANDERSON ^aid,  that  he  deemed  ii  strictly  proper  and  parliamentary 
to  make  the  motion  which  he  had  oltered  to  the  House.  He  deemed  it  incum- 
bent on  those  who  meant  to  support  this  bill,  to  assign  the  reasons  why  the 
section  should  not  be  struck  out.  To  his  mind,  Mr.  A.  said,  this  system  was 
infinitely  more  injurious  than  beneficial;  it  created  a  kind  of  fictitious  wealth 
in  the  community;  destroyed,  in  a  degree,  the  firm  principles  of  our  political 
institutions;  and,  if  we  went  on  with  it  for  twenty  years  more,  we  should  be 
at  least  fifty  years  older,  he  would  not  say  in  corruption,  but  in  the  want  of 
the  strict  political  virtue,  which,  if  the  bank  had  never  existed,  we  might 
have  maintained.  This  opinion  was  a  sufficient  objection,  without  saying  any 
thing  of  the  unconstitutional"!  ty  of  the  thing,  which,  to  him,  had  always  been  a 
paramount  objection. 

Mr.  Cuvwi-oKi)  said,  that  the  gentlemen  from  Tenne>-ee  and  Maryland 
had  misconceived  \\hat.  he  had  said.  He  had  not  complained  that  the  motion 
was  made;  nothing  like  it.  He  knew  that  such  a  course  was  sometimes  pur- 
sued. But,  it  was  the  fii>t  time  he  ever  knew  such  a  motion  to  be  made, 
without  a  discussion  of  the  details,  without  a  detailed  statement  of  the  rea- 
sons for  opposing  such  and  such  provisions,  lie  must  be  permitted  to  slate, 
that  such  a  course  was  not  usual  in  this,  or  any  other  body,  as  lhat  a  chairman 
should  be  called  up.m  to  state  reasons  which  induced  a  committee  to  report 
any  provision,  when  a  motion  was  made  which  went  to  put  an  end  to  any  dis 
•  Hi  of  the  detail.  Gentlemen  assumed  the  affirmative  ;side  of  the  ques- 
tion; they  were  about  to  defeat  thi-  bill:  ought  they  no!  lo assign  their  reason-? 
What  a  situation  am  I  placed  in.  .-aid  Mr.  ('.  How  is  it  possible  I  can  fore 
>re  all  the  objections  to  the  bill?  And,  if,  perchance  I  should  foresee  them, 
and  defeat  them,  will  not  gentlemen  say  these  are  not  the  reasons  which  in- 
fluenced their  votes?  !(  is  like  pursuin"  a  wilt 0* the  wisp;  you  can  never 
arrive  at  the  true  object  of  pursuit.  1  should  humbly  hope,  sir,  that  some 
gentleman,  who  wishes  to  put  an  end  to  this  bill,  woufd  assign  the  reasons  on 
which  he  determined  to  give  his  vote. 

Mr.  SMITH  (of  Md.)  said,  lie  had  always  thought  it  was  the  duty  of  a  com- 
mittee to  inform  the  Senate  of  the  reasons  which  induced  them' to  report  a 
bill.  1  was  not  on  the  committee,  said  he.  There  were  but  five  on  it;  and, 
consequently,  there  are  twenty-nine  of  us  who  cannot  tell  what  induced  that 
gentleman  to  report  the  bill  which  has  produced  this  agitation  among  us,  and 
which  some  of  the  States  have  declared  hostile  to  the  constitution.  "I  was  so 
certain  that  the  gentleman  would  give  his  views  of  the  subject,  that  I  did  not. 
come  prepared  to  enter  into  the  question.  I  did  expect  to  hear  something 
from  that  gentleman,  which  I,  or  some  other  gentleman,  would  have  thought 
it  our  duty  to  give  an  answer  to. 

Mr.  CRAWFORD  said  that  he  should  proceed,  though  reluctantly,  to  explain 
the  reasons  of  the  committee  for  reporting  the  bill  which  is  now  under  con- 
sideration. After  the  most  minute  examination  of  the  constitution,  the  ma- 
jority of  that  committee  were  decidedly  of  opinion,  that  the  Congress  of  the 
United  States  were  clearly  invested  with  power  to  pass  such  a  bill.  The  ob- 


304  BANK  OF  THE  UNITED  STATES. 

ject  of  the  constitution  was  two-fold:  1st,  the  delegation  of  certain  general 
powers  of  a  national  nature,  to  the  Government  of  the  United  States;  and 
2d,  the  limitation  or  restriction  of  the  State  sovereignties.  Upon  the  most 
thorough  examination  of  this  instrument,  I  am  induced  to  believe  that  many 
of  the  various  constructions  given  to  it  are  the  result  of  a  belief  that  it  is 
absolutely  perfect.  It  has  become  so  extremely  fashionable  to  eulogise  this 
constitution,  whether  the  object  of  the  eulogist  is  the  extension  or  contraction 
of  the  powers  of  the  Government,  that,  whenever  its  eulogium  is  pronounced, 
I  feel  an  involuntary  apprehension  of  mischief.  Upon  the  faith  of  this  im- 
puted perfection,  it  has  been  declared  to  be  inconsistent  with  the  entire  spirit 
and  character  of  this  instrument,  to  suppose  that,  after  it  has  given  a  general 
power,  it  should  afterwards  delegate  a  specific  power  fairly  comprehended 
within  the  general  power.  A  rational  analysis  of  the  constitution  will  refute, 
in  the  most  demonstrative  manner,  this  idea  of  its  perfection.  This  analysis 
may  excite  unpleasant  sensations;  it  may  assail  honest  prejudices:  for  there 
can  be  no  doubt  that  honest  prejudices  frequently  exist,  and  are  many  times 
perfectly  innocent.  But,  when  these  prejudices  tend  to  destroy  even  the  ob- 
ject of  their  affection,  it  is  essentially  necessary  that  they  should  be  eradicated. 
In  the  present  case,  if  there  be  any  who,  under  the  conviction  that  the  consti- 
tution is  perfect,  are  disposed  to  give  it  a  construction  that  will  render  it 
wholly  imbecile,  the  public  welfare  requires  that  the  veil  should  be  rent,  and 
that  its  imperfection  should  be  disclosed  to  public  view.  By  this  disclosure, 
it  will  cease  to  be  the  object  of  adoration,  but  it  will,  nevertheless,  be  entitled 
to  our  warmest  attachment. 

The  eighth  section  of  the  first  article  of  the  constitution  contains  among 
others  the  following  grant  of  powers,  viz.  to  coin  money,  regulate  the  value 
thereof,  and  of  foreign  coin,  and  fix  the  standard  of  weights  and  measures;  to 
raise  and  support  armies;  to  provide  and  maintain  a  navy;  to  regulate  com- 
merce with  foreign  nations,  and  among  the  several  States,  and,  with  the  Indian 
tribes;  to  establish  post  offices  and  post  roads.  This  selection  contains  five 
grants  of  general  power.  Under  the  power  to  coin  money  it  is  conceived  that 
Congress  would  have  a  right  to  provide  for  the  punishment  of  counterfeiting 
the  money  after  it  was  coined,  and  that  this  power  is  fairly  incidental  to,  and 
comprehended  in,  the  general  power.  The  power  to  raise  armies  and  provide 
and  maintain  a  navy  comprehends,  beyond  the  possibility  of  doubt,  the  right  to 
make  rules  for  the  government  and  regulation  of  the  land  and  naval  forces; 
and  yet,  in  these  three  cases,  the  constitution,  after  making  the  grant  of  gene- 
ral power,  delegates  specifically  the  powers  which  are  fairly  comprehended 
within  the  general  power.  If  this  however  should  be  denied,  the  construc- 
tion which  has  been  uniformly  given  to  the  remaining  powers  which  have  been 
selected,  will  establish  the  fact  beyond  the  power  ot  contradiction.  Under 
the  power  to  regulate  commerce,  Congress  has  exercised  the  power  of  erecting 
light  houses,  as  incidental  to  that  power,  and  fairly  comprehended  within  it. 
Under  the  power  to  establish  post  offices  and  post  roads,  Congress  has  provid- 
ed for  the  punishment  of  offences  against  the  post  office  department.  If  the 
Congress  can  exercise  an  incidental  power  not  granted  in  one  case,  it  can  in 
all  cases  of  a  similar  kind.  But  it  is  said,  that  the  enumeration  of  certain  pow- 
ers excludes  all  other  powers  not  enumerated.  This  is  true  so  far  as  original 
substantive  grants  of  power  are  concerned,  but  it  is  not  true  when  applied  to 
express  grants  of  power  which  are  strictly  incidental  to  some  original  and  sub- 
stantive grant  of  power.  If  it  were  true  in  relation  to  them,  Congress  could 
not  pass  a  law  to  punish  offences  against  the  post  office  establishment,  because 
the  constitution  has  expressly  given  the  power  to  punish  offences  against  tho 
current  coin;  and  as  it  has  given  the  power  to  punish  offences  committed  against 
that  grant  of  general  power,  and  has  withheld  it  in  relation  to  the  power  to 
establish  post  offices  and  post  roads,  Congress  cannot,  according  to  this  rule 
of  construction,  so  warmly  contended  for,  pass  any  law  to  provide  for  the 
punishment  of  such  offences.  The  power  to  make  rules  for  the  regulation  and 
government  of  the  land  and  naval  forceSj  I  have  shown  to  be  strictly  inciden- 
tal to  the  power  to  raise  armies,  and  provide  and  maintain  navies;  but,  accord- 


ON  THE  BILL  TO  RENEW   THE  CHARTER    OF   1791.  395 

ing  to  this  rule  of  construction,  all  incidental  powers  are  excluded  except  the 
few  which  are  enumerated,  which  would  exclude  from  all  claim  to  constitu- 
tionality nearly  one  half  of  your  laws,  and,  what  is  still  more  to  be  deprecat- 
ed, would  render  your  constitution  equally  imbecile  with  the  old  articles  of 
confederation.  When  we  come  to  examine  the  fourth  article,  the  absurdity 
of  this  rule  of  construction,  and  also  of  the  idea  of  perfection  which  has  been 
attributed  to  the  constitution,  will  be  equally  manifest.  This  article  appears 
to  be  of  a  miscellaneous  character,  and  very  similar  to  the  codicil  ot  a  will. 
The  first  article  provides  for  the  organization  of  Congress;  defines  its  powers; 
prescribes  limitations  upon  the  powers  previously  gran  ted;  and  sets  metes  and 
bounds  to  the  authority  of  the  State  Governments.  The  second  article  provides 
for  the  organization  of  the  Executive  Department,  and  defines  its  power  and 
duty.  The  third  article  defines  the  tenure  by  which  the  persons  in  whom  the 
judicial  power  may  be  vested  shall  hold  their  offices,  and  prescribes  the  extent 
of  their  power  and  jurisdiction.  These  three  articles  provide  for  the  three 
great  Departments  of  Government,  called  into  existence  by  the  constitution, 
put  some  other  provisions  just  then  occur,  which  ought  to  have  been  included 
in  one  or  the  other  of  the  preceding  articles,  and  these  provisions  are  incor- 
porated and  compose  the  fourth  article.  The  first  section  of  it  declares,  that 
*'  full  faith  and  credit  shall  be  given,  in  each  State,  to  the  public  acts,  records, 
and  judicial  proceedings,  of  every  other  State;  and  the  Congress  may,  by  gene- 
ral laws,  prescribe  the  manner  in  which  such  acts,  records,  and  proceedings, 
shall  be  proved,  and  the  effect  thereof."  In  the  second  section  it  declares  that 
a  person  charged,  in  any  State,  with  treason,  felony,  or  other  crime,  who  shall 
flee  from  justice,  and  be  found  in  another  State,  shall,  on  demand  of  the  Ex- 
ecutive authority  of  the  State  from  which  he  fled,  be  delivered  up,  to  be  re- 
moved to  the  State  having  jurisdiction  of  the  crime.  A  similar  provision  is 
contained  in  the  same  section,  relative  to  fugitives  who  are  bound  to  labor,  by 
the  laws  of  any  State.  In  the  first  case  which  has  been  selected,  express  au- 
thority has  been  given  to  Congress,  to  prescribe  the  manner  in  which  the  records, 
&c.  should  be  proved,  and  also  the  effect  thereof;  but,  in  the  other  two,  no  au- 
thority is  given  to  Congress;  and  yet,  the  bare  inspection  of  the  three  cases,  will 
prove  that  the  interference  of  Congress  is  less  necessary  in  the  first  than  in  the 
two  remaining  cases.  A  record  must  always  be  proved  by  itself,  because  it  is 
the  highest  evidence  of  which  the  case  admits.  The  effect  of  a  record  ought 
to  depend  upon  the  laws  of  the  State  of  which  it  is  a  record,  and  therefore  the 
power  to  prescribe  the  effect  of  a  record  was  wholly  unnecessary,  and  has  been 
so  held  by  Congress — no  law  having  been  passed  to  prescribe  the  effect  of  a 
record.  In  the  second  case,  there  seems  to  be  some  apparent  reason  for  pas- 
sing a  law  to  ascertain  the  officer  upon  whom  the  demand  is  to  be  made;  what 
evidence  of  the  indentity  of  the  person  demanded,  and  of  the  guilt  of  the  party 
charged,  must  be  produced,  before  the  obligation  to  deliver  shall  be  complete. 
The  same  apparent  reason  exists  for  the  passage  of  a  law  relative  to  fugitives 
from  labor.  According,  however,  to  the  rule  of  construction  contended  for,  Con- 
gress cannot  pass  any  law  to  carry  the  constitution  into  effect,  in  the  two  last  ca- 
ses selected,  because  express  power  has  been  given  in  the  first,  and  is  withheld  in 
the  two  last.  But  Congress  has  nevertheless  passed  laws  to  carry  those  provi- 
sions into  effect,  and  this  exercise  of  power  nas  never  been  complained  of  by 
the  People  or  the  States. 

Mr.  President,  it  is  contended  by  those  who  are  opposed  to  the  passage  of 
this  bill,  that  Congress  can  exercise  no  power  by  implication,  and  yet  it  is 
admitted,  nay,  even  asserted,  that  Congress  would  have  power  to  pass  all  laws 
necessaiy  to  carry  the  constitution  into  effect,  whether  it  nad  given  or  withheld 
the  power  which  is  contained  in  the  following  paragraph  of  the  eighth  section 
of  the  first  article:  "To  make  all  laws  which  shall  be  necessary  and  proper  for 
carrying  into  execution  the  foregoing  powers,  and  all  other  powers  vested  by 
this  constitution  in  the  Government  of  the  United  States  or  in  any  department 
or  officer  thereof."  If  this  part  of  the  constitution  really  confers  no  power, 
it.  at  least,  according  to  this  opinion,  strips  it  of  that  attribute  of  perfection 
which  has  by  these  gentlemen  been  ascribed  to  it.  But,  sir,  this  is  not  the 
39 


306  BANK    OF    THE    UMTF.I)    STATF,*. 

fact.  It  does  confer  power,  of  the  most  substantial  and  salutary  nat KM 
Let  us,  sir,  take  a  view  of  the  constitution  upon  the  supposition  that  no  power 
is  vested  in  the  Government  by  this  clause,  and  see  how  the  exclusion  of  pow- 
er by  implication  can  be  reconciled  to  the  most  important  acts  of  the  Govern- 
ment. The  constitution  has  expressly  given  Congress  power  "to  constitute 
tribunals  inferior  to  the  supreme  court,"  but  it  lias  no  where  expressly  given 
the  power  to  constitute  a  supreme  court.  In  the  third  article  it  is  said,  "  the 
judicial  power  of  the  United  States  shall  be  vested  in  one  supreme  court, 
;;iid  iii  such  inferior  courts  as  the  Congress  may  from  time  to  time  ordain  and 
establish."  The  discretion,  which  is  here  given  to  Congress,  is  confined  to 
the  inferior  courts,  which  it  may  from  time  to  time  ordain  and  establish,  and 
not  to  the  supreme  court.  In  the  discussion  which  took  place  upon  the  bill 
to  repeal  the  judicial  system  of  the  United  States,  in  the  year  1802,  this  dis- 
tinction is  strongly  insisted  upon  by  the  advocates  for  the  repeal.  The  su- 
preme court  was  said  to  be  the  creature  of  the  constitution,  and  therefore  in  • 
tangible,  but  that  Congress,  possessing  a  discretionary  power  to  create  or  not 
to  create  inferior  tribunals,  had  the  same  discretionary  power  to  abolish  them 
whenever  it  was  expedient.  But,  if  even  the  discretionary  power  here  vested 
does  extendto  the  supreme  court,  yet  tl>e  power  of  Congress  to  establish  that 
court  must  rest  upon  implication,  and  upon  implication  alone.  Under  the  au- 
thority to  establish  tribunals  inferior  to  the  supreme  court,  the  power  to  es- 
tablish a  supreme  court  would,  according  to  my  ideas,  be  vested  in  Congress 
by  implication.  And,  sir,  it  is  only  vested  by  implication,  even  if  the  decla- 
ration, that  Congress  shall  have  power  to  pass  all  laws  necessary  and  proper 
to  carry  into  elfect  the  power  vested  in  any  department  or  officer  of  the  Go- 
vernment, should  be  held  to  be  an  operative  grant.  Under  this  grant,  Con- 
gress can  pass  laws  to  carry  into  effect  the  povyers  vested  in  the  judicial  de- 
partment. What  are  the  powers  vested  in  this-  department  r  That  it  shall 
exercise  jurisdiction  in  all  cases  in  law  and  equity  arising  under  this  constitu- 
tion, &c.  in  all  cases  affecting  ambassadors,  &c.  but  the  power  to  create 
the  department,  and  to  carry  into  effect  the  powers  given  to,  or  vested  in,  that 
department,  are  very  different  things. 

The  power  to  create  the  supreme  court  cannot  be  expressly  granted  in 
the  power  to  pass  all  laws  necessary  and  proper  to  carry  into  effect  the  povyers 
vested  in  that  court,  but  must,  as  I  have  endeavored  to  prove,  be  derived 
from  implication.  Let  me  explain  my  understanding  of  a  power  which  exists 
by  implication,  by  an  example  which  will  be  comprehended  by  all  who  hear 
me.  in  a  devise,  an  estate  is  granted  to  A,  after  the  death  of  13,  and  no  ex- 
press disposition  is  made  of  the  estate  during  the  life  of  A;'  in  that  case,  A  is 
said  to  have  an  estate  for  life,  by  implication,  in  the  property  so  devised.  So, 
when  the  constitution  gives  the  right  to  create  tribunals  inferior  to  the  su- 
preme court,  the  right  to  create  the  supreme,  is  vested  in  Congress  by  impli- 
cation. Shall  we,  after  this,  be  told  that  Congress  cannot  constitutionally 
exercise  any  right  by  implication?  By  the  exercise  of  a  right,  derived  only 
from  implication,  Congress  has  organized  a  supreme  court,  and  then,  as  in- 
cidental to  this  power,  existing  only  by  implication,  it  has  passed  laws  to 
punish  offences  against  the  law  by  which  the  court  has  been  created  and  or- 
ganized. Sir,  the  right  of  the  Government  to  ?ccept  of  the  District  of  Colum- 
bia exists  only  by  implication.  The  right  of  the  Government  to  purchase  or 
accept  of  places  tor  the  erection  of  forts,  magazines,  arsenals,  and  dock-yards, 
exists  only  by  implication;  and  yet  no  man  in  the  nation,  so  far  as  my  know 
ledge  extends,  has  complained  of  the  exercise  of  these  implied  powers,  as  an 
unconstitutional  usurpation  of  power.  The  right  to  purchase  or  accept  of 
places  for  the  erection  of  light  houses,  as  well  as  the  right  to  erect  and  support 
light  houses,  must  be  derived  by  implication  alone,  if  any  such  right  exists. 
The  clause  in  the  constitution  which  gives  Congress  the  power  "  to  exercise 
exclusive  legislation,  in  all  cases  whatsoever,  over  such  district  (not  exceeding 
ten  miles  square)  as  may,  by  cession  of  particular  States,  and  the  acceptance 
of  Congress,  become  the  seat  of  Government  of  the  United  States,  and  to 
exercise  like  authority  over  all  places  purchased  by  the  consent  of  the  Legis- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     3Q7 

lature  of  the  State  in  which  the  same  shall  be,  for  the  erection  of  forts,. maga- 
zines, arsenals,  dock  yards,  and  other  needful  buildings,"  certainly  gives  no 
cept  or  purchase  any  of  the  places,  destined  for  the^  uses 
he  01  " 
legisj 

111U.OI     UV_,     \lVsI   ft  Y\.\A          J       llYlJjIl  V-lti."^  i»      i«\'«.*.      »•••••        v-«~. ,          - 

comprehended  in,  or  incidental  to,  some  other  power,  expressly  delegated  by 
the  constitution.  I  shall  now  attempt  to  show,  that,  according  to  the  con- 
struction which  has  been  given  to  other  parts  of  this  constitution,  Congress 
has  the  right  to  incorporate  a  bank,  to  enable  it  to  manage  the  fiscal  concerns 
of  the  nation.  If  this  can  be  done,  and  if  it  can  also  be  shown  that  the  cor- 
rectness of  such  construction  has  never  excited  murmur  or  complaint— that 
it  has  not  even  been  questioned— I  shall  have  accomplished  everything  which 
it  will  be  incumbent  on  me  to  prove,  to  justify  the  passage  of  the  bill  upon 
yoftr  table.  The  power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises, 
together  with  the  power  to  pass  all  laws  which  may  be  necessary  and  proper 


late  commerce,  Congress  exercises  the  right  of  building  and  supporting  light- 
houses. What  do  we  understand  by  regulating  commerce?  Where  do  you 
expect  to  find  regulations  of  commerce?  Will  any  nun  look  for  them  any 
where  else  than  in  your  treaties  with  foreign  nations,  and  in  your  statutes  regu- 
lating your  custom  houses  and  customhouse  officers?  What  are  the  reasons 
for  vesting  Congress  with  the  right  to  regulate  commerce  with  foreign  nations, 
and  among  the  several  States?  The  commerce  of  a  nation  is  a  matter  of  the 
greatest  importance  in  all  civilized  countries.  It  depends  upon  compacts 
with  other  nations;  and  whether  they  are  beneficial  or  prejudicial,  depends 
not  so  much  on  the  reciprocal  interest  of  nations  us  upon  their  capacity  to  de- 
fend their  rights  and  redress  their  wrongs.  It  Was,  therefore,  highly  impor- 
tant that  the  right  to  regulate  commerce  with  foreign  nations  should  be  vested 
in  the  national  Government,  I!'  the  regulation  of  commerce  among  the  seve- 
ral States  had  boon  left  with  the  States,  a  multiplicity  of  conflicting  regula- 
tions would  have  been  the  consequence.  landless  collisions  would  have  been 
created,  and  that  harmony  and  good  neighborhood,  so  essential  between  the 
members  of  a  federal  republic,  would  have  been  wholly  unattainable.  The 
best  interest  of  the  community  therefore  imperiously  required,  that  this  power 
should  be  delegated  to  Congress.  Not  so  of  light  houses.  The  interest  of 
the  States  would  have  induced  them  to  erect  light  houses,  where  they  were 
necessary,  and  when  erected  they  would  have  been  equally  beneficial  to  their 
own  vessels,  the  vessels  of  their  sister  States,  and  ol  foreign  nations.  The 
performance  of  this  duty  could  have  been  most  safely  confided  to  the  States. 
They  were  better  informed  of  the  situations  in  which  they  ought  to  be  erect- 
ed, than  Congress  could  possibly  be,  and  could  enforce  the  execution  of  such 
regulations  as  might  be  necessary  to  make  them  useful.  How  then  has  it 
happened  that  Congress  has  taken  upon  itself  the  right  to  erect  light  houses, 
under  their  general  power  to  regulate  commerce?  [  have  heard  and  seen,  in 
the  public  prints,  a  great  deal  of  unintelligible  jargon  about  the  incidentally 
of  a  law  to  the  power  delegated  and  intended  to  be  executed  by  it,  and  of  its 
relation  to  the  end  which  is  to  be  accomplished  by  its  exercise, .  which  I  ac- 
knowledge I  do  not  clearly  and  distinctly  comprehend,  and  must,  therefore, 
be  excused  from  answering.  I  speak  now  of  the  public  newspapers  to  which 
I  am  compelled  to  resort  to  ascertain  the  objections  which  are  made  to  this 
measure,  as  gentlemen  have  persevered  in  refusing  to  assign  the  reasons  which 
have  induced  them  to  oppose  the  passage  of  the  bill.  But,  sir,  I  can  clearly 
comprehend  that  the  right  to  erect  light  houses  is  not  incidental  to  the  power 
of  regulating  commerce,  unless  every  thing  is  incidental  to  that  power  which 
tends  to  facilitate  and  promote  the  prosperity  of  commerce.  It  is  contended 
that,  under  the  power  to  lay  and  collect  taxes,  imposts,  and  duties,  you  can 
pass  all  laws  necessary  for  that  purpose;  but  they  must  be  laws  to  lay  and 


SOS  .  BANK  OF  THE  UNITED  STATES. 

collect  taxes,  imposts,  and  duties,  and  not  laws  which  tend  to  promote  the 
collection  of  taxes.  A  law  to  erect  light  houses  is  no  more  a  law  to  regulate 
commerce,  than  a  law  creating  a  bank  is  a  law  to  collect  taxes,  imposts,  and 
duties.  But  the  erection  of  light  houses  tends  to  facilitate  and  promote  the 
security  and  prosperity  of  commerce,  and,  in  an  equal  degree,  the  erection 
of  a  bank  tends  to  facilitate  and  ensure  the  collection,,  safe-keeping,  antt 
transmission,  of  your  revenue.  If,  by  this  rule  of  construction,  which  is  ap- 
plied to  light  houses,  but  denied  to  the  banky  Congress  can,  as  incidental  to- 
the  power  to  regulate  commercev  ereet  light  houses,  it  will  be  easy  to  show 
that  the  same  right  may  be  exercised,  as  incidental  to  the  power  of  laying  and 
collecting  duties  and  imposts.  Duties  cannot  be  collected^  unless  vessels 
importing  dutiable  merchandise  arrive  in  port;  whatever,  thereforey  tends  to 
secure  their  safe  arrival,  may  be  exercised  under  that  general  power;  the  erec- 
tion of  light  houses  does  facilitate  the  safe  arrival  of  vessels  in  port;  and  Con- 
gress, therefore,  can  exercise  this  right  as  incidental  to  the  power  to  lay  imposts 
and  duties, 

But  it  is  said  the  advocates  of  the  bank  differ  among  themselves  in  fixing, 
upon  the  general  power  to  which  the  right  ta  create  a  bank  is  incidental,  and 
that  this  difference  proves  that  there  is  no  ineidentality,  to  use  a  favorite  ex 
pression,  between  that  and  a«y  one  of  the  enumerated  general  powers.  The 
same  reason  can  be  urged  with  equal  force  against  the  constitutionality  of 
every  law  for  the  erection  of  light  houses.  Let  the  advocates  for  this  doc- 
trine lay  their  finger  upon  the  power  to  which  the  right  of  erecting  light  houses 
is  incidental.  It  can  be  derived,  with  as  much  apparent  plausibility  and  rea- 
son, from  the  right  to  lay  duties,  as-from  the  right  to  regulate  commerce.  Who 
is  there  now  in  this  body  who  has  not*  voted  for  the  erection  of  a  light  house? 
And  no  man  who  reads  one  of  thesey  will  believe  it  to  be  a  regulation  of  com- 
merce. And  no  man  in  tke  nationy  so  far  as  my  knowledge  extends,  has  ever 
complained  of  the  exercise  of  this  power.  The  right  to  erect  light  houses  is 
exercised,  because  the  commerce  of  the  nation,  or  the  collection  of  duties,  is 
greatly  facilitated  by  that  means;  and,  sir,  the  right  to  create  a  bank  is  exer- 
cised, because  the  collection  of  your  revenue,  and  the  safe  keeping  and  easy 
and  speedy  transmission  of  your  public  money,  is  not  simply  facilitated,  but 
because  these  important  objects  are  more  perfectly  secured  by  the  erection  of  a 
bank  than  they  can  be  by  any  other  means  in  the  power  of  human  imagina- 
tion to  devise.  We  say,  therefore,  in  the  words  of  the  constitution,  that  a 
bank  is  necessary  and  proper  to  enable  the  Government  to  carry  into  com- 
plete effect  the  right  to  lay  and  collect  taxes,  impo3tsT  duties,  and  excises. 
We  do  not  say,  that  the  existence  of  the  Government  absolutely  depends 
upon  the  operations  of  a  bank,  but  that  a  National  Bank  enables  the  Govern- 
ment to  manage  its  fiscal  concerns  more  advantageously  than  it  could  do  by 
any  other  means.  The  terms  necessary  and  proper,  according  to  the  con- 
struction given  to  every  part  of  the  constitution,  impose  no  limitation  upon- 
the  powers  previously  delegated.  If  these  words  had  been  omitted  in  the 
clause  giving  authority  to  pass  laws  to  carry  into  execution  the  powers  vested 
by  the  constitution  in  the  National  Government,  still  Congress  would  have 
been  bound  to  pass  laws  which  were  necessary  and  proper,  and  not  such  as 
were  unnecessary  and  improper.  Every  Legislative  body,  every  person  in- 
vested with  power  of  any  kind,  is  morally  bound  to  use  only  those  means 
which  are  necessary  and  proper  for  the  correct  execution  of  the  powers  de- 
legated to  them.  But,  it  is  contended,  that,  if  a  bank  is  necessary  and  proper 
for  the  management  of  the  fiscal  concerns  of  the  nation,  yet  Congress  has  no 
power  to  incorporate  one,  because  there  are  State  banks  which  may  be  resorted 
to.  No  person  who  has  undertaken  to  discuss  this  question,  has,  as  far  as 
my  knowledge  extends,  ventured  to  declare,  that  a  bank  is  not  necessary, 
Every  man  admits,  directly  91-  indirectly,  the  necessity  of  resorting  to  banks 
of  some  kind.  This  admission  is  at  least  an  apparent  abandonment  of  the 
constitutional  objection:  for,  if  a  bank  is  necessary  and  proper,  then  have 
Congress  the  constitutional  right  to  erect  a  bank.  But  this  is  denied.  It  is 
contended  that  this  idea  rests  alone  upon  the  presumption  that  the  Govern- 


ON  THE    BILL  TO  RENEW  THE  CHARTER  OF    1791. 

ment  of  the  United  States  is  wholly  independent  of  the  State  Governments; 
which  is  not  the  fact.  That  this  very  law  is  dependent  upon  the  State  courts 
for  its  execution.  This  is  certainly  not  the  fact.  The  courts  6£  the  United 
States  have  decided,  in  the  most  solemn  manner,  that  they  have  cognizance 
of  all  cases  affecting  the  Bank  of  the  United  States.  Sir,  it  is  true  that  the 
Government  of  the  United  States  is  dependent  upon  the  State  Governments 
for  its  organization.  Members  of  both  Houses  of  Congress,  and  the  Presi- 
dent of  the  United  States,  are  chosen  by  the  State  Governments,  or  under 
the  authority  of  their  laws.  But  it  is  equally  true,  that,  wherever  the  consti- 
tution confides  to  the  State  Governments  the  right  to  perform  any  act  in  re- 
lation to  the  Federal  Government,  it  imposes  the  most  solemn  obligation  upon 
them  to  perform  the  act.  The  constitution  of  the  United  States,  as  to  these 
particular  acts,  is  the  constitution  of  the  several  States,  and  their  function- 
aries are  accordingly  sworn  to  support  it.  Can  it  then  be  seriously  contended 
that,  because  the  constitution  has,  in  some  cases,  made  the  Government  of 
the  United  States  dependent  upon  the  State  Governments,  in  all  which  cases 
it  has  imposed  the  most  solemn  obligations  upon  them  to  act,  that  it  will  be 
necessary  and  proper  for  Congress  to  make  itself  dependent  upon  them,  in 
cases  where  no  such  obligation  is  imposed?  The  constitution  has  defined  all 
:he  cases  where  this  Government  ought  to  be  dependent  upon  that  of  the 
States,  and  it  would  be  unwise  and  improvident  for  us  to  multiply  these  cases 
»y  legislative  acts,  especially  where  we  have  no  power  to  compel  them  to  per- 
orm  the  act  for 


ng  a  permanent 

or  its  collection  and  transmission  from  one  extreme  of  this  extensive  empire 
o  the  other,  upon  any  accidental  circumstance,  wholly  beyond  their  power 
•r  control.  There  are  State  banks  in  almost  every  State  in  the  Union,  but 
Jieir  existence  is  wholly  independent  of  this  Government,  and  their  dissolu- 
ion  is  equally  so.  The  Secretary  of  the  Treasury  has  informed  you  that  he 
conceives  a  bank  is  necessary  to  the  legitimate  exercise  of  the  powers  vested 
ly  the  constitution  in  the  Government;  I  know,  sir.  that  the  testimony  of  this 
officer  will  not  be  very  highly  estimated  by  several  honorable  members  of  this 
oody.  I  am  aware  that  this  opinion  has  subjected  him,  and  the  committee 
also,  to  the  most  invidious  aspersions;  but,  sir,  the  situation  of  that  officer, 
independent  of  his  immense  talents,  enables  him  to  form  a  more  correct 
opinion  than  any  other  man  in  the  nation,  of  the  degree  of  necessity  which 
exists  at  the  present  time  for  a  National  Bank,  to  enable  the  Government  to 
manage  its  fiscal  operations.  He  has  been  ten  years  at  the  head  of  your  trea- 
sury; he  is  thoroughly  acquainted  with  the  influence  of  the  bank  upon  your 
revenue  system;  and  he  has,  when  called  upon,  declared  that  a  bank  is  neces- 
sary to  the  proper  exercise  of  the  legitimate  powers  of  the  Government.  His 
testimony  is  entitled  to  great  weight  in  the  decision  of  this  question,  at  least 
with  those  gentlemen  who  have  no  knowledge  of  the  practical  effects  of  the 
operations  of  the  bank  in  the  collection,  sate  keeping,  and  transmission  of 
your  revenue.  In  the  selection  of  means  to  carry  any  of  your  constitutional 
powers  into  effect,  you  must  exercise  a  sound  discretion;  acting  under  its 
influence,  you  will  discover  that  what  is  proper  at  one  time,  may  be  extremely 
unfit  and  improper  at  another.  The  original  powers  granted  to  the  Govern- 
ment by  the  constitution,  can  never  change  with  the  varying  circumstances 
of  the  country;  but  the  means  by  which  those  powers  are  to  be  carried  into 
effect,  must  necessarily  vary  with  the  varying  state  and  circumstances  of  the 
nation.  We  are,  when  acting  to-day,  not  to  inquire  what  means  were  neces 
sary  and  proper  twenty  yeurs  ago;  not  what  were  necessary  and  proper  at  the 
organization  of  the  Government;  but  our  inquiry  must  be,  what  means  are 
necessary  and  proper  this  day.  The  constitution,  in  relation  to  the  means  by 
vhich  its  powers  are  to  be  executed,  is  one  eternal  now.  The  state  of  things 
now,  the  precise  point  of  time  when  we  are  called  upon  to  act,  must  deter- 
mine our  choice  in  the  selection  of  means  to  execute  tne  delegated  powers. 

It  is  said,  that  the  States  have  reserved  to  themselves  the  exclusive  right 
of  erecting  banks.    That  the  States  have  exercised  the  right  of  establishing 


310  BANK  OF  THE  UNITED  STATES. 

banks,  is  a  fact  not  to  be  denied;  but  that  they  have  this  right  under  the  con- 
stitution, is  extremely  questionable.  Had  these  great  States,  who  have  un- 
dertaken, by  their  instructions,  to  influence  the  decision  of  this  question  by 
Congress,  contented  themselves  with  the  exercise  of  this  right  to  establish 
banks,  I  should  not,  upon  this  occasion,  enter  into  an  investigation  of  that  right. 
But  these  great  States,  not  content  with  the  exercise  of  an  usurped  authority, 
are,  by  usurpation,  attempting  to  legislate  for  Congress. 

And,  sir,  what  is  the  inducement  with  these  great  States,  to  put  down  the 
Bank  of  the  United  States?  Their  avarice,  combined  with  the  love  of  domi- 
nation. They  have  erected  banks,  in  many  of  which  they  hold  stock  to  a 
considerable  amount,  and  they  wish  to  compel  the  United  States  to  use  their 
banks  as  places  of  deposite  for  their  public  moneys,  by  which  they  expect  to 
increase  their  dividends.  And  in  the  banks  in  which  they  hold  no  stock, 
many  of  the  individual  members  of  their  Legislatures  are  stockholders,  and 
no  doubt  were  influenced  to  give  instructions  by  motives  of  sheer  avarice. 
The  love  of  power,  no  doubt,  lias  had  some  influence  in  producing  these  in- 
structions. Every  person  who  is  not  wholly  ignorant  of  the  history  of  this 
Government,  knows  something  of  the  influence  of  these  great  States  upon  the 
councils  of  the  nation. 

Have  we  not  heard  it  said,  that,  after  three  of  the  great  States  had  instruct- 
ed their  members  to  vote  against  the  bank,  it  was  a  matter  of  too  great  deli- 
cacy for  Congress  to  think  of  acting  upon  the  subject?  I  had  thought  that 
the  rights  of  the  States  were  equal;  that,  if  the  rights  of  three  of  the  little  States 
were  violated  or  affected,  in  any  manner,  that  it  was  the  subject  of  as  much 
delicacy,  as  if  the  rights  of  three  great  States  had  been  affected..  Sir,  if  this 
doctrine  becomes  fashionable,  if  two  or  three  great  States  can,  upon  all  occa- 
sions, through  the  agency  of  their  Legislatures,  control  the  deliberations  of 
Congress,  you  will  compel  the  smaller  States,  by  the  most  direful  necessity, 
to  adopt  the  principle  ot  one  consolidated  Government.  Which  of  the  States 
are  to  be  principally  benefitted  by  the  dissolution  of  the  bank?  Those  States 
in  which  the  principal  part  of  your  revenue  is  to  be  collected.  The  great 
commercial  States  are  to  monopolize  the  benefits  which  are  to  arise  from  the 
deposites  of  your  public  money.  The  suppression  of  this  bank  will  benefit 
none  of  the  interior,  or  smaller  States,  in  which  there  is  little  or  no  revenue 
collected.  As  the  whole  benefit  is  to  be  engrossed  by  three  or  four  of  the 
great  Atlantic  States,  so  the  whole  of  the  power,  which  the  dissolution  of  this 
bank  will  take  from  the  National  Government,  will  be  exclusively  monopo- 
lized by  the  same  States.  Is  it  desirable  to  increase  the  influence  of  these 
great  States,  which  is  already  too  great,  at  the  expense  of  the  United  States? 
Does  not  the  history  of  these  great  States  admonish  us,  in  the  most  impres- 
sive terms,  to  beware  of  placing  this  Government  in  a. state  of  dependence 
upon  them?  Sir,  the  time  has  been,  and  it  will  certainly  arrive  again,  when 
some  one  or  more  of  these  great  States  will  be  found  in  a  state  of  hostility  to 
the  National  Government;  and,  with  this  knowledge,  you  are  about  to  place 
the  management  ot  your  public  money  in  the  hands  ot  the  State  banks,  who 
are  dependent,  for  their  legal  existence,  upon  the  State  Governments.  But, 
sir,  permit  me  to  examine  this  exclusive  right  of  the  State  Governments  to 
create  banks.  In  the  tenth  section  of  the  first  article  of  the  constitution  of 
the  United  States,  it  is  declared,  among  other  things,  that  no  State  shall  coin 
money;  emit  bills  of  credit;  make  any  thin§,  but  gold  or  silver,  a  tender  in 
the  payment  of  debts.  AVhat,  sir,  is  a  bill  ot  credit?  Will  it  be  contended 
that  a  bank  bill  is  not  a  bill  of  credit?  They  are  emphatically  bills  of  credit. 
But  it  may  be  said,  that  the  States  do  not,  by  the  creation  of  banks,  with 
authority  to  emit  these  bills  of  credit,  infringe  upon  the  constitution,  be- 
cause they  do  not  emit  the  bills  themselves.  If  they  have  not  the  power 
to  emit  bills  of  credit,  a  fortiori,  they  cannot  delegate  to  others  a  riglit 
which  they  themselves  cannot  exercise.  But,  sir,  according  to  the  maxims 
of  law  and  sound  reason,  what  they  do  by  another  they  do  themselves. 
If,  then,  the  State  Governments  are  restrained  from  exercising  this  right 
to  incorporate  a  bank,  it  would  appear  ex  necessitate  ret  that  this  right 
is  vesteu  in  the  Government  of  the  United  States.  The  entire  sover- 


ON    THE   BILL   TO    RENEW   THE   CHARTER   OF    1791.  3]J 

eignty  of  this  nation  is  vested  in  the  State  Governments,  and  in  the  Fede- 
ral Government,  except  that  part  of  it  which  is  retained  by  the  People,  which 
is  solely  the  right  of  electing  their  public  functionaries.     The  right  to  create 
a  corporation,  is  a  right  inherent  in  every  sovereignty;  the  People  of  the  United 
States  cannot  exercise  this  right.   If,  then,  the  States  are  restrained  from  cre- 
ating a  bank,  with  authority  to  emit  bills  of  credit,  it  appears  to  be  establish- 
ed that  the  Federal  Government  does  possess  this  right.      If,  however,  it  is 
still  believed  that  the  law,  by  which  this  bank  has  been  created,  was  the  re- 
sult of  a  forced  construction  of  the  constitution,  yet  I  must  contend,  that  that 
construction  is  entitled  to  some  weight  in  the  decision  of  this  question.     The 
time  and  state  of  the  public  mind,  when  this  construction  was  given,  gives  it 
a  strong  claim  to  consideration  upon  this  occasion.     This  construction  was 
given  shortly  after  the  Government  was  organized,  when  first  impressions  had 
riot  been  effaced  by  lapse  of  time,  or  distorted  by  party  feelings,  or  individual 
animosity.      This  law  did  riot  puss  in  the  hard  unconstitutional  times  which 
produced  the  sedition  law.      No,  sir,  this  law  passed  in  the  best  days  of  this 
republic.     At  that  time  the  idea  of  party,  as  now  understood,  was  wholly  un- 
known.    The  parties  which  then  existed  were  literally  federal  and  anti-fede- 
ral.    Those  who  were  friendly  to  the  federal  constitution,  and  those  who  were 
inimical  to  it,  formed  the  only  party  then  known  in  this  nation.     What,  sir, 
is  the  situation  in  which  we  are  now  placed?     What  are  the  circumstances 
under  which  we  are  called  upon  to  reject   this  bill?     The  great   influential 
States,  induced  by  motives  ol   avarice  and  ambition,  interpose  the.  weight  of 
their  authority;  attempt  to  put  a  veto  upon  your  right  to  pass  such  laws  as  are 
necessary  and  proper  for  the  general  welfare,  through  the  instrumentality  of 
instructions,  by  depriving  not  only  their  Senators  and    Representatives  of 
the  exercise  of  a  sound  and  honest  discretion,  but,  also,  by  intimidating  others 
by  the  weight  of  their  influence  and  authority.     The   democratic  presses  in 
these  great  Statcv  have,  for  more  than   twelve  months  pa.4,  teemed  with  the 
most  scurrilous  abuse  again.-t  every  member  of  Congress  who  lias  dared  to 
litter  a  syllable  in  favor  of  the  renewal  of  the  bank  charter.    The  member  who 
dares  to  give  his  opinion  in  favor  of  the  renewal  of  the  charter,  is  instantly 
charged  with  being  bribed  by  the  agents  of  the  bank — with  being  corrupt — with 
having  trampled  upon  the  rights  and  liberties  of  the  People — with  having  sold 
the  sovereignty  of  the  United  States  to  foreign  capitalists — with  being  guilty 
of  perjury,  by  having  violated  the  constitution.     Yes,  sir,  these  are  the  <  n 
ciunstances  under  which  we  are  called  upon  to  reject  the  bill,      When  we 
compare  the  circumstances  under  which  we  are  now  acting,  with  those  which 
existed  at  tlie  time  when  Hie  law  was  passed  to  incorporate  the  bank,  we  may 
vyell  distrust  our  own  judgments.     Sir.  I  had  always  thought  that  a  corpora- 
tion was  an  artificial  body,  existing  only  in  contemplation  of  law;  but,  if  we 
can  believe  the  rantings  of  our  democratic  editors  in  these  great  States,  and 
the  denunciations  of  our  public  declaimers,  it  exists  under  the  form  of  every 
foul  and  hateful  beast,  and  bird,  and  creeping  thing.      It  is  an  Hydra;  it  is  a 
Cerberus;  it  is  a  Gorgon;  it  is  a  J'ltllure;  it  is  a  f'iper.     Yes,  sir,  in  their 
imaginations  it  not  only  assumes  every  hideous  and  frightful  form,  but  it  pos- 
sesses every  poisonous,  deleterious,  and  destructive  quality.      Shall  we.  sir, 
suffer  our  imaginations  to  be  alarmed,  and  our  judgments  to  be  influenced,  by 
such  miserable  stuff?     Shall  we  tamely  act  under  the  lash  of  this  tyranny  of 
the  press?    No  man  complains  of  the  discussion  in  the  newspapers,  of  any 
subject  which  conies  before  the  Legislature  of  the  Union:  butl  most  solemnly 
protest  against  the  course  which  has  been  pursued  by  these  editors,  in  rela- 
tion to  this  question.     Instead  of  reasoning,  to  prove  the  unconstitutionality 
of  the  Ia\y.  they  charge  members  of  Congress  with  being  bribed  or  corrupted; 
and  this  is  what  they  call  the  liberty  of  the  press.     To  tyranny,  under  what- 
ever form  it  may  be  exercised,  I  declare  open  and  interminable  war.     To  me 
it  is  perfectly  indifferent  whether  the  tyrant  is  an  irresponsible  editor,  or  a 
despotic  monarch. 

Mr.  President,  if  the  construction  which  has  been  given  to  the  constitution 
is  entitled  to  no  weight  with  the  members  who  now  compose  the  Senate,  will 


312  BANK   OF  THE    UNITED    STATES. 

it  be  contended  that  the  different  acts  of  successive  democratic  Congresses, 
by  which  they  have  sanctioned  the  validity  of  the  construction  under  which 
this  bank  was  created,  are  entitled  to  no  weight  or  consideration?  Perhaps 
it  would  be  unfair  to  lay  any  stress  upon  the  simple  acquiescence  of  our  de- 
mocratic predecessors  in  this  measure;  I  shall,  therefore,  show,  that  the  acts 
to  which  I  allude  were  positive  affirmative  acts,  and  not  simply,  or  in  any 
degree,  acts  of  acquiescence.  By  the  charter,  the  corporation  was  authorized 
to  establish  offices  of  discount  and  deposite  wheresoever  it  should  think  fit, 
within  the  United  States.  In  the  year  1803,  the  United  States  obtained  Lou- 
isiana by  purchase.  Under  the  authority  given  in  the  charter,  the  corpora- 
tion could  not  extend  its  branches  into  Louisiana.  In  the  year  1804,  a  demo- 
cratic Congress  passed  a  law  to  authorize  this  devouring  monster  to  lay  its 
destructive  fangs  upon  the  unfortunate  people  of  these  newly  acquired  terri- 
tories. It  has  been  said  that  the  State  Governments  were  competent  to  resist 
the  execution  of  this  law.  How  ungenerous,  tben,  was  it,  in  our  democratic 
predecessors,  to  authorize  this  institution,  with  its  pestilential  fangs,  to  seize 
upon  these  helpless  and  unfortunate  people,  who  had  no  State  Governments 
competent  to  resist  the  execution  of  this  law,  and  shield  them  from  the  deadly 
poison  of  this  venomous  viper?  It  was  unkind;  it  was  cruel.  Permit  me, 
sir,  to  make  one  or  two  observations  upon  this  competency  of  the  State  Go- 
vernments to  resist  the  authority  or  the  execution  of  a  law  of  Congress. 
What  kind  of  resistance  can  they  make,  which  is  constitutional?  I  know  of 
but  one  kind;  and  that  is  by  elections.  The  People,  and  the  States,  have  a 
right  to  change  the  members  of  the  National  Legislature,  and,  in  that  way,  and 
in  that  alone,  can  they  effect  a  change  of  the  measures  of  this  Government. 

It  is  true,  there  is  another  kind  ot  resistance  which  may  be  made,  but  it  is 
unknown  to  the  constitution.  This  resistance  depends  upon  physical  force; 
it  is  an  appeal  to  the  sword;  and  by  the  sword  must  that  appeal  be  decided, 
and  not  by  the  provisions  of  the  constitution. 

We  are  informed,  however,  that  the  States  thought  it  most  prudent  to  acqui- 
esce in  this  law,  and  waive  the  right  of  resisting  it,  to  which  they  were  so  en- 
tirely competent. 

Does  the  positive  sanction  of  this  measure,  by  our  democratic  Congresses, 
rest  alone  upon  this  act  of  1804?  No,  sir.  The  act  by  which  the  bank  was  in- 
corporated, made  no  provision  for  the  punishment  of  those  who  might  counter- 
feit its  bills  and  checks.  In  the  year  1798,  a  law  for  the  punishment  of  such 
offences  was  passed.  In  the  year  1807,  a  democratic  Congress,  composed 
of  many  of  the  same  members  who  are  now  called  upon  to  act  again  upon  the 
subject  of  the  bank,  passed  a  law  also  for  the  punishment  of  the  same  offences 
against  the  bank.  This  is  not  all,  sir;  so  great  was  the  unanimity  of  both 
Houses  upon  this  question,  that  the  bill  passed  through  both  Houses  without 
producing  a  call  for  the  yeas  and  nays  upon  its  final  passage,  or  in  any  of  its 
intermediate  stages.  The  constitution  says,  Congress  shall  make  laws  "  to 
provide  for  the  punishment  of  counterfeiting  the  securities  and  current  coin 
of  the  United  States."  I  have  shown  that  the  power  to  punish  counterfeiting 
the  current  coin  was  fairly  incidental  to  the  power  of  coining  money.  But 
the  power  to  punish  counterfeiting  the  securities  is  an  original  grant  of  power, 
and  not  incidental  to  any  one  of  the  delegated  powers.  As  the  constitution 
has  given  the  power  to  punish  counterfeiting  the  securities  and  the  current 
coin,  expressly,  according  to  the  doctrine  contended  for  by  the  enemies  of  the 
bank,  the  power  to  punish  any  other  species  of  forgery  is  withheld.  But  let 
us  pursue  this  idea  a  little  further.  The  law  incorporating  the  bank  is  de- 
nounced as  unconstitutional;  it  therefore  is  not  binding  upon  the  People  of  the 
United  States  as  a  law;  and  yet  the  very  men  who  denounce  it,  who  declare 
it  to  be  unconstitutional,  have  passed  a  law  to  condemn  those  who  violate  its 
provisions  to  ten  years'  imprisonment,  and  to  enormous  fines.  With  what 
propriety  can  we  say  that  our  republican  predecessors  have  simply  acquiesced 
in  tnis  measure?  With  what  consistency  can  we  now  refuse  to  renew  the  char- 
ter, on  account  of  the  want  of  constitutional  power?  But  it  is  contended  that 
we  have  done  nothing  more  than  simply  acquiesced  in  this  measure,  and  that 
our  acquiescence  was  wholly  the  result  of  a  conviction  that  the  act  incorpo- 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

rating  a  bank  was  a  contract.  What,  sir,  is  the  essence  of  a  contract?  That 
there  shall  be  parties  able  to  contract;  that  they  do  contract;  that  there  shall 
be  a  consideration;  a  quid  pro  quo;  that  the  conditions  shall  be  reciprocal. 
What  is  the  fact  in  relation  to  the  bank  bill?  Does  the  bank  make  any  stipu- 
lations in  favor  of  the  Government?  No,  none.  Does  the  charter  stipulate 
that  the  Government  shall  provide  for  the  punishment  of  those  who  counter- 
feit bank  bills?  No.  And  yet  a  republican  Congress,  under  the  idea,  I  sup- 
pose, of  its  being  a  contract,  has  passed  a  law  lor  that  purpose.  The  law  does 
not  contain  one  essential  feature  of  a  contract;  it  is  therefore  no  contract. 

If  I  have  succeeded  in  establishing  the  constitutional  right  of  this  House  to 
pass  a  bill  to  incorporate  a  bank,  the  remaining  part  of  the  task  which  I  have 
undertaken  to  perform  will  be  easily  despatched.  What  are  the  circumstances 
under  which  we  are  called  upon  to  vote  against  the  renewal  of  the  charter  of 
the  Bank  of  the  United  States?  Europe  is  still  convulsed  to  its  centre  by  wars, 
which,  in  their  progress,  have  overthrown  the  ancient  bounds  and  limits  of 
the  independent  nations  among  whom  it  has  been  immemorially  parcelled  out. 
The  established  usage  and  law  of  nations  have  been  trampled  under  foot,  both 
by  land  and  sea.  Such  is  the  prospect  abroad.  What  is  our  own  internal 
situation?  The  confiscation  of  American  property  in  the  ports  of  France,  Spain, 
Italy,  and  Holland;  tin?  depredations  committed  upon  our  commerce  on  the 
high  seas,  by  British  cruisers;  and  the  embarrassments  to  which  it  has  been 
subjected  in  the  northern  ports  of  Europe,  havi-  already  produced  numerous 
bankruptcies  in  most  of  our  commercial  cities.  In  addition  to  the  embarrass- 
ments produced  by  thcs"  cau>es  we  have  superaddod  those  which  must  ne- 
cessarily result  from  a  non-intercourse  with  England,  the  country  with  which 
we  have  hitherto  had  the  most  extensive  commercial  intercourse.  From  these 
additional  embarrassments  we  may  be  saved  by  the  want  of  good  faith  in  the 
French  Government.  Should  that  be  the  case,  we  *.hall  most  inevitably  be 
excluded  from  all  commercial  intercourse  with  the  European  continent,  which 
may  be  as  embarrassing  as  the  non-intercourse  with  Great  Britain,  in  that 
event,  our  European  commerce  will  be  confined  solely  to  Great  Britain  and 
her  dependencies.  Such,  sir,  arc  the  circumstances  under  which  we  are  call- 
ed upon  to  dissolve  suddenly  an  institution  which  circulates  thirteen  millions 
of  dollars,  and  to  which  the  commercial  class  of  this  nation  are  indebted  four- 
teen millions  of  dollars.  It  must  also  be  remembered,  that  the  same  class  of 
your  citizens  are  indebted  to  the  Government  nearly  twelve  millions  of  dollars, 
upon  which  your  payments  into  the  treasury  for  the  discharge  of  the  current 
expenses  of  the  year  arc  solely  dependent.  Sir,  I  have  never  believed  that 
the  mantle  of  Elijah  has  descended  upon  my  shoulders,  and  yet  I  can  very 
easily  foresee  that  individual  and  national  distress  must  be  produced  by  the 
sudden  dissolution  of  the  bank.  The  poorer  part  of  your  manufacturers  and 
mechanics  will  be  the  first  to  fed  the  distress.  The  deputation  of  mechanics 
and  manufacturers  from  the  city  of  Philadelphia  stated  to  the  committee, that, 
upon  the  rejection  of  the  bill  for  the  renewal  of  the  charter,  in  the  other  House, 
the  bank  began  to  contract  its  discounts,  and  that  the  whole  city  was  tilled 
with  alarm  and  dismay;  that  the  credit  even  of  bank  paper  was  shaken,  and 
individual  confidence  had  received  a  severe  shock;  that,  in  consequence  of 
this  alarm  and  distress,  the  bank  had  determined  to  return  to  its  former  ex- 
tent of  discounts,  and  to  continue  it  to  the  last  moment;  that  the  contraction 
of  discounts,  by  the  Bank  of  the  United  States,  had  produced  a  contraction^ 
discounts  in  the  State  banks,  so  that  those  who  had  their  accounts  with  the 
latter  banks  were  in  no  better  situation  than  the  debtors  of  the  former.  When- 
ever a  man  testifies  against  his  apparent  interest,  he  ought  to  be  believed.  It 
is  apparently  the  interest  of  the  State  banks  that  the  Bank  of  the  United  States 
should  be  put  down.  It  is  their  interest  to  discount  good  paper  as  largely  as 
possible.  The  Bank  of  the  United  States  discounts  to  the  amount  of  about 
fifteen  millions  of  dollars.  The  dissolution  of  this  bank  will  bring  into  the 
market,  which  will  then  be  solely  occupied  by  the  State  banks,  an  excess  of 
fifteen  millions  of  good  paper  to  b«  discounted.  The  demand  for  discounts, 
when  compared  w:th  th  j  discounting  <iiir»if--$l,  will  be  greatly  increased,  and 
40 


314  BANK   OF  THE   UNITED   STATES. 

the  benefit  of  that  increase  will  be  exclusively  enjoyed  by  the  State  banks; 
it  is  therefore  apparently  their  interest,  that  the  Bank  of  the  United  States 
should  be  dissolved.  But  they  have  petitioned  for  the  renewal  of  the  charter, 
It  is  said,  however,  that  if  so  much  distress  is  to  flow  from  the  dissolution 
of  the  bank,  it  proves  that  the  banking  system  is  deleterious  in  its  conse- 
quences. I  will  not  now  enter  into  the  discussion  of  that  question,  because 
it  is  not  the  question  before  the  Senate.  The  system  has  long  been  practised 
upon;  is  increasing  from  day  to  day,  and  is  wholly  beyond  the  control  of  Con- 
gress. But,  sir,  an  inspection  of  the  journals  of  the  Senate,  of  the  present 
session,  affords  abundant  evidence  that  this  House,  at  least,  believe  that  the 
banking  system  is  a  beneficial  one.  We  have  not  incorporated  more,  I  be- 
lieve, than  five  banks  within  the  District  of  Columbia,  during  the  present 
session.  The  renewal,  or  the  refusal  to  renew  this  charter,  does  not  then 
decide  the  question  whether  the  banking  system  shall  be  abolished  in  the 
United  States  or  not.  Gentlemen  cannot  but  be  sensible  of  this.  The  old 
Congress  incorporated  the  Bank  of  North  America  in  the  year  1781.  New 
York  and  Massachusetts  had  followed  the  example  before  the  Bank  of  the 
United  States  was  incorporated,  and  every  State  in  the  Union  has  since  in- 
corporated banks-  The  banking  system  has  been  too  long  and  too  deeply 
rooted,  to  be  frowned  out  of  existence  by  Congress.  If,  however,  gentlemen 
are  convinced  that  the  system  of  banking  known  and  established  among  us  is 
injurious  in  its  effects,  these  injurious  effects  will  be  diminished  by  renewing 
the  charter  of  the  Bank  of  the  United  States.  The  State  banks,  whose  cre- 
dibility, in  this  case,  is  unquestionable,  have  told  you  that  the  influence  of 
the  Bank  of  the  United  States  upon  them  is  a  beneficial  one;  that  it  prevents 
excessive  discounts  and  emissions  of  paper,  which,  but  for  this  check,  would 
inevitably  take  place  in  the  State  banks.  Every  one  of  the  State  banks  of 
Philadelphia,  except  one,  has  petitioned  for  the  renewal  of  the  Bank  of  the 
United  States,  and  one  of  the  deputation  of  merchants,  who  was  a  director  of 
one  of  those  banks,  stated  the  reason  why  that  bank  had  declined.  That  an 
association  in  some  of  the  interior  towns  had  been  formed,  without  the  autho- 
rity of  law,  and  that  the  bank  was  suspected,  by  the  State  Legislature,  of 
having  favored  it;  that  a  motion  had  been  made  in  the  State  Legislature  to 
inquire  into  the  fact,  and  tha*,  in  consequence  of  this  circumstance,  that  bank 
had  been  prevented  from  petitioning.  The  check  which  one  bank  has  upon 
another  is,  in  fact,  the  only  substantial  check  which  can  be  devised  against 
excessive  discounts  and  emissions  by  State  banks.  You  may  limit  and  restrain 
them  by  subjecting  the  directors,  individually,  to  any  loss  which  may  be  in- 
curred by  a  violation  of  the  restrictions  imposed  by  the  charter.  Suppose 


the  renewal  of  the  charter,  that  it  has  been  a  political  machine  in  the  hands 
of  our  political  opponents,  and  that  it  has  been  partial  in  its  operations. 
That  it  may  have  been  so  used  is  very  possible;  but  that  it  has,  within  the  last 
twelve  years,  been  so  used,  is  not  believed.  Some  "of  the  delegation  of  the 
mechanics,  all  of  whom,  1  believe,  were  democrats,  had  been  dealers  with 
that  bank  for  twelve  years,  and  they  all  united'in  contradicting  all  idea  of  its 
being  partial,  or  influenced,  in  the  slightest  degree,  by  the  political  character 
of  its  customers,  during  that  time.  And  one  of  them  said,  explicitly,  that 
opposition  to  the  renewal  in  Philadelphia  was  confined  principally  to  the 
newspapers.  When  there  were  but  few  banks,  and  the  competition  for  dis- 
counts was  great,  I  can  readily  believe  that  it  might  have  had  some  influence 
upon  political  questions,  and  that  it  was  guilty  of  partiality;  and  so  would  any 
other  institution  be,  placed  in  the  same  situation.  The  multiplication  of  banks, 
in  the  United  States,  has  given  us  the  most  ample  security  against  the  repeti  • 
tion  of  either  of  these  offences.  The  most  formidable  objection  against  the 
expediency  of  the  renewal,  in  the  estimation  of  those  who  are  opposed  to  it,  is, 
that  a  large  portion  of  the  stock  is  held  by  foreigners;  and  apprehensions  are 
entertained  that  these  foreigners  have  had,  and  will  again  have,  some  influence 


ON  THE  BILL  TO  RENEW  THE  CHARIER   OF    1791. 

upon  our  public  councils;  that,  but  for  the  influence  thus  acquired,  we  should 
have  taken  stronger  measures  in  vindication  of  our  rights.  It' this  influence 
really  exists,  some  degree  of  influence  must  also  exist  and  operate  upon  those 
foreigners  in  our  favor.  If  the  most  profitable  part  of  their  capital  is  that 
which  is  invested  in  our  bank  stock,  which  the  Government  has  sold  to  them, 
will  they  not  exert  their  influence  upon  their  own  councils,  upon  any  appre- 
hension of  war  between  the  two  countries?  Surely  the  country  in  which  their 
capital  is  employed,  and  who  can,  at  any  moment,  lay  their  hands  upon  it, 
must  have  more  influence  upon  the  conduct  of  the  capitalists,  than  they  can 
possibly  have  upon  it.  How  long  shall  we  frighten  ourselves  with  empty 
phantoms  and  imaginary  evils?  How  long  shall  we  indulge  ourselves  in  the 
pursuit  of  some  imaginary  theoretical  good,  which,  like  the  will  o"  the  wisp, 
continually  eludes  our  grasp?  Sir,  we  have  the  experience  of  twenty  years 
for  our  guide.  During  that  lapse  of  years  .,your  finances  have  been,  through 
the  agency  of  this  bank,  skilfully  and  successfully  managed.  During  this 
period,  the  improvement  of  the  country,  and  the  prosperity  of  the  nation,  have 
been  rapidly  progressing.  Why,  then,  should  we,  at  this  perilous  and  mo- 
mentous crisis,  abandon  a  well  tried  system;  faulty,  perhaps,  in  the  detail, 
but  sound  in  its  fundamental  principles?  Does  the  pride  of  opinion  revolt  at 
the  idea  of  acquiescing  in  the  system  of  your  political  opponents?  Come!  and 
with  me  sacrifice  your  pride  and  political  resentments  at  the  shrine  of  politi- 
cal good.  Let  them  be  made  a  propitiatory  sacrifice  for  the  promotion  of  the 
public  welfare,  the  savor  of  which  will  ascend  to  Heaven,  and  be  there  re- 
corded as  a  lasting,  an  everlasting  evidence,  of  your  devotion  to  the  happiness 
of  your  country. 

FEBRUARY  12t  1811. 

Motion  to  strike  out  the  first  section  of  the  bill. 
Mr.  LKIB  spoke  in  favor  of  the  motion,  and  Mr.  LLOYD  against  it. 

Mr.  LEIB  said  that  it  was  not  his  intention  to  have  broken  silence  on  this 
subject;  he  meant  to  content  himself  with  a  silent  vote,  as  he  considered  the 
merits  of  the  bill  to  be  well  understood,  and  every  member's  mind  made  up 
on  them.  The  subject  had  become  so  trite,  and  was  so  hackneyed,  as  to  have 
become  threadbare,  and  he  united  in  opinion  with  his  friend  from  Tennessee, 
that  it  was  not  only  a  waste  of  time,  but  a  work  of  supererogation  to  discuss 
it.  He  should  not  have  risen  but  for  some  remarks  which  had  yesterday 
fallen  from  the  gentleman  from  Georgia.  Some  intimation  had  been  given  by 
him  about  instructions  from  the  great  States,  and  while  it  seemed  to  be  mat- 
ter of  complaint  that  such  instructions  had  been  given,  it  appeared,  also,  that 
the  complaint  extended  to  the  non-production  of  them  to  the  Seriate.  Pie 
had  received  instructions  from  a  great  State,  as  the  gentleman  from  Georgia 
had  termed  it— for  he  did  not  recollect  that  the  gentleman  from  Maryland,  to 
whom  the  phrase  was  attributed,  had  used  it— the  great  State  of  Pennsylva- 
nia: and  those  instructions  he  would  have  ottered  to  the  Senate  before,  had 
not  some  informality  in  their  shape  precluded  him.  The  instructions  having 
been  mentioned,  he  deemed  it  a  duty  to  read  them  to  the  Senate. 

In  the  General  Assembly  of  the  Commonwealth  of  Pennsylvania. 

The  People  of  the  United  States,  by  the  adoption  of  the  federal  constitution,  esta- 
blished a  General  Government  for  special  purposes,  reserving  to  themselves,  respec- 
tively, the  rights  and  authorities  not  delegated  in  that  instrument.  To  the  compact, 
thereby  created,  each  State  acceded,  in  its  charter,  as  a  State,  and  is  a  party;  the 
United  States  forming,  ?s  to  it,  the  other  party — the  act  of  union,  thus  entered  into, 
being,  to  all  intents  and  purposes,  a  treaty  between  sovereign  States.  The  General 
Government,  by  this  treaty,  was  not  constituted  the  exclusive  or  final  judge  of  the 
powers  it  was  to  exercise:  for,  if  it  were  so  to  judge,  then  its  judgment,  and  not  the 
constitution,  would  be  the  measure  of  its  authority. 


316  BANK   OF  THE    UNITED   STATES. 

Should  the  General  Government,  in  any  of  its  departments,  violate  the 
the  constitution,    it  rests  with  the   States  and  with    the  People,   to  apply  suitable 
remedies. 

With  these  impressions,  the  Legislature  of  Pennsylvania,  ever  solicitous  to  secure 
an  administration  of  the  Federal  and  State  Governments,  conformably  to  the  true  spirit 
of  their  respective  constitutions,  feel  it  their  duty  to  express  their  sentiments  upon  an 
important  subject  now  before  Congress,  viz.  the  continuance  or  establishment  of  a 
bank.  From  a  careful  review  of  the  powers  vested  in  the  General  Government,  they 
have  the  most  positive  conviction  that  the  authority  to  grant  charters  of  incorpora- 
tion, within  the  jurisdiction  of  any  State,  without  the  consent  thereof,  is  not  recogniz- 
ed in  that  instrument,  either  expressly,  or  by  any  warran table  implication:  Therefore, 
Resolved  by  the  Senate  and  House  of  Representatives  of  the  Commonwealth  of  Penn- 
sylvania in  General  Assembly  met,  That  the  Senators  of  this  State  in  the  Senate  of  the 
United  States  be,  and  they  are  hereby,  instructed,  and  the  Representatives  of  this 
State  in  the  House  of  Representatives  of  the  United  States  be,  and  they  hereby  are, 
requested,  to  use  every  exertion  in  their  power  to  prevent  the  charter  of  the  Bank  of 
the  United  States  from  being  renewed,  or  any  other  bank  from  being  chartered  by 
Congress,  designed  to  have  operation  within  the  jurisdiction  of  any  State,  without 
first  having  obtained  the  consent  of  the  Legislature  of  such  State . 

Resolved,' Thai  the  Governor  be,  and  he  hereby  is,  requested  to  forward  a  copy  of 
the  above  preamble  and  resolution  to  each  of  the  Senators  and  Representatives  of  this. 
State  in  the  Congress  of  the  United  States. 

JOHN  WEBER, 
Speaker  of  the  House  of  Representatives. 

P.   C.   LANE, 
Speaker  of  the  Senate. 

Lv  THE  HOUSE  OF  REPRESENTATIVES,  January  llth,  1811. 
Read  and  adopted. 

Attest,  GEO:   HECKERT, 

Clerk  of  the  House  of  Representatives. 

Ix  SENATE,  January  llth,  181 I. 
Read  and  adopted. 

Attest,  JOSEPH  A.  M'JIMSEY, 

Clerk  of  the  Senate, 

Wherefore,  he  would  ask,  was  this  made  a  cause  of  complaint?  The  instruc- 
tions were  given  by  the  Legislature  of  Pennsylvania  to  their  Representatives. 
Was  the  right  of  the  constituent  denied  to  instruct  his  Representative?  For 
the  instructions  extended  not  beyond  the  representation.  It  was  an  affair  be- 
tween Representatives  and  constituents,  and  as  it  did  not  proceed  beyond 
them,  as  none  else  were  comprehended,  surely  no  cause  could  have  been 
given  for  complaint.  For  his  part  he  assented  to  the  right  of  constituents  to- 
instruct,  and  was  readv  to  yield  it  obedience — it  was  in  accordance  with  his 
political  maxims;  and  he  should  ever  consider  himself  bound  to  obey  instruc- 
tions as  long  as  they  did  not  require  the  performance  of  an  act,  which  would 
violate  that  oath  which  he  had  taken.  On  this  occasion  he  yielded  obedience 
with  pride  and  pleasure,  as  the  instructions  corresponded  with  his  own  im- 
pressions of  solemn  obligation.  He  considered  himself  as]thc  Representative  of 
the  State  of  Pennsylvania;  to  represent,  in  his  mind,  was  to  appear  for,  or 
stand  in  the  place  of,  the  body  represented,  and,  in  this  view,  he  considered  it 
his  duty  to  speak  the  sense  of  his  constituents:  to  do  as  they  would  dp,  were 
they  present;  otherwise  he  should  misrepresent  them.  Did  this  look  like  dic- 
tation? Did  it  appear  as  if  the  great  States  desired  to  give  law  to  the  smaller 
ones,  when  they  only  gave  their  instructions  to  their  own  Representatives,  and 
none  else  were  asked  to  render  them  obedience?  He  could  not  suppose  it. 

Allusion  had  been  made  to  Pennsylvania  on  account  of  resistance  to  the 
laws  of  the  United  States.  He  felt  the  reproach,  and  had  often  experienced 
mortification  from  it.  He  had  never  countenanced  unlawful  opposition,  nor 
had  the  People  of  Pennsylvania:  for,  when  it  had  existed,  it  had  been  local, 
and  had  never  embraced  the  State;  and,  therefore,  the  People  of  Pennsylvania 


ON   THE    BILL   TO  RENEW    THE  CHARTER    OF    1791. 

not  comprehended  in  the  reproach.  The  gentleman  from  Georgia  had 
cited  authority  for  renewing  the  charter  of  the  Bank  of  the  United  States,  and 
had  at  the  same  time  disclaimed  authority;  in  imitation  of  his  example  he  would 
do  so  too,  and  he  might  say,  that,  for  the  excitement  to?insurrection  in  a  part 
of  Pennsylvania,  he  might  refer  to  a  source  of  authority  as  high  as  the  gentle- 
man from  Georgia  had  referred  for  the  establishment  of  the  bank  charter. 

Some  reasons  had  been  assigned  for  the  refusal  of  the  Farmers  and  Mecha- 
nics' Bank  of  Philadelphia  to  unite  with  the  other  banks,  in  petitioning  for  a 
charter,  which  did  not  appear  to  him  to  be  correct.  The  gentleman  who  gave 
the  information  to  the  committee  was  director  of  the  Bank  of  Philadelphia, 
and  his  information  must  have  been  derived  from  out  of  doors  rumor.  The 
Farmers  and  Mechanics'  Bank,  Mr.  Leib  apprehended,  refused  to  petition  for 
the  renewal  of  the  charter  of  the  Bank  of  the  United  States,  for  other  reasons. 
He  knew  a  gentleman  who  managed  the  aftairs  of  that  bank,  of  superior  intel- 
ligence and  information,  and  second  to  none  in  point  of  knowledge  of  bank- 
ing, who  was  as  much  opposed  to  a  renewal  as  he  was,  and  for  a  reason  not 
unlike  that  hinted  at  by  the  gentleman  from  Georgia,  that  the  Bank  of  the 
United  States  was  a  check  upon  the  other  banks,  but  a  check  like  that  of  a, 
shark  upon  the  little  fish  around  him.  It  was  in  the  power  of  the  Bank  of  the 
United  States,  by  means  of  its  great  capital  and  the  Governmental  patronage, 
to  prey  upon  the  other  banks  whenever  it  pleased,  and  this  was  sufficient  rea- 
son for  the  Farmers  and  Mechanics'  Bank  to  refuse  its  aid  towards  a  renew- 
al of  the  charter.  These  remarks  he  thought  it  his  duty  to  submit  to  the  Sen- 
ate, and,  in  conformity  with  his  first  determination,  he  avoided  any  remarks 
upon  the  merits  of  the  bill,  which  he  conceived  every  member  was  already  pre- 
pared to  decide  upon. 

MK.  LLOYD. — Mr.  President:  This  is,  indeed,  sir,  an  up-hill,  wind-mill 
sort  of  warfare — a  novel  mode  ot  Legislative  proceeding.  That  a  bill  should 
be  brought  in,  on  a  very  important  subject,  wfrich  has  been  long  under  consi- 
deration, and  that  a  gentleman  should  move  to  strike  out  the  first  section  of 
the  bill,  which  comprises  all  its  vitality,  (for  it  is  the  first,  section  which  pro- 
vides for  the  continuance  of  the  bank)  and  should  be  supported  in  it,  without 
deigning  to  assign  any  other  reasons  than  may  be  derived  from  newspaper 
publications,  which  are  so  crude  and  voluminous  that  not  one  man  out  of  ten 
will  so  far  misspend  his  time  as  to  take  the  trouble  to  read  them,  is  indeed  ex- 
traordinary. Still,  if  gentlemen  choose  to  adopt  this  dumb  sort  of  legislation, 
and  are  determined  to  take  the  question  without  oflfering  any  arguments  in 
support  of  their  opinions,  I  certainly  should  not  have  interfered  with  their 
wishes,  had  1  not  been  a  member  of  the  committee  who  had  reported  the  bill, 
who  had  heard  the  testimony  ottered  by  two  very  respectable  delegations 
from  Philadelphia — one  from  the  master  manufacturers  and  mechanics  of  the 
city,  and  the  other  from  the  merchants;  and  had  1  not  taken  minutes  of  this 
testimony,  which  1  find  it  is  expected  from  me  that  I  should  relate  to  the 
Senate. 

Sir,  I  consider  the  motion  to  strike  out,  now  under  consideration,  as  going 
to  the  entire  destruction  of  the  bill,  without  any  reference  to  its  details  or  mo- 
difications; it,  therefore,  appears  to  me  in  order,  to  take  into  consideration 
only  the  material  principle  of  the  bill  :  that  is,  whether  it  be  proper  that  the 
charter  of  the  bank  should  be  renewed  on  any  terms  whatever,  let  those  terms 
be  what  they  may. 

[General  SMITH  of  Maryland  stated,  that  the  gentleman  was  mistaken:  he 
was  at  liberty  to  go  into  consideration  of  the  details,  and  might  discuss  them 
if  he  pleased.] 

1  had  thought,  Mr.  President,  that  when  a  section  of  a  bill  was  moved  to  be 
struck  out,  that  the  subject  matter  of  the  part  so  moved  to  be  stricken  out  was 
only  in  order  to  be  considered^but,  however  this  may  be,  I  take  it  to  be  strict- 
ly in  order  to  show,  that  this  bank  has  been  ably  and  fairly  conducted;  that  it 
has  been  beneficial  to  the  country,  and  extremely  useful  to  the  Government; 


318  BANK   OF  THE   UNITED  STATES. 

because,  if  this  be  shown,  it  will  be  the  best  argument  that  can  be  adduced 
for  the  rejection  of  the  present  motion,  and  the  continuance  of  the  bank. 

Sir,  it  is  admitted  by  the  Secretary  of  the  Treasury,  in  his  communications 
to  Congress,  that  the  concerns  of  this  bank  have  been  "  skilfully  and  wisely 
managed;"  that  the  bank  has  made  a  very  limited  and  moderate  use  of  the 
public  moneys  deposited  with  it;  and  that  it  has  greatly  facilitated  the  opera- 
tions of  Government  by  the  safe  keeping  and  transmission  of  the  public  mo- 
neys. It  has  at  all  times  met  the  wishes  of  the  Government  in  making  loans. 
It  lias  done  this  even  at  six  per  cent,  while  the  Government  have  been  oblig- 
ed, in  one  instance,  for  a  considerable  amount,  to  nay  8  per  cent,  to  other  per- 
sons for  the  loans  obtained  from  them.  It  is  admitted,  sir,  that  the  bank,  at 
the  request  of  the  Treasury  Department,  has  established  branches  for  the  pur- 
pose of  facilitating  the  operations  of  the  Government  at  places  where  such  es- 
tablishments could  not  but  be  inconvenient  to  them  in  point  of  management, 
and  disadvantageous  in  point  of  profit.  I  allude  more  particularly,  sir,  to  the 
branches  of  the  bank  which  have  been  established  at  New  Orleans  and  at 
Washington.  We  have  been  told  this  session,  sir,  by  a, gentleman  from  Ma- 
ryland, (Mr.  SMITH)  that  the  territory  of  Orleans  is  a  very  wealthy  one;  that 
it  probably  contains  a  greater  number  of  rich  inhabitants,  for  its  population, 
than  any  other  district  in  the  Union.  Sir,  if  this  be  the  fact,  of  whom  does 
this  wealthy  population  consist?  Not  of  the  inhabitants,  but  of  the  planters; 
men  who  are  not  borrowers  of  the  bank;  who,  when  they  realise  the  sales  of 
their  produce,  invest  the  surplus  proceeds  of  it,  beyond  their  expenditure,  in 
the  funds,  or  in  the  acquisition  of  new  lands,  or  in  the  purchase  of  an  addi- 
tional number  of  negroes.  Sir,  it  is  notorious,  that,  from  the  recent  posession 
by  the  United  States  of  Louisiana,  and  the  certainty  that  New  Orleans  must 
soon  be  the  emporium  of  an  immense  western  commerce,  that  city  has  become 
more  the  resort  of  the  young,  the  adventurous,  the  enterprising,  and  the  rash, 
among  the  mercantile  men  of  our  country,  than  any  other  city  in  the  Union; 
and  it  is  obvious,  sir,  in  proportion  as  the  borrowers  from  a  bank  consist  of 
persons  of  this  description,  in  the  same  proportion  must  ihe  circumstances  of 
such  bank  be  unsound;  and,  without  possessing  any  particular  knowledge 
whatever  on  the  state  of  this  bank,  if  the  collections  of  its  debts  are  speedily 
made,  I  would  not  make  the  purchase  at  a  discount  of  twenty-five  per  cent, 
from  the  nominal  amount  of  them. 

Sir,  we  can  judge  with  more  accuracy  when  we  come  nearer  home.  What 
is  the  state  of  the  bank  in  this  city?  What  the  ability  of  its  debtors  to  meet 
their  engagements?  It  is  stated  the  branch  has  a  loan  out  here  of  four  hundred 
thousand  dollars.  Where  is  the  navigation?  Where  the  wealthy  merchant? 
Where  are  the  opulent  tradesmen?  The  extensive  manufacturers — to  refund 
this  money  when  they  are  called  on  to  do  it?  Sir,  they  are  not  to  be  found : 
they  do  not  exist  here;  there  are  but  very  few  opulent  men  in  the  city,  and 
those  are  either  not  borrowers  of  the  bank,  or  not  borrowers  to  an  amount  of 
any  importance.  Where,  then,  is  the  money  to  be  found ,  or  what  has  been  done 
with  it?  It  has  probably  been  taken  out  of  the  Bank  of  the  United  States  to 
build  up  the  five  or  six  District  banks  which  you  have  chartered  the  present 
session;  to  furnish  the  means  of  erecting  the  fifty  or  sixty  brick  houses  which 
we  are  told  have  made  their  appearance  during  the  last  summer;  to  encourage 
speculations  in  city  lots,  and  to  enable  the  proprietors  to  progress  with  the 
half  finished  canal  which  nearly  adjoins  us.  Well,  sir,  if  the  bank  promptly 
calls  in  its  loan  of  four  hundred  thousand  dollars,  will  the  debtors  be  enabled 
to  meet  their  payments?  Can  they  sell  these  city  lots,  these  brick  houses, 
these  canal  shares?  No,  sir,  in  such  a  state  of  things  they  could  find  no  pur- 
chasers; they  could  nearly  as  well  create  a  world  as  to  furnish  the  money; 
and  if  the  bank  is  to  stop,  and  the  payment  of  this  debt  be  speedily  coerced,  I 
would  not  give  two  hundred  thousand  dollars  for  the  whole  of  it. 

In  addition  to  this,  I  shall  show  presently,  from  testimony  which  cannot  be 
controverted,  that  the  conduct  of  the  Bank  of  the  United  States?  or  its  direct- 
ors, or  rather  the  stockholders,  whose  agents  they  are,  in  addition  to  being 
wise,  and  skilful,  and  moderate,  as  the  Secretary  of  the  Treasury  states  them 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OP  1791.  3JQ 

to  have  been,  that  they  have  also  been  honorable,  and  liberal,  and  impartial; 
and  if,  in  addition  to  this,  it  be  proved  that  the  bank  has,  in  every  instance 
where  it  had  the  ability  to  doit,  met  the  wishes  of  the  Government,  and,  to 
facilitate  its  views  in  the  security  and  collection  of  the  revenue,  it  has  also  es- 
tablished branches  where  it  must  have  been  obviously  and  palpably  to  the 
disadvantage  of  the  bank  to  do  it;  if  it  has  furnished  capitals  for  the  exten- 
sion of  our  commerce,  if  it  has  provided  means  for  the  establishment  of  import- 
ant manufactories,  if  it  has  had  a  tendency  to  raise  the  price  of  our  domestic 
produce,  and  has  thus  encouraged  industry,  and  improved  and  embellished 
the  interior  of  the  country;  it  would  seem  pretty  strongly  to  follow,  that,  if  it 
be  expedient  to  preserve  the  existence  of  an  institution  similar  to  this,  then 
these  gentlemen,  on  the  score  of  merit,  added  to  the  experience  of  twenty 
years'  successful  operation,  have  a  fair  claim  on  the  Government  for  a  prefer- 
ence in  favor  of  that  which  is  already  in  operation. 

I  am  aware,  sir,  that  it  may  be  stated,  jin  opposition  to  this  claim,  that  these 
stockholders  have  enjoyed  a  boon  for  twenty  years,  from  which  others  of  their 
fellow-citizens  have  been  deprived,  except  on  such  terms  as  the  sellers  of 
shares  chose  to  prescribe;  that  the  charter  expires  by  its  own  limitation,  and 
that,  beyond  this  period,  they  have  no  right  to  expect  any  thing  which  may  not 
arise  from  the  interest  and  convenience  of  the  Government.  I  admit,  sir, 
there  is  considerable  strength  in  these  objections.  The  exclusive  right  contained 
in  the  charter  ever  appeared  to  me  as  furnishing  the  most  solid  constitutional 
objection  against  the  bank.  The  creation  of  monopolies,  the  granting  of  ex- 
clusive privileges,  except  so  far  as  to  secure  to  the  authors  of  useful  inventions 
the  benefit  of  their  discoveries;  the  tying  up  of  the  hands  of  the  Legislature, 
and  depriving  itself  of  the  power  of  according  to  a  set  ot  citizens,  who  may 
come  into  legal  existence  to-morrow,  or  ten  years  hence,  what  it  had  given  to 
another;  ever  appeared  to  me  hostile  to  the  genius  and  spirit  of  the  People  of 
the  United  States,  and  otall  their  institutions.  Highly,  then,  sir,  as  I  am  in- 
duced to  think  of  the  conduct  of  this  bank,  from  the  best  evidence  I  can  ob- 
tain, still,  from  the  considerations  I  have  just  mentioned,  did  the  question 
now  before  us  simply  affect  the  stockholders,  I  should  certainly  not  trouble 
the  Senate  with  any  remarks  in  reference  to  it,  and  should  sit  down  in  entire 
acquiescence,  whether  the  prayer  of  their  petition  for  the  renewal  of  the  char- 
ter of  the  bank  wore  granted  or  rejected. 

Sir,  before  quitting  this  idea  of  constitutional  objection,  permit  me  to  make 
one  or  two  brief  remarks  in  regard  to  it.  It  is  impossible  tor  the  ingenuity  ot 
man  to  devise  any  written  system  of  government,  which,  after  the  lapse  of 
time,  extension  of  empire,  or  change  ot  circumstances,  shall  be  able  to  carry 
its  own  provisions  into  operation;  hence,  sir,  the  indispensable  necessity  of 
implied  or  resulting  power.-,  and  hence  the  provision  in  the  constitution  that 
the  Government  should  exercise  such  additional  powers  as  were  necessary  to 
carry  those  that  had  been  delegated  into  effect.  Sir,  if  this  country  goes  on 
increasing  and  extending,  in  the  ratio  it  has  done,  it  is  not  impossible  that 
hereafter,  to  provide  for  all  the  new  cases  that  may  arise  under  this  new  state 
ot  things,  the  defined  powers  may  prove  only  a  text,  and  the  implied  or  result- 
ing powers  may  furnish  the  sermon  to  it. 

Permit  me,  sir,  to  put  one  question  on  this  head,  in  addition  to  those  so  ably, 
and,  to  my  view,  unanswerably  put  yesterday,  by  the  honorable  gentleman  from 
Georgia  (Mr.  CRAWFORD.)  Whence,  sir,  do  you  get  the  right,  whence  do 
you  derive  the  power  to  erect  custom  houses  in  the  maritime  districts  of  the 
United  States?  To  attach  to  them  ten,  fifteen,  or  twenty  custom  house  offi- 
cers, and  clothe  these  men  with  authority  to  invade  the  domicile,  to  break 
into  the  dwelling-house  of  perhaps  an  innocent  citizen?  Whence  do  you  get 
it,  sir,  except  as  an  implied  power,  resulting  from  the  authority  given  in  the 
constitution,  "  to  lay  and  collect  taxes,  duties,  imposts,  and  excises?"  If,  un- 
der this  authority,  you  can  erect  these  custom  houses,  and  create  this  municipal, 
fiscal,  inquisitorial  gens  (Farmerie,  with  liberty  to  violate  the  rights  of  the 
citizen,  to  break  into  his  castle  at  midnight,  without  even  a  form  ot  a  warrant, 
on  a  plausible  appearance  ot  probability,  or  probable  cause  of  suspicion  of  his  so  % 


320  BANK   OF  THE    UNITED    STATES. 

creting  smuggled  goods,  which  the  event  may  prove  to  be  unfounded— -and  it  will 
be  recollected  that  a  majority  of  Congress  voted  for  the  grant  of  this  power  in 
its  most  offensive  form,  when,  two  years  since,  they  voted  for  the  act  enforcing 
the  embargo — I  say,  sir,  if.  under  this  general  power  to  collect  duties,  you  can 
erect  the  establishment  and  give  the  offensive  power  just  mentioned,  can  you 
not,  with  the  concurrence  even  of  the  citizens,  adopt  another  more  mild  and 
useful  mode,  and  create  an  establishment  for  the  collection  and  safe-keeping 
of  the  revenue,  and  place  it  under  the  direction  of  ten  or  twelve  directors, 
and  christen  it  an  office  of  Discount  and  Deposite,  or  of  Collection  and  Pay- 
ment, as  you  like  best?  And  can  you  not,  when  you  have  thus  created  it,  give 
to  the,  directors  ft  power,  which,  perhaps,  they  would  have  without  your  grant, 
to  receive  and  keep  the  cash  of  those  who  choose  to  place  it  with  them,  and  to 
loan  them  money  at  the  legal  rate  of  interest,  and,  in  some  places,  as  at  New 
York,  at  nearly  fifteen  per  cent,  below  the  legal  rate  of  interest?  If  you  can 
do  this, then  you  have  your  bank  established,  sir, — and  most  assuredly,  if  you 
can  do  one  of  these  things,  you  can  do  the  other. 

Sir,  the  constitutional  objection  to  this  bank,  on  the  ground  that  Congress 
had  not  the  power  to  grant  an  act  of  incorporation,  has  ever  appeared  to  me 
most  unsound  and  untenable.  Still,  gentlemen  of  intelligence  and  of  integrity, 
who  have  thought  long  and  deeply  on  the  subject,  think  differently  from  me; 
and  I  feel  bound  to  respect  their  opinions,  however  opposed  they  maybe  to  my 
own.  Yet,  sir,  I  will  venture  to  predict,  without  feeling  any  anxiety  for 
the  fate  of  the  prophecy,  that,  should  this  bank  be  suffered  to  run  down,  such 
will  be  the  state  of  things,  before  this  time  twelve  months,  that  there  are  other 
gentlemen,  who  at  present  have  constitutional  objections,  but  who  have  not 
thought  so  long  and  deeply  upon  them,  will,  before  that  time,  receive  such  a 
flood  of  intelligence,  as,  on  this  head,  perfectly  to  dispel  their  doubts,  and  quiet 
their  consciences. 

Sir,  I  shall  now  proceed,  as  briefly  as  may  be  in  my  power,  to  state  the  situa- 
tion of  this  bank  on  the  expiration  of  its  charter,  and  the  effects  on  the  com- 
munity consequent  on  it.  There  is  now  due  to  the  bank,  from  individuals,  fif- 
teen millions  of  dollars.  _  These  fifteen  millions  of  dollars  must  be  collected; 
the  power  of  the  bank  to  grant  discounts  will  have  ceased,  and  the  duty  of  the 
directors  must  require  them  to  make  the  collection.  Sir,  how  is  this  to  be  done? 
Whence  can  the  money  be  obtained?  I  shall  demonstrate  to  you,  presently, 
that  already,  from  an  apprehension  of  a  non-renewal  of  the  charter  of  the 
bank,  business  is  nearly  at  a  stand;  that  navigation,  real  estate,  and  mer- 
chandise, are  unsaleable;  and  that  a  man  worth  one  hundred  thousand  dollars, 
at  the  recently  rated  value  of  property,  and  owing  10,000  dollars,  must  still 
be  utterly  unable  to  meet  his  engagements.  Suppose,  sir,  this  property  con- 
sists in  houses  or  shipping;  suppose  his  warehouse  is  full  of  goods,  and  he  has 
a  large  sum  placed  at  his  credit  in  England:  If,  sir,  he  can  neither  sell  his 
ships,  nor  his  goods;  if  he  cannot  sell  his  real  estate,  nor  scarcely  give  away 
his  exchange,  which,  hitherto,  to  men  who  had  money  in  England,  has  been  a 
never  failing  source  of  supply  in  case  of  need;  I  say,  under  these  circumstan- 
ces, sir,  whatever  may  be  his  property,  he  cannot  meet  his  engagements.  Sir, 
can  men,  thus  situated,  solvent  as  they  ought  to  be  ten  times  over,  find  relief 
from  the  State  banks?  Certainly  not,  sir.  These  banks  have  already  gone 
to  the  extreme  length  of  their  ability;  they  have  always  discounted  to  an 
amount  in  proportion  to  their  capital,  exceeding  that  of  the  Bank  of  the  United 
States,  which  is  incontrovertibly  proved  by  the  dividends  they  have  declared, 
which  have  at  most  universally  equalled  and  frequently  exceeded  those  of  the 
Bank  of  the  United  States,  notwithstanding  the  advantage  enjoyed  by  the  lat- 
ter from  the  deposite  of  public  moneys.  Sir,  so  far  from  having  it  in  their  pow- 
er, in  the  case  of  the  dissolution  of  the  Bank  of  the  United  States,  to  assist 
the  debtors  to  that  bank  in  meeting  their  engagements  to  it,  I  affirm  the  fact, 
on  which  1  have  myself  a  perfect  reliance,  that,  take  the  State  banks,  from 
Boston  to  Washington,  and  after  paying  their  debts  to  the  Bank  of  the  United 
States,  they  have  not,  nor  do  I  believe  they  have  had,  for  six  months  back, 
specie  enough  to  pay  the  debts  due  to  their  depositors,  and  the  amount  of  their 


ON  THE  BILL  TO  RENEW   THE  CHARTER  OF   1791. 

bills  in  circulation.  And  here  I  beg  it  to  be  observed,  that  bank  bills,  and 
bank  deposites,  or  credits,  are  precisely  the  same  thing — with  this  difference, 
that  the  latter,  from  the  residence  in  the  neighborhood  of  the  banks,  and  the 
vigilance  of  the  proprietors,  would  be  the  first  called  for.  How  idle  is  it  then 
to  expect  to  obtain  relief  from  banks  which  have  already  extended  themselves 
beyond  the  bounds  of  prudence,  and  have  not  even  at  present  the  ability  to 
meet  their  existing  engagements?  It  might  nearly  as  well  be  expected  that 
a  man  who  was  already  a  bankrupt  should  prop  and  support  his  failing 
neighbor. 

Sir,  much  has  been  recently  said  of  the  amount  of  specie  in  the  United 
States.  Theoretical  men  have  made  many  and  vague  conjectures  about  it,  for, 
after  all,  it  must  rest  upon  conjecture.  Some  have  estimated  it  at  ten  millions 
of  dollars,  some  twelve,  some  twenty,  and  some  newspaper  scribblers  at  forty 
millions  of  dollars.  Sir,  I  do  not  believe  that,  for  the  last  ten  years,  the  United 
States  have  at  any  time  been  more  bare  of  specie  than  at  the  present  moment. 
A  lev/  years  since,  specie  flowed  in  upon  us  in  abundance.  This  resulted 
principally  irorn  an  operation  of  a  very  singular  and  peculiar  nature.  The  Spa- 
nish Government,  as  it  was  then  understood,  agreed  to  pay  to  France  a  very 
large  sum  of  money — many  millions  of  dollars,  the  precise  number  I  am  una- 
ble to  state — from  her  possessions  in  South  America.  France  contracted  with 
a.  celebrated  English  banking  house,  as  was  said  at  the  time,  with  either  the 
concurrence  or  connivance  of  the  English  Government,  that  this  money  should 
be  obtained  through  the  United  States.  These  bankers,  by  their  agent,  con- 
tacted with  certain  American  houses,  principally  1  believe  in  Baltimore,  for 
the  importation  of  this  specie  from  La  Vera  Cruy.  into  the  United  States,  from 
whence  it  was  not  transmitted  in  coin  to  Europe,  but  invested  in  adventures 
in  the  shipments  of  produce,  the  proceeds  of  which  ultimately  go  into  the 
hands  of  these  bankers  in  London,  or  of  their  friends  on  the  continent,  from 
whom  it  was  finally  realized  by  the  French  Government,  either  by  drafts 
from  Paris  or  remittances  to  that  city.  This  operation  had  a  trebly  favorable 
ell'ect  on  the  United  States— it  made  fortunes  for  some  of  the  merchants,  it 
furnished  the  means  of  shipments  to  Eurone?  and  it  also  provided  the  funds 
for  adventures  to  the  East  Indies  and  to  China.  But  this  contract  has  now 
been  finished  some  years;  and  since  that  time  there  has  been  a  constant  drain 
of  specie  from  the  country.  Where  it  is  in  future  to  be  procured  from,  I 
know  not.  Not  from  South  America— specie  is,  I  believe,  protected  from 
exportation  there,  except  to  Spain.  From  Spain  we  cannot  get  it — to  a  great 
part  of  what  was  Spain  we  have  now  scarcely  any  trade.  From  France  it 
cannot  be  obtained:  tor,  if  we  can  get  there  even  by  licence,  we  are  obliged  to 
bring  back  her  produce  or  manufactures.  From  England  it  cannot  be  im- 
ported—it is  now  made  highly  penal  to  attempt  to  send  it  out  of  the  kingdom. 
SVith  South  America  we  have  but  little  trade;  hitherto  we  furnished  them 
with  smuggled  or  licensed  European  and  India  goods,  but  now  the  markets 
are  flooded  with  these  goods,  by  importations  direct  from  England,  and  which 
have  been  attended  with  great  loss  to  the  shippers.  For  these  reasons,  it  is 
difficult  to  find  a  vessel  sailing  from  the  United  States  to  the  Spanish  ports  in 
South  America.  These  are  among  the  reasons  why  the  amount  of  specie 
now  in  the  country  is  small,  and  has  for  some  time  past  been  gradually  les- 
sening. Sir,  without  indulging  in  vague  conjectures,  what  are  the  best  data 
trom  which  we  have  to  form  an  estimate  of  the  amount  of  specie  in  the  country? 
The  Bank  of  the  United  States  has  five  millions  of  dollars  in  its  vaults.  In  Bos- 
ton there  are  three  State  banks;  in  New  York  I  believe  four;  Philadelphia 
four;  and  Baltimore  eight;  call  these  nineteen,  twenty,  and  allow  on  an  aver- 
age one  hundred  and  fifty  thousand  dollars  specie,  which  probably  is  as  much 
as  they  generally  possess,  and  this  will  make  three  millions  of  dollars;  this 
amount,  united  to  the  sum  in  the  vaults  of  the  Bank  of  the  United  States 
gives  eight  millions  of  dollars,  to  which,  if  you  allow  two  millions  of  dollars 
tor  a  loose  circulation  of  specie,  you  get  an  aggregate  of  ten  millions  of  dol- 
lars. \\e  are  sometimes  told  of  the  large  sums  of  money  hoarded  incur 
country  by  individuals;  probably  there  may  be  some  among  the  German 
4  1 


322  BANK  OF  THE  UNITED  STATES. 

farmers  in  Pennsylvania — perhaps  more  in  that  State  than  in  any  other,  or  alt 
the  others  in  the  Union,  but  still  of  no  great  amount — the  reputation  of  a  little 
money  possessed  in  this  way  easily  swells  into  a  large  sum.  At  any  rate,  let 
the  amount  be  what  it  may,  in  time  of  distress  and  mistrust,  it  would  afford 
no  addition  to  your  circulating  medium:  for  it  is  precisely  in  times  like  these, 
that  men  who  hoard  money  will  lock  it  up  most  securely. 

Sir,  the  circulation  of  our  country  is  at  present  emphatically  a  paper  circu- 
lation; very  little  specie  passes  in  exchange  between  individuals;  it  is  a  cir- 
culation bottomed  on  bank  paper  and  bank  credits,  amounting  perhaps  to  fifty 
millions  of  dollars.  And  on  what,  sir,  does  this  circulation  rest?  It  rests 
upon  the  ten  millions  of  dollars,  if  that  be  the  amount  of  specie  in  the  country, 
and  upon  public  confidence. 

The  Bank  of  the  United  States  has  fifteen  millions  of  dollars  to  collect; 
call  it  ten,  sir — nobody  will  dispute  this— no  one  will  pretend  that  this  bank, 
is  not  solvent — the  remnant  ot'its  surplus  dividends,  and  the  interest  it  will' 
have  earned,  will  be  sufficient  to  cover  its  losses  at  New  Orleans,  at  Wash- 
ington, arid  perhaps  elsewhere.  In  what  are  these  ten  millions  of  dollars  to  be 
collected?  In  bank  bills,  the  credit  of  which  is  at  least  doubtful?  No,  Sir, 
in  specie;  and  when  this  is  entirely  withdrawn  from  the  State  banks,  and  the 
banks  are  unable  to  pay  the  money  for  their  bills,  who  does  not  see  that  this 
confidence  is  instantly  destroyed—that  the  bubble  bursts — that  floods  of  paper 
bills  will  be  poured  in  upon  them,  which  they  will  be  unable  to  meet,  and 
which  will  for  a  time  be  as  worthless  as  oak  leaves;  that  the  banks  themselves 
must  at  least  temporarily  become  bankrupts;  and  that  a  prostration  of  credit, 
and  of  all  those  habits  of  punctuality  which,  for  twenty  years,  we  have  been 
striving  so  successfully  to  establish,  will  inevitably  ensue,  and,  with  them 
also,  there  must  be  suspended  the  commerce,  the  industry  and  manufactures- 
of  the  country;  and  a  scene  of  embarrassment  and  derangement  be  produced,, 
which  has  been  unexampled  in  our  history. 

I  will  now  make  a  very  few  remarks  on  the  effects  which  the  dissolution  of 
the  bank  will  have  on  the  revenue  and  fiscal  concerns  of  the  country.  Can  it 
be  supposed,  sir,  that  the  source  to  which  will  be  imputed  the  distress  that 
will  have  flowed  from  this  event,  will  be  the  first  to  be  thought  of,  to  be  guard- 
ed against  a  participation  of  the  evils  that  will  result  from  it,  in  preference  to 
the  claims  of  the  most  intimate  friends  and  connexions?  No,  sir,  the  bond* 
due  to  the  United  States  will  be  collected  only  at  the  tail  of  an  execution. 
But  I  mean  not  to  press  this  consideration.  Admit,  for  a  moment,  that  they 
will  all  be  equally  well  collected;  that  they  will  be  paid  as  usual,  although  it 
is  palpable,  that,  fora  considerable  time, the  merchants  will  be  unable  to  find 
the  means  to  pay  them;  yet,  admit,  sir,  that  the  money  is  collected  in  the 
State  banks,  how  is  it  to  be  transmitted?  It  must  come  to  the  centre  of  the 
Seat  of  Government;  very  little  of  the  public  money  is  expended  in  the  North- 
ern section  of  the  Union.  Will  it  come  from  the  Eastward,  in  bills  of  the 
State  banks?  Penobscot  bank  bills  sometimes  will  not  pass  in  Boston;  Boston 
bills  pass  with  difficulty  in  New  York  or  Philadelphia;  and  bills  of  New  York 
State  banks  probably  would  not  be  readily  current  in  Washington.  You 
must,  then,  sir,  if  Boston  gives  you  a  revenue  of  two  millions  of  dollars,  trans- 
mit the  greater  part  of  it  to  the  seat  of  Government,  or  wherever  else  it  may 
be  wanted,  in  specie.  Can  this  be  done?  We  have  not  two  millions  of  dol- 
lars of  specie  in  our  town,  and,  I  may  almost  venture  to  say,  never  had^  Sup- 
pose you  make  this  transmission  once,  can  you  do  it  the  second  time?  No, 
sir,  the  thing  is  utterly  impracticable.  You  must  adopt  some  other  mode. 
Exchange  between  the  ditterent  cities  will  not  reach  the  case;  frequently  it 
cannot  be  purchased  even  for  an  insignificant  amount.  . 

Sir,  will  your  money,  when  collected,  be  safe  in  the  State  banks?  Jt  this 
I  am  extremely  doubtful.  Solicitations  will  undoubtedly  be  made  for  it  from 
all  quarters.  They  have  already  been  made.  In  one  instance,  I  am  told,  sir, 
the  agent  of  a  bank,  even  during  the  few  past  weeks,  has  been  here  for  the 
purpose;  that  suddenly  the  agent  was  gone,  and  in  a  few  days  it  was  discover- 
ed that,  owing  to  the  failure  of  one  of  the  debtors  to  the  bank  which  he  repre- 


ON  THE   BILL  TO  RENEW    THE  CHARTER  OF  1791. 

sented,  (a  great  broker)  the  stock  had  fallen  in  one  day  near  twenty  per  cent. 
What  was  tliis  the  evidence  of,  but  that  those  who  were  most  interested  in 
this  bank,  the  stockholders  who  were  on  the  spot,  and  best  acquainted  with  its 
solidity,  were  willing  to  wash  their  hands  of  their  concern  in  it,  at  almost  any 
rate  of  sacrifice?  Sir,  I  only  state  this,  as  it  was  here  reported,  I  have  no 
personal  knowledge  on  the  subject.  But  will  you  trust  your  funds  with  an 
institution  thus  precarious,  and  whose  solidity  is  distrusted  even  by  its  best 
friends? 

By  an  account  of  the  receipts  and  expenditures  for  the  year  1810,  laid  on 
our  tables.  I  find  there  lias  been  passed  to  the  credit  of  the  United  States  $390 
received  from  the  Lincoln  and  Kennebeck  bank,  *in  Massachusetts,  as  an  in- 
terest on  the  public  money  while  deposited  in  that  bank.  The  history  of  this 
credit  of  interest,  is,  I  presume,  the  following:  The  money  was  deposited  at 
the  bank  for  account  ot  the  United  States;  the  bank  used  the  money  for  its 
own  accommodation,  and  when  called  on  for  the  amount  could  not  refund  it. 
This  allowance  of  interest  is,  therefore,  for  the  time  during  which  the  bank 
could  not  pay  the  money.  The  amount,  in  this  instance,  is  small,  sir,  and  the 
United  States  have  received  a  compensation  for  the  use  of  the  money.  It 
proves,  however,  what  has  [been  done,  and  will  be  done  again.  Suppose  it 
should  be  done  on  a  large  scale,  and  when  the  Government  wants  its  funds, 
it  cannot  command  them;  an  interest  on  the  amount  will  not  pay  the  salaries 
of  the  officers  of  the  nation;  it  will  not  feed  your  armies,  nor  suport  your 
navy;  it  must  derange  the  whole  system  of  the  Government,  and,  perhaps, 
bring  it  to  a  stand  still.  1  have  no  hesitation,  sir,  in  declaring,  that,  in  my 
opinion,  if  the  collection  and  transmission  of  the  public  moneys  be  entrusted 
exclusively  to  the  State  banks,  that,  at  least,  great  trouble,  perplexity,  and 
occasional  defalcation  will  ensue. 

I  shall  now  present,  sir,  to  the  Senate,  the  testimony  which  was  offered  to 
the  committee  by  the  two  delegations  from  Philadelphia,  the  one  selected  from 
the  master  manufacturers  and  mechanics,  and  the  other  from  the  merchants 
of  that  city.  It  will  go  conclusively  to  show  the  effects  which  it  is  apprehended 
will  ensue  from  the  cessation  of  the  Bank  of  the  United  States  in  a  city,  the 
first,  perhaps,  in  population  and  wealth  in  the  Union,  and  the  one  least  engaged, 
of  any  of  the  great  seaports,  in  proportion  to  its  wealth,  in  foreign  commerce. 

The  agents  from  the  manufacturers  and  mechanics  told  their  story  in  a  plain, 
straight  forward  manner,  each  one  narrating  facts  which  affected  himself,  and 
came  within  the  scope  of  his  personal  observations.  The  representatives  of 


the  former  testimony,  which  was  very  impressively  given  to  the  committee,  will 
be  stated  in  detail,  and  the  latter  be  presented  in  a  much  more  comprised  and 
concise  form, 

Mr.  Leiper,  a  respectable,  wealthy,  and  extensive  tobacconist,  and  a  pro- 
prietor also  of  some  stone  quarries,  which  furnish  considerable  building  stone 
to  the  masons  in  Philadelphia,  informed  the  committee,  that  he  had  been  long 
and  extentively  engaged  in  a  tobacco  manufactory.  He  employs  upwards  ot 
a  hundred  workmen,  and  the  expenses  of  his  business  amount  to  about  one 
hundred  and  sixty  dollars  a  day;  he  believes  that  the  dissolution  of  the  Bank 
of  the  United  States  would  produce  a  scene  of  distress  in  the  seaports  unpre- 
cedented in  our  country;  that  it  would  stop  one-half  of  the  master  manufac- 
turers and  mechanics  of  the  city;  that,  already,  confidence  was  nearly  de- 
stroyed; the  debts  due  to  manufacturers  and  mechanics  were  on  open  account*, 
on  which  it  was  impossible  to  make  collections  to  any  amount  of  consequence; 
that  the  manufacturers  and  mechanics  must,  unless  the  state  of  things  be  al- 
tered, in  a  great  measure  stop  their  business,  and  dismiss  their  workmen,  and 
very  many  of  them  sacrifice  their  property,  or  lose  their  reputation,  and  stop 
payment.  Money,  he  said,  could  not  be  commanded,  a  short  time  since,  how- 
ever good  the  security  offered;  he  generally  met  his  engagements  easily;  he 
liad,  however,  shortly  before  leaving  home,  occasion  to  remit  to  his  correspon- 


324  BANK  OF  THE  UNITED  STATES. 

dent  at  Richmond,  where  he  was  in  the  habit  of  having  considerable  quantities 
of  tobacco  purchased,  fourteen  hundred  dollars;  he  had  on  hand  towards  this 
sum  eight  hundred  dollars,  and  found  considerable  difficulty  in  procuring  the 
remainder;  it  had,  however,  been  clone  since  he  left  home,  arid  remitted,  with 
directions,  however,  to  the  agent,  to  make  no  more  purchases,  nor  to  enter 
into  any  new  contracts  for  his  account. 

Mr,  Leiper  further  stated^  that  the  pressure  for  money,  which  recently  ex- 
isted in  Philadelphia,  has,  for  the  moment,  been  relieved,  although  scarcely 
any  sales  or  purchases  are  making,  except  at  greatly  reduced  and  destructive 
rates  to  the  seller.  This  relief  had  been  obtained,  by  the  Bank  of  the  United 
States  agreeing  to  continue  its  full  discounts  to  the  4th  of  March  next;  and 
from  the  State  banks,  calculating  on  the  forbearance  of  the  Bank  of  the 
United  States,  having  liberally  issued  new  paper.  The  Bank  of  Pennsylvania, 
of  which  Mr.  Leiper  has  been  many  years  a  director,  recently  let  out,  in  one 
week,  eighty  thousand  ^dollars  of  new  money;  but  if  the  Bank  of  the  United 
States  is  not  continued,  this  momentary  relief  would  only  extend  the  evil,  as 
it  would  enlarge  the  liabilities,  and  still  further  increase  the  pressure  and  dis- 
tress, and  want  of  money  which  must  then  arise- 

About  seventeen  years  since,  Mr.  Leiper  felt  hurt  at  the  conduct  of  the 
Bank  of  the  United  States  in  rejecting  his  paper;  he  left  the  bank,  and  did 
his  business  elsewhere:  since  that  time  he  had  heard  no  complaints;  he  be- 
lieved the  concerns  of  the  bank  had  been  conducted  fairly  and  liberally,  and 
that  discounts  had  been  afforded  to  democrats  as  well  as  to  federalists,  to 
manufacturers  and  mechanics,  as  well  as  the  merchants. 

Mr.  Leiper,  sir,  has  been  a  zealous  and  unwavering  partizan  of  the  persons 
now  in  power,  since  the  adoption  of  the  federal  constitution,  and  his  testimo- 
ny will  not  probably  be  thought  entitled  to  less  weight  on  that  account, 

Mr.  Grice,  a  respectable  master  ship  carpenter,  in  large  business,  informed 
the  committee  that  there  are  now  building,  in  Philadelphia,  9,145  tons  of 
shipping,  a  list  of  which  he  exhibited  to  the  committee;  a  lager  amount  of 
tonnage  than  was  ever  before  on  the  stocks  in  that  city,  and  which,  when  fin- 
ished, would  cost  about  a  million  of  dollars;  that  the  whole  of  this  shipping 
had  been  contracted  for,,  except  about  1000  tons;  that  the  work  was  to  be 
done  and  delivered  in  the  course  of  the  ensuing  spring;  that  there  were  em- 
ployed in  the  city,  in  connexion  with  this  business,  about  2,000  persons;  that,, 
owing  to  the  apprehensions  excited  by  the  expected  non- renewal  of  the  char- 
ter of  the  Bank  of  the  United  States,  great  inconvenience  had  been  already 
experienced  by  all  classes  of  men  iti  that  city;  that  confidence  was  nearly  de- 
stroyed; he  could  neither  obtain  money  to  pay  his  workmen  or  to  carry  on 
his  business^  that  the  former,,  unless  a  change  took  place,  he  must  dismiss; 
that  such  had  been  the  rapid  growth  of  the  navigation  of  the  United  States,  it 
was  difficult  to  procure  good  workmen,  was  highly  important  to  keep  them  in 
the  country,  and  would  be  extremely  disadvantageous  to  have  them  drawn 
out  of  it;  that  already.,  owing  to  the  great  increase  of  ship  building  in  Canada,, 
agents  were  endeavoring  to  induce  mem  to  leave  the  United  States  for  that 
country,  where  they  could  earn  more  money  than  at  home.  That,  if  the  bank 
was  obliged  to  stop,  the  master  ship  carpenters  could  neither  borrow  money 
nor  collect  their  debts,  and  must  of  necessity  dismiss  their  workmen*. in  which 
case  very  many  of  them  would  leave  the  United  States,  and  probably  never 
return.  That  he  did  not  believe  that  more  than  two  or  three  of  the  persons 
who  had  contracted  for  vessels,  in  the  event  of  the  dissolution  of  the  bank- 
would  be  able  to  fulfil  their  contracts;  that,. in  consequence,  the  vessels  would 
be  left  on  the  hands  of  the  builders,  who,  on  their  part,  would  be  unable  to 
meet  their  engagements;  and  that  the  vessels  must  finally  be  sold  for  the  most 
they  would  fetch,  probably  at  half  their  value,  to  the  great  loss,  and  perhaps 
ruin  of  the  builders. 

He  had  been  himself  largely  in  business,  and  had  dealt  for  many  years  with 
the  Bank  of  the  United  States:  he  had  ever  been  treated  liberally  and  kindly 
by  it;  he  viewed  himself  indebted,  in  a  considerable  degree,  for  his  present 
standing  in  society,  to  the  accommodations  he  had  received  at  that  bank;  still,. 


ON  THE  BILL   TO  RENEW  THE  CHARTER  OF   1791. 

in  the  course  of  his  business,  he  occasionally  took  notes,  at  three,  four,  or  six 
months,  which,  having  a  longer  time  to  run  than  that  at  which  the  bank  dis- 
counted, of  sixty  days,  he  found  it  convenient  to  convert  into  money;  this, 
hitherto,  he  could  always  readily  do,  by  carrying  the  notes  to  a  wealthy  mer- 
chant, for  whom  he  sometimes  did  business,  and  who,  hitherto,  had  always 
been  willing  to  discount  them  for  him,  at  bank  interest;  that,  being  cut  oft" 
from  his  usual  discounts  at  the  bank,  he  recently  endeavored  to  avail  himself 
of  this  resource,  but  found  it  wholly  shut  against  him;  that  the  gentleman 
whose  funds  had,  hitherto,  appeared  inexhaustible,  would  now  aftord  no  re- 
lief; confidence  was  destroyed;  he  knew  not  who  was  safe,  he  would  make 
no  new  discounts,  were  the  answers  he  obtained  instead  of  money. 

Mr.  Grice  stated  that  this  out-of-door  discounting  had  been  of  great  service 
to  the  manufacturers  and  mechanics,  as  they  could  frequently  get  money  from 
it,  when  they  could  not  obtain  discounts  at  the  banks;  he  had  reason  to  be- 
lieve that  the  amount  of  money  thus  employed  in  the  city,  at  the  legal  and 
advanced  rates  of  interest,  was  not  less  than  seven  millions  of  dollars;  that 
this  resource  was  now  wholly  cut  off:  they  who  had  money  would  not  loan  it 
at  any  rate,  and  kept  it  on  hand,  either  to  secure  it,  or  to  derive  an  exorbi- 
tant advantage  from  the  necessities  and  sacrifices  of  others.  Mr.  Grice  be- 
lieved that,  with  very  few  exceptions,  all  classes  in  Philadelphia  were  in 
favor  of  the  renewal  of  the  charter  of  the  bank;  without  it,  he  believed  great 
numbers  of  persons  would  be  rendered  bankrupts,  and  general  distress,  at 
least  among  the  manufacturers  and  traders,  would  en 

Mr.  Vogdes,  a  master  house  carpenter,  in  extensive  business,  informed  the 
committee  there  were,  at  this  time  building,  about  five  hundred  brick  houses, 
in  Philadelphia,  two  thirds  of  which  belonged  to  the  mechanics  of  the  city, 
who  arc  in  the  habit  of  purchasing  lots  of  land  on  credit,  and  who,  with  their 
own  capitals,  which,  in  many  instances,  are  small,  and  by  borrowing  of  the 
banks,  or  of  individuals,  and  buying  materials  on  credit,  are  enabled  to  erect 
buildings,  on  the  sale  of  which  they  depend  for  tin?  means  of  meeting  their 
engagements;  that  he  himself  at  present  owns  buildings  of  this  description, 
on  the  sale  of  which  he  had  calculated,  to  the  amount  of  $130,000.  He  em- 
ploys 100  workmen. 

Mr.  Vogdes  stated  he  had  been  in  the  habit  of  receiving  a  moderate  accom- 
modation at  the  bank;  he  had  ever  been  well  treated  by  the.  bank;  the  direc- 
tors had  recently  reduced  his  notes,  but  not  in  so  great  a  degree  as  the  State 
banks  had  done;  that  the  expected  termination  of  the  charter  of  the  Bank  of 
the  United  States  had  greatly  incommoded  him,  and  others  probably  more; 
it  had  nearly  suspended  all  business  among  the  manufacturers  and  mecha- 
nics; it  had  stopped  all  sales  of  real  estate,  which  he  does  not  believe  could 
now  be  effected  at  so  high  a  rate,  within  30  per  cent,  as  the  sales  could  have 
been  made  at  some  time  since;  he  had  himself  engaged  to  sell  two  houses, 
one  for  $10,000,  the  contractors  for  which  had  fallen  from  their  engagements 
under  one  small  pretence  or  another,  but,  really,  as  he  believes,  from  the 
change  of  times,  and  the  difficulty  there  existed  in  procuring  money  to  meet 
the  engagements  even  of  the  most  wealthy  persons;  he  himself  had  a  note  of 
one  of  the  most  respectable  arid  undoubted  men  in  the  city;  he  offered  it  at 
three  banks,  but  could  not  obtain  a  discount  on  it,  and  was  finally  obliged,  in 
order  to  meet  his  engagements  and  pay  his  workmen,  to  sell  it  at  one  and  a 
half  per  cent,  per  month  discount;  he  knew  a  broker  who  had  notes  to  the 
amount  of  half  a  million  of  dollars  laying  by  him  for  sale,  which  were  con- 
sidered good,  but  which  he  could  not  dispose  of  at  any  rate;  he  had  a  mort- 
gage which  he  was  constrained  to  sell  at  18  per  cent,  for  twelve  months:  and 
his  son,  to  pay  his  workmen,  was  obliged  to  have  his  note  discounted  on  the 
best  terms  at  which  it  could  be  done,  which  were  at  2  per  cent,  per  month. 

Mr.  Vogdes  is  concerned  in  some  rolling  and  slitting  .mills,  which  work 
about  500  tons  of  iron  annually.  The  proprietors  have  now  on  hand  about 
100  tons  of  manufactured  iron;  commonly  it  is  very  saleable,  at  present, 
owing  to  the  causes  that  have  been  mentioned,  there  is  no  demand  for  it.  It 
is  usual  for  manufacturers  of  iron  to  lay  in  their  stock  when  the  importa- 


326  BANK  OF  THE  UNITED  STATES. 

tions  are  largest,  generally  late  in  the  autumn;  this,  several  ot  them  have 
clone.  The  price  is  usually  from  $108  to  $120  per  ton;  it  has,  however,  fallen, 
from  the  pressure  of  the  times?  to  $85  per  ton.  This  difference  the  manu- 
facturers must  suffer,  which,  in  addition  to  the  want  of  sale  for  their  manu- 
factures, and  the  other  disadvantages  under  which  they  labor,  if  relief  be  not 
speedily  obtained,  must  ruin  most  of  those  who  have  not  large  capitals  to 
enable  them  to  sustain  the  shock. 

He  does  not  believe  that  political  considerations  enter  at  all  into  the.  direc- 
tion of  this  bank.  He  has  no  knowledge  of  a  well  founded  complaint  of  any 
mechanic,  democrat  or  federalist,  not  receiving  a  discount,  if  entitled  to  it, 
and  the  circumstances  of  the  bank  would  admit  of  it.  He  stated  that  this  was 
no  party  question;  that,  with  a  very  few  exceptions,  all  classes  in  Philadel- 
phia are  in  favor  of  the  renewal  of  the  charter  of  the  bank.  He  is  authorized 
to  say,  that  the  person  who  now  has,  and  for  the  last  twelve  months  has  had, 
the  largest  accommodation  at  the  bank,  is  one  of  the  best  known,  and  most 
leading  democrats  in  the  city.  If  the  charter  be  not  renewed,  it  is  his  opi- 
nion the  most  serious  and  general  distress  will  be  the  consequence. 

Mr.  Ord,  a  respectable  rope  manufacturer,  stated  to  the  committee,  that  he 
worked  up  annually,  in  his  manufactory,  about  one  hundred  tons  of  hemp; 
that  he  seldom  wanted  discounts;  when  he  did,  he  obtained  them  with  facility 
from  the  Bank  of  the  United  States,  where  he  had  been  always  well  treated, 
and  the  business  of  which,  he  believed,  had  been  conducted  fairly  and  libe- 
rally, without  reference  to  any  party  or  political  views  whatever.  He  had 
hitherto  been  able  to  carry  on  his  business  with  ease.  He  had  large  debts  out, 
but  now  all  confidence  was  destroyed;  he  could  collect  nothing,  nor  could  he, 
without  receiving  his  debts  or  borrowing  money  to  meet  his  engagements;  and 
if  times  did  not  change,  he  must  stop  his  business  and  dismiss  his  workmen, 
as  must  most  of  the  other  manufacturers  of  cordage  in  the  city;  that  at  pre- 
sent all  business  was  at  a  stand;  no  sales  could  be  effected.  Hemp,  which 
shortly  since  was  at  $350  per  ton,  had  fallen  to  $250,  without  finding  a  market. 
He  had  recently  bought  some  at  $200  per  ton,  which  had  sustained  so  small 
a  degree  of  damage  as  to  make  it  scarcely  worth  naming.  Kentucky  yarns 
were  also  unsaleable,  although  there  were  never  so  many  ships  on  the  stocks 
in  Philadelphia,  and  the  cordage  for  which  must  be  principally  manufactured 
from  these  yarns,  which,  but  for  the  present  state  of  things,  would  have  risen 
rather  than  declined  in  price,  as  the  vessels  building  would  have  been  rigged 
in  the  ensuing  spring;  that  the  cordage  for  them  would  have  been  wanted 
nearly  at  the  same  time,  and  could  be  made  much  sooner  from  yarns  than 
from  hemp,  which  would  have  given  them  the  preference. 

Mr.  Ord  fully  concurs  with  the  other  gentlemen  in  the  distress  which  would 
be  produced  in  consequence  of  a  dissolution  of  the  charter  of  the  bank. 

Mr.  Peering,  an  intelligent  and  respectable  currier  of  leather,  informed  the 
committee  that  he  was  in  the  habit  of  purchasing  domestic  and  foreign  hides 
to  a  large  amount,  which,  after  manufacturing,  he  sold  to  his  customers  in  the 
interior,  and  to  the  boot  and  shoe  makers  in  me  city,  generally  on  a  credit  of 
six  months;  which,  however,  frequently  extended  to  twelve  months  before  he 
received  his  money;  he  also  ships  considerable  quantities  of  leather  to  other 
parts  of  the  United  States.  There  are  about  forty  curriers  in  Philadelphia; 
and  from  two  to  three  thousand  persons,  including  those  who  work  the  lea- 
ther, are  dependent  on  this  manufactory  in  the  city;  a  considerable  number 
of  whom,  he  believes,  (unless  some  relief  is  obtained)  from  the  present  scar- 
city of  money,  will  be  greatly  distressed,  and  be  dismissed  from  employment. 
He  has  kept  his  account  principally  with  the  Bank  of  the  United  States;  has 
always  been  well  treated,  and  has  derived  a  great  facility  in  his  business, 
both  to  the  north  and  south,  by  the  bank  collecting  his  debts  for  him,  and 
passing  the  amount  to  his  credit  in  Philadelphia,  free  of  commission  and  the 
risk  ot  remitting  money.  This,  he  believes,  is  generally  done  by  the  bank  for 
the  merchants,  manufacturers,  and  mechanics,  who  may  request  it,  and  can- 
not be  done  by  the  State  banks,  because  they  have  not  branches  in  the  differ- 
ent seaports  of  the  United  States,  even  if  they  had  the  disposition  to  do  it.  He 


ON  'THE  BILL  TO   RENEW    THE    CHARTER  OF   1791. 

has  hitherto  been  able  to  command,  with  ease,  as  large  an  amount  of  money 
as  his  business  required;  at  present,  he  cannot  collect  his  debts  nor  sell  his 
stock,  nor  get  discounts  at  tlie  banks.  Having  failed  to  do  it  at  the  Bank  of 
the  United  States,  he  applied  to  a  State  bank,  where  he  had  made  some  depo- 
sites,  but  without  success. 

Mr.  Peering  states,  that  confidence  is  beginning  to  be  impaired  even  in  bank 
paper.  He  shortly  since  bought  some  hides  of  an  opulent  farmer,  with  whom 
lie  had  dealt  before,  and  wholiad  always,  without  objection,  received  his  pay- 
ments in  checks  or  bank  bills;  in  the  recent  sale  he,  however,  declined  at 
first  to  receive  them;  after  some  persuasion,  he  did  take  them,  but  immedi- 
ately went  to  the  bank  and  demanded  the  money  and  took  it  home  with  him. 
Very  rnanv  of  the  manufacturers  and  mechanics  have  accounts  open  with  the 
Bank  of  the  United  States.  He  has  found  discounts  more  readily  obtained 
there  than  at  the  State  banks.  When  he  left  Philadelphia  he  had  no  personal 
knowledge  of  any  one  director  of  the  banks.  He  has  heard  no  complaints  for 
many  years,  of  the  conduct  of  the  bank;  the  attkirs  of  which  he  believes  to  be 
liberally  and  honorably  conducted.  He  believes  the  only  consideration  with 
them  in  discounting,  is,  whether  the  paper  whieh  is  offered  be  good  or  bad, 
without  reference  to  political  principles  or  conduct  of  the  party  ottering  it. 

Mr.  Peering  asserts,  that,  in  Philadelphia,  this  is  no  party  question;  nearly 
til  classes  wish  for  a  continuance  of  the  bank.  He  does  not  believe  there  are 
.  hundred  master  manufacturers  and  workmen  in  the  city,  who  would  not 
eadily  have  signed  the  memorial,  had  there  been  time  for  it.  The  subscrip- 
ion  was  very  hastily  filled  up,  or,  although  it  contains  the  names  of  between 
ive  and  six  hundred  master  manufacturers  and  mechanics,  and  not  one  name 
»f  any  other  description,  it  would  have  included  a  large  number  of  others. 
le  carried  round  one  of  the  memorials,  and  met  with  scarcely  any  one  who 
efused  to  sign  it.  He  does  not  believe  one  out  of  a  hundred  would  object  to 
t;  it  was  not  true  that  it  was  a  party  question;  he  was  a  democrat — the  whole 
lelegation  were  democrats;  some  of  them  were  from  the  very  focus  of  demo- 
cracy, the  Northern  Liberties;  and  yet  they  were  anxious  the  charter  of  tlu- 
jank  should  be  renewed;  indeed,  if  it  were  not,  or  some  other  relief  obtain- 
ed, a  great  many  of  the  mechanics  and  manufacturers  must  stop  their  busi- 
ness, dismiss  their  workman,  and  some  of  them  be  ruined,  as  they  could  now, 
neither  by  loans  nor  by  collections,  get  money  enough  to  meet  their  engage- 
ments and  pay  their  expenses.  The  journeymen  and  laborers  have  not  yet 
felt  the  pressure;  because  they  have  been  kept  in  employ  from  the  hope  that 
business  and  confidence  would  be  renewed,  and  money  again  become  as 
plenty  as  it  had  been.  Should  this  not  be  the  case,  the  clamor  and  distress 
will  then  be  heard  and  felt  more  universally  and  extensively. 

This,  sir,  was  the  narration  which  was  most  impressively  delivered  to  the 
committee.  In  the  sentiments  of  the  delegation  there  was  no  variance;  all 
the  members  of  it  stated  the  anxiety  and  wish  for  the  renewal  of  the  charter 
which  pervaded  nearly  all  ranks  in  the  city  of  Philadelphia.  They  united  in 
the  opinion  that  party  considerations  did  not  mingle  with  the  question;  that, 
if  the  bank  were  permitted  to  run  down,  they  would,  individually,  be  great 
sufferers;  that  a  scene  of  embarrassment  and  distress  would  overwhelm  great 
numbers  of  the  citizens;  that  the  State  banks  could  afford  no  relief,  having 
already  extended  their  discounts  to  the  utmost  limits  of  prudence,  calculating 
on  the  renewal  of  the  charter,  or  the  forbearance  of  the  Bank  of  the  United 
States;  if  this  were  not  obtained,  the  mischiefs  they  have  described  must  be 
experienced,  and  the  manufacturers  and  mechanics  would  fall  the  first  sacri- 
fices; for  the  merchants  were  in  the  habit,  either  by  auction  or  otherwise,  of 
selling  their  property  for  endorsed  paper  or  collateral  security,  while  the 
manufacturers  and  mechanics  were  left  exposed  on  a  single  name,  as  it  never 
was  their  usage  to  demand  security,  nor  could  they  do  it;  were  they  to  attempt 
it,  they  would  give  offence  to  their  employers,  and  lose  not  only  their  present, 
but  all  future  business  from  them;  and,  of  consequence,  severely  as  the  mer- 
chants would  suffer  by  this  unexampled  stoppage  of  business,  the  manufac- 


328  BANK  OF  THE  UNITED  STATES. 

turers  and  mechanics  would  feel  it  still  more  seriously,  and  numbers  of  them 
undoubtedly  be  ruined. 

A  delegation  from  the  merchants  of  the  city  of  Philadelphia,  composed  of 
very  respectable  men,  and  equally  divided  as  regards  an  attachment  to  the 
two  great  political  divisions  in  our  country,  were  heard  before  the  committee. 
They  confirmed  the  representations  that  had  been  made  as  to  the  conduct  of 
the  bank ;  the  absence  of  party  influence  from  its  management;  the  interest 
which  was  excited  for  its  continuance;  the  stagnation  of  business  and  the 
prostration  of  credit  and  all  habits  of  punctuality,  which  they  believed  would 
ensue  from  its  dissolution.  They  also  stated  the  serious  loss  it  would  occa- 
sion to  the  Government  from  the  inability  of  the  importers  to  pay  their  bonds, 
and  their  disbelief  in  the  ability  of  the  State  banks  to  afford  any  permanent  relief. 
These  gentlemen  gave  it  as  their  opinion  that  the  more  liberal  these  banks 
were  now,  the  worse  would  be  their  situation  when  the  Bank  of  the  United 
States  ceased  its  discounts;  that  if  the  affairs  of  that  bank  were  speedily  wound 
up,  the  State  banks  could  not  meet  their  engagements  and  pay  for  the  notes 
they  had  in  circulation,  and  that  they  must,  of  course,  stop  payment  as  well 
as  the  merchants;  that,  in  such  a  state  of  things,  the  depositors  would  with- 
draw their  deposites  instantly,  and  the  bank  notes  which  were  in  circulation 
would  immediately  return  upon  the  banks,  when  they  would  be  unable  to  pay 
them;  that,  already  a  considerable  degree  of  suspicion  was  beginning  to  pre- 
vail of  the  security  of  bank  paper;  that  there  had  been  recently  brought  to  the 
Bank  of  North  America  notes  which  had  been  issued  twenty  years  before,  and 
\yere  supposed  to  have  been  lost,  but  which  distrust  had  again  brought  to 
light;  that  neither  navigation,  nor  merchandise,  nor  exchange,  however  un- 
exceptionable, could  now  be  disposed  of,  except  at  great  sacrifices;  that  flour 
had  fallen  in  price  from  eleven  to  seven  and  three-quarters  of  a  dollar,  or 
eight  dollars  per  barrel;  that  the  house  to  which  one  of  the  gentlemen  belong- 
ed, one  of  the  first  in  point  of  standing  in  the  United  States,  had  recently  re- 
ceived orders  for  the  shipment  of  30,000  barrels  of  flour,  \yhich,  from  the  un- 
certainty of  finding  funds  or  procuring  purchasers  for  bills  of  exchange,  as 
heretofore,  lucrative  as  was  the  commission,  they  had  declined  to  execute. 
That  it  was  the  belief  of  these  gentlemen,  that  the  dissolution  of  the  bank,  and 
the  collection  of  its  capital  at  so  unfortunate  a  period  as  the  present,  when  so 
much  property  was  otherwise  absorbed  and  sequestered  abroad,  would  be  at- 
tended with  extremely  injurious  consequences  to  the  commercial,  agricultu- 
ral, and  manufacturing  interests,  and  to  the  revenue  and  prosperity  of  the 
country. 

Sir,l  shall  neither  trespass  further  upon  your  time, nor  weaken  this  testimony 
by  any  comments  of  mine.  I  havenovy  only  to  ask  the  indulgence  of  the  Senate 
while  I  trouble  them  with  a  few  additional  observations,  and  those  chiefly  of 
a  personal  nature.  Most  certainly,  sir,  I  am  not  acting  under  the  bias  of 
any  sinister  influence  or  partiality  in  advocating  the  renewal  of  the  charter  of 
this  bank.  I  do  not  own  a  share  of  the  stock,  nor  have  I  owned  one  for  a 
considerable  time  past,  nor  do  T  owe  to  the  institution  a  dollar.  A  few  years 
since,  I  was  in  the  direction  of  one  of  its  branches — the  bank  in  Boston — and 
I  was  left  out  of  it  with  very  little  ceremony:  not  because  I  had  abused  the 
confidence  reposed  in  me,  for  at  the  time  I  was  left  out  of  the  direction  I  did 
not  owe  to  the  bank  a  single  cent,  either  on  my  own  account,  or  as  surety  for 
another,  and  my  accommodation  at  the  bank  had  never  been  large.  I  was  then 
young,  and  possessed  of  but  little  properly,  and  to  enable  me  to  exercise  an 
independence  of  action,  which  I  hope  ever  to  preserve,  I  thought  it  proper  to 
abstain  in  a  considerable  degree  from  accommodations  to  myself,  in  order 
that  I  might  be  enabled,  if  necessary,  more  freely  to  check  undue  accommoda- 
tions to  others.  Still,  sir,  this  was  a  conduct  towards  me  not  calculated  to 
produce  any  peculiar  partiality  for  the  institution.  It  is  true  I  was  subsequently 
offered,  from  a  source  which  I  respected,  a  seat  again  at  the  Board  of  Direc- 
tors, with  the  understanding  that  1  should  retain  it  as  long  as  I  pleased. 

This  I  declined,  and  should  ever  have  declined  it.  Although  from  these 
circumstances  it  cannot  be  expected  that  I  should  feel  any  particular  regard 


ON  THE  BILL  TO  REN?EW  THE  CHARTER  OF  1791. 

for  the  bank,  yet  still  1  am  bound  to  say  I  feel  no  hostility  towards  it.  I 
believe  it  has  been  an  extremely  useful  institution;  and,  from  a  personal 
knowledge  of  the  management  of  the  affairs  of  the  branch  bank  at  Boston,  I 
freely  declare,  that,  in  my  opinion,  it  is  impossible  for  the  concerns  of  any 
moneyed  institution  to  be  conducted  with  more  correctness,  integrity,  and  im- 
partiality; with  more  discretion  towards  the  public,  or  greater  safety  towards 
the  corporation  which  created  it.  I  knoyv  the  directors.  They  are  honorable 
and  estimable  men;  and  at  the  head  of  the  bank  is  a  gentleman,  an  Essex 
junto  man,  perhaps,  he  may  be  called,  who  would  grace  any  station  in  any 
country , 

Sir,  I  have  received  from  the  most  numerous  branch  of  the  Legislature  of 
Massachusetts,  a  request  that  I  would  oppose  the  renewal  of  the  charter  of 
this  bank.  I  receive  the- request,  sir,  with  all  the  deference  and  respect 
which  is  due  from  me  to  an  expression  of  the  opinion  of  that  honorable  body. 
It  has  induced  me  to  examine  my  sentiments,  t9  re  weigh,  and  deliberately  re- 
flect upon  them.  Having  done  this,  and  having  come  into  office  without  an 
intimation  of  a  wish  on  my  part  for  public  life,  without  a  single  stipulation  as  to 
my  political  opinions,  or  an  indication  of  the  course  I  should  pursue,  I  can  only 
say?  I  should  not  act,  on  a  question  in  which  I  considered  the  public  interests 
as  implicated,  in  opposition  to  the  convictions  of  my  own  mind,  deliberately 
formed,  in  consequence  of  the  request,  or,  if  you  please,  instruction,  of  the  en- 
tire Legislature  of  the  State  which  I  have  in  part  the  honor  to  represent, 
much  as  I  am  bound,  both  by  duty  and  inclination,  to  respect  it,  nor  in  conse- 
quence of  the  request  or  instruction  of  all  the  congregated  legislatures  on 
earth.  I  believe  the  renewal  of  the  charter  of  the  bank  will  avert  many  evils, 
and  I  shall  vote  for  it. 

It  will  probably  be  said,  sir,  that  the  distresses  which  will  be  incident  on 
the  dissolution  ol  the  bank,  have  been  greatly  exaggerated;  that  a  city  in  this 
vicinity  is  ready  to  meet  the  consequences,  and  to  set  them  at  defiance.  Let 
it  be  recollected,  that,  in  the  five  New  England  States,  a  country  for  which  it 
is  both  my  pride  and  pleasure  to  avow  a  marked  partiality,  we  have  but  one 
branch  of  the  Bank  of  the  United  States,  and  that  with  a  capital  of  only 
700,000  dollars.  Surely,  then,  if  a  single  city,  with  a  population  of  thirty  or 
forty  thousand  persons,  can  meet  these  consequences,  we  can  sustain  them; 
but  we  shall  undoubtedly  suffer  much  inconvenience,  not, however,  so  great  a 
degree  of  it  as  any  other  district  on  the  seaboard  of  the  United  States. 

It  is  possible,  sir,  that  apprehension  may  have  magnified  the  evils  which  are 
to  flow  from  the  dissolution  of  the  bank;  it  is  possible,  in  this  untried  state  of 
things,  there  may  be  found  a  power  of  expansion  in  the  moneyed  market  of  the 
country,  which  will  be  equal,  or  nearly  equal,  to  the  unexpected  demand  that 
may  be  made  upon  it.  Should  this  be  the  result,  I  should  be  extremely  gra- 
tified to  have  been  mistaken.  I  should  rejoice  in  my  own  disappointment. 

FEBRUARY  14,  1811. 
Same  motion.  > 

Mr.  GILES  spoke  at  great  length  in  favor  of  the  motion. 

Mr.  GILES.— Mr,  President:  It  is  with  great  reluctance  that  I  find  myself 
compelled  to  enter  into  the  discussion  of  the  subject  now  under  the  considera- 
tion of  the  Senate;  but  the  observations  which  fell  from  the  honorable  gentle- 
man from  Georgia,  (Mr.  CRAWFORD)  were  of  such  a  character  as  to  impose  on 
me  an  irresistible  obligation  to  present  that  view  of  the  subject  which  has  re- 
sulted from  the  best  reflections  I  have  been  enabled  to  bestow  on  it.  This  obli- 
gation arises  from  the  very  high  respect  I  entertain  for  the  Legislature  of  the 
State  I  have  the  honor  to  represent— the  great  respect  I  feel  for  the  gentleman 
who  made  the  observations,  as  well  as  from  the  respect  which  is  manifestly 
due  to  myself.  In  executing  this  unpleasent  task,  I  labor  under  circumstances 
of  peculiar  embarrassment  This  embarrassment  arises  from  a  conviction,  that 
the  views  of  the  subject  now  proposed  to  be  exhibited  will  disappoint  the 
42 


33Q  BANK  OF  THE  UNITED  STATES. 

expectations  both  of  the  opposers  and  the  favorers  of  the  bill;  and  that  they  will 
not  be  acceptable  to  either.  I  shall  not,  however,  ii>  this  instance,  depart 
from  my  invariable  habit,  when  urged  by  duty  to  participate  in  debate  before 
this  honorable  body,  of  disclosing,  in  the  most  undisguised  manner,  my  real 
opinions  upon  the  whole  subject,  from  any  consideration  of  political  difficulties 
or  inconveniences  which  may  consequentially  affect  myself. 

In  the  first  place,  I  find  myself  called  upon  to  oppose  a  law  on  constitutional 
grounds,  which  has  been  in  existence  for  nearly  twenty  years;  and,  during 
that  period,  I  am  compelled  to  admit,  has  been  acquiesced  in  by  the  several 
State  Governments,  as  well  as  by  the  General  Government,  and  its  republican 
administrations.  It  is  peculiarly  irksome  to  me  to  question  the  constitutionality 
of  a  law  which  has  been  thus  and  so  long  acquiesced  in,  because  it  tends  to 
give  the  character  of  instability  to  the  laws  generally;  and  in  my  judgment,, 
tends  also,  in  some  degree,  to  impair  the  sacred  character  of  the  laws,  and  of 
course,  to  lessen  their  efficacy.  In  a  government  like  ours,  where  the  laudable 
boast  of  every  citizen  is,  that  he  lives  under  a,  government  of  laws,  and  not  of 
men,  no  subject  should  be  touched  with  more  caution  and  delicacy  than 
one  which  questions  the  validity  of  the  laws,  lessens  the  confidence  of  the 
citizens  in  themy  or  impairs  the  obligation  of  obedience  to  them.  Yet.  siry 
the  course  of  observations  I  propose  to  make,  may  have  some  of  these  ten- 
dencies, which  I  should  extremely  regret,  and  this  apprehension,  of  course, 
produces  embarrassment.  Connected  with  this  idea,  is  another  circumstance 
of  embarrassment.  I  cannot  help  observing  the  inordinate  zeal  manifested  by 
the  opposers  of  this  bill,  evidently  resulting  from  a  belief  that  its  rejection 
will  lessen  the  powers  of  the  Federal  Government.  Although  it  may  be  pro- 
perty directed  in  the  present  instance,  yet,  I  think  [  have  seen,  and  fear  I 
may  hereafter  see,  the  same  spirit  directed  against  some  of  the  powers  and 
proceedings  of  the  Government,  which  I  have  deemed  indispensable  to  its  own 
preservation  and  its  beneficial  efficacy  toward  the  People.  It  may,  perhaps, 
be  thought,  by  some,  not  becoming  in  me  to  say,  that  I  have  not  been  an  inat- 
tentive observer  of  the  progress  of  this  Government  for  twenty  years;  and 
more  particularly,  since  the  republican  party  came  into  power.  Some  of  the 
scenes  through  which  I  have  passed,  have  produced  an  impressive  influence  on 
my  mind.  Such  is  the  nature  of  the  Government,  that  its  administration  will 
vibrate  from  one  principle  to  another,  and  it  will  always  require  great  wisdom 
to  keep  its  oscillations  from  wandering  too  far.  Whilst  those  who  preceded 
us  in  power,  endeavored  to  legislate  into  the  constitution  an  unnecessary  con- 
structive energy,  leading  to  what  has  been  called  consolidation,  it  appears  to 
me  that  we  have  taken  too  much  the  opposite  course,  leading  to  disunion  and 
dissolution,  by  depriving  it  constructively  of  its  legitimate,  necessary,  and  pro- 
per powers.  If  this  course  should  be  unfortunately  persevered  in,  it  requires 
no  spirit  of  prophecy  to  foresee,  that  the  Government  will  fall  to  pieces  from 
the  want  of  due  energy  in  the  administration  of  its  legitimate  powers;  or  that 
some  extraordinary  means  must  be  resorted  to  for  its  resuscitation.  When 
we  cast  our  eyes  abroad,  and  see  the  aggressions  committed  on  our  rights  by 
all  the  belligerents,  &c.;  when  we  reflect  that  we  cannot  calculate  upon  a  per- 
petual exemption  from  wars  and  other  political  calamities,  the  common  lot  of 
all  nations;  when  we  look  at  home,  and  see  the  State  Governments  interfering 
with  and  controlling  the  proceedings  of  the  General  Government,  even  in  rela- 
tion to  measures  directed  towards  these  aggressing  belligerents;  when  we  look 
around  us  at  home,  and  see  every  where  me  inveterate  struggles  amongst  poli- 
tical partizans  for  political  power;  when  we  recollect  the  number  of  choice 
spirits  amongst  us,  not  content  with  the  dull  pursuits  of  civil  life;  when  we 
look  at  out  extensive  defenceless  frontier,  almost  without  limits,  and  see,  al- 
most every  year,  ambitious  enterprising  individuals,  with  hostile  arms  in  their 
hands,  raised  in  defiance  of  the  authority  of  the  United  States,  &c.  &c.,  it 
appears  to  me  wonderful  that  gentlemen  should  be  delighted  with  curtailing 
the  constitutional  powers  of  the  Government,  and  enfeebling  its  necessary  en- 
ergies. It  is  the  more  wonderful,  when  we  see  the  same  gentlemen,  who  seem 
to  consider  every  curtailment  of  power  as  an  individual  triumph  to  themselves, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791. 

the  most  clamorous  against  the  Government  for  not  taking  a  manly  attitude  in 
repelling  foreign  aggressions,  &c.  &c.  It  appears  to  me,  sir,  we  often  see 
the  same  gentlemen,  with  the  best  and  most  patriotic  intentions,  indulging  in 
these  irreconcileable  opinions.  This  is  not  the  first  time  I  have  endeavored, 
in  a  solemn  and  impressive  manner,  to  present  this  subject  to  the  view  of  the 
party  now  in  power.  Hitherto  my  efforts  have  been  unavailing. 

Let  me  now  indulge  a  hope,  that  these  reflections  will  meet  with  due  con- 
sideration from  those  now  entrusted,  by  the  People,  with  the  management  of 
their  dearest  interests.  If  inducements  to  these  observations  were  called  for, 
sunily  sufficient  could  be  found  during  the  republican  administrations.  I 
need  only  call  your  attention,  sir,  to  the  lessons  afforded  in  the  inefficacy  of 
pur  measures  to  repel  foreign  aggressions,  to  assert  our  rights,  and  do  ourselves 
justice,  &c.  and  the  causes  which  have  led  to  this  inactivity  and  feebleness  of 
the  Government.  They  will  not  be  found  in  any  defect  of  powers  in  the  con- 
stitution, because,  in  that  respect,  they  are  unlimited;  it  is  because  gentlemen, 
from  various  weak  and  groundless  alarms  and  apprehensions,  have  been  un- 
willing to  exert  the  legitimate  energies  of  the  constitution  for  those  great 
objects.  They  have  theorised  and  criticized  themselves  into  such  fears  of  the 
undue  exercise  of  power,  that  they  will  not  duly  exercise  it  when  indispen- 
sably necessary  to  the  national  character  and  interests.  It  is  not  my  wish  to 
extend  the  powers  of  the  constitution  beyond  the  fair  and  candid  interpreta- 
tion of  its  meaning;  because,  that,  in  my  judgment,  it  will  be  sufficient  for  all 
saltuary  purposes.  I  only  regret  the  unwillingness  of  gentlemen  to  act  up  to 
that  point,  and  the  probable  consequences  resulting  from  that  indisposition. 
1  have  also  to  unite  with  the  gentleman  from  Georgia  (Mr.  CRAWFORD)  in 
expivs>ing  my  regret,  that,  in  discussing  this  subject,  both  within  and  without 
the  walls  of  Congress,  and  particularly  in  various  republican  news- 
papers, an  unwise  spirit  and  zeal  should  have  been  manifested,  which,  being 
more  repulsive  than  persuasive,  have,  I  verily  believe,  tended  to  defeat  their 
own  object,  and  to  put  at  hazard  the  rejection  of  the  bill.  Why,  on  this  sub- 
ject particularly,  should  we  witness  such  a  display  of  intolerance  and  denun- 
ciation? Why  the  illiberal  ascription  of  impropi.'r  motives  to  the  republican 
members  who  support  the  bill?  Can  any  good  result  to  the  nation,  to  the  re- 
publican party,  or  to  the  favored  side  of  the  question,  by  this  course  of  con- 
duct? May  it  not  produce  an  injurious  influence  on  all?  The  subject  cer- 
tainly presents  fair  grounds  for  a  difference  of  opinion  amongst  individuals, 
and  even  amongst  republicans,  without  searching  for  the  causes  of  this  differ- 
ence in  corrupt  motives.  Why,  then,  upon  this  particular  occasion,  should 
the  free  exercise  of  opinion  be  hunted  down  by  a  spirit  of  intolerance  or  de- 
nunciation? It  was  this  spirit  which,  more  than  any  other  cause,  blasted  the 
hopesjof  the  republican  principle  in  France,  and,  if  indulged  in  to  excess,  will 
destroy  it  in  any  other  country  upon  earth.  In  the  due  administration  of  a 
republican  government,  truth  and  right  alone  ought  to  be  sought  after,  and  they 
can  only  be  found  by  leaving  the  mind  to  free  investigation;  by  guarantying 
to  all  its  faculties,  the  most  perfect  exemption  from  all  terror  and  alarm.  I 
hesitate  not  to  say,  that,  in  my  judgment,  this  spirit,  if  indulged  in,  will  be- 
come more  dangerous  to  the  due  administration  of  this  Government,  more 
deleterious  to  its  proceedings,  than  the  adoption  of  any  one  single  measure, 
however  unwise  or  impolitic — even  than  the  renewal  of  the  charter  of  the 
Bank  of  the  United  States  for  twenty  years — which  now  seems  to  be  the  cause 
or  the  pretext  for  exciting  and  stimulating  this  unfortunate  spirit.  1  am  ready 
to  admit,  too,  that  I  have  never  seen  this  spirit  displayed  with  more  positive 
assertion  and  bold  denunciation  upon  any  question  than  upon  the  present. 
This  circumstance  induced  the  gentleman  from  Georgia  (Mr.  CRAWFORD)  to 
indulge  himself  in  severe  and  most  sensitive  invectives  upon  this  topic;  and, 
in  my  judgment,  not  without  cause.  But  it  would  have  afforded  me  great 
pleasure,  if  the  gentleman  could  have  prevailed  on  himself  to  have  viewed 
these  proceedings  "in  the  calm  light  of  mild  philosophy,-'  and  not  to  have 
presented  to  the  Senate  an  example  in  himself,  in  appearance  at  least,  of  the 
passions  and  prejudices  he  so  justly  reprehended  in  others.  I  think  I  do  not 


532  BANK  OF  THE  UNITED  STATES. 

mistake  myself,  Mr.  President,  when  I  profess  to  enjoy  the  most  entire  ex- 
emption from  this  baneful  spirit  of  intolerance;  when  I  profess  to  feel  the 
greatest  respeet  for  the  gentlemen  who  differ  from  me  on  this  occasion;  anil 
lor  their  motives,  when  I  profess  to  extend  all  possible  indulgence  and  for- 
bearance towards  the  opinions  of  those  gentlemen,  and  feel,  at  the  same 
time,  conscious,  that  I  shall  stand  in  need  of  the  same  liberality  myself,  from 
both  sides  of  the  question.  Indeed,  sir,  I  would  not  deign  to  accept  a  vic- 
tory in  argument,  founded  solely  upon  the  ascription  of  improper  motives  to 
my  antagonist.  It  is  my  intention  to  give  the  arguments  of  the  genlemen  on 
the  other  side  of  the  question  the  most  impartial  and  attentive  consideration. 
I  know  the  gentlemen  are  personally  'entitled  to  it,  and  their  observations- 
merit  it. 

The  honorable  gentleman  from  Georgia,  (Mr,  CRAWFORD)  who  reported 
this  bill,  as  the  chairman  of  the  committee  to  whom  the  subject  was  general- 
ly referred,  excited  not  a  little  surprise  in  my  mind,  by  the  prefatory  remarks 
which  fell  from  him  in  support  of  it.  The  gentleman  prefaced  his-  arguments 
by  observing,  that  "  it  had  latterly  become  the  fashion  to  eulogise  the  constitu- 
tion of  the  United  States;  and  that,  whenever  he  heard  lavish  encomiums  ap- 
plied to  it,  he  could  not  help  apprehending  mischief."  I  acknowledge  I 
could  not  comprehend  the  bearing  of  this  remark  upon  the  question  under 
discussion.  I,  sir,  have  long  been  in  the  habit  of  venerating  the  constitution* 
and  have  often  expressed  my  admiration  at  the  wisdom  of  its  provisions;  ana 
I  really  had  hoped  that  I  might  have  been  indulged  in  these  sentiments  and 
prepossessions,  and  even  the  expression  of  them,  upon  proper  occasions,  with- 
out exciting  in  the  mind  of  any  gentleman  apprehensions  of  mischief;  nor 
can  I  divine  what  species  of  mischief  the  gentleman  apprehends  from  that 
cause.  Mr.  President,  when  we  look  over  the  whole  world  known  to  us; 
when  we  particularly  cast  our  eyes  over  that  part  of  it  with  which  we  have 
the  most  intimate  relations;  when  we  see  the  rapid  strides  which  despotism 
is  making  over  the  whole  human  race;  when  we  observe  the  various  and  pow- 
erful means  now  in  use,  to  rivet  its  immov cable  dominion  upon  mankind  f 
when  we  reflect  that  the  constitution  of  the  United  States  now  affords  the 
only  practical  experiment  upon  the  republican  principle,  and  the  only  and  last 
hope  for  the  preservation  and  extension  of  the  liberties  of  man;  is  it  wonder- 
ful or  alarming  that  we  should  feel  and  express  some  partiality,  and  even 
veneration,  for  an  instrument  of  so  peculiar  a  character,  or  should  even  en- 
deavor to  teach  others  to  venerate,  to  cherish,  to  support  it? — an  instrument, 
whose  provisions  at  least  exempt  us  from  the  general  scene  of  despotism,  and 
may  eventually  extend  their  blessings  to  the  whole  human  race.  Or,  if,  in 
dwelling  upon  the  wisdom  and  importance  of  its  provisions,  we  might  pass 
over  some  possible  defects,  without  scrutinizing  them  with  an  hypercritical 
eye,  might  not  the  omission  be  indulged  without  producing  animadversion  or 
censurer  Sir,  we  all  venerate  the  republican  principle.  I  know  the  gentle- 
man from  Georgia  (Mr.  CRAWFORD)  does;  nor  do  I  pretend  that  my  devotion 
to  it  is  greater  than  his;  but,  sir,  I  have  given  the  greatest  attention  to  the  ob- 
servations of  the  gentleman  upon  the  constitution,  and  I  can  novy  say,  that  my 
veneration  for  the  instrument,  and  admiration  at  the  wisdom  of  its  provisions, 
are  not  at  all  impaired,  nor  diminished,  notwithstanding  the  gentleman's  criti 
cisms,&c.  I  will  now,  Mr.  President,  endeavor  to  exhibit  the  general  cha- 
racter of  the  constitution;  to  point  out  the  mode  for  its  correct  interpretation; 
and  apply  it  to  the  subject  now  under  consideration.  In  doing  so,  I  propose  to 
follow  the  course  of  observations  made  by  the  honorable  chairman  of  the  com- 
mittee who  reported  the  bill. 

The  gentleman  proceeded  to  remark,  that,  in  taking  a  review  of  the  consti- 
tution, he  found  general  as  well  as  incidental  powers  enumerated  therein.  I 
did  not  see  the  precise  application  the  gentleman  intended  to  make  of  this  re- 
mark, but  I  have  been  induced  to  review  the  constitution  in  reference  to  this 
subject,  and  it  does  appear  to  me,  that  the  classification  and  definition  of 
powers  is  as  well  arranged  as  human  wisdom  could  devise.  I  know  that 
nothing  is  perfect,  which  is  the  work  of  man;  that  no  language  is  capable  of 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     333 

perfect  definition.  But,  as  far  as  definition  can  be  drawn  from  language,  I 
conceive  the  constitution  exhibits  as  perfect  an  example  as  is  in  existence.  In 
the  next  place,  the  gentleman  remarked,  that  there  was  a  number  of  cases  in 
which  Congress  had  departed  from  the  particular  enumerated  powers  in  the 
constitution,  and  had  resorted  to  implication,  or  construction,  for  the  deriva- 
tion of  its  powers.  The  remark  is  perfectly  correct,  and  I  am  very  ready  to  ad- 
mit that  there  is  no  such  thing  as  carrying  into  eftect  enumerated  pmvers,inany 
instrument  whatever,  without  the  intervention  ot  certain  derivative  and  im- 
plied powers.  But,  if  the  gentleman  had  succeeded  in  showing  that  there  had 
been  aberrations  by  the  Congress  of  the  United  States,  from  the  enumerated 
powers  of  the  constitution — would  he  think  it  correct  to  use  those  aberra- 
tions as  precedents  for  still  further  aberrations?  Ought  they  not  rather  to  be 
considered  as  mementoes  on  the  part  of  Congress,  to  induce  them  to  tread 
with  more  care,  and,  if  they  find  that  their  former  errors  could  not  be  supported 
by  a  fair  and  candid  construction  of  the  constitution,  to  restrain  the  laws  with- 
in its  wholesome  provisions?  Certainly,  that  is  the  use  to  which  the  history 
of  errors,  presented  by  the  gentleman  from  Georgia,  ought  to  be  applied.  But, 
before  I  proceed  to  examine  the  subject  with  more  accuracy,  I  cannot  avoid 
expressing  my  surprise  at  another  observation  which  fell  from  the  gentleman. 
The  gentleman  observed,  that  the  argument  drawn  from  the  distinction  be- 
tween ends  and  means  was  "  incomprehensible;"  and  he  went  so  far  as  to  call 
it  "  nonsensical  jargon."  It  is  not  only  comprehensible  to  me,  sir,  as  I  con- 
ceive, but,  in  my  opinion,  is  the  only  way  in  which  a  just  construction  of  the 
constitution  is  to  be  attained.  This  results  from  the  peculiar  nature  and  or- 
ganization of  the  instrument.  Permit  me  here  to  endeavor  to  illustrate  my 
idea  by  a  reference  to  the  constitution  itself.  The  constitution  is  an  instru- 
ment which  grew  out  of  the  situation  of  the  United  States,  at  the  time  of,  and 
preceding  its  adoption;  and,  to  show  that  the  constitution  recited  the  great 
objects  ot  its  formation,  and  then  prescribed  the  means  for  carrying  them  into 
eftect,  I  beg  leave  to  refer  to  a  part  of  the  instrument  itself.  The  preamble, 
like  all  other  preambles,  was  designed  to  express  the  objects  of  theinstrument. 
or  the  ends  to  be  effected  by  its  provisions.  "We,  the  People  of  the  United 
States,  in  order  to  form  a  more  perfect  union,  establish  justice,  ensure  domes- 
tic tranquillity,  provide  for  the  common  defence,  promote  the  general  welfare, 
and  secure  the  blessings  of  liberty  to  ourselves  and  our  posterity,  do  ordain 
and  establish  this  constitution  for  the  United  States  of  America."  What  is 
the  plain  language  of  this  preamble?  The  answer  is  obvious.  That  certain 
great  ends,  or  objects,  are  here  proposed  to  be  effected.  In  what  mode,  or  by 
what  means,  are  they  to  be  effected?  The  preamble  tells  you,  sir,  "  by  esta- 
blishing this  constitution,  for  the  United  States  of  America."  That  is  the  mode 
in  which  these  great  ends  are  proposed  to  be  effected;  and  the  body  of  the  in- 
strument prescribes  the  means,  which  were  deemed  necessary  and  proper  to 
the  effectuation  of  these  ends.  This  subject  will  be  better  understood  by 
throwing  the  mind  back  to  the  period  of  time  when  this  constitution  origi- 
nated, and  reviewing  the  peculiar  political  situation  of  the  United  States  then, 
and  for  sometime  antecedently  thereto. 

At  the  time,  and  antecedently  to  the  establishment  of  the  present  constitu- 
tion, the  existing  State  Governments  were  in  possession  of  all  the  powers  of 
sovereignty,  subject  only  to  feeble  and  inefficient  articles  of  confederation, 
without  the  means  of  executing  their  own  will;  and  resting  for  its  execution 
solely  on  requisitions  upon  the  respective  States,  which  might  either  comply 
or  refuse  to  comply  with  such  requisitions,  at  their  discretion.  A  non-com- 

Eliance  was  almost  invariably  the  result  of  State  deliberations;  and  hence  the 
jebleness  of  the  old  confederation.  The  present  constitution  was  adopted  as 
the  remedy  for  this  great  and  alarming  evil.  Without  it,  disunion  and  ruin  to 
the  States  would  have  been  the  inevitable  consequences;  because,  upon  actual 
experiment,  the  States  were  found  utterly  incompatent  to  the  due  administra- 
tion ot  all  the  powers  of  sovereignty  entrusted  to  their  management.  The 
reason  of  this  incompetency  was,  that  some  of  the  most  important  powers  of 
sovereignty  inherently  possessed  a  geographical  influence  beyond  the  geogra- 


334  BANK  OF  THE  UNITED  STATES. 

phical  limits  of  the  several  States,  individually;  and  their  jurisdiction  could  not 
transcend  their  geographical  limits.  Of  this  description  of  powers  is  the  pow- 
er to  declare  war,  &c.  to  regulate  commerce,  &c.  &c.  and  all  the  other  enu- 
merated powers  of  the  constitution.  In  consequence  of  the  conflicting  sys- 
tems adopted  by  the  several  States  in  relation  to  some  of  these  powers,  which 
were  then  in  practical  operation,  particularly  in  the  conflicting  regulations  of 
commerce,  the  States  were  getting  into  the  most  serious  collisions,  &c.  &c. 
The  formidable  evils  necessarily  growing  out  of  this  state  of  things  required  a 
formidable  and  competent  remedy.  The  great  subject  for  the  contemplation 
of  every  reflecting  mind  in  America  was,  what  that  remedy  should  be? 

The  wise  framers  of  our  admirable  constitution,  after  great  deliberation, 
conceived  and  executed  the  only  practicable  expedient.  It  consisted  in  se- 
parating the  powers  of  sovereignty;  in  establishing  a  GeneraljGovernment,  and 
conferring  on  it  all  the  powers  of  sovereignty,  whose  geographical  influence 
was  found  co-extensive  with  the  geographical  limits  of  the  United  States,  and 
reserving  to  the  State  Governments,  respectively,  those  powers  which  were  of 
a  more  local  character,  and  which  possessed  no  influence  beyond  the  limits  of 
the  States,  respectively.  And  also  to  confer  on  the  General  Government  "  all 
the  means  necessary  and  proper"  for  executing  its  own  laws  in  relation  to 
these  enumerated  powers,  without  any  dependence  upon  requisitions  from  the 
respective  State  Governments  for  this  indispensable  object.  The  idea  was  a 
grand  one,  and  executed  with  an  admirable  simplicity,  and  the  most  consum- 
mate wisdom.  Hence  it  appears,  that  the  great  object  of  the  framers  of  the 
constitution  was,  to  establish  a  general  or  federal  government,  and  to  confer 
on  it  all  the  powers  of  sovereignty,  which,  in  their  nature  and  character,  pos- 
sessed an  influence  co-extensive  with  the  United  States;  and  to  reserve  to 
the  previously  existing  State  Governments,  all  the  powers  of  sovereignty  of  a 
more  local  character,  and  whose  influence  did  not  extend  beyond  the  geo- 
graphical limits  of  the  States,  respectively,  and  therefore  could  be  rendered 
completely  subservient  to  State  jurisdiction  and  management.  These  are  the 
means  prescribed  in  the  constitution,  for  effecting  the  ends  expressed  in  the 
preamble.  To  the  administrators  of  the  General  Government,  the  framers  of 
the  constitution  have  said,  We  give  to  you  all  the  powers  of  sovereignty  of  « 
general  character;  and  to  the  administrators  of  the  State  Governments,  they 
have  said,  We  reserve  to  you  all  the  powers  of  sovereignty  of  a  local  charac- 
ter. I  verily  believe,  that,  if  those  various  governments  should  be  administer- 
ed with  the  wisdom  with  which  this  separation  of  powers  was  made  in  the 
body  of  the  constitution,  the  People  of  the  United  States  will  not  be  disap- 
pointed in  the  great  and  interesting  objects  proclaimed  in  its  preamble.  But 
1  cannot  help  expressing  some  apprehensions,  that,  from  an  incorrect  under- 
standing of  the  constitution;  from  an  unwise  spirit  of  jealousy;  a  disposition  to 
strip  the  Government  of  its  necessary  and  proper  energies,  &c.  &c.  the  ad- 
ministrators of  the  Government  may  not  only  disappoint  the  just  expectations 
of  the  People  in  this  respect,  but  may  lead  to  incalculable  political  mischiefs 
and  disasters.  This  arrangement  was,  in  my  judgment,  indispensable  to  the 
preservation  of  the  republican  principle,  and  all-important  to  the  dearest  in- 
terests of  the  People  of  the  United  States.  As  far  as  the  practical  experiment 
has  been  carried,  it  lias  been  attended  with  the  happiest  effects.  I  still  hope 
for  the  best  in  its  future  operations;  but  I  also  hope  I  shall  be  pardoned  for 
expressing  some  fears,  arising  from  various  manifestations  of  imbecility  in 
measures  relating  to  our  internal  as  well  as  external  concerns.  From  this 
short  history  of  the  origin  of  the  constitution,  and  the  causes  which  produced 
it,  it  evidently  appears  that  the  General  or  Federal  Government  is,  in  its  na- 
ture and  character,  a  government  of  enumerated  powers,  taken  from  previous- 
ly existing  State  Governments,  enumerated,  and  conferred  on  it,  reserving 
all  unenumcratetl  powers  to  the  State  Governments,  or  to  the  People  in  their 
individual  capacities.  But  if  any  doubts  had  existed  upon  this  subject,  two 
amendments  to  the  constitution,  growing  out  of  some  jealousies  lest  a  contrary 
interpretation  should  be  given  to  the  constitution,  have  been  adopted,  which 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       335 

ought  to  put  this  question  to  rest  for  ever.  The  9th  and  10th  articles  of 
amendments  to  the  constitution  are  as  follow: 

'•  The  enumeration,  in  the  constitution,  of  certain  rights,  shall  not  be  constru- 
ed to  deny  or  disparage  other?,  retained  by  the  People."  "  The  powers  not  de- 
legated to  the  United  States  by  the  constitution,  nor  prohibited  by  it  to  the 
States,  are  reserved  to  the  States,  respectively,  or  to  the  People-" 

Now,  sir,  can  language  be  more  explicit  than  this,  in  declaring  that  this 
charter  contains  certain  enumerated  powers,  and  that  all  not  enumerated  are 
reserved  to  the  States  or  to  the  People?  There  is  one  article  reserving  rights 
to  the  People,  and  afterwards  another  article  reserving  them  to  the  States  and 
to  the  People. 

While  on  this  subject,  I  beg  leave  to  read  a  clause  in  the  constitution,  which 
1  find  among  the  enumerated  powers,  and  which  has  been  construed  by  some, 
as  intended  to  convey  a  general  grant  of  powers  amongst  the  enumerated 
powers:  "  Congress  shall  have  power  to  lay  und  collect  taxes,  duties,  imposts, 
and  excises,  to  pay  the  debts,  and  provide  for  the  common  defence  and  general 
welfare  of  the  United  States."  The  words,  "  and  to  provide  for  the  common 
defence  and  general  welfare,"  have,  by  some,  been  considered  as  conveying 
a  general  grant  of  power.  Nothing  is  necessary  to  show  that  this  is  not  a  fair 
and  correct  construction  of  tin1  constitution,  but  reading  it  with  attention. 
These  terms  contain  no  grant  of  power  whatever,  but  are  used  to  express  the 
ends  or  objects  for  which  particular  grants  of  power  were  given.  Paying  the 
debts,  and  providing  for  the  common  defence  and  general  welfare,  are  great 
objects,  intimately  connected  with  the  particular  grants  of  power  which  are 
given  for  their  cttectuation.  And,  without  these  particular  grants  of  power, 
it  would  not  have  been  possible  for  Congress  to  effect  them.  The  framers  of 
the  constitution  have  simply  selected  some  of  the  objects  expressed  in  the  pre- 
amble, and  declared,  that,  to  elt'ect  them,  and  to  pay  the  debts  of  the  United 
States,  were  the  considerations  which  induced  thfm  to  uive  to  Congress  the 
"  p:nver  to  lay  and  collect  taxes,"  &.c.  Thu-.  taxes  are  to  be  laid,  &c.  "•  to 
pay  the  debts,  and  to  provide  for  the  common  defence  and  ^em-raj  welfare." 
Could  they  have  chosen  a  more  appropriate  phraseology?  The  plain  language, 
to  Congress  is,  "  You  shall  have  power  to  lay  and  collect  taxes,  to  pay  the 
debts,"  &c.,  and  to  proude  for  the  common  defence  and  general  welfare,  or, 
in  other  words,  for  the  purpose  of  paying  the  debts,  6cc.  and  of  providing  for 
the  common  defence  and  general  welfare.  The»e  words  do  not  contain  a 
general  grant  of  powers,  Inn  rxpnws  theobjectsof  a  particular  grant  of  powers. 
The  framers  of  the  constitution  could  not  have  done  an  act  so  absurd,  as  to 
make  a  general  srant  of  powers  amount  an  enumeration  of  specified  powers. 

I  will  now,  Mr.  President,  proceed  to  examine  those  instances  which  the 
gentleman  has  presented,  of  the  supposed  aberrations  of  the  Congress  of  the 
United  States  from  the  enumerated  powers:  and  I  think  it  vyill  not  be  diffi- 
cult to  show  that  there  is  not  a  single  instance  quoted,  but  which  is  cleducible 
from  a  fair  and  correct  interpretation  ot  the  express  words  of  the  constitution, 
giving  them  their  common  and  appropriate  meaning. 

The  first  instance  presented  to  our  consideration  by  the  honorable  gentle- 
man from  Georgia,  (Mr.  CRAWFORD)  of  the  exercise  of  a  power  by  Congress, 
not  enumerated  in  the  constitution,  was  the  erection  ot  light  houses.  The 
gentleman  from  Massachusetts,  (Mr.  LLOYD)  to  whose  dispassionate  observa- 
tions I  listened  with  great  pleasure,  superadded  the  instance  of  the  erection  of 
customhouses.  On  these,  both  of  the  gentlemen  seemed  to  place  great  re- 
liance, as  cases  in  point  with  the  one  under  consideration.  Both  thes'e  powers 
I  conceive  are  given  to  Congress  by  the  express  words  of  the  constitution;  but 
if  I  should  be  mistaken  in  this  idea,  they  are  certainly  comprehended  as  inci- 
dental and  subservient  to.  or,  in  other  words,  "  necessary  and  proper"  for,  car- 
rying into  effect  some  of  the  enumerated  powers. 

The  express  words  of  the  constitution  give  to  Congress  the  power  "  to  lay 
and  collect  taxes,  duties,  imposts,  and  excises,"  &c.  &c.  "  To  regulate  com- 
merce ^with  foreign  nations,  amongst  the  several  States,  and  with  the  Indian 
tribes;"  t4  to  exercise  exclusive  legislation  in  all  cases  whatever,  &c.  over 


336  BANK   OF   THE    UNITED    STATES. 

all  places  purchased  by  consent  of  the  Legislature  of  the  State  in  which  the 
same  shall  be,  for  the  erection  of  forts,  magazines,  arsenals,  dock  yards,  and 
other  neecjful  buildings."  From  these  clauses  of  the  constitution,  taken  in 
connexion  with  each  other,  I  think  Congress  possesses  the  po\yer  to  erect 
light  houses  and  custom  houses  by  the  express  words  of  the  constitution:  for 
both  of the&e  descriptions  of  houses  must  necessarily  be  included  within  the 
term,  "  needful  buildings;"  or,  the  only  construction  which  is  at  all  applica- 
ble to  these  cases,  is.  that  needful  buildings  is  the  general  term,  and  li^ht 
houses  and  custom  nouses  are  particular  instances,  or  examples,  under  the 
general  term:  or,  if  I  may  be  so  allowed  to  express  my  ideas,  needful  build- 
ings may  be  considered  as  the  genus,  of  which  light  houses  and  custom  houses 
are  particular  species.  The  reason,  with  the  framers  of  the  constitution,  for 
using  this  general  term,  is  obvious:  It  was,  because  it  was  impossible  for 
them  to  foresee  all  the  particular  species  of  needful  buildings  which  might 
become  necessary  to  the  salutary  operations  of  this  Government,  in  the  course 
of  its  complicated  and  due  administration;  they,  therefore,  wisely  left  that 
subject  to  the  discretion  of  Congress,  restrained  and  limited,  nevertheless,  by 
the  requisition  of  the  consent  of  the  Legislatures  of  the  States,  respectively, 
in  every  case  proposed  for  the  exercise  of  this  discretion.  That  this  is  a  plain 
and  correct  interpretation  of  the  constitution,  is  evinced  by  the  concurrent 
opinions  of  every  Legislature  of  every  State  which  has  heretofore  ceded  lands 
for  any  of  these  objects;  and  it  is  to  be  remarked,  that  Congress  has  never 
attempted  to  erect  any  of  these  buildings  without  the  constitutional  requisi- 
tion of  the  consent  of  the  States,  respectively.  But  if  this  term,  "  needful 
buildings,"  had  not  been  expressed  in  the  constitution,  I  should  not  hesitate 
to  admit,  with  these  gentlemen,  that  the  erection  of  light  houses  and  custom 
houses  might  properly  be  deduced  from  the  power  to  lay  and  collect  taxes, 
duties,  &c.  &c.,  and  from  the  power  to  regulate  commerce.  &c.  which  are 
particular  grants  of  power  enumerated  in  the  constitution.  Because  custom 
nouses  are  appropriately  necessary  to  the  collection  of  duties^  and  have  al- 
ways been  deemed  indispensable  ior  that  object,  as  are  light  houses  to  the  due 
regulation  of  commerce. 

These  two  powers  are  indispensably  connected  with,  and  subservient  to, 
particular  enumerated  powers,  and  are,  therefore,  amongst  the  means  which 
are  necessary  and  proper  for  their  effectuation;  and  as  such,  are  given  to  Con- 
gress by  the  express  words  of  the  constitution;  which  are,  Congress  shall  have 
power  *4to  make  all  laws  which  shall  be  necessary  and  proper  for  carrying  into 
execution  the  foregoing  powers,  and  all  other  powers  vested  by  this  constitu- 
tion in  the  Government  of  the  United  States,  or  in  any  department  or  officer 
thereof."  From  this  course  of  interpretation,  the  gentlemen,  reasoning  from 
a  supposed  analogy,  have  asked,  if  Congress  can  derive  the  right  to  erect  light 
houses  and  custom  nouses  from  their  necessary  agency  in  effectuating  the  par- 
ticular powers  to  which  they  are  said  to  be  appendant,  or  appurtenant,  why 
may  it  not,  in  the  same  way,  derive  the  right  of  granting  charters  of  incorpo- 
ration for  the  same  objects?  Or,  in  other  words,  if  Congress  can  constitution- 
ally erect  custom  houses  for  the  purpose,  or  as  the  necessary  means,  of  col- 
lecting duties,  why  may  it  not  establish  a  bank  for  the  same  object?  &c-  The 
question  is  admitted  to  be  a  fair  one;  and  if  a  clear  distinction  cannot  be  made 
in  the  two  cases,  it  will  be  admitted,  either  that  Congress  may  constitutionally 
establish  a  bank,  or,  that  it  has  heretofore  transcended  its  powers,  in  erecting 
custom  houses,  &c.  A  clear  and  most  obvious  distinction  appears  to  me  to 
exist  in  the  cases  suggested  by  the  gentlemen  to  be  analogous,  arising  from  the 
striking  difference  in  the  nature  and  essential  character  of  these  powers.  A 
custom  house  is,  in  its  nature,  incidental  and  subservient  to  the  collection  of 
duties.  It  is  one  of  the  common,  necessary,  and  proper  means  to  affect  that 
end.  It  is  believed  that,  in  no  commercial  country  in  the  world,  are  duties 
collected  without  them.  Besides,  the  erection  of  custom  houses  does  not  in- 
volve in  it  the  exercise  of  any  other  higher  or  consequential  powers.  The 
same  remarks  will  apply  to  light  houses,  as  amongst  the  common,  necessary, 
and  proper  means  for  the  regulation  of  commerce,  &c. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     337 

Is  the  incorporation  of  a  bank  of  this  character?  It  is  not  amongst  the  com- 
mon, necessary,  and  proper  means  of  effecting  either  of  the  foregoing  enume- 
rated powers,  nor  of  any  other  enumerated  in  the  constitution;  still  less  is  it 
incidental  or  subservient  to  any  of  the  enumerated  powers.  It  wants  that  con- 
nexion, affiliation,  and  subserviency,  to  some  enumerated  power,  which  are 
clearly  pointed  out  in  relation  to  the  two  powers  to  which  it  has  been  said  to 
be  analogous.  Besides,  does  granting  a  charter  of  incorporation  to  a  bank  in- 
volve no  other  higher  or  consequential  power,  than  merely  erecting  a  needful 
building  for  collecting  duties?  &c.  It  certainly  does.  It  involves  the  power 
to  grant  charters  of  incorporation  generally;  and  in  this  respect,  principally, 
its  character  is  essentially  different  from  both  of  the  powers  cited  by  the  gen- 
tleman. The  power  to  grant  charters  of  incorporation  is  not  an  incidental, 
subordinate,  subservient  power;  it  is  a  distinct,  original,  substantive  power. 
It  is,  also,  susceptible  of  the  clearest  definition;  and  not  being  amongst  the 
enumerated  powers,  it  seems  to  me  that  Congress  can  have  no  fair  claim  to 
its  exercise  in  any  case.  If  Congress  had  been  expressly  authorized  to  grant 
charters  of  incorporation  generally,  then,  granting  a  charter  of  incorporation 
to  a  bank  would  have  been  an  instance,  or  amongst  the  means,  of  carrying  into 
effect  that  enumerated  power;  and  would  have  been  as  much  connected  and 
affiliated  with  it,  as  is  tne  erection  of  custom  houses  with  the  collection  of  du- 
ties; but  the  power  to  grant  charters  of  incorporation  generally',  not  being  ex- 
pressly given  in  the  constitution,  no  particular  instance  involving  the  exercise 
of  that  power  can  be  inferred,  by  a  fair  and  candid  interpretation  of  the  in- 
strument. I  do  not  mean  to  exaggerate  the  consequences  which  might  result 
from  an  assumption  of  the  power  to  grant  charters  of  incorporation,  &c.  It  is 
sufficient  for  me  to  say,  that  it  is  a  power  of  primary  importance;  that  it  in- 
volves as  many  incidental  powers  in  its  exercise,  as  anyone  of  the  enumerated 
powers;  that  it  is  equal,  ii*  not  paramount,  to  any;  and  therefore,  in  my  judg- 
ment, cannot  be  assumed,  by  fair  construction,  as  incidental  and  subservient 
to  any;  and,  of  couse,  not  as  amongst  the  necessary  and  proper  means  for  car- 
rying any  into  effect.  In  fact,  in  its  nature,  it  does  not,  in  the  smallest  degree, 
partake  of  the  derivative,  incidental  character.  It  is  original,  substantive, 
distinct  in  itself,  and  susceptible  of  the  plainest  definition.  Hence,  whilst  I 
am  willing  to  admit  that  a  power,  which  is,  in  its  nature,  incidental  and  sub- 
servient to  any  enumerated  power,  and  also  amongst  the  necessary  and  proper 
means  for  carrying  it  into  effect,  may  be  exercised  by  Congress  without  the 
express  words  of  the  constitution,  I  should  be  very  unwilling  to  admit  that 
Congress  should  also  exercise  a  power  neither  incidental  or  subservient  tr)  any 
of  the  enumerated  powers,  nor  amongst  the  necessary  and  proper  means  for 
carrying  any  into  effect:  still  less  should  I  be  inclined  to  this  admission,  when 
the  power  thus  proposed  to  be  derived,  incidentally  or  constructively,  involves 
in  it  the  exercise  of  almost  unlimited  powers.  To  illustrate  my  idea  still  fur- 
ther, in  this  respect,  I  would  observe,  that  the  power  to  regulate  descents, 
and  to  regulate  the  distribution  of  intestates.  I  conceive  to  be  original,  distinct, 
substantive  powers;  and,  being  amongst  the  powers,  \vhich  could  in  all  re- 
spects be  limited  by  the  geographical  boundaries  of  the  individual  States,  and 
were,  therefore,  amongst  the  powers  reserved  to  the  management  of  the  States, 
might  as  easily  be  assumed  by  Congress  as  incidental  to  some  one  of  the  enu- 
merated powers,  as  the  assumption  of  the  power  to  grant  charters  of  incorpo- 
ration, which  I  conceive  was,  for  the  same  reason,  left  to  the  management  of 
the  States.  I  believe  no  gentleman  will  contend  that  Congress  can,  under 
any  caudid  construction,  go  so  far  in  relation  to  those  powers;  nor  do  I  see 
how  it  can  in  relation  to  the  power  of  granting  charters  of  incorporation. 

I  have  not  overlooked  the  observation,  sir,  made  by  gentlemen  to  destroy 
the  effect  of  this  course  of  reasoning,  to  wit:  that  the  passing  every  law  is  an 
act  of  sovereignty;  that  to  pass  a  law  to  erect  a  light  house,  is  as  much  an  act 
of  sovereignty,  as  to  pass  a  law  to  lay  and  collect  a  tax,  &c.  or  to  grant  a  char- 
ter to  a  bank,  &c.  In  fact,  that  there  are  no  degrees  of  sovereignty.  Without 
entering  into  this  reasoning,  it  will  be  sufficient  to  show  its  inapplicability  to 
my  argument,  to  observe,  that  I  have  not  grounded  my  distinctions  upon  any 
43 


338  BANK  OF  THE  UNITED  STATES. 

suggested  difference  in  the  degrees  of  sovereignty;  but  upon- the  clear  and  ob- 
vious difference  in  the  nature  and  character  of  the  powers  upon  which  this* 
sovereignty,  £c.  is  intended  to  operate,  &c. 

The  gentleman  from  Georgia  (Mr.  CRAWFORD)  observed,  that  the  clause  in 
the  constitution,  last  read,  "Congress  shall  have  power  to  pass  all  laws  which 
shall  be  necessary  and  proper,"  &c.  had  been  considered  by  some,  as  entirely 
inoperative;  but  that  bethought  it  a  clause  of  great  importance,  &c.  In  this 
opinion,  I  entirely  concur  with  the  gentleman;  I  consider  it  the  most  import- 
ant clause  in  the  constitution.  It  is,  in  my  judgment,  the  true  key  for  unlock- 
ing the  meaning  of  all  the  other  clauses.  The  former  confederation  did  not 
possess  the  means  necessary  and  proper  for  carrying  into  execution  its  own 
powers.  It  was  dependent  upon  the  State  Legislatures  for  that  purpose;  and  it 
was  too  important  a  difference  in  the  organization  of  the  present  and  former 
Government,  to  be  left  to  construction.  It  was  therefore  expressed,  to  declare 
the  true  character  of  the  present  Government;  and  to  proclaim^ ts  sovereignty 
upon  all  the  subjects  of  the  enumerated  powers.  But,  sir,,  the  most  important 
bearing  of  this  clause  appears  to  me  to  be  the  designation  of  the  department 
which  should  be  the  ultimate  depository  of  all  the  power  vested  in  the  Govern- 
ment by  the  constitution.  Thus*  Congress  is  declared  not  only  to  have  power 
to  pass  all  laws  which  shall  be  necessary  and  proper  for  carrying  into  execu- 
tion the  powers  particularly  confided  to  its  management,  but  "  all  other  pow- 
ers vested  by  this  constitution  in  the  Government  of  the  United  States,  or  in 
any  department  or  officer  thereof."  This  clause,  I  think,  intended  to  settle 
all  differences  between  the  departments  respecting  the  ultimate  deposite  of 
power,  in  which  light  it  has  been  hitherto  too  little  regarded.  None  of  these 
considerations,  however,  can  vary  in  the  smallest  degree  the  results  I  have 
attempted  to  draw  against  the  power  of  Congress  to  resort  to  unenumerated* 
original,  substantive  power,  general  in  its  character  and  operation,,  as  the  ne- 
cessary and  proper  means  for  carrying  into  effect  any  of  the  enumerated  powers. 

This  brings  me  to  consider  the  observations  of  the  gentleman  (Mr.  CRAW- 
FORD) upon  the  4th  article  of  the  constitution,  in  the  following  words: 

'•Full  faith,  and  credit  shall  be  given,  in  each  State,  to  the  public  acts,  records,  and 
judical  proceedings,  of  every  other  State.  And  the  Congress  may,  by  general  laws> 
prescribe  the  manner  in  which  such  acts,  records,  and  proceedings,  shall  be  provcdr 
und  the  effect  thereof. 

"  The  citizens  of  each  State  shall  be  entitled  to  all  privileges  and  immunities  of  citi- 
zens in  the  several  States. 

"  A  person  charged,  in  any  State,  with  treason,  felony,  or  other  crime,  who  shall  ftee 
from  justice,  and  be  found  in  another  State,  shall,  on  demand  of  the  Executive  au- 
thority of  the  State  from  which  he  fled,  be  delivered  up,  to  be  removed  to  the  State 
having  jurisdiction  of  the  crime. 

"  No  person  held  to  service  or  labor  in  one  State,  under  the  laws  thereof,  escaping 
into  another,  shall,  in  consequence  of  any  taw  or  regulation  therein,  be  discharged 
from  such  service  or  labor,  but  shall  be  delivered  up  on  claim  of  the  party  to  whom 
such  service  or  labor  may  be  due/' 

The  gentleman  observed,  that  this  article  contained  no  grant  of  power  what- 
ever; it  was  merely  declaratory  of  certain  principles,  which  ought  to  be  left  to 
the  States  to  carry  into  effect;  yet  Congress  had  passed  laws  in  relation  to  se- 
veral of  these  subjects  &c.  and  of  course  transcended  the  limits  of  the  consti- 
tution; or  rather  had  legislated  upon  subjects  not  enumerated,  &c.  To  these 
observations  I  would  reply  that  I  do  consider  these  clauses  as  investing  the 
Government,  generally,  with  the  exercise  of  all  these  powers,  although  the  par- 
ticular department  intended  for  their  exercise  is  not  here  designated;  but  by 
reading  these  clauses  in  connexion  with  the  clause  before  read,  it  wdl  be 
found  that  Congress  is  entrusted  with  the  execution  of  these  powers. 

Congress  shall  have  power  to  pass  all  laws  which  shall  be   necessary  and 

_    _      j* !«4-*-,.    s^.£Fs\s>4-  -4-Krk   4-/»r«rirrr\in  rr   r^r\nr/»i'c:     otiM   all  /A'Mior'   TiniVPfS  1)P$f- 


ON  THE  BILL  TO  RENEW  THK  CHARTER  OF  1791.     339 

I  presume  to  be  strictly  of  this  description.  That  this  is  the  understand- 
ing of  the  article,  is  evinced  by  the  concurrent  opinions  of  the  General  and 
State  Governments  in  those  respects. 

The  difference  of  opinion,  therefore,  between   the   gentleman  and  myself 
consists  in  this:    That  the  principles  here  declared,  he  thinks,  ought  to  be  ex 
ecu  ted  by  the  State  authorities;  and  I  think  they  were  intended  to  be  executed 
by  Congress;  and  it'  my  interpretation  be  correct,  then  Congress  has  not  trans- 
cended the  limits  of  its  authority. 

Tins  solution  is  at  least  satisfactory  to  myself.  Another  argument  urged 
by  the  honorable  gentleman  (Mr.  CRAWFORD)  requires  some  attention.  The 
gentleman  considered  the  General  and  State  Governments,  taken  collectively, 
as  forming  one  complete  sovereignty;  he  then  referred  to  a  clause  in  the  con- 
stitution which  he  conceived  excluded  the  State  Governments  from  the  right 
to  grant  bank  charters;  and  thence  inferred  the  right  in  the  General  Govern  - 
inent,  &c-  Although  I  have  full  confidence  in  the  opinions  generally  ex- 
pressed by  that  gentleman,  I  cannot  concur  with  him  in  this  mode  of  deriv 
ing  power  to  the  General  Government.  It  is  directly  repugnant  to  the  princi- 
ples of  construction  [have  just  suggested,  and  therefore!  cannot  yield  my 
assent  to  it. 

The  10th  section  of  the  1st  article  says:  "  No  State  shall  enter  into  any 
treaty  of  alliance  or  confederation;  grant  letters  of  marque  and  reprisal;  coin 
money,  emit  bills  of  credit,"  &c.  The  particular  terms  of  this  section,  se- 
lected to  exclude  the  States  from  incorporating  banks,  aie  these:  **No  State 
shall  emit  bills  of  credit."  The.  gentleman  supposes  that  a  bank  bill  isa  bill 
of  credit,  and  therefore,  that  the  States  cannot  establish  an  institution  to  i--u<- 
a  bill  of  credit  Our  ideasdiffer  as  to  the  meaning  of  the  term  4i  bills  of  credit."* 
\>  to  the  argument  of  the  gentleman,  that  he  who  does  an  act  by  another  docs 
it  by  himself,  it  does  not  apply  to  the  present  case:  for,  if  we  recur,  to  the 
charters  of  incorporation,  we  shall  find  that  a  particular  fund  is  fixed,  and  that 
this  fund  only  is  answerable  for  the  redemption  of  the  notes.  The  argument 
of  the  gentleman  would  as  well  apply  to  every  common  note,  juvrn  by  one  in- 
dividual to  another;  because  the  Slates  as  much  issue  bills  of  credit  by  pro- 
tecting promissory  notes, as  by  authorizing  banks  to  issue  such  notes.  In  case 
of  notes  given  by  individuals,  they  become  the  property  of  him  to  whom  they 
are  payable;  the  drawer  is  responsible  for  the  amount,  and  the  State  enforces 
the  payment.  In  that  case,  too,  the  whole  property  of  the  drawer  is  pledged 
for  the  payment.  In  the  case  of  bank  bills,  nothing  is  pledged  but  the  sum 
specified  in  the  charter.  The  real  meaning  of  this  clause,  therefore,  1  under 
stand  to  be,  to  prevent  the  emission  of  bills,  the  payment  of  which  is  to  be 
made  by  the  States,  themselves;  similar  to  the  old  continental  paper  money; 
for  that  was  evidently  iu  the  contemplation  of  the  framers  of  the  constitution, 
when  they  very  wisely  denied  the  power  of  issuing  such  bills  to  the  States. 

The  gentleman  from  Georgia  next  read  the  1st  section  of  the  third  article 
of  the  constitution.  I  should  not  take  up  the  time  of  the  Senate  in  noticing 
it,  but  that  the  construction  which  I  then  put  upon  it  differs  from  that  which 
he  gave  as  an  universal  admission.  The  gentleman  supposed  there  had  been 
some  departure  from  the  constitution,  under  the  following  clause:  k*  The  judi- 
cial power  of  the  tJnited  States  shall  be  vested  in  one  supreme  court,  and  in 
such  ^inferior  courts  as  the  Congress  may  from  time  to  time  ordain  and  esta- 
blish." The  gentleman  observes  that,  at  the  time  of  the  repeal  of  the  judiciary 
act,  it  was  generally  admitted  by  the  advocates  of  the  repeal,  that  the  su- 
preme court  was  not  tangible.  That  was  not  the  opinion  I  then  expressed; 
and  the  opinion  I  then  expressed  has,  since  that  time,  been  .strengthened  and 
confirmed  by  further  reflection.  1  do  not  know  how  the  gentleman's  argu- 
ment can  apply  to  the  case  under  consideration,  unless  he  meant  to  shew  that 
the  decision  in  that  respect,  made  by  Congress,  wras  unconstitutional.  My 
opinion  is,  that  it  was  constitutional,  and  that  Congress  might  constitutionally 
modify  and  change  the  supreme  court  in  the  most  essential  point;  and  permit 
me  here  to  protest  against  the  usual  mode  of  construing  the  constitution  ]>y 
analogy.  Instead  of  examining  the  expressions  of  the  constitution  itself  to 


340  BANK  OF  THE  UNITED  STATES. 

ascertain  its  meaning,  we  are  often  referred  to  certain  principles  borrowed 
from  British  jurists.  Thus  we  are  often  referred  to  the  fundamental  princi- 
ple of  the  separation  of  departments,  &c.  the  independence  of  judges,  &c. 
although  neither  of  these  terms  are  to  be  found  in  the  constitution;  and  the 
principles,  although  correct  in  themselves,  as  general-  principles,  are  subject 
in  practice  to  material  qualifications  and  limitations;  and  this  is  particularly 
the  case  in  the  constitution.  It  appears  to  pie  as  easy  to  ascertain  the  true 
meaning  of  the  words  used  in  the  constitution,  as  the  meaning  of  these  or  any 
other  terms;  and  the  error  in  this  mode  of  reasoning  generally,  arises  from  the 
misapplication  of  the  terms  to  the  subject  in  question;  or,  in  other  words,  when 
reasoning  from  analogy,  in  recollecting  the  resemblances  and  overlooking  the 
differences  in  eases  supposed  to  be  analogous.  To  ascertain  the  true  meaning 
of  the  constitution,  therefore,  I  have  always  had  reference  to  its  own  words,, 
and  discarded  all  reasoning  from  its  analogy  to  any  thing  else.  By  referring 
to  the  clause  respecting  the  judicial  department,  just  read,  and  taking  it  in 
connexion  will*  the  clause  which  declares  that  Congress  shall  have  power  to 
pass  all  laws  which  shall  be  necessary  and  proper  for  carrying*  into  execution 
all  the  powers,  &c.  "  vested  in  any  department,"  &c.  it  will  appear  obvi- 
ous, that  Congress  might,  according  tathe  express  words  of  the  constitution, 
establish  the  judicial  department,  as  it  has  done;  and  from  time  to  time  alter 
or  modify  it  at  its  discretion,  &c.;  and  if  Congress  thought  proper  to  increase 
or  lessen  the  number  of  judges  of  the  supreme  court?  or  to  increase  or  lesser> 
the  duties  to  be  performed  by  them,  I  would  ask,  where  is  the  constitutional 
prohibition?  I  see  none.  Congress  can  designate  the  duties  of  the  court  and 
the  compensation  of  the  judges.  They  may  takeaway  the  duties,  and  of  course* 
also,  the  compensation.  And  why?  Because  we  find  .the  service  and?  compen- 
sation inseparably  connected,  and  the  one  made  the  consideration  oi  the  other- 
Congress  has  a  right  to  designate  the  services-  which  the  judges  shall  perform? 
And  by  what  authority  will  they  retain  compensation  after  the  services  to  be 
performed  are  taken  away?  It  is  not  the  name  of  office,  nor  good  behavior  in 
it,  for  which  compensation  is  constitutionally  given  f  but  for  service  rendered. 
The  reason  of  this  article,  in  relation  to  the  -supreme  court,  is  very  obvious. 
It  was  to  obtain  an  uniformity  of  decision;  and  if  Congress  establish  one  su- 
preme court,  they  perfectly  satisfy  all  the  injunctive  part  of  the  constitution, 
But,  I  eto  not  know  how  the  gentleman's  reference  to  this  clause  could  affect 
the  constitutional  question  in  the  present  case. 

I  have  thus  far  endeavored  to  explain  and  reconcile  to  the  constitution  those 
laws  passed  by  Congress,  which  the  gentleman  has  considered  contrary  to  the 
constitution. 

I  will  now  proceed  to  some  other  arguments  of  the  gentleman.  He  observed 
that  the  bank  law  had  been  in  existence  fi<r  twenty  years,  during  which  time 
there  had  been  an  acquiescence  in  the  law.  I  concur  in  that  opinion.  I  do 
consider  that  all  the  instances  presented  by  the  gentleman,  to  wit:  authorizing 
the  bank  to  letid  money;  the  extension  of  its  right  of  establishing  branches  to 
New  Orleans  in  1804;  and  also  the  act  to  punish  counterfeiting  bank  paper,  in 
1807,  ought  to  be  considered  as  acts  of  acquiescence  by  the  Government  in  the. 
constitutionality  of  that  law. 

I  have  given  the  most  respectful  attention  to  the  arguments  used  by  the  op- 
posers  of  the  bill,  to  account  for  this  acquiescence,  and  to  obviate  the  reasoning 
drawn  from  it  by  its  friends;  and,  whilst  I  give  the  gentlemen  in  opposition 
great  credit  for  the  ingenuity  of  the  argument,  I  cannot  concur  in  the  reason  - 
ing  upon  which  it  is  founded.  I  understand  it  to  be  bottomed  upon  the  idea, 
that  the  bank  law  \vas  in  the  nature  of  a  contract;  and  that,  under  its  influ- 
ence, private  rights  became  vested  in  individuals;  and  that,  therefore,  the 
Government  was  bound  to  carry  it  into  eu'ect,  and  that  a  refusal  to  have  done 
so,  or  the  repeal  of  the  act,  would  have  been  a  violation  of  good  faith,  &c.  &c. 
The  honorable  gentleman  from  Tennessee  (Mr.  ANDERSON)  observed,  that  the 
republican  administration,  viewing  this  law  in  the  nature  of  a  contract,  from 
a  saci  ed  regard  to  the  preservation  of  good  faith,  passed  these  several  acqui- 
escing laws,  &c.  &c.  The  observation  of  the  gentleman,  so  far  as  it  respected 


ON  THE  BILL  TO  RENEW  THE  CHARTER    OF   1791.  34  J 

the  manifestations  of  good  faith  on  the  part  of  the  republicans,  was  certainly 
both  just  and  pertinent  The  republicans  have  certainly  fulfilled,  with  the 
most  scrupulously  fidelity,  all  the  public  engagements  of  their  predecessors  as 
well  as  their  own;  yet  I  do  not  believe  that  these  several  acquiescing  laws 
were  passed  under  the  pressure  of  any  obligation  for  the  preservation  of  good 
faith. 

I  concur  with  the  honorable  gentleman  from  Georgia  (Mr.  CRAWFORD)  in  the 
conclusions  he  drew  against  this  argument,  of  the  imperious  obligation  due  to 
contracts,  under  the  influence  of  this  law;  but  not  precisely  for  the  reasons 
he  assigned  for  them.  The  gentleman  observed,  that  it  was  essential,  in  the 
formation  of  contracts,  that  there  should  be  parties,  and  a  consideration.  That, 
under  the  bank  law,  there  was  no  sufficient  consideration  for  the  formation  of 
a  contract.  In  this  I  am  inclined  to  think  the  gentleman  is  mistaken.  I  pre- 
sume the  mistake  has  arisen  from  an  inattention  to  the  circumstances  under 
which  the  law  was  passed.  Under  the  terms  of  the  law,  there  were  facilities 
given  to  the  United  States  by  the  bank,  of  very  considerable  value.  The  bonus 
given  was  certainly  a  sufficient  consideration  to  make  the  contract  binding  on 
the  part  of  the  United  States.  But  I  have  several  objections  to  this  argument 
urged  against  the  bill.  In  the  first  place,  parties  and  a  consideration  are  uot 
only  essential  to  the  formation  of  a  contract,  but  parties  capable  of  contract- 
ing. If  the  bank  law  be  unconstitutional,  then  it  cannot,  as  I  conceive,  give 
a  constitutional  capaci/y  to  the  artificial  person  created  by  it  to  contract.  An 
unconstitutional  corporation  lias  no  more  a  constitutional  or  le^al  capacity  to 
contract,  than  a  married  wuman,  or  even  an  idiot,  each  equally  laboring  under 
legal  disabilities.  The  argument,  therefore,  which  is  used,  to  shew  that  the 
bank  law  is  unconstitutional,  and,  at  die  same  time, gave  a  constitutional  ca- 
pacity to  an  artificial  person  to  contract,  appears  to  me  to  be  in  the  nature  of  a 
felo  de  se — it  destroys  itself-  Hence  I  conclude,  that,  if  the  law  be  unconsti- 
tutional in  itself,  it  cannot  confer  on  an  artificial  person  a  legal  capacity  to 
contract;  and  that  any  contract,  made  under  its  influence,  would  be  void,  for 
the  want  of  that  legal  capacity.  In  the  next  place,  if  it  be  urged  that  Congress 
is  bound  to  carry  into  eftect  all  contracts  in  which  individual  rights  or  interests 
are  concerned,  then  Congress  may,  in  this  way,  derive  to  itself  all  the  powers 
it  may  want  for  an  object,  instead  of  getting  them  by  the  shorter  route  of  the 
assumption,  under  the  terms  common  defence  and  general  welfare;  and  in  a 
much  more  exceptionable  mode;  because,  it  may  not  only  thus  acquire  any 
power  whatever,  but  may  also  acquire  it  in  perpetuity.  Hence,  it  appears  to 
me  that,  if  gentlemen  should  succeed  in  establishing  this  argument,  they 
would  lose  more  by  the  admission,  than  they  would  gain  by  limiting  the  powers 
of  Congress  to  the  enumerations  of  the  constitution.  In  fact,  that  argument 
would  be  rendered  worse  than  nugatory  by  this  admission. 

But  I  have  a  third  objection  to  this  argument  of  the  obligation  of  the  con- 
tract, mwre  formidable  than  either  of  the  preceding.  It  appears  to  me  to  be 
an  argument  against  a  fact.  I  know  it  is  so  as  it  respects  myself.  I  have 
been  present  when  most  of  these  acquiescing  laws  have  been  passed,  and  I 
have  no  recollection  of  having  been  influenced  in  the  votes  I  gave  in  their  fa- 
vor, by  a  view  of  the  sacred  obligations  due  to  contracts;  nor  do  I  recollect  to 
have  heard  this  consideration  urged  by  any  gentleman,  at  the  time  of  passing 
these  several  laws.  In  fact,  at  the  time  of  passing  the  law  for  punishing  coun- 
terfeiting the  bills  of  the  Bank  of  the  United  States,  I  recollect  no  other  con- 
sideration operating  on  me,  than  the  information  that  certain  unprincipled  in- 
dividuals were  counterfeiting  bills  in  general  circulation,  to  the  great  injury 
of  the  honest  part  of  the  community.  I  thought  such  conduct  ought  to  be  sup- 
pressed, and  therefore  voted  for  punishing  all  who  should  be  engaged  in  it, 
without  much  attention  to  the  constitutional  question  respecting  the  bank  law. 


tainly  not  apply  to  those  gentlemen  who  voted  under  the  suggested  impres- 
sions.    The  general  principle  operating  with  me,  was  this:  that  all  laws  pass- 


342  BANK  OF  THE  UNITED  STATES. 

ed  by  Congress  must  be  considered  as  constitutional,  until  they  are  repealed. 
Their  unconstitutional ity  is  a  good  reason,  and  the  best  reason,  for  their  re- 
peal; but,  so  long  as  they  remain  in  the  statute  book  unrepealcd,  they  must  be 
considered  constitutional,  and,  in  my  judgment,  no  tribunal  on  earth  can  ques- 
tion their  validity;  nor  can  1  admit  that  they  are  subject  to  the  censorial 
power  claimed  by  the  judiciary.  I  am,  therefore,  disposed  to  admit  the  acqui- 
escence in  the  bank  law,  and  to  give  the  gentlemen  in  favor  of  renewal  all 
the  advantage  of  the  precedents  quoted  by  them  for  that  object,  considered 
under  all  the  circumstances  of  the  case;  and  to  what  do  they  amount?  Will 
they  go  so  far  as  to  preclude  the  present  Congress  from  exercising  its  sound 
discretion  upon  the  constitutional  question,  when  brought  directly  to  its  con- 
sideration? and  when,  at  the  time  of  the  several  precedents  quoted,  it  was 
only  collaterally  or  incidentally  considered,  if  considered  at  all?  Certainly 
not;  and,  if  in  exercising  the  right  of  reviewing  the  constitution,  the  present 
Congress  should  be  convinced  that  a  former  Congress  had  exceeded  its  limits, 
is  it  not  bound  by  every  conscientious  consideration  to  correct  the  error,  and 
to  bring  the  laws  within  its  wholesome  provisions?  It  appears  to  me  not  only 
to  be  the  right,  but  the  indispensable  duty  of  Congress  to  do  so. 

I  will  now  proceed  to  animadvert  upon  some  important  observations  made 
by  two  gentlemen,  upon  the  right  of  the  Legislatures  of  the  respective  States 
to  instruct  the  Senators  of  the  United  States. 

Acting,  as  I  now  am,  Mr.  President,  under  the  influence  of  instructions 
from  the  Legislature  of  the  State  I  have  the  honor  to  represent,  I  feel  myself 
imperiously  called  upon  to  notice  some  observations  which  fell  from  the  hon- 
orable gentleman  from  Georgia  (Mr.  CRAWFORD)  and  the  honorable  gentle- 
man from  Pennsylvania,  (Mr.  LEIB)  in  relation  to  that  subject. 

The  honorable  gentleman  from  Georgia  (Mr.  C.)  feelingly  complains  of 
the  tendency  of  instructions  from  the  great  States,  to  embarrass  the  proceed- 
ings of  this  Government,  by  giving  an  undue  bias  to  the  deliberations,  and 
restraining  the  free  exercise  of  opinion  in  this  honorable  body,  &c.  &c.  With  - 
out  particularly  adverting  to  the  emphasis  laid  by  the  honorable  gentleman 
upon  the  term  "  great  States ,"  I  agree  in  general  with  the  gentleman  in  his 
opinions  in  that  respect.  But,  sir,  in  the  present  case,  it  may  be  observed, 
that  the  questions  ot  instruction  to  Senators  was  first  moved  in  the  State  of 
Maryland.  Now,  sir,  Maryland,  although  great  in  virtues  and  resources,  is 
not  so  great,  in  point  of  population  and  extent  of  territory,  as  to  have  obtained 
the  denomination  of  a  great  State.  The  proposition,  then,  however,  was  re- 
jected by  one  vote.  A  similar  motion,  I  am  informed,  is  now  depending  be- 
fore the  Legislature  ol  New  Jersey.  New  Jersey,  like  Maryland,  although 
great  in  virtues  and  resources,  is  not  so  great  in  point  of  population  and  ex- 
tent of  territory,  as  to  have  obtained  the  denomination  of  a  grtat  Mate. 
Indeed,  sir,  the  right  to  instruct  Senators  has  not  been  exclusively  acted  upon 
by  the  great  S'.ates,  generally  so  called,  during  the  operations  of  this  Govern- 
ment; but,  I  admit,  has  been  more  frequently  resorted  to  by  them. 

The  gentleman  from  Pennsylvania,  (Mr.  LEIB)  after  having  read  his  in- 
structions, informed  the  Senate  that  he  represented  one  of  the  great  States 
which  had  given  instructions,  and  that  he  felt  himself  absolutely  bound  by 
them  in  the  vote  he  should  give  on  the  present  question:  that  he  considered 
himself  the  representative  of  the  Legislature  of  Pennsylvania;  that  it  was  the 
principal,  arid  he  the  agent,  and  he  was  bound  to  carry  into  effect  its  will,  &c. 
However  high  may  be  the  respect  I  generally  entertain  for  the  opinions  of  the 
honorable  gentleman  (Mr.  L.)  I  am  compelled  to  dissent  from  him  in  these 
opinions.  I  feel  myself  compelled,  too,  to  express  this  dissent,  lest  it  might 
be  supposed  that,  being  smilarly  circumstanced  with  that  gentleman,  on  the 
present  question,  my  conduct  might  be  influenced  by  similar  considerations. 

I  do  not  consider  myself  the  representative  of  the  Legislature  of  Virginia, 
although  I  feel  the  most  unbounded  confidence  in  its  wisdom  and  patriotism, 
and  the  highest  respect  for  its  proceedings.  I  consider  myself  the  represen- 
tative of  the  People  of  the  United  States,  delegated  to  that  character  by  the 
Legislature  of  Virginia.  As  an  evidence  of  the  correctness  of  this  opinion, 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  179.1.     343 

I  have  only  to  remark,  that  the  laws  which  I  contribute  to  pass,  in  the  cha- 
racter of  Senator,  are  co-extensive  with  the  United  States,  and  operate  upon 
the  People  thereof  in  their  individual  capacities.    They  do  not  operate  upon 
the  State  Legislatures  in  their  corporate,  characters,  except  in  cases  where, 
in  that  character,  they;  are  connected  with  the  Federal  Government,  or  instru- 
mental in  the  execution  of  some  of  its  powers.     Still  less  do  they  operate 
upon  the  Legislature  of  Virginia  exclusively;  of  course,  I  cannot  consider 
myself  as  the  representative  of  that  Legislature  exclusively,  as  its  agent,  and 
bound,  iu  all  cases,  to  execute  its  will  upon  this  floor,  &c.  &c.     It  is  not  ne- 
cessary, nor  do  I  mean  to  question  the  right  of  the  State  Legislatures,  so  long 
practised  upon,  to  instruct  the  Senators  of  the  United  States,  chosen  by  them, 
respectively;  because  that  might  produce  an  unmeaning  and  useless  discus- 
sion about  terms;  but  I   mean  to  inquire,  whether  the  exercise  of  the  right 
imposes  a  constitutional  obligation  on  the  Senator  instructed,  to  obey;  in 
what  the  real  obligation  to  obedience  consists;  whether  the  instruction  is  in- 
junctive  and  compulsory  on  him,  or  addressed  only  to  his  discretion;^ or,  in 
other  words,  whether  the  Senator  instructed  has  not  a  right  to  disobey?    and 
whether  such  disobedience  violates  any  moral  or  political  obligation?  I  also 
propose  to  make  a  few  observations  on  the  operation  of  instructions  upon  the 
Federal  Government  and  its  proceedings.     '1  hat  the  Senator  instructed  has  a 
constitutional  and  legal   right  to  disobey  his  instructions,  is  most  obvious  to 
my  understanding,  from  the  single  consideration,  that  a  law  passed  by  a  vote, 
in  disobedience  of  instructions,  is  as  valid  as  a  law  passed  by  a  vote  in  obedi- 
ence to  instructions.     Obedience  to  instructions  is  no  where  commanded, 
nor  is  disobedience  of  instructions  any  where  prohibited,  by  any  written  law 
or  constitution.     The  act  of  disobedience  does  not  subject  the  disobeying 
Senator  to  any  punishment  whatever;  of  course,  the  disobedience  of  instruc- 
tions violates  no  political  duty,  and,  if  the  instructions  be  addressed  only  to 
the  discretion  of  the  Senator,* his  disobedience  of  them  violates  no  moral  obli- 
gation; provided  he  exercises  a  sound  and  conscientious  discretion,  founded 
upon  the  best  reflections  he  is  able  to  bestow  upon  the  subject  thus  presented 
lor  consideration.    I  therefore  conclude,  if  the  State  Legislatures  possess  the 
right  to  instruct  Senators  of  the  United  States,  chosen  by  them,  respectively, 
it  is  an  incomplete  right,  without  a  remedy,  or  with  a  very  remote  one-     The 
influence  or  the  true  obligation  of  instructions,  therefore,  arises  from  the  ex- 
pression* of  opinion  by  the  State  Legislatures;  and  the  very  high  respect 
which  is  at  all  times  due  from  the  Senator  to  the  expression  of  such  opinion 
by  the  Legislature  of  the  State  he  represents — a  respect  which  I  feel  so  strong 
ly,  that  I  never  would  depart  from  an  opinion  thus  expressed,  unless  in  a  clear 
and  indisputable  case;  but  the  point  I  contend  for  is,  that  this  opinion  is  not 
injunctive,  compulsory,  or  mandatory.     That  it  is  not  in  the  nature  of  a  com- 
mand, but  addressed  to  the  discretion  of  the  Senator  instructed:  taking  into 
due  consideration  all  the  circumstances  of  the  case  connected  with  such  in- 
structions. 

It  may  be  said,  that  the  Senator  is  responsible  to  the  Legislature  which  ap- 
points him,  at  the  expiration  of  his  term  of  service;  this  is  true,  if  applied  to 
the  individuals  who  may  compose  the  Legislature  at  that  time;  but  it  does 

*  It  is  presumed  that  this  was  the  sense  in  which  the  Legislature  of  Virginia  viewed 
this  subject  in  1800.  In  the  memorable  instructions  of  that  day,  the  Legislature  pre- 
faces them  with  a  declaration  to  the  Senators  of  the  United  States,  that  they  deem  it 
important  "  to  express  their  opinions"  upon  the  subject  of  instructions.  Then  fol- 
lows a  course  of  reasoning,  to  convince  the  Senators  of  the  propriety  of  the  opinions 
thus  expressed.  The  instructions  in  this  case,  therefore,  were  clearly  addressed  to 
the  discretion  of  the  Senators,  and  not  considered  as  imposing  a  positive  demand. 

In  1808,  the  Legislature  of  Virginia  instructed  the  Senators  of  the  State,  in  the 
Congress  of  the  United  States,  to  use  their  best  endeavors  to  obtain  amendments  to 
the  constitution  of  the  United  States,  which,  in  effect,  would  make  the  Senators  of  the 
United  States  recallable  at  the  pleasure  of  the  Legislatures  of  the  respective  States. 
It  is  presumed  that  the  Legislature  did  not  consider  its  instructions  mandatory^  and 


344  BANK  OF  THE  UNITED  STATES. 

not  vary  my  conclusion;  because,  every  act  he  performs,  whether  instructed 
or  not,  is  an  act  of  responsibility;  and  the  most  which  can  be  inferred  from 
this  idea,  is,  that  it  increases  his  responsibility,  and  would  naturally  produce 
caution;  but  cannot  affect  his  right  to  disobey. 

It  cannot  escape  attention,  that  I  purposely  avoid  all  observations  upon  the 
rights  of  the  People,  as  the  legitimate  source  of  all  power  in  their  highest  so 
vereign  capacities,  and  upon  whom  all  laws  passed  by  their  representatives, 
operate  in  their  individual  characters,  to  instruct  all  their  representatives, 
which,  I  presume,  if  practicable,  would  not  be  denied  by  any;  because  such  a 
discussion  would  be  unnecessary  upon  the  present  question.  The  inquiry  I 
am  making  respects  the  right  of  one  set  of  representatives  of  the  People,  cho- 
sen for  certain  purposes,  to  give  mandatory  instructions  to  another  set  of  re- 
presentatives of  the  People,  chosen  for  other  purposes,  without  any  written  law 
to  that  effect,  and  by  the  mere  force  of  implication.  If  it  should  be  contended 
that  the  Senators  ot  the  United  States  are  the  representatives  of  the  Legisla- 
tures of  the  respective  States,  and  not  the  representatives  of  the  People  of  the 
United  States,  in  their  individual  characters,  contrary  to  the  express  provi- 
sions of  the  constitution,  then  this  absurd  conclusion  would  follow:  that  the 
People  of  the  United  States  are  governed  by  laws,  not  passed  by  their  repre- 
sentatives, but  by  the  representatives  of  their  State  Legislatures,  in  their  cor- 
porate characters,  contrary  to  the  fundamental  principles  of  all  republican 
Governments,  and  directly  opposite  to  the  universal  expectations  of  the  whole 
American  People. 

But.  sir,  let  us  resort  to  the  constitution  itself,  and  see  the  actual  relations 
which  do  there  exist  between  the  Legislatures  of  the  respective  States,  and 
the  Senators  of  the  respective  States,  composing  the  Senate  of  the  United 
States. 

In  the  3d  section  of  the  1st  article  of  the  constitution,  are  these  words: 
4i  The  Senate  of  the  United  States  shall  be  composed  of  two  Senators  from 
each  State,  chosen  by  the  Legislature  thereof,  for  six  years,  and  each  Senator 
shall  have  one  vote."  In  another  place,  are  these  words:  "  And  if  vacancies 
happen,  by  resignation  or  otherwise,  during  the  recess  of  the  Legislature  of 
any  State,  the  Executive  thereof  may  make  temporary  appointments,  until 
the  next  meeting  of  the  Legislature,  which  shall  then  fill  such  vacancies." 
These  clauses  of  the  constitution  present  all  the  relations  between  the  Legis- 
latures and  Executives  of  the  respective  States,  and  the  Senators  of  the  Unit- 
ed States;  and  in  what  do  they  consist?  Certainly  in  nothing  but  in  choosing 
the  Senators;  when  that  is  done,  all  the  functions,  of  the  Legislature  and 
Executive  are  at  an  end,  quo  ad  that  particular  subject.  I  see  no  influence 
§iven,  either  over  the  votes  or  the  acts  of  the  Senator,  during  the  six  yeara 
for  which  he  is  elected.  During  that  period,  the  Senator  is  entrusted  with 
the  execution  of  all  the  powers  and  authorities  conferred  upon  him  by  the  con- 
stitution, at  his  own  discretion,  subject  only  to  his  constitutional  responsibility, 
at  the  expiration  of  his  term  of  service.  But  it  may  be  said,  that  the  right  to 
instruct  arises  from  the  necessary  connexion  between  the  constituent  and  the 
representative.  To  this  it  may  be  replied,  that  this,  upon  the  general  princi- 

that  the  instructed  Senator  was  bound  to  obey,  or  in  other  words,  had  no  right  to  dis- 
obey. Because,  if  the  Senator  was  bound  to  obey  the  instructions  of  the  Legislature, 
it  might  instruct  him  to  resign,  upon  the  same  principle  which  would  authorize  in- 
structions how  to  vote;  and  if  the  instructions  be  mandatory,  the  instructed  Senator 
would  be  bound  to  resign  as  well  as  vote  conformably  thereto,-  of  course,  such  an  amend- 
ment to  the  constitution  would  be  unnecessary.  The  Senators  from  Virginia,  with 
the  most  respectful  attention  to  the  opinion  expressed  by  the  Virginia  Legislature,  in 
the  most  respectful  terms,  presented  the  instruction  to  the  consideration  of  the  Senate; 
but  never  thought  themselves  bound  to  use  their  best  endeavors  to  obtain  the  amend- 
ment to  the  constitution,  as  they  were  instructed  to  do.  The  Legislature,  however, 
forwarded  the  proposed  amendment  to  the  other  State  Legislatures  for  concurrence; 
and,  as  far  as  information  is  yet  received,  the  proposition  has  been  unanimously  disap- 
proved by  every  State  Legislature  which  has  acted  upon  it. 


OX  THE  BILL  TO  RENEW  THE  CHARTER  OF    1791.  345 

pie,  is  a  constructive  or  an  implied  right;  but  I  doubt  its  application,  at  least 
m  its  full  force,  to  this  particular  case.  The  relations  in  this  case,  between 
the  constituent  and  the.  representative,  are  expressly  prescribed  by  the  con 
stitution;  neither  of  them  can  claim  any  original  or  native  lights;  and  no  con- 
struction nor  implication  ought  to  be  inferred  against  its  provisions,  not  in- 
consistent with  its  obvious  meaning.  Besides,  if  this  mere  implication  be  the 


contended  for,  that  the  instruction  is  mandatory  s^A  conclusive.  Will  jt  not 
also  apply  to  the  connexion  between  the  electors  and  the  Presidentof  the  United 
•States?  I  find,  by  the  2d  article  of  the  constitution,  that  the  President  of  the 
United  States  is  to  be  chosen  by  electors  appointed  by  the  several  States, 
and  they,  of  course,  become  the  immediate  constituents  of  the  President.  Hut 
what  would  be  thought  of  their  inferring  a  righr,  from  this  connexion,  to  in- 
struct the  President  of  the  United  States  in  what  manner  to  execute  the 
powers  and  duties  of  his  office?  And  what  would  be  the  probability  of  a  con- 
currence in  such  instructions  from  the  different  electors  of  the  several  States? 
The  President's  responsibility  is  tested  at  the  expiration  of  every  four  years; 
that  of  a  Senator,  at  the  expiration  of  every  MX  years;  and  I  believe  that  the 
changes  of  the  individual  electors  in  the  several  States  are  Hot  greater,  at  the 
expiration  of  every  four  years,  than  are  the  changes  in  the  individuals  com- 
posing the^  Stale  Legislatures,  at  the  expiration  of  every  MX  year.-.  The  re- 
sponsibility of  the  President  ot  the  United  States,  therefore,  may  be  considered 
as  great,  or  greater,  to  his  electors,  than  the  reponsibility  of  the  Senators  of 
the  United  S'lates  to  the  respective  State  Legislatures:  for.  I  contend,  the 
responsibility  of  the  Senator  is  not  to  the  Slate  Legislature,  in  its  corporate, 
character,  but  to  the  individuals  who  may  happen  to  compose  the  State  Legis- 
lature at  the  time  of  his  election,  in  their  individual  capacities,  described  only 
by  the  corporate  term.  It  is  believed  that  a  pretension  of  this  kind,  by  the 
electors  of  the  President  of  the  United  States,  would  not  be  tolerated  even  by 
the  State  Legislatures.  But,  is  there  nothing  expressly  contained  in  the  con- 
stitution of  the  United  States,  which  would  afford  a  stronger  implication 
against  the  exercise  of  this  right  by  the  State  Legislatures,  than  the  implica- 
tion from  which  the  right  is  said  to  be  derived?  I  think  the  very  first  words 
of  the  constitution,  after  the  preamble,  afford  strong  evidence  of  the  exclu- 
sion of  the  right  of  the  State  Legislatures  to  give  mandatory  instructions  to 
the  Senators  of  the  State.  They  are  the  following:  "  All  legislative  powers, 
heretofore  granted,  shall  be  vested  in  a  Congress  of  the  United  States,  which 
shall  consist  of  a  Senate  and  House  of  Representatives."  Now,  sir,  upon  the 
principle  of  mandatory  instructions  from  the  State  Legislatures  to  the  Sena- 
tors of  the  United  States,  will  Congress  exercise  all  the  legislative  powers 
granted  by  the  constitution?  Will  not  the  State  Legislatures  essentially  par- 
ticipate in  the  exercise  of  the  legislative  powers?  It  they  can  command  and 
direct  the  votes  of  one  distinct  and  essential  branch  of  Congress,  upon  all 
legislative  subjects,  will  it  not  be  a  material  participation  in  the  legislative 
powers  granted  exclusively  to  Congress?  Could  they  not  thus  embarrass  the 
whole  proceedings  of  Congress?  Could  they  riot  render  all  deliberations  on 
the  part  of  the  Senate  unnecessary?  Could  they  not  thus  deprive  the  Govern- 
ment itself  of  all  energy  and  efficiency?  Surely  the  wise  framers  of  the  con- 
stitution could  never  have  anticipated,  still  less  could  they  have  sanctioned, 
.the  assertion  of  such  principles. 

These  considerations  bring  me  to  examine  the  tendency  of  the  principle 
contended  for,  upon  the  character  arid  proceedings  of  the  General  Govern- 
ment; and,  sir,  had  it  not  been  for  the  opinions  I  entertain  on  this  question, 
I  should  not  have  given  the  other  the  critical  examination  I  have  attempted; 
but,  sir,  such  is  my  opinion  of  the  injurious  effects  of  the  practice  of  giving 
instructions  by  the  Legislatures  of  the  States  to  the  Senators  of  the  United 
States,  that  I  deem  it  my  indispensable  duty  to  give  the  subject  a  full  and 
44 


546  BANK  OF  THE  UNITED  STATES 

candid  investigation,*  although,  in  doing  so,  I  know  I  shall  have  to  encounter 
strong  and  honorable,  and  perhaps  insuperable  prepossessions  against  my 
opinions;  particularly  in  the  State  I  have  the  honor  to  represent,  t  wish  it 
to  be  understood,  however,  sir,  that,  in  the  discharge  of  my  duties  on  this 
floor,  I  shall  always  obey  the  honest  dictates  of  my  own  judgment;  and  when- 
ever I  see,  or  think  I  see,  danger  of  any  kind  threatening  the  due  administra- 
tion of  this  Government,  I  will,  at  all  times,  endeavor  to  expose  it  to  the  view 
of  the  People,  and  particularly  of  those  from  whom  the  unintentional  danger 
is  apprehended,  regardless  of  any  consequences  to  myself  upon  the  political 
theatre.  The  best  mode  of  appreciating  the  tendency  of  mandatory  instruc- 
tions upon  the  proceedings  of  the  Federal  Government,  will  be  to  bring  to  our 
recollection  the  great  points  of  difference  between  the  present  Government 
and  former  confederation. 

Under  the  former  confederation,  the  States  voted  in  their  coporate  charac- 
ters,- and  if  the  representatives  of  any  one  of  them  were  equally  divided  in 
opinion,  the  State  gave  no  vote.  Under  the  present  Government  each  repre- 
sentative votes  in  his  individual  character,  and  upon  his  individual  responsi- 
bility. The  words  of  the  constitution  are,  4 '  and  each  Senator  shall  have  one 
vote."  Under  the  former  confederation,  the  requisitions  of  Congress  operat- 
ed upon  the  States  in  their  corporate  characters.  Under  the  present  Govern- 
ment, the  laws  of  Congress  operate  upon  the  People  of  the  United  States  in 
their  individual  characters. 

The  former  Congress  did  not  possess  the  means  necessary  and  proper 
for  executing  its  own  will  upon  the  subjects  confided  to  its  deliberations. 
The  present  Congress  possesses  power  to  carry  into  effect  its  own  will  or  its 
laws,  upon  all  subjects  confided  to  its  management.  These  are  amongst  the 
great  points  of  difference  in  the  character  arid  powers  of  the  two  Govern- 
ments. The  former  government  fell  to  pieces  from  the  feebleness  of  its  orga- 
nization, and  principally  from  the  want  of  power  to  execute  its  ownwill^  from 
its  dependence  upon  the  State  Legislatures  for  the  execution  of  its  requisi- 
tions. 

Now,  sir,  if  the  State  Legislatures  possess  the  right  to  give  mandatory  in- 
structions to  their  Senators,  respectively,  I  see  very  little  difference  in  the 
character  of  the  present  and  former  •confederation;,  for  there  can  be  very  little 
difference  in  the  practical  effect  of  the  principle  of  requisitions  by  Congress 
upon  the  State  Legislatures,  which  may  be  rejected  at  their  discretion >  and 
the  principle  of  the  State  Legislatures  making  requisitions  by  mandatory  in- 
structions upon  one  essential  branch  of  Congress;  which  must  be  obeyed  by 
that  branch,  in  exclusion  of  all  discretion  whatever.  The  feebleness  and  in- 
congruity of  the  latter  principle  is.  in  my  opinion,  at  least  equal  to  the  first; 
and,  if  admitted  and  indulged  in,  will  as  certainly  terminate  in  the  ruin  and  dis- 
solution of  the  Government.  Another  injurious  tendency  of  mandatory  instruc- 
tions is,  to  add  to  the  locality  of  feelings  and  opinions  of  the  deliberations  of  this 
honorable  body,  already  top  strong  by  native  and  habitual  prepossessions  and  pre- 
dilections. Another  injurious  tendency  vf  mandatory  instructions  results  from 
their  influence  in  restraining  the  free  exercise  of  opinion  in  the  diliberations 
of  this  honorable  body;  and,  if  generally  practised  upon,  would  render  all 
deliberations  unnecessary.  The  incongruity  of  mandatory  instructions  to  the 
operations  of  this  Government  will  appear  more  obvious,  by  reflecting, 
thaty  if  the  same  measure  were  to  be  concurred  in,  and  required  by  every 
vState  Legislature  in  the  Union,  and  their  Senators  peremptorily  instructed 
to  effect  it,  without  exercising  any  discretion  of  their  own,  it  is  probable  that 
such  would  be  the  difference  in  the  mude  or  detail  of  the  instructions  from 
the  respective  State  Legislatures,  as  to  put  it  out  of  the  power  of  the  Senate 
to  effect  their  object,  the  Senators  from  each  State  being  bound  ta  pursue  the 
mode  pointed  out  to  them  by  the  Legislature  of  the  State  they  respectively 
represent.  Indeed,  such  is  my  opinion  of  the  tendency  of  the  principle  of 
mandatory  instructions,  that  1  should  regret  very  much  to  see  it  established 
and  frequently  resorted  to.  The  practice,  in  my  opinion »  would  eventuate 
in  producing  feebleness  and  inefficiency  in  the  General  Government;  collision 


g 
B 


ON  THE  BILL  TO  RENEW  THK  CHARTER  OF  1791.    347 

among  the  several  States:  and  finally  disunion  and  dissolution  of  the  General 
Government. 

Sir,  I  now  am,  and  always  have  been,  attached  to  an  efficient  government; 
a  government  strong  enough  to  repel  external  violence,  and  to  ensure  domestic 
tranquillity,  and  to  secure  the  person  and  property  of  the  individual  citizens. 
The  Federal  Government  I  conceive  to  be  an  indispensable  instrument  in  the 
effectuation  of  these  great  objects.  I  have  often  wondered  at  seeing  gentle- 
men of  learning,  of  talents,  and  of  patriotism,  rejoicing  at  the  curtailment  of  its 
necessary  powers.  They  seem  to  me  to  enjoy  the  triumph  of  every  event  of  this 
kind,  as  much  as  if  they  had  plucked  a  laurel  from  the  brow  of  their  most  inve- 
terate enemy,  and  placed  it  round  their  own;  not  being^sufficiently  impressed, 
in  my  judgment,  with  the  importance  of  the  Federal  Government  to  the  pre- 
servation of  their  own  personal  safety,  and  the  security  of  their  property,  &c. 

The  gentleman  from  Georgia  (Mr.  CRAWFORD)  was  pleased  to  say,  mat,  in 
iving  I  instructions  to  the  Senators  upon  this  occasion,  the  great  States  had 
een  influenced  solely  by  motives  of  avarice.  I  regret  the  remark;  and  I 
think,  if  the  gentleman  would  dispassionately  reconsider  it,  he  would  also  re- 
gret it.  I  think  he  would  admit  that  the  Legislature  of  Virginia  could  not 
have  acted  under  the  influence  of  such  a  motive.  And,  sir,  I  feel  a  pride  arid 
a  pleasure  irt  standing  here  to  repel  the  imputation,  and  to  do  justice  to  the 
real  motives  of  the  Legislature.  I  am  at  a  loss  to  determine  what  are  the 
particular  circumstances  which  could  have  induced  the  gentleman  to  ascribe 
the  motive  of  avarice  to  the  Virginia  Legislature  on  this  occasion.  It  is  true, 
that  a  branch  of  the  Bank  of  the  United  States,  with  the  trifling  capital  of 
300,000  dollars,  is  established  at  Norfolk;  and  that  a  branch  of  the  Bank  of 
Virginia  is  also  established  there.  But  these  circumstances  furnish  no  possible 
motive  of  avarice  to  the  Virginia  Legislature^  The  amount  of  capital  and  its 
effects,  are  quite  unimportant  to  the  State.  Norfolk  itself,  although  equally 
respectable  and  important  with  any  other  portion  of  the  State  of  tiic  same  ex  • 
tent  and  population,  is  not  sufficient  to  excite  the  avarice  of  the  VVginia  Le- 
gislature. The  Legislature  of  Virginia  consists  principally  of  agriculturists, 
residing  in  the  interior  of  the  State,  who  concern  themselves  very  little  with 
banks  and  bank  operations.  They  therefore  have  made  no  calculations  of 
pecuniary  interests  upon  this  occasion.  They  have  acted,  in  giving  instructions, 
irpm  the  purest  and  most  honorable  motives,  from  a  conviction  mat  the  power 
of  granting  charters  of  incorporation  was  not  conferred  on  Congress  by  the 
constitution,  but  reserved  to  the  States,  respectively.  That  this  conviction 
alone  was  the  inducement  to  their  instructions  will  appear  obvious  from  the 
instructions  themselves,  which  I  beg  leave  to  read: 

The  General  Assembly  of  Virginia  view,  with  the  most  serious  concern,  the  late 
attempts  which  have  been  made  to  obtain  from  Congress  a  renewal  of  the  charter  in- 
corporating- the  Bank  of  the  United  States. 

This  Assembly  are  deeply  impressed  with  the  conviction  that  the  original  grant  of 
that  charter  was  unconstitutional;  that  Congress  have  no  power  whatever  to  renew  it; 
and  that  the  exercise  of  such  a  power  would  be  not  only  unconstitutional,  but  a 
dangerous  encroachment  on  the  sovereignty  of  the  States.  Therefore, 

Resolved,  That  the  Senators  of  this  State  in  the  Congress  of  the  United  States  be 
instructed,  and  our  Representatives  most  earnestly  requested,  in  the  execution  of  their 
duties,  as  faithful  representatives  of  their  country,  to  use  their  best  efforts  in  oppos- 
sing,  by  every  means  in  their  power,  the  renewal  of  the  charter  of  the  Bank  of  the 
United  States. 

January  22,  1811.  Agreed  to. 

ROBERT  TAYLOR,  S.  S. 
JAMES  BARBOUR,  S.  H.  D, 

A  copy  from  the  original. 

Test.  JAS.  PLEASAXTS,  c,  u.  D. 

It  manifestly  appears  from  these  instructions  that  a  conviction  of  the  un  • 
constitutionality  of  the  original  bank  law  was  the  sole  inducement  with  the 
Legislature  for  giving  them;  and  here,  sir,  permit  me  to  express  a  hope,  that 
the  arguments  I  have  urged,  in  tavor  of  this  opinion,  will  amply  justify  the 


348  BANK   OP   THE   UNITED    STATES. 

Legislature  in  the  honest  conviction  under  which  it  has  acted.  Permit  mcr 
also,  to  remark,  sir,  that,  whilst  I  cannot  admit  that  instructions  in  any  case 
possess  a  mandatory  influence  over  the  Senator;  and  whilst  I  think  the  prac- 
tice of  giving  instructions  in  general,  and  upon  general  points  of  policy,  is 
attended  with  injurious  effects  upon  the  proceedings  of  this  Government,  &c.f 
yet,  in  a  case  of  rights  reserved  to  the  States,  the  Legislatures  not  only  have 
the  right,  but  it  is  their  duty  to  express  their  opinions  to,  or  instruct,  their 
Senators  (for  I  will  not  cavil  about  terms)  to  resist  the  usurpations  of  the 
General  Government.  It  is  the  mildest  vyay  in  which  their  agency  can  be 
brought  to  bear  upon  all  such  cases,-  and,  this  being  a  case  in  point,  the  in- 
structing Legislatures  stand  perfectly  justifiable  in  the  conduct  they  have 
adopted  in  that  respect.  I  hope,  sir,  that  I  have  rescued  the  Legislature  of 
Virginia  from  the  unmerited  imputation  thrown  against  it,  inadvertently  I  am 
sure,  by  the  gentleman  from  Georgia,  (Mr.  CRAWFORD)  and  have  shown  that 
it  has  been  influenced  by  the  purest,  the  most  laudable,  and  the  most  honora- 
ble motives,  &c. 

I  have,  sir,  thus  presented  to  the  Senate  the  most  impartial  and  comprehen- 
sive views,  which  my  best  reflections  have  enabled  me  to  take  of  the  constitu- 
tional question  involved  in  the  present  discussion,  and  of  all  the  other  topics 
which  have  been  incidentally  connected  with  it.  I  will  now  proceed  to  ex- 
amine the  subject  in  another  point  of  view. 

Upon  the  question  respecting  the  expediency  of  the  renewal  of  the  bank 
charter,  the  friends  of  the  bill  claim  the  whole  weight  of  the  argument;  whilst 
some  oi  its  opposers  tacitly  acquiesce  in,  and  others  faintly  oppose  this  lofty 
pretension.  Notwithstanding  these  circumstances,  I  entertain  very  great 
doubts  upon  that  point.  There  appear  to  me  to  be  considerations  of  great 
weight  against  it;  perhaps  more  than  sufficient  to  counterbalance  those  urged 
in  favor^it.  Both  the  gentlemen  in  favor  of  the  bill  relied  very  much  upon 
1he  suggs$?on,  that  the  prosperity  of  the  United  States  was  attributabley  in  a 
very  gr<&#tfegree,  indeed  almostexclusively,  to  the  establishment  and  operation 
of  the  Baivfe  of  the  United  States.  I  believe,  sir,  nothing  is  more  difficult 
than  to  ascertain  the  true  causes  of  the  wealth  and  prosperity  of  nations^ 
very  few*  Writers  have  been  successful  in  the  investigation  of  that  intricate 
subject;  but  the  adventitious  establishment  and  operation  of  the  Bank  of  the 
United  States  are  amongst  the  last  causes  to  which  I  would  ascribe  their 
rapid  increase  of  wealth,  and  their  general  and  extensive  prosperity.  It  is  not 
to  any  adventitious  local  causes  we  are  to  look  for  these  universal  effects.  If 
I  were  to  look  for  their  real  causes,  I  should  expect  to  find  them  in  the  genius 
and  wisdom  of  our  political  institutions;  in  permitting  every  citizen  to  employ 
his  faculties  at  his  own  discretion,  for  the  attainment  of  property;  and  secur- 
ing to  him  the  perfect  and  uncontrolled  enjoyment  of  it  when  acquired.  Each 
citizen,  thus  acquiring  wealth  and  prosperity  to  himself,  would  of  course 
accumulate  the  general  stock,  &c.  These  inestimable  blessings  have  also 
been  attended  with  signal  and  peculiar  advantages,  with  an  exemption  from 
wars,  and  all  other  great  political  calamities,  &c.  &c.  whilst  that  portion  of 
the  world  with  which  we  have  the  most  extensive  commercial  relations  has 
been,  and  still  is,  unhappily  involved  in  wars  almost  interminable,  and  of  the 
most  disastrous  characters;  from  which,  till  Hitterly,  our  commercial  fellow 
citizens  have  derived  advantages  almost  incalculable,  and  of  course  added 
rreatly  to  the  general  stock  of  wealth  and  prosperity,  &c.  To  these,  and  such 
like  causes,  permanent  in  their  character,  and  universal  in  their  operation, 
are  properly  to  be  ascribed  the  general  wealth  and  prosperity  of  the  nation; 
and  not  to  the  adventitious  circumstance  of  the  creation  of  a  bank;  still  less 
should  we  rely  upon  this  cause,  when  we  reflect  that  the  bank  is  local  in  its 
operations:  whilst  the  scene  of  prosperity  is  universal  through  the  United 
States,  pervading  those  parts  of  them  where  the  operations  of  the  bank  are 
scarcely  known,  and  its  influence  never  felt,  as  much  as  those  parts  imme- 
diately within  the  local  point  of  its  influence,  &c.  This  argument,  therefore, 
I  conceive  has  been  urged  by  the  friends  of  the  bill  greatly  beyond  its  real 
merits,  and  received  with  too  much  facility  and  effect  by  its  opposers. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     549 

The  gentleman  from  Georgia,  (Mr.  CRAWFORD)  upon  introducing  to  the  con- 
sideration of  the  Senate  the  report  of  the  Secretary  of  the  Treasury,  was 
pleased  to  say,  that  he  should  rely  in  some  degree  upon  that  report;  although 
he  knew  that  mentioning  it  would  excite  invidious  feelings  in  some  of  the 
members  of  this  body.  1  do  not  know  to  whom  the  gentleman  meant  to  apply 
his  allusion.  I  can  only  say,  for  myself,  that  I  think  the  report  is  entitled  to 
a  respectful  attention;  that  I  would  give  it  the  same  respect  that  I  would 
show  to  a  report  from  the  head  of  any  other  department.  It  has  always  been 
my  invariable  habit  to  form  my  opinions  from  the  facts  contained  in  the  docu- 
ments before  me,  regardless  of  the  authors  of  them;  nor  could  I  ever  conde- 
scend, in  the  discharge  of  my  duty  upon  this  floor,  to  permit  personal  con- 
siderations to  intermingle  with,  still  less  bias  my  deliberations.  But,  sir,  I 
see  nothing  very  operative  in  the  Secretary's  report.  He  says,  in  substance, 
that  he  has  found  in  practice  the  Bank  of  the  United  States  to  be  a  convenient 
.  instrument  for  facilitating  the  management  of  the  fiscal  concerns  of  the  nation; 
which  I  believe  is  generally  admitted.  It  is  also  true  that  the  Secretary  has 
found  it  convenient,  and  has  ventured  to  express  his  opinion  in  favor  of  the 
constitutionality  of  the  bank  bill;  and  I  am  willing  to  give  to  the  opinion 
credit  for  what  it  is  worth.  No  gentleman  would  say  it  ought  to  preclude 
the  free  exercise  of  opinion  by  others;  and  I  acknowledge,  upon  this  particu- 
lar subject,  I  am  not  inclined  to  give  it  the  weight  to  which  that  gentleman's 
opinion  would  be  entitled  upon  other  occasions;  because  he  has  uniformly 
manifested  too  much  zeal  for  the  success  of  this  bill,  to  leave  the  mind  per- 
fectly free  in  the  investigation.  He  has,  for  a  long  time,  used  such  various  and 
incessant  means  to  effect  the  renewal,  that  his  mind  must,  in  some  degree,  be 
divested  of  that  cool  ness  and  impartiality  which  arc  indispensable  to  a  critical 
and  correct  analysis  of  the  constitution. 

The  gentleman  from  Georgia  (Mr.  CRAWFORD)  observed,  that  it  was  better 
to  have  a  bank  dependent  on  the  United  States,  than  to  increase  the  depen- 
dence of  the  Government  upon  the  State  banks,  over  which  the  Government 
of  the  United  States  cannot  exercise  any  control.  I  would  submit  to  the 
honorable  gentleman,  upon  further  reflection,  to  say,  whether  the  remark  is 
applicable  to  the  bill  under  consideration.  A f KM*  the  charter  is  once  granted, 
I  see  no  control  reserved  to  the  Government.  I  fear  the  controlling  influence 
would  be  on  the  other  side.  If,  however,  there  must  be  a  United  States' 
Bank,  I  would  prefer  one  of  that  character  to  the  present  project.  I  have 
too  much  confidence  in  Congress  to  be  alarmed  at  the  influence  of  a  bank 
under  its  direction;  and  should  greatly  prefer  it  to  one  whose  direction  should 
be  under  the  influence  of  British  capitalists. 

The  honorable  gentleman  from  Massachusetts,  (Mr.  LLOYD)  to  whose  dis 
passionate, enlightened, and  dignified  observations,  I  listened  with  great  plea- 
sure, informed  us,  that  there  \\as  a  capital  of  fifty  millions  of  bank  paper  in 
circulation  in  the  United  States,  and  the  specie  circulation  for  its  support  did 
not  exceed  ten  millions — ami  that  was  daily  diminishing.  If  this  be  the  true 
state  of  the  circulating  medium,  I  think  the  extension  of  bank  paper  circula- 
tion already  too  great;  and  it  would  not  be  surprising  to  me,  if  a  knowledge 
of  this  fact  alone  should  lessen  its  credit.  Its  excess  has  certainly  become  an 
evil,  and,  instead  of  being  still  further  extended,  ought  be  curtailed.  But  the 
most  objectionable  circumstance  to  this  excess  of  circulation  of  bank  paper,  I 
conceive  to  be  its  inevitable  tendency  to  exclude  the  specie  circulation,  which 
it  substitutes.  A  specie  circulation  is  certainly  greatly  preferable  to  paper 
circulation;  it  has  an  intrinsic  value  in  itself,  whereas  the  paper  circulation 
has  no  intrinsic  value;  and  its  currency  depends  upon  the  value  of  the  specie 
circulation  which  it  represents.  Of  course  a  circulation  of  value  is  excluded 
from  the  country,  and  substituted  by  one  of  no  value;  and  in  times  of  war,  or 
other  great  political  calamities,  when  the  Government  would  stand  most  in 
need  of  the  aid  of  banks  for  its  support,  their  capacity  to  lend  would  be  the 
most  diminished,  if  not  entirely  destroyed,  by  the  absence  of  specie  capital, 
which  the  circulation  of  bank  paper  has  banished  from  the  country.  I  presume 
the  gentleman  would  not  consider  the  banishment  of  a  circulation  of  intrinsic 


350  BANK  OF  THE  UNITED  STATES. 

value,  and  substituting  it  with  one  of  a  representative  value  only,  amongst 
the  prosperous  effects  resulting  from  the  operation  of  the  Bank  of  the  United 
States.  The  gentleman  from  Massachusetts  (Mr.  LLOYD)  favored  the  Senate 
with  the  perusal  of  his  notes  of  the  evidence  of  the  democratic  merchants  and 
manufacturers  of  Philadelphia.  I  paid  great  attention  to  this  information, 
derived  from  practical  men,  and  should  be  sorry  to  misconceive  it;  and  cer- 
tainly could  not  disrespect  it.  But  there  were  two  facts,  stated  and  assented 
to  by  all  of  them,  which  seem  to  me  irreconcileable  with  the  opinions  expressed 
by  those  gentlemen,  respecting  the  real  causes  of  the  present  scarcity  of 
money,  and  the  distresses  consequent  upon  that  scarcity.  The  first  fact  was, 
that  the  bank  in  Philadelphia  discounted  precisely  as  much  now,  and  proposed 
to  do  so  till  the  4th  of  March,  as  it  heretofore  had  done.  The  other  fact  was, 
that  the  paper  had  not  depreciated,  but  was  still  in  good  credit.  The  com- 
plaint was  not  that  the  paper,  when  obtained,  was  not  of  good  credit,  and  would 
not  answer  their  purposes,  but  that  they  could  not  obtain  it. 

Now,  sir,  I  cannot  conceive  how  the  scarcity  of  money,  and  consequent 
distress,  can  arise  from  any  apprehension  of  putting  down  the  bank,  when 
precisely  the  same  sum  of  money  is  now  put  into  circulation  by  it  as  was  for- 
merly done,  and  the  money  itself  in  good  credit.  The  pecuniary  distresses 
complained  of,  in  my  judgment,  are  not  properly  attributable  to  these  causes, 
but  to  some  others,  more  inscrutable,  and  which  have  escaped  the  observa- 
tions of  those  gentlemen.  Perhaps  they  may  more  justly  be  ascribed,  in  some 
instances,  to  tne  general  embarrassment  of  the  commercial  world  at  present, 
particularly  the  embarrassments  of  American  commerce  at  the  present  mo- 
ment, and  perhaps,  in  some  instances,  to  some  unknown  embarrassments  and 
difficulties  in  the  particular  occupations  of  the  complaining  individuals.  There 
is  another  fact  to  show,  that  the  alarm  at  present  is  greatly  exaggerated,  or'is 
certainly  greatly  beyond  any  real  cause  for  it.  It  will  appear,  from  the  Se- 
cretary's report,  that  the  debts  due  to  the  Bank  of  the  United  States  are  only 
$600,000  less  now,  than  they  were  twelve  months  ago;  of  course  the  discounts 
of  the  whole  institution  could  only  be  lessened  to  that  extent,  and  it  is  im- 
possible for  me  to  believe  that  the  payment  of  that  trivial  sum,  compared  with 
the  whole  mercantile  capital  of  the  United  States,  could  be  seriously  felt  by 
the  merchants  generally,  especially  as  they  have  been  twelve  whole  months 
in  paying  it.  If  the  payment  of  that  sum,  in  twelve  months,  could  produce 
all  the  distresses  we  hear  of,  I  hope  we  shall  hear  no  more  of  our  immense 
mercantile  wealth,  and  the  great  extension  of  our  mercantile  capital.  Yet 
this  is  the  only  real  cause  for  all  the  clamor  and  alarm  circulating  through  the 
country.  I  think,  with  some  confidence,  that  the  consequences  of  putting 
down  the  bank  of  the  United  States  must  be  artificially  exagerated,  or  very 
much  misapprehended,  and  this  opinion  is  grounded  upon  the  consideration 
that  it  is  directly  repugnant  to  the  interest  of  the  bank  to  cause  the  appre- 
hended distresses,  and  its  directors  certainly  have  the  power  to  avoid  the 
production  of  them.  And  1  think  that,  when  a  calculation  is  made,  and  a  con- 
clusion drawn,  upon  the  idea  that  a  moneyed  institution  will  pursue  its  own  in- 
terest, it  may  fairly  be  said  to  be  grounded  on  a  solid  consideration.  I  can- 
not see  how  putting  down  this  institution  can  materially  affect  the  pecuniary 
abilities  of  the  nation;  its  actual  funds  for  discounting  will  be  nearly  the 
same;  the  position  of  them  only  will  be  changed;  they  will  find  their  way 
into  the  State  banks,  and  their  ability  to  discount  will  be  increased  propor- 
tionably  to  the  increase  of  their  deposites.  Nor  am  I  at  all  alarmed  at  the  sug- 

§2stion  that  seven  millions  of  dollars  will  be  drawn  out  of  the  country  by  the 
ritish  capitalists,  because  it  will  not  be  their  interest  to  do  so;  their  dollars 
are  worth  more  here  than  in  Great  Britain;  if  drawn  there,rthey  would  soon 
be  melted  down  into  their  depreciated  paper  circulation.  They  might  also 
draw  bills  to  advantage,  so  that  I  doubt  whether  an  additional  dollar  will  be 
shipped  from  the  country  in  consequence  of  the  rejection  of  this  bill.  Cer- 
tainly they  will  not  to  any  great  extent. 

I  will  now,  Mr.  President,  suggest  a  few  considerations,  which  I  acknow- 
ledge have  great  influence  on  my  mind  in  deciding  on  the  expediency  of  the 


ON    THE    BILL    TO    RENEW    THE   CHARTER    OF    1791. 

proposed  renewal  of  the  charter  of  the  Bank  of  the  United  States.  I  do  it  with 
great  diffidence,  because  I  have  not  yet  heard  them  suggested  by  any  other 
gentleman,  at  least  not  precisely  as  they  affect  my  mind.  I  will,  however, 
present  them  to  the  Senate,  and  do  not  wish  them  to  be  appreciated  beyond 
what  they  are  worth.  In  the  incorporation  of  a  bank  upon  the  principles  now 
proposed,  the  great  advantage  to  the  stockholders  consists  in  legalising  their 
credit,  and  authorizing  them  to  draw  an  interest  on  it,  as  well  as  on  their 
money;  individuals  can  obtain  interest  only  on  a  loan  of  money;  the  bank  is 
authorized  to  obtain  interest  on  a  loan  of  credit,  and  that  interest,  according 
to  the  reported  dividends  of  the  Bank  of  the  United  States,  has  been  8  per 
cent,  per  annum,  and  it  is  probable  it  will  continue  quite  as  high.  This  ad- 
vantage is  not  confined  to  the  credit  arising  from  the  money  owned  by  the  stock- 
holders; but,  also,  that  which  arises  from  the  deposites  of  money  belonging  to 
other  people.  Nor  is  this  all;  it  extends  to  the  credit  which  arises  from  the 
enormous  deposites  of  public  money.  It  appears  from  the  Secretary's  report, 
that  seven  tenths  of  the  whole  stock  are  held  by  British  capitalists;  perhaps 
the  proportion  is  greater,  but  covered,  in  some  instances,  by  American  names. 
It  also  appears  that  they  will  have  enjoyed  the  full  term  of  these  incorporated 
advantages  on  the  4th  of  March  next;  of  course,  a  refusal  to  renew  them  can- 
not, in  any  respect,  be  considered  as  a  departure  from  good  faith.  Now  I 
can  see  neither  the  policy  nor  expediency  of  extending  these  favors  and  ad- 
vantages voluntarily  to  these  foreigners  for  twenty  years,  in  exclusion  of  our 
own  citizens,  at  least  to  the  extent  of  the  foreign  capital  now  invested  in  the 
institution.  I  think,  sir,  at  the  same  time,  I  can  see  very  strong  and  pecu- 
liar grounds  of  objection  to  the  policy  and  expediency  of  this  measure.  My 
objection  arises  from  the  enormous  British  influence  which  notoriously  per- 
vades this  country;  and,  I  believe,  affects  the  proceedings  of  Government  so 
seriously,  that  it  can  hardly  be  said  to  be  independent.  I  verily  believe  that 
this  baneful  influence  has  already  driven  the  Government  from  measures  which 
the  best  interest  of  the  nation  required. 

Whilst  we  find  Great  Britain  claiming  exclusive  dominion  on  the  ocean, 
possessed  of  an  immense  mercantile  capital  and  pecuniary  resources,  almost 
inexhaustible,  wo  find  many  of  her  subjects  intimately  connected  with  our 
citizens  in  commercial  pursuits.  \Vo  lincl  many  mercantile  houses  in  that 
country  associated  witli  mercantile  houses  in  this,  so  much  so,  that  when  we 
hear  of  great  failures  in  Liverpool,  we  may  look  out  for  squalls  and  breakers 
at  New  York.  Not  only  has  this  influence  operated  on  the  people  generally, 
but  I  state  it  as  my  firm  conviction,  that  it  has  operated,  and  now  operates,  on 
the  Government  of  the  United  States.  Is  this  mercantile  connexion  the  only 
source  of  influence  ?  Not  at  all,  sir;  the  influence  accruing  to  Great  Britain, 
from  the  identity  of  language;  from  reading  British  books;  from  the  prece- 
dents derived  from  her  systems  of  jurisprudence,  inculcated  in  early  life; 
from  intermarriages,  and  various  other  circumstances,  paralyzes  the  efforts  of 
our  country,  and  almost  reduces  it  to  a  state  of  colonial  dependence.  I  con- 
sider  this  bank  as  giving  that  diversified  influence  a  body  and  form  for  action. 
Have  we  not  been  told  that  this  bank  has  been  so  operative,  as  to  elevate  or 
depress  the  State  banks  at  pleasure  ?  As  to  enlarge  or  contract  the  circulat- 
ing medium  ?  And  is  it  desirable  that  such  an  engine  should  exist  in  the 
hands  of  foreigners  ?  Take  away  this  influence,  and  Great  "Britain  would 
stand  nearly  on  the  same  footing,  in  relation  to  us,  that  any  other  nation  does. 
I  have  not  overlooked  the  observations  of  the  gentleman  from  Georgia,  in  re- 
lation to  this'subject.  He  observed,  if  there  be  any  influence,  it  is  recipro- 
cal; that  these  foreigners,  having  funds  in  the  United  States'  Bank,  will  use 
their  best  exertions  to  procure  a  respect  for  pur  rights,  or  to  keep  the  two  na- 
tions at  peace.  I  believe  they  will;  but,  whilst  they  may  have  an  influence  in 
this  country,  they  will  have  none  in  their  own.  The  influence  of  seven  mil- 
lions of  dollars  will  not  be  felt  in  that  country  where  three  hundred  millions 
are  annually  expended,  although  it  will  have  much  weight  here.  There  is. 
then,  no  such  reciprocation  of  influence  as  the  gentleman  supposes.  I  would 
ask  the  gentleman  how  this  influence  has  been  heretofore  exerted,  in  practice, 


352  BANK  OF  THE  UNITED  STATES. 

upon  the  two  Governments  ?  Has  it  been  able  to  induce  Great  Britain  to  re- 
lax in  her  hostility  against  us  in  the  smallest  degree?  Has  it  prevented  or 
repealed  the  orders  in  council?  &c.  Has  it  saved  from  imprisonment  one 
American  seaman?  Did  it  prevent  the  attack  upon  the  Chesapeake?  In  short, 
has  it  restrained  the  hostile  arm  of  Great  Britain  from  any  hostile  act?  &c. 
On  the  other  hand,  how  has  it  acted  on  our  Government  ?  Has  it  not  been 
instrumental  in  paralysing  every  effort  of  resisting  these  hostilities?  Has  it 
not  cooled  us  down  to  a  state  of  humble  submission?  &c.  &c.  &c.  These  are 
its  natural  practical  effects,  and  will  continue  to  be  so.  1  am  very  far  from 
wishing  to  interrupt  the  harmony  and  friendship  between  the  United  States 
and  Great  Britain,  provided  they  can  be  preserved  on  honorable  terms,  but 
not  by  submission  brought  about  by  British  influence.  I  find  I  have  trespass- 
ed too  long  on  the  indulgence  of  the  Senate,  but  I  beg  to  be  permitted  to  reply 
to  two  observations,  one  of  which  has  been  much  relied  on,  and  I  will  pass 
over  all  others. 

It  has  been  asked  by  one  gentleman,  whether  this  was  a  very  propitious  time 
for  putting  an  end  to  this  establishment?  I  admit  that  it  is  not;  that  very 
serious  embarrassments  attend  our  commercial  operations.  The  sequestra- 
tions of  France,  the  British  orders  in  council,  as  well  as  the  interruptions  from 
other  countries,  must  have  had  a  very  serious  effect  on  our  commerce.  I  re- 
gret that  this  measure  is  called  for,  at  so  inauspicious  a  time.  I  am  willing 
to  admit  that,  if  we  enforce  the  non-intercourse,  the  pressure  will  not  be  les- 
sened. But  are  these  circumstances  so  inauspicious,  as  to  warrant  us  in  pass- 
ing over  solemn  constitutional  objections?  Are  they  such  as  to  warrant  us  in 
still  further  increasing  British  influence  in  the  nation?  These  are  serious 
considerations;  and,  in  my  judgment,  furnish  strong  grounds  of  objection  to 
the  policy  and  expediency  of  the  proposed  renewal  of  the  bank  charter.  Gen- 
ak  of  the  impartiality  of  the  bank  as  they  please;  but  it  is  no- 


tlemen  may  speal  .  .,  .          , 

torious  that  it  has  always  been  hostile  to  all  measures  directed  against  Great 
Britain,  and  against  the  administration  generally;  evinced  in  the  choice  of 
directors,  &c. 

The  honorable  gentleman  from  Georgia  (Mr.  CRAWFORD)  feelingly  com- 
plained, that  this  had  artificially  been  made  a  party  question  by  the  course 
adopted  in  its  discussion.  I  fear  the  remark  is  too  true;  that  this  discussion 
partakes  too  much  of  that  character.  I  have  endeavored  to  exclude  every 
idea  of  that  nature  from  the  observations  just  made.  I  always  regret  to  see 
any  question,  in  discussion  before  this  honorable  body,  assume  the  character 
of  parties.  It  is  always  unwise  in  the  parly  in  power  artificially  to  create 
party  questions.  It  reminds  me  of  the  silly  boatswain,  who,  not  content  to 
sail  easily  along  before  a  pleasant  breeze,  puts  up  his  whistle  for  a  storm, 
which,  when  it  arrives,  upsets  his  vessel,  and  sends  her  to  the  bottom.  It  is 
our  duty  to  examine  every  question  solely  on  the  ground  of  right  and  wrong. 

In  this  country,  that  party  will  keep  longest  in  possession  of  povyer,  which 
shall  do  right,  and  administer  justice  regardless  of  all  other  considerations. 
1  hope  all  my  efforts  have  heretofore  tended  to  produce  these  ends.  It  has 
been  at  all  times  my  object  to  search  out  right;  and  vigilantly  to  pursue  it, 
regardless  of  incidental  consequences.  Influenced  solely  by  these  considera- 
tions, I  have  endeavored  to  give  this  subject  the  most  impartial  investigation. 
I  have  done  so,  with  the  most  respectful  attention  to  the  motives  and  reason- 
ings of  other  gentlemen.  I  knovy  that  I  stand  much  in  need  of  the  same  liber- 
ality and  indulgence  myself,  which,  I  hope,  and  doubt  not,  I  shall  receive  in 
return. 

FEBRUARY  15,   1811. 

Motion  to  strike  out  the  first  section  depending. 
Mr.  CLAY  spoke  in  favor  of  the  motion,  and  Mr.  POPE  against  it. 

Mr.  CLAY. — Mr.  President:  When  the  subject  involved  in  the  motion  now 
under  consideration  was  depending  before  the  other  branch  of  the  Legislature, 
a  disposition  to  acquiesce  in  their  decision  was  evinced:  for,  although  the 


ON  THE  BILL   TO   RENEW    THE  CHARTER  OF   1791,  353 

Committee  who  reported  this  bill  had  been  raided  many  weeks  prior  to  the  de- 
termination of  that  House  on  the  proposition  tore-charter  the  bank,  except 
the  occasional  reference  to  it  of  memorials  and  petitions,  we  .scarcely  ever 
heard  of  it.  The  rejection,  it  is  true,  of  a  measure  brought  before  either  branch 
of  Congress,  does  not  absolutely  preclude  the  other  from  taking  up  the  same 
proposition;  but  the  economy  of  our  time,  and  a  just  deference  for  tlte  opinion 
of  others,  would  seem  to  recommend  a  delicate  and  cautious  exercise  ot  this 
power.  As  this  subject,  at  the  memorable  period  when  the  charter  was  grant- 
ed, called  forth  the  best  talents  of  the  nation;  as  it  has,  on  various  occasions, 
undergone  the  most  thorough  investigation;  and  as  we  can  hardly  expect  that 
it  is  susceptible  of  receiving  any  further  elucidation;  it  was  to  have  been  hoped 
that  we  should  have  been  spared  an  useless  debate.  This  was  the  more  desir- 
able, because  there  are,  I  conceive,  much  superior  claims  upon  us  for  every 
hour  of  the  small  portion  of  the  session  yet  remaining  to  us.  Under  the  opera- 
tion of  these  motives.  I  had  resolved  to  give  a  silent  vote,  until  J  feJt  mysell 
bou ad,  by  tbe  defying  manner  of  the  arguments  advanced  in  support  ot  the 
renewal,  to  obey  the  paramount  duties  I  owe  my  country  and  its  constitution, 
to  make  one  effort,  however  feeble,  to  avert  the  passage  of  what  appears  to  me 
a  most  unjustifiable  law.  After  my  honorable  friend  from  Virginia  (Mr. 
GILES)  had  instructed  and  amused  us  with  the  very  able  and  ingenious  argument 
which  he  delivered  on  yesterday,  1  should  have  still  forborne  to  tresspas*  on 
the  Senate,  but  for  the  extraordinary  character  of  his  speech.  lie  discussee) 
both  sides  of  the  question  with  great  ability  and  eloquence,  and  certainly  de- 
monstrated, to  the  satisfaction  of  all  who  heard  him,  both  that  it  was  constitu- 
tional and  unconstitutional,  highly  proper  and  improper  to  prolong  the  charter 
of  the  bank.  The  honorable  gentleman  appeared  to  me  in  the  predicament  in 
which  the  celebrated  orator  of  Virginia,  Patrick  Henry,  is  said  to  have  been 
once  placed-  Engaged  in  a  most  extensive  and  lucrative  practice  of  the  law. 
he  mistook  in  one  instance  the  side  of  the  cause  on  which  he  was  retained, 
and  addressed  the  court  and  jury  in  a  very  spl  ended  and  convincing  speech  in 
behalf  of  his  antagonist.  His  distracted  client  came  up  to  him  whilst  he  was 
progressing*,  and  interrupting  him,  bitterly  exclaimed, <k  You  have  undone  me! 
You  have  ruined  me!"  "Never  mind:  give  yourself  no  concern,  said  the 
adroit  advocate;"  and  turning  to  the  court  and  jury,  continued  his  argument, 
by  observing,  "May  it  please  your  honors,  and  you,  gentlemen  of  the  jury.  I 
have  been  stating  to  you  what  1  presume  my  adversary  may  urge  on  his  side. 
1  will  uow  show  you  how  fallacious  his  reasoning  and  groundless  his  preten- 
sions are."  The  skilful  orator  proceeded,  satisfactorily  refuted  every  argu- 
ment he  had  advanced,  and  gained  his  cause!  A  success  with  which  I  trust 
the  exertions  of  my  honorable  friend  will  on  this  occasion  be  crowned. 

It  has  been  said  by  the  honorable  gentleman  from  Georgia,  (Mr,  CRAW- 
FORD) that  this  has  been  made  a  party  question,  although  the  law  incorporat- 
ing the  bank  was  passed  prior  to  the  formation  of  parties,  and  when  Congress 
was  not  biassed  by  party  prejudices,  [Mr,  CRAWFORD  explained.  He  did 
not  mean  that  it  had  been  made  a  party  question  in  the  Senate.  His  allusion 
was  elsewhere.]  1  do  not  think  it  altogether  fair  to  refer  to  the  discussions 
in  the  House  of  Representatives,  as  gentlemen  belonging  to  that  body  have 
no  opportunity  of  defending  themselves  here.  It  is  true  that  this  law  vvas  not 
the  effect,  but  it  is  no  less  true  that  it  was  one  of  the  causes  of  the  political 
divisions  in  this  country.  And,  if,  during  the  agitation  of  the  present  ques- 
tion, the  renewal  has,  on  one  side,  been  opposed  on  party  principles,  let  me 
ask  if,  on  the  other,  it  has  not  been  advocated  on  similar  principles?  Where 
is  the  Macedonian  phalanx —  the  opposition  in  Congress?  1  believe,  sir,  1  shall 
not  incur  the  charge  of  presumptuous  prophecy,  when  I  predict  that  we  shall 
not  pick  up  from  " 
worthy  friend  f 
kind  in  him  to 
fidelity  with  which  they  adhere  to  their  old  principle 

1  shall  not  stop  to  examine  how  far  a  representative  is  bound  by  the  instruc- 
tions of  his  constituents.    That  is  a  question  between  the  giver  and  receiver 
45 


354  BANK  OF  THE  UNITED  STATES. 

ot  the  instructions.  But  I  must  be  permitted  to  express  my  surprise  at  the 
pointed  difference  which  has  been  made  between  the  opinions  and  instruc- 
tions of  State  Legislatures,  and  the  opinions  and  details  of  the  deputa- 
tions with  which  we  have  been  surrounded  from  Philadelphia.  Whilst 
the  resolutions  of  those  Legislatures— known,  legitimate,  constitutional,  and 
deliberative  bodies — have  been  thrown  into  the  back  ground,  and  their  inter- 
ference regarded  as  officious,  these  delegations  from  self-created  societies, 
composed  of  whom  no  body  knows,  have  been  received  by  the  committee 
with  the  utmost  complaisance.  Their  communications  have  been  treasured 
up  with  the  greatest  diligence.  Never  did  the  Delphic  priests  collect  with 
more  holy  care  the  frantic  expressions  of  the  agitated  Pythia,  or  expound 
them  with  more  solemnity  to  the  astonished  Grecians,  than  has  the  committee 
gathered  the  opinions  and  testimony  of  these  deputies,  and,  through  the  gen- 
tleman from  Masschusetts.  pompously  detailed  them  to  the  Senate!  Phila- 
delphia has  her  immediate  representatives,  capable  of  expressing  her  wishes 
upon  the  floor  of  the  other  House.  If  it  be  improper  for  States  to  obtrude 
upon  Congress  their  sentiments,  it  is  much  more  highly  so  for  the  unauthor- 
ized deputies  of  fortuitous  congregations. 

The  first  singular  feature  that  attracts  attention  in  this  bill  is,  the  new  and 
unconstitutional  veto  which  it  establishes.  The  constitution  has  required 
only,  that,  after  bills  have  passed  the  House  of  Representatives  and  the  Se- 
nate, they  shall  be  presented  to  the  President  for  his  approval  or  rejection, 
and  his  determination  is  to  be  made  known  in  ten  days.  But  this  bill  pro- 
vides, that,  when  all  the  constitutional  sanctions  are  obtained,  and  when,  ac- 
cording to  the  usual  routine  of  legislation, it  ought  to  be  considered  as  a  law,  it 
is  to  be  submitted  to  a  new  branch  of  the  Legislature,  consisting  of  the  Presi- 
dent and  twenty-four  Directors  of  the  Bank  of  the  United  States,  holding 
their  sessions  in  Philadelphia,  and  if  they  please  to  approve  it,  why  then,  it 
is  to  become  a  tawl  And  three  months  (the  term  allowed  by  our  law  of  May 
last,  to  one  of  the  great  belligerents  for  revoking  his  edicts,  after  the  other 
shall  have  repealed  his)  are  granted  them  to  decide ,  whether  an  act  of  Con- 
gress shall  be  the  law  of  the  land  or  not!  An  act  which  is  said  to  be  indis- 
pensably necessary  to  our  salvation,  and  without  the  passage  of  which,  uni- 
versal distress  and  bankruptcy  are  to  pervade  the  country.  Remember,  sir, 
that  the  honorable  gentleman  from  Georgia  has  contended  that  this  charter  is 
no  contract.  Does  it  then  become  the  Representatives  of  the  nation  to  leave 
the  nation  at  the  mercy  of  a  corporation?  Ought  the  impending  calamities  to 
be  left  to  the  hazard  of  a  contingent  remedy? 

/      This  vagrant  power  to  erect  a  bank,  after  having  wandered  throughout  the 
/    whole  constitution  in  quest  of  some  congenial  spot  whereupon  to  fasten,  has 
/     been  at  length  located,  by  the  gentleman  from  Georgia,  on  that  provision  which 
/      authorizes  Congress  to  lay  and  collect  taxes,   &c.     In  1791,  the  power  is 
l       referred  to  one  part  of  the  instrument;  in  1811,  to  another.    Sometimes  it  is 
\     alleged  to  be  deducible  from  the  power  to  regulate  commerce.    Hard  pressed, 
\    here,  it  disappears  and  shows  itself  under  the  grant  to  coin  money.    The  saga- 
cious Secretary  of  the  Treasury,  in  1791,  pursued  the  wisest  course;  he  has 
taken  shelter  behind  general  high  sounding  and  imposing  terms.     He  has  de- 
clared, in  the  preamble  to  the  act  establishing  the  bank,  that  it  will  be  very 
conducive  to  the  sucsessful  conducting  of  the  national  finances;  will  tend  to 
give  facility  to  the  obtaining  of  loans;  and  will  be  productive  of  considerable 
advantage  to  trade  and  industry  in  general.    No  allusion  is  made  to  the  col- 
lection of  taxes.     What  is  the  nature  of  this  Government?    It  is  emphatically 
federal — vested  with  an  aggregate  of  specified  powers  for  general  purposes, 
conceded  by  existing  sovereignties,  who  have  themselves  retained  what;is  not 

(so  conceded.  It  is  said,  that  there  are  cases  in  which  it  must  act  on  implied 
powers.  This  is  not  controverted,  but  the  implication  must  be  necessary, 
and  obviously  flow  from  the  enumerated  power  with  which  it  is  allied.  The 
power  to  charter  companies  is  not  specified  in  the  grant,  and  I  contend,  is  of 
a  nature  not  transferable  by  mere  implication.  It  is  one  of  the  most  exalted 
attributes  of  sovereignty.  In  the  exercise  of  this  gigantic  power,  \ye  have 
seen  an  East  India  company  created,  which  has  carried  dismay,  desolation,  and 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       355 

death,  throughout  one  of  tiie  largest  portions  of  the  habitable  world.  A  com- 
pany which  is,  in  itself,  a  sovereignty;  which  has  subverted  empires  and  set 
up  new  dynasties;  and  has  not  only  made  war,  but  war  against  its  legitimate 
sovereign!  Under  the  influence  of  this  power,  we  have  seen  arise  a  South 
Sea  company  and  a  Mississippi  company,  that  distracted  and  convulsed  all 
Europe,  and  menaced  a  total  overthrow  of  all  credit  and  confidence,  and  uni- 
versal bankruptcy.  Is  it  to  be  imagined  that  a  power  so  vast  would  have  been 
left  by  the  wisdom  of  the  constitution  to  doubtful  inference?  It  has  been 
alleged  that  there  are  many  instances  in  the  constitution,  where  powers,  in 
their  nature  incidental,  and  which  would  have  necessarily  been  vested  along 
with  the  principal  power,  are,  nevertheless,  expressly  enumerated:  and  the 
power  "  to  make  rules  and  regulations  for  the  government  of  the  land  and 
naval  forces,"  which,  it  is  said,  is  incidental  to  the  power  to  raise  armies  and 
provide  a  navy,  is  given  as  an  example.  What  does*  this  prove?  IIow  ex- 
tremely cautious  the  convention  were,  to  leave  as  little  as  possible  to  implica- 
tion! In  all  cases  where  incidental  powers  are  acted  upon,  the  principal  and 
incidental  ought  to  be  congenial  witn  each  other,  and  partake  of  a  common 
nature.  The  incidental  power  ought  to  be  strictly  subordinate  and  limited  to 
the  end  proposed  to  be  attained  by  the  specified  power.  In  other  words,  under 
the  name  of  accomplishing  one  object  which  is  specified,  the  power  implied 
ought  not  to  be  made  to  embrace  other  objects,  which  are  not  specified  in  the 
constitution.  If,  then,  you  could  establish  a  bank  to  collect  and  distribute 
the  revenue,  it  ought  to  be  expressly  restricted  to  the  purpose  of  such  collec- 
tion and  distribution.  It  is  mockery,  worse  than  usurpation,  to  establish  it 
for  a  lawful  object,  and  then  extend  it  to  other  object-,  which  are  not  lawful. 
In  deducing  the  power  to  create  corporations,  such  as  I  have  described  it, 
from  the  power  to  collect  taxes,  the  relation  and  condition  of  principal  and 
incident  are  prostrated  and  destroyed.  The  accessory  is  exalted  above  the 
principal.  As  well  might  it  be  said,  that  the  great  luminary  of  day  is  an  ac- 
cessory— a  sattelite  to  the  humblest  star  that  twinkles  forth  its  feeble  light  in 
the  firmament  of  Heaven  ! 

Suppose  the  constitution  had  been  silent  as  to  an  individual  department  of 
this  Government,  could  you,  under  the  povver  to  lay  and  collect  taxes,  esta- 
blish a  judiciary?  I  presume  not.  But,  if  you  could  derive  the  power  by 
mere  implication,  could  you  vest  it  with  any  other  authority,  than  to  enforce 
the  collection  of  the  revenue?  A  bank  is  made  for  the  ostensible  purpose  of 
aiding  in  the  collection  of  the  revenue,  and  whilst  it  is  engaged  in  this,  the 
most  inferior  and  subordinate  of  all  its  functions,  it  is  made  to  diffuse  itself 
throughout  society,  and  to  influence  all  the  great  operations  of  credit,  circu- 
lation, and  commerce.  Like  the  Virginia  justice,  you  tell  the  man  whose 
turkey  had  been  stolen,  that  your  book  of  precedents  furnishes  no  form  for 
his  case;  but,  then,  you  will  grant  him  a  precept  to  search  for  a  cow,  and 
when  looking  for  that,  he  may  possibly  find  his  turkey!  You  say  to  this  cor- 
poration, we  cannot  authorize  you  to  discount,  to  emit  paper,  to  regulate  com- 
merce, &c.  No.  Our  book  has  no  precedents  ot  that  kind.  But,  then,  we 
can  authorize  you  to  collect  the  revenue,  and  whilst  occupied  with  that,  you 
may  do  vyhatever  else  you  please. 

What  is  a  corporation,  such  as  the  bill  contemplates?  It  is  a  splendid  asso- 
ciation of  favored  individuals,  taken  from  the  mass  of  society,  and  invested 
with  exemptions  and  surrounded  by  immunities  and  privileges.  The  honora- 
ble gentleman  from  Massachusetts,  (Mr.  LLOYD)  has  said,  that  the  original 
law,  establishing  the  bank,  was  justly  liable  to  the  object  ion  of  vesting,  in 
that  institution,  an  exclusive  privilege,  the  faith  of  the  Government  being 
pledged  that  no  other  bank  should  be  authorized  during  its  existence.  This 
objection  he  supposes  is  obviated  by  the  bill  under  consideration.  But  all 
corporations  enjoy  exclusive  privileges;  that  is,  the  corporators  have  privileges 
which  no  others  possess.  And  if  you  create  fifty  corporations  instead  of  one, 
y^ou  have  only  fifty  privileged  bodies  instead  of  one.  1  contend  that  the 
States  have  the  exclusive  power  to  regulate  contracts,  to  declare  the  capacities 
and  incapacities  to  contrac  f,  and  to  provide  as  to  the  extent  of  responsibility  of 


356  BANK  OF  THE  UNITED  STATES. 

debtors  to  their  creditors.  If  Congress  have  the  power  toerect  an  artificial  body, 
and  say  it  shall  be  endowed  with  the  attributes  of  an  individual;  if  you  can 
bestow  on  this  object  of  your  own  creation  the  ability  to  contract?  may  you 
not,  in  contravention  of  State  lights,  confer  upon  slaves,  infants,  and  femmes 
covert,  the  ability  to  contract?  And  if  you  have  the  power  to  say  that  an 
association  of  individuals  shall  be  responsible  for  their  ciebts,  only  in  a  certain 
limited  degree,  what  is  to  prevent  an  extension  of  a  similar  exemption  to  indi- 
viduals? Where  is  the  limitation  upon  this  power  to  set  up  corporations? 
you  establish  one,  in  the  heart  of  a  State,  the  basis  of  whose  capital  is  money. 
You  may  erect  others  whose  capital  shall  consist  of  land ,  slaves,  and  personal 
estate,,  and  thus  the  whole  property  within  the  jurisdiction  of  a  State  might 
be  absorbed  by  these  political  bodies.  The  existing  bank  contends,  that  it  is 
beyond  the  power  of  a  State  to  tax  itf  and  it  this  pretension  be  well  founded, 
it  is  in  the  power  of  Congress,  by  chartering  companies,  to  dry  up  the  whole 
of  the  sources  of  State  revenue.  Georgia  has  undertaken 9  it  is  true,  to  levy 
a  tax  on  the  branch  within  her  jurisdiction,  but  this  law,  now  under  a  course 
of  litigation,  is  considered  as  invalid.  The  United  States  own  a  great  deal  of 
land  in  the  State  of  Ohio;  can  this  Government,  for  the  purpose  of  creating 
an  ability  to  purchase  it,  charter  a  company?  Aliens  are  forbidden,  I  believe, 
in  that  State,  to  hold  real  estate;  could  you^  in  order  to  multiply  purchasers, 
confer  upon  them  the  capacity  to  hold  land,  in  derogation  of  the  local  law?  1 
imagine  this  will  hardly  be  insisted  upon;  and  vet,  there  exists  a  more  obvious 
connexion  between  the  undoubted  power  which  is  possessed  by_  this  Govern- 
ment to  sell  its  land  and  the  means  of  executing  that  power  by  increasing  the 
demand  in  the  market,  than  there  is  between  this  bank  and  the  collection  of  a 
tax.  This  Government  has  the  power  to-  levy  taxes,  to  raise  armies,  provide  a 
navy,  make  war,  regulate  commerce,  coin  money,  &c.&c.  It  would  not  be 
difficult  to  show  as  intimate  a  connexion  between  a  corporation  established  for 
any  purpose  whatever,  and  some  one  or  other  of  those  great  powers,  a& there 
is  between  the  revenue  and  the  Bank  of  the  United  States, 

Let  us  inquire  into  the  actual  participation  of  this  bank  in  the  collection  of 
the  revenue.  Prior  to  the  passage  of  the  act  of  1800,  requiring  the  collectors 
of  those  ports  of  entry,  at  which  the  principal  bank  or  any  of  its  offices  are  situ- 
ated, to  deposite  with  them  the  custom  house  bonds,  it  had  not  the  smallest 
agency  in  the  collection  of  the  duties.  During  almost  one  moiety  of  the  pe- 
riod to  which  the  existence  of  this  institution  was  limited,  it  was  nowise  in- 
strumental in  the  collection  of  that  revenue,  to  which  it  is  now  become  indis- 
pensable! The  collection,  previous  to  1800,  was  made  entirely  by  the  collec- 
tors; and  even  at  present,  where  there  is  one  port  of  entry,  at  which  this  bank 
is  employed,  there  are  eight  or  ten  at  which  the  collection  is  made  as  it  was 
before  1800.  And,  sir,  what  does  this  bank  or  its  branches,  when  resort  is 
had  to  it?  It  does  not  adjust  with  the  merchant  the  amount  of  the  duty,  nor 
take  his  bond;  nor,  if  the  bond  is  not  paid,  coerce  the  payment,  by  distress  or 
otherwise.  In  fact,  it  has  no  active  agency  whatever  in  the  collection.  Its 
operation,  is  merely  passive;  that  is,  if  the  obligor,  after  his  bond  is  placed 
in  the  bank,  discharges  it,  all  is  very  well.  Such  is  the  mighty  aid  afforded 
by  this  tax-gatherer,  without  which  the  Government  cannot  get  along!  Again, 
it  is  not  pretended  that  the  very  limited  assistance  which  this  institution  does, 
in  truth,  render,  extends  to  any  other  than  a  single  species  of  tax — that  is,  du- 
ties. In  the  collection  of  the  excise,  the  direct,  and  other  internal  taxes,  no  aid 
was  derived  from  any  bank.  It  istrue,  in  thecollection  of  those  taxes,  the  farmer 
did  not  obtain  the  sameindulgence  which  the  merchant  receives  in  payingduties. 
But  what  obliges  Congress  to  give  credit  to  all?  Could  it  not  demancf  prompt 
payment  of  the  duties?  And,  in  fact,  does  it  not  so  demand,  in  many  instances? 
Whether  credit  is  given  or  not,  is  a  matter  merely  of  discretion.  If  it  be  a  facility 
to  mercantile  operations,  (as  I  presume  it  is)  it  ought  to  be  granted.  But  I  de- 
ny the  right  to  engraft  upon  it  a  bank,  which  you  would  not  otherwise  have  the 
power  to  erect.  You  cannot  create  the  necessity  of  a  bank,  and  then  plead  that 
necessity  for  its  establishment.  In  the  administration  of  the  finances,  the  bank 
acts  simply  as  a  payer  and  receiver.  The  Secretary  of  the  Treasury  has  mo- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     357 

ney  in  Ne\y  York,  and  wants  it  in  Charleston;  the  bank  will  furnish  him  with  a 
check,  or  bill,  to  make  the  remittance,  whichany  merchant  woulddojustas  well. 

I  will  now  proceed  to  show,  by  fact,  actual  experience,  not  theoretic  reason- 
ing, but  by  the  records  themselves  of  the  treasury,  that  the  operations  of  that 
department  may  be  as  well  conducted  without,  as  with  this  bank.  The  delu- 
sion has  consisted  in  the  use  of  certain  high  sounding  phrases,  dexterously  used 
on  the  occasion.  "  The  collection  of  the  revenue;"  "the  administration  of  the 
finance;"  "  the  conducting  the  fiscal  affairs  of  the  Government;" — the  usual 
language  of  the  advocates  of  the  bank;  extort  express  assent,  or  awe  into 
acquiescence,  without  inquiry  or  examination  into  its  necessity.  About  the 
commencement  of  this  year,  there  appears,  by  the  report  of  the  Secretary  of 
the  Treasury,  of  the  7th  January,  to  have  been  a  little  upwards  of  two  mil- 
lions four  hundred^thpusand  dollars  in  the  treasury  of  the  United  States; 
and  more  than  one-third  of  this  whole  sum  was  in  the  vaults  of  local  banks. 
In  several  instances,  where  an  opportunity  existed  of  selecting  the  bank,  a 
preference  has  been  given  to  the  State  bank,  or,  at  least,  a  portion  of  the  de- 
posites has  been  made  with  it,  In  New  York,  for  example,  there  was  deposit- 
ed with  the  Manhattan  Bank  $188,670,  although  a  branch  bank  is  in  that  city. 
In  this  District,  $115,OSOwere  deposited  with  the  Bank  of  Columbia,  although 
here,  also,  is  a  branch  bank;  and  yet  the  State  banks  are  utterly  unsafe  to  be 
trusted!  If  the  money,  after  the  bonds  are  collected,  is  thus  placed  with  these 
banks,  I  presume  there  can  be  no  difficulty  in  placing  the  bonds  themselves 
there,  if  they  must  be  deposited  witli  some  bank  for  collection,  which  I  deny. 

Again,  one  of  the  most  important  and  complicated  branches  of  the  Treasury 
Department  is  the  management  of  our  landed  system.  The  sales  have,  some 
years,  amounted  to  upwards  of  half  a  million  of  dollars;  are  generally  made 
upon  credit:  and  yet  no  bank  whatever  is  made  use  of  to  facilitate  the  collec- 
tion. After  it  is  made,  the  amount,  in  some  instances,  has  been  deposited 
with  banks,  and,  according  to  the  Secretary's  report,  which  I  have  before  ad- 
verted to,  the  amount  so  deposited  was,  in  January,  upwards  of  $300,000,  not 
one  cent  of  which  was  in  the  vaults  of  the  Bank  of  the  United  States,  or  in 
any  of  its  branches,  but  in  the  Bank  of  Pennsylvania,  its  branch  at  Pittsburg, 
the  Marietta  Bank,  and  the  Kentucky  Bank.  Upon  the  point  of  responsibility, 
I  cannot  subscribe  to  the  opinion  of  the  Secretary  ot  the  Treasury,  if  it  is 
meant  that  the  ability  to  pay  the  amount  of  any  deposites  which  the  Govern- 
ment may  make,  under  any  exigency,  is  greater  than  that  of  the  State  banks. 
That  the  flecoiM/o&tVtft/ of  a  ramified  institution,  whose  affairs  are  managed  by 
a  single  head,  responsible  for  all  its  members,  is  more  simple  than  that  of  a 
number  of  independent  and  unconnected  establishments,  I  shall  not  deny;  but, 
with  regard  to  safety,  I  am  strongly  inclined  to  think  it  is  on  the  side  of  the 
local  banks.  The  corruption  or  misconduct  of  the  parent,  or  any  of  its  branch- 
es, may  bankrupt  or  destroy  the  whole  system,  and  the  loss  of  the  Govern- 
ment, in  that  event,  will  be  of  the  deposites  made  with  each;  whereas,  in  the 
failure  of  one  State  bank,  the  loss  will  be  confined  to  thedeposite  in  the  vaults 
of  that  bank.  It  is  said  to  have  been  a  part  of  Burr's  plan,  to  seize  on  the 
branch  bank  at  New  Orleans.  At  that  period,  large  sums,  imported  from  La 
Vera  Crux,  are  alleged  to  have  been  depositecl  with  it,  and  if  the  traitor  had 
accomplished  his  design,  the  Bank  of  the  United  States,  if  not  actually  bank- 
rupt, might  have  been  constrained  to  stop  payment. 

It  is  urged  by  the  gentleman  from  Massachusetts  (Mr.  LLOYD)  that  as  this 
nation  progresses  in  commerce,  wealth,  and  population,  new  energies  will  be 
unfolded,  new  wants  and  exigencies  will  arise,  and  hence  he  infers  that  pow- 
ers must  be  implied  from  the  constitution.  But,  sir,  the  question  is,  shall  we 
stretch  the  instrument  to  embrace  cases  not  fairly  within  its  scope,  or  shall  we 
resort  to  that  remedy,  by  amendment,  which  the  constitution  prescribes  ? 

Gentlemen  contend  that  the  construction  which  they  give  to  the  constitu  • 
tion  has  been  acquiesced  in  by  all  parties  and  under  all  administrations;  and 
they  rely  particularly  on  an  act  which  passed  in  1804,  for  extending  a  branch 
to  New  Orleans,  and  anotheract,  of  1807,  for  punishing  those  who  :-hould  forge 
or  utter  forged  paper  of  the  bank.  With  regard  to  the  first  law.  passed  no 


358  BANK  OF  THE  UNITED  STATES. 

doubt  upon  the  reccommendation  of  the  Treasury  Department,  I  would  re- 
mark, that  it  was  the  extension  of  a  branch  to  a  territory  over  which  Congress 
possesses  power  of  legislation  almost  uncontrolled,  and  where,  without  any 
constitutional  impediment,  charters  of  incorporation  may  be  granted.  As  to 
the  other  act,  it  was  passed  no  less  for  the  benefit  of  the  community  than  the 
bank — to  protect  the  ignorant  and  unwary  from  counterfeit  paper,  purporting 
to  have  been  emitted  by  the  bank.  When  gentlemen  are  claiming  the  advan- 
tage supposed  to  be  deducible  from  acquiescence,  let  me  inquire  what  they 
would  have  had  those  to  have  done,  who  believed  the  establishment  of  the 
bank  an  encroachment  upon  State  rights  ?  Were  they  to  have  resisted,  and 
how  ?  By  force  ?  Upon  the  change  of  parties  in  1800  it  must  be  well  reccol- 
lected  that  the  greatest  calamities  were  predicted  as  consequences  of  that 
event.  Intentions  were  ascribed  to  the  new  occupants  of  power  of  violating 
the  public  faith,  and  prostrating  national  credit.  Under  such  circumstances, 
that  they  should  act  with  great  circumspection,  was  quite  natural.  They  saw 
in  full  operation  a  J>ank,  chartered  by  a  Congress  who  had  as  much  right  to 
judge  of  their  constitutional  powers  as  their  successors.  Had  they  revoked 
the  law  which  gave  it  existence,  the  institution  would,  in  all  probability,  have 
continued  to  transact  business  notwithstanding.  The  judiciary  would  have 
been  appealed  to,  and,  from  the  known  opinions  and  predilections  of  the  jud- 
ges then  composing  it,  they  would  have  pronounced  the  act  of  incorporation 
as  in  the  nature  of  a  contract,  beyond  the  repealing  power  of  any  succeeding 
Legislature.  And,  sir,  what  a  scene  of  confusion  would  such  a  state  of  things 
have  presented — an  act  of  Congress,  which  was  law  in  the  statute  book,  and 
a  nullity  on  the  judicial  records  !  Was  it  not  wisest  to  wait  the  natural  dis- 
solution of  the  corporation,  rather  than  accelerate  that  event  by  a  repealing 
law,  involving  so  many  delicate  considerations  ? 

When  gentlemen  attempt  to  carry  this  measure  upon  the  ground  of  acqui- 
escence or  precedent,  do  they  forget  that  \ve  are  not  in  Westminster  Hall  ? 
In  courts  of  justice,  the  utility  of  uniformity  of  decision  exacts  of  the  judge 
a  conformity  to  the  adjudication  of  his  predecessor.  In  the  interpretation  and 
administration  of  the  law  this  practice  is  wise  and  proper,  and  without  it,  eve- 
ry thing  depending  upon  the  caprice  of  the  judge,  we  should  have  no  security 
for  our  dearest  rights.  It  is  far  otherwise  when  applied  to  the  source  of  legis- 
lation. Here  no  rule  exists  but  the  constitution;  and  to  legislate  upon  the 
ground  merely  that  our  predecessors  thought  themselves  authorized,  under 
similar  circumstances,  to  legislate,  is  to  sanctify  error  and  perpetuate  usur- 
pation. But,  if  we  are  to  be  subjected  to  the  trammels  of  precedents,  I  claim, 
on  the  other  hand,  the  benefit  of  the  restrictions  under  which  the  intelligent 
judge  cautiously  receives  them.  It  is  an  established  rule  that,  to  give  to  a  pre- 
vious adjudication  any  effect,  the  mind  of  the  judge  who  pronounced  it  must 
have  been  awakened  to  the  subject,  and  it  must  have  been  a  deliberate  opin- 
ion formed  after  full  argument.  In  technical  language,  it  must  not  have  been 
sub  silentio.  Now,  the  acts  of  1804  and  1807,  relied  upon  as  pledges  for 
the  rechartering  this  company,  passed  not  only  without  any  discussions  what- 
ever of  the  constitutional  power  of  Congress  to  establish  a  bank,  but,  I  ven- 
ture to  say,  without  a  single  member  having  had  his  attention  drawn  to  this 
question.  I  had  the  honor  of  a  seat  in  the  Senate  when  the  latter  law  passed, 
probably  voted  for  it;  and  I  declare,  with  the  utmost  sincerity,  that  I  never 
once  thought  of  that  point,  and  I  appeal  confidently  to  every  honorable  mem- 
ber who  was  then  present  to  say  if  that  was  not  his  situation. 

This  doctrine  of  precedents,  applied  to  the  Legislature,  appears  to  me  to  be 
fraught  with  the  most  mischievous  consequences.  The  great  advantage  of 
our  system  of  government,  over  all  others,  is,  that  we  have  a  written  constitu- 
tion, defining  its  limits,  and  prescribing  its  authorities;  and  that,  however,  for 
a  time,  faction  may  convulse  the  nation,  and  passion  and  party  prejudice 
sway  its  functionaries,  the  season  of  reflection  will  recur,  when,  calmly  retrac- 
ing their  deeds,  all  aberrations  from  fundamental  principle  will  be  corrected. 
But  once  substitute  practice  for  principle;  the  expositions  of  the  constitution 
for  the  text  of  the  constitution;  and  in  vain  shall  we  look  for  the  instrument 


ON  THE    BILL  TO  RENEW     I  HE   CHAHTEK   OF   1791.  359 

in  the  instrument  itself!  It  will  be  as  diffused  and  intangible  as  the  pretend- 
ed constitution  of  England.  And  it  must  be  sought  for  in  the  statute  book, 
in  the  fugitive  journals  of  Congress,  and  in  reports  of  the  Secretary  of  the 
Treasury!  What  would  be  our  condition  if  we  were  to  take  the  interpreta- 
tions given  to  that  sacred  book,  which  is,  or  ought  to  be,  the  criterion  of  our 
faith,  for  the  book  itself  ?  We  should  find  the  holy  bible  buried  beneath  the 
interpretations,  glosses,  and  comments,  of  councils,  synods,  and  learned  di- 
vines, which  have  produced  swarms  of  intolerant  and  furious  sects,  partaking 
less  of  the  mildness  and  meekness  of  their  origin  than  of  a  vindictive  spirit  of 
hostility  towards  each  other!  They  ought  to  afford  us  a  solemn  warning  to 
make  that  constitution,  which  we  have  sworn  to  support,  our  invariable  guide. 

1  conceive,  then,  sir,  that  we  are  not  empowered,  by  the  constitution,  nor 
bound  by  any  practice  under  it,  to  renew  the  charter  of  this  bank:  and  I  might 
here  rest  the  argument.  But,  as  there  are  strong  objections  to  the  renewal 
upon  the  score  of  expediency,  and  as  the  distresses  which  will  atend  the  dis- 
solution of  the  bank  have  been  greatly  exaggerared,  I  will  ask  your  indul- 
gence for  a  few  moments  longer.  That  some  temporary  inconvenience  will 
arise,  I  shall  nut  deny;  but  mostgroundlessly  have  the  recent  failures  in  New 
York  been  attributed  to  the  discontinuance  of  this  bank.  As  well  might  you 
ascribe  to  that  cause  the  failures  of  Amsterdam  and  Hamburg,  of  London  and 
Liverpool.  The  embarrassments  of  commerce — the  sequestration  in  France 
— the  Danish  captures — in  fine,  the  belligerent  edicts,  are  the  obvious  sources 
of  these  failures.  Their  immediate  cause  is  the  return  of  bills  upon  London, 
drawn  upon  the  faith  of  unproductive  or  unprofitable  shipments.  Yes,  sir, 
the  protests  of  the  notaries  of  London,  not  those  of  New  York,  have  oc- 
casioned these  bankrupticies. 

The  power  of  a  nation  is  said  to  consist  in  the  sword  and  the  purse.  Perhaps, 
at  last, all  power  is  resolvable  into  that  of  the  purse:  for,  with  it,  you  may  com- 
mand almost  every  thing  else.  The  specie  circulation  of  the  United  States  is 
estimated  by  some  calculators  at  ten  millions  ol  dollars;  and  if  it  be  no  more* 
one  moiety  is  in  the  vaults  of  this  bank.  May  not  the  time  arrive  when  the 
concentration  of  such  a  vast  portion  of  the  circulating  medium  of  the  country 
in  the  hands  of  any  corporation,  will  be  dangerous  to  our  liberties?  By  whom 
is  this  immense  power  wielded?  By  a  body,  who,  in  derogation  of  tne  great 
principle  of  all  our  institutions —  responsibility  to  the  People — is  amenable  only 
to  a  few  stockholders,  and  they  chiefly  foreigners.  Suppose  an  attempt  to 
subvert  this  Government — would  not  the  traitor  first  aim,  by  force  or  corrup- 
tion, to  acquire  the  treasure  of  this  company?  Look  at  it  in  another  aspect. 
Seven-tenths  of  its  capital  are  in  the  hands  of  foreigners,  and  these  foreigners 
chiefly  English  subjects.  We  are  possibly  upon  the  eve  of  a  rupture  with  that 
nation.  Should  such  an  event  occur,  do  you  apprehend  that  the  English  pre- 
mier would  experience  any  difficulty  in  obtaining  the  entire  control  of  this 
institution?  Republics,  above  all  "other  nations,  ought  most  studioufly  to 
guard  against  foreign  influence.  All  history  proves  that  the  internal  dissen- 
sions, excited  by  foreign  intrigue,  have  produced  the  downfalof  almost  every 
free  government  that  has  hitherto  existed;  and  yet  gentlemen  contend  that  we 
are  benefitted  by  the  possession  of  this  foreign  capital!  If  we  could  have  its 
use,  without  its  attending  abuse,  I  should  be  gratified,  also.  But  it  is  in  vain 
to  expect  the  one  without  the  other.  Wealth  is  power,  and,  under  whatso- 
ever form  it  exists,  its  proprietor,  whether  he  lives  on  this  or  the  other  side  of 
the  Atlantic,  will  have  a  proportionate  influence.  It  is  argued  that  our  pos- 
session of  this  English  capital  gives  us  certain  influence  over  the  British  Go- 
ernment.  If  this  reasoning  be  sound,  we  had  better  revoke  the  interdiction 
as  to  aliens  holding  land,  and  invite  foreigners  to  engross  the  whole  property, 
real  and  personal,  of  the  country.  We  had  better  at  once  exchange  the  condi- 
tion of  independent  proprietors  for  that  of  stewards.  We  should  then  be  able 
to  govern  foreign  nations,  according  to  the  arguments  of  gentlemen  on  the 
other  side.  But  let  us  put  aside  this  theory,  and  appeal  to  the  decisions  of  ex- 
perience. Go  to  the  other  side  of  the  Atlantic,  and  see  what  has  been  achieved 
for  us  there,  by  Englishmen,  holding  seven-tenths  of  the  capital  of  this  bank. 


380  BANK  OF  THE  UNITED  STATES 

Has  it  released  from  galling  and  ignominious  bondage  one  solitary  American 
seaman,  bleeding  under  British  oppression?  Did  it  prevent  the  unmanly  at- 
tack upon  the  Chesapeake?  Did  it  arrest  the  promulgation,  or  has  it  abro- 
gated the  orders  in  council — those  orders  which  have  given  birth  to  a  new  era 
in  commerce?  In  spite  of  all  its  boasted  effect,  are  not  the  two  nations  brought 
to  the  very  brink  of  war?  Are  we  quite  sure,  that,  on  this  side  of  the  water, 
it  has  had  no  effect  favorable  to  British  interests?  It  has  often  been  stated, 
and  although  I  dp  not  know  that  it  is  susceptible  of  strict  proof,  I  believe  it  to 
be  a  fact,  that  this  bank  exercised  its  influence  in  support  of  Jay's  treaty;  and 
may  it  not  have  contributed  to  blunt  the  public  sentiment,  or  paralyse  the  ef- 
forts of  this  nation  against  British  aggression? 

The  duke  ol  Northumberland  is  said  to  be  the  most  considerable  stockhold- 
er in  the  Bank  of  the  United  States.  A  late  lord  chancellor  of  England, 
besides  other  noblemen,  was  a  large  stockholder.  Suppose  the  prince  of  Es- 
sling,  the  duke  of  Cadore,  and  other  French  dignitaries,  owned  seven-eighths 
of  the  capital  of  this  bank,  should  we  witness  the  same  exertions  (I  allude  not 
to  any  made  in  the  Senate)  to  re-charter  it?  So  far  from  it,  would  not  the  dan- 
ger of  French  influence  be  resounded  throughout  the  nation? 

I  shall  give  my  most  hearty  assent  to  the  motion  for  striking  out  the  first  sec- 
tion of  the  bill. 

Mr.  POPK. — Mr.  President:  In  rising,  on  this  occasion,  I  never  more  en- 
tirely obeyed  both  my  feelings  and  my  judgment.     The  principle  involved  in 
the  decision  about  to  be  given,  is,  in  my  view,  of  more  magnitude  than  any  which 
has  been  presented  for  our   consideration,  since  I  had  the  honor  of  a  seat 
here.     It  is  no  less  than  whether  we  shall  surrender  to  the  State  Govern- 
ments the  power  of  collecting  our  revenue,  and  rely  upon  the  old  system'of  re- 
quisitions.    We  are  called  upon  to  return  to  that  state  of  imbecility  and  chaos 
from  which  this  political  fabric  was  reared,  by  the  wisdom  and  patriotism  of 
the  first  statesmen  of  which  any  age  t>r  nation  can  boast.     For  twenty  years  we 
have  collected  our  revenue,  borrowed  money,  paid  our  debts,  and  managed  our 
fiscal  concerns,  through  the  agency  of  a  national  bank.    That  it  has  answered 
the  most  sanguine  expectations  of  its  authors;  that  it  has  been  well  managed; 
is  admitted  by  the  most  decided  opponents  to  the  renewal  of  the  charter. 
Although,  in  public  debate,  in  newspapers,  courtyards,  muster  fields,  &c. 
we  have  heard  much  of  dangerous   powers,   violations  of  the   constitution, 
British  influence,  and  poisonous  vipers,  &c.  which  were  to  sting  to  death  the 
liberties  of  the  People,  yet  we  find  ourselves  as  free  almost  as  the  air  we  breathe, 
and  hardly  subservient  to  the  mildest  code  of  laws  by  which  any  nation  was 
ever  governed.     In  the  city  of  Philadelphia,  and  the  state  of  Pennsylvania 
generally,  where  these  animals  called  banks*  have  grown   to  the  most  enor- 
mous size,  we  find  as  sound  morals,  and  as  much  real  practical  republicanism, 
as  in  those  parts  of  the  Union  where  the  rattling  of  this  viper's  tail  has  never 
been  heard;  and,  in  point  of  solid  wealth  and  internal  improvements,  mark 
the  contrast.    We  are  required  to  disregard  the  lessons  of  that  best  teacher, 
experience,  and  to  try  some  new  scheme.     However  captivating  new  theories 
and  abstract  propositions  were,  a  few  years  since,  I  believe  the  thinking  men 
of  all  parties  in  the  nation  are  perfectly  convinced  that  one  ounce  of  experience 
and  common  matter  of  fact  sense  is  worth  more,  for  the  purposes  of  legislation, 
than  a  ship  load  of  theory  and  speculation.  We  are  told  that  we  musttorce  into 
the  vaults  of  the  bank  a  large  portion  of  the  circulating  medium,  and  thereby 
depress  the  price  of  every  thing  in  the  market;  we  must  give  a  shock  to  credit 
of  every  kind;  check  and  embarrass  every  branch  of  agricultural,  commercial, 
and  manufacturing  industry;  give  up  the  young  mechanics,  manufacturers,  and 
merchants,  with  small  capitals,  a  prey  to  the  cupidity  of  moneyed  men,  who  will 
be  tempted  to  withdraw  their  funds  from  trade,  to  speculate  on  the  wrecks  of 
the  unfortunate.     This  is  not  mere  matter  of  calculation.     I  only  state  facts 
proved  to  us  by  the  most  unquestionable  evidence.     We  are  not  only,  sir,  to 
ruin  many  innocent  and  unoffending  individuals,  but  to  derange  the  national 
finances.  And  for  what  is  all  this  to  be  done  ?  To  promote  the  public  good,  or 


ON  THE    BILL  TO  RENEW  THE  CHAHTER  OF    1791. 

advance  the  national  prosperity  r  No,  sir,  it  is  not  pretended.  We  arc  grave* 
ly  told  that  \ve,  the  Representatives  of  the  People,  must  sacrifice  the  People  to 
save  the  constitution  of  the  People,  whose  happiness  and  welfare  it  was  intend- 
ed to  secure.  If  this  be  true,  it  is  indeed  a  strange  government  under  which 
we  live.  I  advance  the  opinion  with  confidence,  that  no  principle  which,  in 
its  pratical  effects,  outrages  the  common  sense  and  feelings  of  mankind,  can 
be  a  sound  one,  and  we  ought  to  examine  it  well,  and — hesitate  much  before 
we  give  our  assent.  To  bring  distress  on  the  country,  not  to  prevent  a 
violation  of  any  positive  provision  of  the  constitution,  but  to  correct  what  we 
suppose  to  have  been  an  erroneous  construction  of  it  by  our  predecessors,  of 
which  neither  the  States  or  the  People  have  ever  complained,  appears  to  me 
more  nice  than  wise. 

Disguise  this  question  as  you  will,  sir,  and  still  it  will  clearly  appear  to  be  a 
•contest  between  a  few  importing  States  and  the  People  of  the  United  States. 
Resolutions  have  been  already  laid  on  our  table  by  gentlemen  from  the  two 
large  States;  from  which  instructions  have  been  received  in  substance,  re- 
quiring Congress  to  give  wp  to  the  State  banks  the  collection  of  the  national  re- 
venue. I  am,  Mr.  President,  on  the  side  of  the  People  of  the  United  States. 
This  is,  indeed,  a  question  of  party,  but  of  a  very  different  character  from  (hat 
which  will  be  attempted  to  be  palmed  on  the  People.  It  is  a  contest  between 
the  friends  and  enemies  of  the  federal  constitution,  revived:  for,  if  I  am  not 
mistaken,  the  power  of  laying  and  collecting  imposts  and  duties  was  strongly 
objected  to  by  some  of  the  large  States,  having  advantageous  sea  ports,  before 
the  constitution  was  adopted.  I  am  for  preserving  both  the  States  and  the 
Union.  I  consider  the  safety  and  independence  of  the  several  States,  and 
the  liberties  of  the  People,  inseparably  connected  with,  and  dependent  on,  the 
efficiency  of  the  National  Government;  and  it  is  to  me  unaccountable  that 
gentlemen  in  favor  of  strong  measures  against  foreign  nations  should  be  so 
solicitous  to  strip  the  General  Government  of  this  very  essential  part  of  its 
power.  We  were  told,  a  few  days  since,  that  our  army  was  so  insignificant  and 
contemptible,  that  it  would  require  a  constable  with  a  search  warrant  to  find  it. 
I  have  heard  another  gentleman,  of  very  high  standing,  suggest  the  propriety 
of  retroceding  the  ten  miles  square  to  the  States  of  Virginia  and  Mary- 
land. Our  gun  boats  are  almost  rotten.  We  have  not  more  frigates  and 
other  armed  vessels  than  sufficient  to  carry  our  ministers  and  diplomatic 
despaches  to  foreign  courts;  and  if  we  yield  to  the  States  the  collection  of  our 
revenue,  what  will  remain  of  the  Federal  Government  with  which  the  People 
can  indentify  their  feelings  or  affections?  In  what  will  this  Government  con- 
sist? It  will  be  a  mere  creature  of  the  imagination— a  political  fiction.  And, 
analogous  to  the  fiction  in  the  action  of  ejectment,  we  shall  have  to  suppose 
its  existence,  and  then  bottom  our  proceedings  upon  that  supposition.  If  I  was 
hostile  to  our  Federal  Union,  or  wanted  to  prepare  the  public  mind  for  a 
surrender  of  this  happy  system  of  government,  I  would  join  in  the  hue  and 
cry  against  this  institution;  I  would  support  every  measure  calculated  to 
destroy  all  confidence  in,  and  respect  for,  this  Government,  both  at  honie  and 
abroad;  I  would  endeavor  to  produce,  throughout  the  country,  confusion  and 
disorder,  and  a  state  of  glorious  uncertainty;  then  persuade  the  People  to  seek 
security  and  tranquillity  under  some  other  form  of  government  The  transition, 
from  a  wild,  factious  democracy,  to  despotism,  is  often  easy,  and  generally 
sudden.  The  extremes  are  very  nearly  allied.  A  republican  Government, 

fuided  by  the  virtue  and  intelligence  of  a  nation,  is  the  first  of  human  blessings; 
ut,  when  directed  by  the  angry  vindictive  passions  of  party,  the  worst  of 
which  the  imagination  can  conceive.  A  republic,  to  be  durable,  must  inspire 
confidence  and  respect.  Such  instability,  such  variable  unsettled  policy,  as 
now  appears  to  be  the  order  of  the  day,  could  not  have  been  anticipated  by 
any  man  blessed  with  a  tolerable  degree  of  faith  in  the  success  of  this  great 
republican  experiment.  Mr.  President,  I  have  ever  been  opposed  to  yielding 
to  the  commercial  interest  an  undue  influence  in  this  Government,  but  I  am 
unwilling  to  make  an  unnecessary  and  wanton  attack  upon  them.  Coming 
from  an  agricultural  State,  I  am  not  disposed  to  increase  the  jealousies  which 
46 


562  BANK   OF   THE   UNITED   STATES- 

unfortunately  exist,  and  thereby  weaken  the  ties  by  which  these  States  an? 
held  together.  I  am  sensible,  too,  how  much  the  prosperity  of  the  State  I 
represent  depends  on  a  prosperous  State  of  trade;  and  although  the  shock  frc-n 
the  dissolution  of  this  bank  will  be  first  felt  in  the  commercial  cities,  it  must 
immediately  react  to  the  extremes  of  the  empire.  I  know  many  are  under  an 
impression  that  federalists  and  British  agents  are  to  be  the  victims;  but  very 
different  will  be  the  result.  I  refer  to  the  evidence  detailed  by  the  honorable 
gentleman  from  Massachusetts,  (Mr.  LLOYD.)  But  is  it  possible  that  are 
intolerant  spirit  of  party  has  prepared  us  for  this  ?  Are  gentlemen  ready  to 


— •-   ~  «  \**\s    ^VAV**!,-*  kj    wi       iu*_s      JLW  T  VI  VI  IIA/1J  ^   €4^  UUfftLV'VI  }     JL    4AI41.      v5  U.  1  C-  y 

by  nobler  views}  when  I  see  the  professors  of  a  religion  which  teaches 
us  to  love  our  neighbors  as  ourselves;  I  cannot  persuade  myself  that  Christian 
charity,  and  all  the  noble,  generous  feelings  of  the  human  heart,  are  extinguish- 
by  this  demon,  party  spirit.  If  there  be  a  man  in  the  nation  who  can  witness, 
with -unfeeling  apathy,  the  distresses  of  his  fellow  citizens,  he  would  have 
figured  in  Smithfield,  in  the  bloody  reign  of  Queen  Mary  of  England,  in 
binding  heretics  to  the  stake,  or  in  the  sanguinary  time  of  Robespierre,  in 
adding  victims  to  the  guillotine;  but  he  is  unworthy  the  blessings  of  a  free 
Government. 

Sir,  I  address  the  Senate  under  circumstances  discouraging  indeed.  I  have 
been  told,  and  on  this  floor,  that  debate  is  useless;  that  no  man's  opinion  i& 
to  be  changed;  that  I  shall  find  verified,  in  the  decision  of  this  question,  the 
sentiment  contained  in  two  lines  of  Hudibras:  "  He  that  is  convinced  against 
his  mil  is  of  the  same  opinion  still."  I  cannot  admit  this.  I  know  there  are 
gentleman  fully  sensible  of  the  evils  about  to  befal  their  country,  without  any 
obstinate  pride  to  conquer,  who  would  rejoice  at  being  convinced  it  is  in  their 
power  to  avert  them.  Let  me  intreat  them  to  pause  and  reflect,  before  they 
inflict  a  wound  on  their  country's  interest, under  the  influence  of  constitutional: 
doubt;  and  if  they  err,  I  would  ask  them,  would  it  not  be  more.saf  e  and  patriotic 
to  err  in' favor  of  the  People?  Permit  me,  now,  sir,  to  redeem" this  subject  from, 
the  constitutional  difficulties  with  which  it  has  been  encumbered. 

To  form  a  correct  opinion,  we  must  retrospect  the  defects  of  the  old  Go- 
vernment, and  ascertain  the  remedy  which  was  anticipated  in  the  present 
constitution.  I  believe  it  will  be  conceded  that  the  great  cause  of  the  ineffi- 
ciency of  the  former  was  not  because  the  principal  field  of  legislation  was  too 
limited,  but  was  owing  to  its  dependence  on  the  States  for  the  means  to  carry 
their  powers  into  effect.For  the  truth  of  this  position  I  appeal  to  the  history  of 
that  day — the  candor  of  gentlemen  who  hear  me.  The  present  constitution 
was  framed  for  rational  purposes,  with  am  pie  authority  to  pass  all  laws  neces- 
sary and  proper  for  the  attainment  of  its  objects,  independent  of  State  authority, 
except  so  far  as  expressly  made  dependent  by  the  constitution.  The  erroneous 
impressions  with  regard  to  this  bank  have  arisen  from  ignorance  of  facts,  relative 
to  the  practical  fiscal  operations  of  the  Government,  and  from  confounding  an 
original  independent  power  to  establish  banks  and  corporations  with  a  necessary 
auxiliary  to  the  execution  of  the  powers  given.  By  the  constitution  it  is  ex- 
pressly declared,  that  Congress  shall  have  power  to  pass  all  laws  necessary 
and  proper  to  carry  into  effect  the  powers  previously  enumerated,  and  all 
other  powers  vested  in  the  Government  of  the  United  States,  or  any  depart- 
ment or  officer  thereof.  Our  power  to  create  a  bank  is  not  derived  by  impli- 
cation. No,  sir.  If  this  express  delegation  of  power  had  not  been  inserted* 
we  must  have  implied  the  authority  to  provide  the  means  necessary  and  pro- 
per, &c. 

But  the  convention,  with  a  full  knowledge  of  the  defects  of  the  old  confede- 
ration, and  deeply  impressed  with  the  necessity  of  an  efficient  national  Go- 
vernment, determined  to  exclude  all  doubt,  by  granting  to  the  new  Govern- 
ment, in  express  and  unequivocal  language,  ample  authority  to  use  all  meansne- 
cessary  and  proper  for  the  attainment  of  the  ends  for  which  it  was  instituted. 
Jf  a  man  was  requested  to  look  at  the  constitution,  and  decide  whether  power 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

is  given  to  Congress  to  create  a  bank  or  corporations  generally,  he  would  an- 
swer in  the  negative-  This  would  very  naturally  be  me  answer  of  most  men, 
upon  the  first  blush  of  the  constitution.  It  is  not  pretended  that  Congress 
have  power  to  create  corporations,  as  an  independent  proposition.  The  author- 
ity to  establish  a  bank,  or  corporation,  is  only  contended  for  so  far  as  it  can  be 
fairly  considered  as  a  necessary  and  proper  auxiliary  to  the  execution  of  the 
powers  granted  by  the  constitution.  The  question  of  constitutionality  depends 
upon  facts,  dehors  the  instrument,  of  which  we  must  be  informed  before  we 
decide,  and  which  could  not  be  ascertained  before  the  attempt  was  made  to 
give  motion  and  energy  to  this  political  machinery.  If  the  tact  be  ascertained, 
by  the  best  evidence  the  nature  of  the  subject  affords,  that  a  bank  is  necessary 
and  proper  to  effectuate  the  legitimate  powers  of  Government,  then  our  power 
is  express,  and  we  need  not  resort  to  implication.  To  prove,  to  the  satisfaction 
of  the  Senate  and  the  world,  this  material  fact,  will  be  my  business,  before  I 
request  their  assent  to  the  position  assumed,  that  Congress  have  an  express 
power  to  incorporate  a  bank.  To  do  this  it  is  indispensable  that  we  should 
understand  the  practical  financial  concerns  of  the  Government,  or  have  the 
information  of  those  who  do.  We  appropriate  money  for  fortifications,  on  the 
report  of  our  engineer,  Colonel  Williams,  and  for  the  capitol,  &c.  upon  the 
report  of  Mr.  Latrobe.  To  know  how  much  timber  or  other  materials  are 
necessary  for  a  ship  or  a  house,  you  must  understand  the  subject  yourself,  or 
have  the  information  of  those  who  do.  For  myself,  I  am  ready  to  admit  that 
I  rely  much  upon  the  information  and  experience  of  others.  To  ignorant  men, 
and  those  who  do  not  profess  to  be  fully  acquainted  with  the  nature  and  ma- 
nagement of  the  national  finances,  the  following  evidence  is  presented.  The 


utility  and  necessity  of  which  was  ascertained  by  the  experience  of  that  day. 
It  is  worthy  of  remark,  that  they  created  a  bank,  under  powers  much  more 
limited  than  ours.  That  act  was  not  passed  precipitately,  but  was  the  result 
of  the  most  mature  and  deliberate  consideration.  I  beg  leave  to  read  the 
preamble  of  the  law  which  contains  the  opinions  of  that  Congress  with  regard 
to  the  utility  and  necessity  of  a  national  bank.  "  Whereas  Congress,  on  the 
26th  day  of  May  last,  did,  from  a  conviction  of  the  support  which  the  finances 
of  the  united  States  would  receive  from  the  establishment  of  a  national  bank, 
approve  a  plan  for  such  an  institution,  submitted  to  their  consideration  by 
Robert  Morris,  Esq.  and  now  lodged  among  the  archives  of  Congress,  and 
did  engage  to  promote  the  same  by  the  most  effectual  means:  And  whereas 
the  subscription  thereto  is  now  filled,  from  an  expectation  of  a  charter  of  in- 
corporation from  Congress,  the  directors  and  president  are  appointed,  and 
application  hath  been  made  to  Congress,  by  the  said  president  and  directors, 
for  an  act  of  incorporation:  And  whereas  the  exigencies  of  the  United  States 
render  it  indispensably  necessary  that  such  an  act  be  immediately  passed: 
Be  it  therefore  ordained,"  &c.  This  act  passed  on  the  3 1st  day  of  Decem- 
ber, 1781.  And  here  permit  me  to  observe,  that  this  national  bank,  styled 
the  IBank  of  North  America,  was  not  produced  by  British  influence  or  party 
spirit.  No,  sir,  the  little,  slandering,  intriguing  partyism,  of  the  present 
moment,  was  unknown  to  the  patriots  of  that  awful  period.  They  had  no 
party  but  their  country;  liberty  and  independence  were  their  objects.  Their 
souls  were  fired  with  a  noble,  a  generous  enthusiasm,  on  which  Heaven  look- 
ed down  with  pleasure.  It  appears,  from  the  journals  of  the  Congress  of  1781, 
that  the  members  from  every  State  were  unanimous  in  favor  of  a  national 
bank,  except  Massachusetts,  Pennsylvania,  and  Virginia;  the  two  members 
from  Massachusetts  voted  against  it,  the  two  members  from  Pennsylvania 
were  divided;  of  the  four  from  Virginia,  Mr.  Madison  alone  voted  against  it. 
Here  it  is  evident  that,  in  the  very  infancy  of  our  republic,  before,  indeed,  it 
could  with  propriety  be  said  to  be  born,  when  every  bosom  glowed  with  en- 
thusiasm for  liberty  and  a  pure  disinterested  patriotism,  a  national  bank  was 
not  thought  that  dangerous  dreadful  monster,  which  the  very  wise,  and  exclu- 


364  BANK   OF    THE   UNITEO    STATES. 

sive  patriots,  of  I&l  I,  are  endeavoring  to  represent  it  to  the  American  People, 
And  the  construction  givent  to  the  grant  of  powers,  in  the  articles  of  confede- 
ration, by  the  Congress  of  1781,  is  strong  evidence  of  our  right  to  establish  a 
bank,  under  a  grant  of  powers  much  more  ample,  and  with  money  concerns 
vastly  more  extensive  and  complicated. 

The  next  evidence  I  shall  adduce,  for  the  consideration  of  the  Senate,  is 
the  opinion  of  the  late  General  Hamilton,  appointed  by  President  Washing- 
ton the  first  Secretary  of  the  Treasury;  whose  province  and  duty  it  was  to 
superintend  the  national  finances.  His  attention  was,  therefore,  particularly 
directed  to  the  subject,  and,  in  a  very  able  report  to  the  first  Congress,  assem- 
bled under  the  new  constitution,  he  recommended  a  national  bank.  Although 
opinions  have  been  imputed  to  this  gentleman,  very  foreign  to  my  feelings  and 
notions  about  government,  yet  he  has  ever  been  acknowledged,  by  the  candid 
and  liberal  of  all  parties,  one  of  the  first  of  American  statesmen.  For  rea- 
sons, which  it  is  unnecessary  for  me  to  assign,  I  will  not  press  his  opinion 
upon  the  attention  of  the  Senate,  but  will  introduce  other  and  perhaps  less 
exceptionable  testimony.  The  Congress  of  1791,  which  incorporated  the 
present  bank,  merits  the  highest  regard.  It  was  composed  of  the  most  en- 
lightened and  distinguished  men  in  America,  many  of  whom  had  been  mem- 
bers of  the  convention,  and  were  fully  apprized  ot  the  defects  of  the  old  and 
the  objects  of  the  new  Government.  A  large  majority  of  both  branches  voted 
in  favor  of  the  bank.  They  were  not  divided  on  the  question  by  party.  Many, 
who  have  continued  with  the  republican  party  under  every  administration, 
voted  in  favor  of  this  bank.  Although  different  speculative  or  abstract  politi- 
cal opinions  were  then  entertained,  yet  the  spirit  and  passion  of  party  had  not 
diffused  itself  so  generally  through  the  nation  as  at  a  subsequent  period.  The 
next  authority  in  favor  of  this  bank,  and  one  which  must,  at  all  times,  and  on 
all  occasions,  command  the  highest  respect,  is  no  less  than  our  immortal 
Washington.  He  was  President  of  the  United  States  in  1791,  when  this  bank 
law  passed.  After  it  had  received  the  sanction  of  both  branches  of  the  Legis- 
lature, with  that  circumspection  and  prudence  which  reg'ilated  his  conduct 
through  life,  he  consulted  the  able  men  who  composed  his  cabinet  council,  on 
the  constitutional  question;  they  differed  in  opinion;  he  heard  their  argu- 
ments for  and  against  the  measure;  and,  after  full  consideration,  approved 
the  law.  I  cannot  vet,  sir,  take  leave  of  this  very  important  testimony  in 
favor  of  the  bank.  The  opinion  of  our  Washington  has  the  strongest  claim  to 
pur  confidence.  Let  us  pause,  before  we  disregard  his  solemn  advice.  This 
is  the  hero  who  led  our  armies  to  victory;  this  is  the  Washington,  who,  at  the 
close  of  our  Revolutionary  war,  disbanded  a  disciplined  army  in  the  bosom  of 
the  republic,  and  voluntarily  exchanged  the  splendid  robes  and  ensigns  of 
military  power,  for  the  plain,  humble  garb  of  a  private  citizen.  This  Wash- 
ington, who  continued  an  American,  a  republican  in  heart  and  in  sentiment, 
until  summoned  to  the  mansions  of  bliss;  yes,  sir,  this  illustrious  departed 
hero,  this  practical  statesman,  has  solemnly  declared  to  the  American  People, 
that  a  national  bank  is  a  necessary  and  proper  auxiliary  to  the  execution  of 
the  national  powers.  The  last  authority  1  shall  particularly  notice,  in  sup- 
port of  this  institution,  is  the  opinion  of  the  present  Secretary  of  the  Treasury, 
Mr.  Gallatin.  If  this  gentleman  cannot  boast  of  the  military  laurels  which 
have  adorned  the  brows  of  the  patriots  I  have  mentioned,  as  a  statesman  and 
faithful  public  servant,  he  stands  inferior  to  none.  Mr.  Galiatin,  from  his 
first  appearance  on  the  theatre  of  public  life,  has  been  considered,  by  all  par- 
ties, an  able  financier.  At  a  very  early  period,  the  finances  of  the  United 
States  became  the  subject  of  his  particular  attention  and  inquiry;  the  result 
of  which  was  a  treatise,  published  in  1796,  called  '  Gallatin  on  the  finances  of 
the  United  States,'  in  which  he  gives  a  decided  opinion  in  favor  of  this  bank. 
I  rely  much  on  his  opinion  at  that  period,  because  it  must  have  been  the  result 
of  conviction,  and  not  9f  any  party  feeling  or  consideration,  as  he  was  then  in 
the  minority,  and  continued  in  it  until  the  administration  changed.  His  re- 
port to  the  Senate,  during  the  last  session  of  Mr.  Jefferson's  administration, 
and  his  letter  to  the  committee,  show  that  time  and  experience,  so  far  from 


ON  THE  BILL  TO  RENEW  THE  CHARTER    OF   1791. 

changing,  have  confirmed  him  in  the  opinion  he  first  formed  on  the  subject; 
to  which,  I  might  add,  every  administration,  and  almost  every  man  practically 
acquainted  with  our  money  concerns.  Is  not  this  mass  of  evidence  sufficient 
to  substantiate  the  facts  upon  the  existence  or  non-existence  of  which  the 
constitutionality  of  this  measure  depends?  I  put  the  question  to  the  candor 
and  good  sense  of  gentlemen,  whether  they  are  not  satisfied,  in  the  language 
of  the  constitution,  that  a  national  bank  is  necessary  and  proper  to  effectuate 
the  legitimate  powers  of  the  National  Government?  If  they  answer  in  the 
negative,  I  can  only  say,  he  who  will  neither  regard  the  suggestions  of  expe- 
rience, nor  believe  the  report  of  the  great  political  disciples  who  have  gone 
before  us,  would  not  believe  though  one  were  to  rise  from  the  dead.  And 
what  is  the  answer  to  all  this  out  of  doors?  Why,  that  we  are  not  to  be 
governed  by  the  information  or  opinion  of  others,  however  well  acquainted 
with  the  subject:  we  are  so  self  sufficient  as  to  disregard  the  best  lights  which 
can  be  presented  to  us.  The  cry  is  up  to  the  hub.  down  with  the  bank,  huzza 
for  the  party!  So  long,  Mr.  President,  as  I  shall  be  honored  with  a  seat  in 
the  Senate  of  the  Union,  I  am  determined  to  respect  my  station,  and  my  own 
feelings  and  character,  too  much,  to  be  driven  along  by  any  such  idle,  ridicu- 
lous clamor. 

To  all  the  high  authority  I  have  mentioned,  in  support  of  a  national  bank, 
may  be  opposed  the  names  of  some  great  men  of  Virginia,  who  have,  long 
since,  I  hope,  got  rid  of  their  errors  and  prejudices;  among  others  will,  pro- 
bably, be  mentioned  the  name  of  the  present  President,  who  voted  against  the 
present  bank,  in  1791,  and  against  the  Bank  of  North  America,  in  1781.  No 
man  has  a  higher  respect  than  myself  for  his  virtues  and  wisdom;  but,  I  be- 
lieve, it  is  not  pretended  that  he  ever  was  a  practical  financier.  No  State  can 
boast  of  more  genius,  eloquence,  and  talents,  than  Virginia;  it  will,  however, 
be  conceded,  that  no  People  are  more  deficient  in  practical  knowledge  of 
finance  and  the  nature  of  moneyed  institutions.  Indeed,  they  were,  a  few 
years  since,  frightened  at  the  very  name  of  a  bank.  As  soon  as  they  heard  of 
one,  they  began  to  write  books,  make  speeches,  and  pass  resolutions,  to  lay  this 
ghost  of  tyranny.  It  required  all  the  eloquence  of  my  honorable  friend  from 
that  State,  (Mr.  BRENT)  to  persuade  the  Legislature  that  the  little  bank  of 
Alexandria  would  not  sweep  away  their  liberties.  The  talents  and  boldness 
with  which  he,  on  that  occasion,  assailed  the  prejudices  of  Virginia,  instead  of 
injuring  him,  inspired  the  People  with  the  highest  confidence  in  his  integrity 
and  firmness;  since,  however,  they  have  become  acquainted  with  this  bank 
animal,  they  find  it  perfectly  harmless,  and  no  People  in  the  Union  are  more 
disposed  to  foster  it. 

The  People,  in  framing  the  constitution,  have  avowed  the  objects  for  which 
it  was  created.  They  say  in  the  preamble,  "  We,  the  People  of  the  United 
States,  in  order  to  form  a  more  perfect  union,  establish  justice,  ensure  domes- 
tic tranquillity,  provide  for  the  common  defence,  promote  the  general  wel- 
fare, and  secure  the  blessings  of  liberty  to  ourselves  and  our  posterity,  do 
ordain  and  establish  this  constitution  for  the  United  States  or  America." 
After  declaring  by  whom,  and  in  what  manner,  the  legislative  power  shall  be 
exercised,  the  qualifications  of  the  electors  and  elected,  the  terms,  &c.  for 
which  the  Senators  and  Representatives  shall  be  respectively  chosen,  and 
making  various  other  provisions  relative  to  the  legislative  department,  they 
proceed  to  enumerate  the  principal  cardinal  powers  granted  to  Congress; 
among  others,  that  the  "  Congress  shall  have  power  to  lay  and  collect  taxes, 
duties,  imposts,  and  excises,  to  pay  the  debts,  and  provide  for  the  common 
defence  and  general  welfare  of  the  United  States;  but  all  duties,  imposts,  and 
excises,  shall  be  uniform  throughout  the  United  States;  to  borrow  money  on 
the  credit  of  the  United  States;  to  regulate  commerce  with  foreign  nations, 
and  with  the  Indian  tribes;  to  establish  an  uniform  rule  of  naturalization,  &c.; 
to  coin  money;  regulate  the  value  thereof;  to  declare  wrar,  &c.;  to  raise  and 
support  armies,  &c.;  to  raise  and  maintain  a  navy." 

At  the  close  of  this  catalogue,  of  what  I  shall  call  cardinal  powers,  they 
have  inserted  the  general  provisions  before  noticed:  "To  make  all  laws  ne- 


366  BANK   OF  THE    UNITED    STATES. 

cessary  and  proper  for  carrying  into  effect  the  foregoing  powers,  and  all  other 
powers  vested  by  this  constitution  in  the  Government  of  the  United  States, 
or  in  any  department  or  officer  thereof."  This  provision  contains  a  general 
authority  as  to  the  means  necessary  to  carry  into  effect  the  national  powers. 
The  convention  could  not  foresee  or  define  what  laws,  in  the  progress  of  the 
Government,  the  varying  circumstances  of  the  nation  might  require,  and  there- 
fore wisely  submitted  them  to  the  discretion  of  Congress,  to  be  exercised  on 
facts  and  circumstances,  as  they  occurred.  It  has  been  said  this  discretion 
may  be  abused;  and  so  may  every  other  power  given  to  Congress,-  the  security 
of  the  People  against  the  abuse  of  this  or  any  other  power  is  their  own  virtue 
and  intelligence,  and  the  responsibility  of  their  public  servants.  The  question, 
on  every  law  bottomed  on  this  clause  of  the  constitution,  must  be,  whether  it 
is  necessary  and  proper;  or,  in  other  words,  fairly  suited  to,  and  well  calculated 
for,  legitimate  national  objects;  and,  if  it  can  be  fairly  considered  necessary 
and  proper,  and  is  not  prohibited,  then  it  is  certainly  within  the  pale  of  the 
constitution. 

The  constitution  may  with  propriety  be  compared  to  a  ship,  finished  as  to  all 
the  substantial  parts,  before  she  is  put  to  sea.  The  People  have  built  the  na- 
tional vessel,  directed  in  what  manner  the  commanders  are  to  be  chosen,  and 
made  it  their  duty  to  provide  sails,  rigging,  sea  stores,  &c.  necessary  and  pro- 
per to  enable  her  to  perform  the  voyages  for  which  she  was  destined;  and 
those  appointed  to  navigate  her  are  not  only  bound  to  provide  what  is  neces- 
sary and  proper  for  those  seas  were  temperate  and  gentle  breezes  are  to  be 
met  with,  but  fit  her  to  encounter  the  most  tempestuous  seasons. 

As  I  heard  much  said  about  absolute,  indispensable  necessity,  I  may  be 
pardoned  for  giving  what  I  consider  the  sound  interpretation  of  the  words  ne- 
cessary and^roper,  in  the  constitution.  This  idea  of  absolute,  indispensable, 
&c.  must  have  originated  in  an  excessive  jealousy  of  power,  or  a  decided  hos- 
tility to  the  federal  Union.  This  instrument  was  framed  by  and  for  the  Peo- 
ple of  the  United  States,  and,  in  the  language  used,  was  certainly  intended  to 
be  understood  in  that  sense  in  which  it  is  used  and  understood  by  them  gene- 
rally. If  you  ask  a  plain  man  what  are  the  necessaries  of  life,  he  will  an- 
swer, something  below  luxury  and  extravagance;  what  is  calculated  to  afford 
him  reasonable  comfort.  Neither  a  house  nor  a  bed  is  absolutely  or  indis- 
pensably necessary  to  a  man's  existence;  he  could  live  in  a  camp,  and  sleep  on 
boards,  or  on  the  ground;  yet,  the  common  sense  of  mankind  would  respond, 
they  are  necessary  and  proper.  If  a  man  had  a  journey  to  make,  either  to 
Richmond,  in  Virginia,  or  Lexington,  in  Kentucky,  although  every  person 
would  pronounce  a  coach  and  six  superfluous  and  unnecessary,  all  reaso- 
nable men  would  say,  he  ought  to  have  a  horse  or  a  hack;  but  it  will  not  be  pre- 
tended that  either  are  indispensable,  because  he  could  perform  it  on  foot. 
If  a  gentleman  from  Baltimore  gives  his  agent  instructions  to  provide  every 
thing  necessary  for  an  East  India  voyage,  what  would  he  expect?  Certainly 
thathe  should  avoid  unnecessary  expense,  but  would  consider  him  acting 
within  the  pale  ot  his  authority  if  he  procured  only  what  was  reasonably  ne- 
cessary and  proper,  or,  in  other  words,  what  was  fairly  suited  to  the  master 
and  crew,  and  well  calculated  to  enable  the  vessel  to  reach  her  port  of  des- 
tination. That  interpretation  is  correct  which  best  accords  with  the  common 
sense  and  understanding  of  mankind.  It  must  therefore  be  evident  that  the 
only  question,  as  regards  the  constitutionality  of  the  measure,  to  be  decided, 
is  a  question  of  fact,  and  that  is,  whether  a  national  bank  is  reasonably  neces- 
sary and  proper,  or  fairly  suited  to,  and  calculated  for,  the  collection  of  our 
revenue  and  the  management  of  our  money  concerns.  And  this  fact  appears 
to  be  admitted  by  the  gentlemen  opposed  to  the  bill:  for  their  arguments  are 
predicated  upon  the  probability  that  the  State  banks  will  answer  the  national 
purposes.  This  is  a  complete  surrender  of  the  constitutional  objection:  for,  if 
banks  be  necessary  and  proper,  it  follows  that  we  have  a  constitutional  pow- 
er to  create  them,  and  it  will  be  a  mere  question  of  expediency  whether  we 
will  use  State  banks  or  a  national  bank.  My  colleague  (Mr.  CLAY)  has  asked 
for  the  congeniality  between  a  bank  and  the  collection  of  our  revenue.  The 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.    357 

argument  in  favor  of  using  Stale  banks  shews  it;  but  let  the  use  hitherto  made 
of  the  bank  answer  the  question .     Is  not  a  bank  a  proper  place  for  the  deposite 
and  safe-keeping  of  money,  more  so  than  the  custom  house?  Is  it  not  a  con- 
venient agent  for  paying  and  receiving  money?     Through  the  agency  of  this 
bank,  our  revenue,  or  the  greater  part  of  it,  has  been  collected,  our  financial 
transactions  done,  and  public  money  transmitted  to  such  places  as  the  neces- 
sities of  the  Government  required.     The  revenue,  collected  at  Boston,  Balti- 
more, or  any  other  port,  is  paid,  if  required,  at  New  Orleans,  Natchez,  St  Louis, 
or  any  other  place,  without  risk  or  expense.     The  money  in  the  bank  and  its 
branches  is  payable  at  such  of  them  as  the  convenience  ot  the  Government  may 
require;  and  by  this  arrangement  we  can  command  the  whole  of  the  public 
money  in  any  quarter  of  the  Union,  without  risk  or  expense.    The  operations  of 
this  institution  have  been  confined  to  the  seaboard.     The  principal  bank  is  at 
Philadelphia,  with  a  branch  at  New  York,   Boston,  Baltimore,  Washington, 
Norfolk,  Charleston,  Savannah,  and  New  Orleans;    at  all  which  places,  the 
Government  has  considerable  revenue  to  collect.    No  branches  have  been  ex- 
tended into  the  interior.    It  has  been  connected  with  our  fiscal  arrangements  at 
all  the  places  to  which  it  has  been  extended,  and  may  be  fairly  deemed  a 
convenient,  necessary,  and  appropriate  auxiliary  to  the  management  of  the 
national  concerns.    It  is  said  that  the  revenue  is  collected  at  many  ports 
w  here  none  of  these  branches  are  placed.     This  is  true;  the  bank  and  branches 
are  fixed  only  at  the  principal  seaports,  where  a  large  amount  of  revenue  is 
collected.    Every  one  draws  into  its  vaults,  subject  to  the  demands  of  Govern- 
ment, the  revenue  collected  at  the  less  important  ports  in  the  same  quarter  of 
the  country.     Boston  being  the  commercial  emporium  of  New  England,  the 
Government,  by  the  agency  of  the  branch  bank  there,  is  enabled  to  draw  to 
that  point  mo*t  of  the  revenue  received  at  the  numerous  ports  in  that  quarter 
of  the  Union.     The  repeated  sanctions  this  bank  has  received  from  the  dif- 
ferent administrations,  and  especially  from  Mr.  Jefferson  and  the  republican 
party,  by  authorizing  the  extension  of  a  branch  to  New  Orleans,  and  selling 
one  million  of  the  stock,  the  property  of  the  United  States,  to  British  subjects, 
for  four  hundred  thousand  dollars  more  than  the  nominal  amount,  is.  indeed, 
strangely  accounted  for.    Gentlemen  say  the  Government  was  bound  to  fulfil 
their  engagements,  and  that  the  charter,  being  in  the  nature  of  a  contract,  was 
sacred.     I  had  thought  the  fashionable  doctrine  was,  that  an  unconstitutional 
law  was  wholly  null  and  void.    It  has  been  held  by  some  of  the  States.    How- 
ever plausible  the  answer  to  the  argument  of  acquiescence,  it  furnishes  no 
apology  for  a  positive  confirmation.     Permit  me  to  assimilate  a  common  case 
between  individuals  to  the  question  before  us.    A  man,   in  Washington,  exe- 
cutes a  joint  power  to  five  trustees,  in  Kentucky,  to  collect  his  debts,  settle 
his  land  business,  &c.  and  authorizes  them  to  take  all  steps,  necessary  and  pro- 
per to  effectuate  the  trust  or  power.  In  the  progress  of  the  business,  a  measure 
is  suggested  as  necessary,  about  which  there  is  a  diversity  of  opinion  among 
the  trustees.     A  majority,  however,  decide  that  it  is  within  their  authority; 
the  principal  is  informed  of  it;  does  not  complain  or  disavow;  but  positively, 
and  by  the  strongest  implication,  assents  to  the  construction  given  by  his 
agents.     In  such  a  case  there  would  be  but  one  opinion.    In  1791  a  national 
bank  is  proposed  to  Congress;  they  differ  as  to  the  constitutionality;  a  large 
majority  decide  in  favor  of  it;  the  People  and  the  States  are  informed  of  the 
measure;  the  States  do  not  protest,  nor  dp  the  People  complain;  many  of  the 
States  pass  laws  to  protect  the  institution;  it  receives  the  confirmation  of 
three  or  four  different  administrations,  and  particularly  of  the  one  composed 
of  men  originally  opposed  to  it;  it  violates  no  positive  provision  of  the  consti- 
tution; no  mischiefs  have  been  produced,  but  great  convenience  and  advan- 
tage has  been  experienced  by  the  Government  and  community.    I  ask  whether, 
under  such  circumstances,  the  question  ought  not  to  be  considered  settled. 
Is  no  respect  due  to  the  opinions  of  our  predecessors?    Is  a  question  of  con- 
struction never  to  be  at  rest?   Why  is  a  judge,  sworn  to  support  the  lavys  and 
constitution  of  the  country,  bound  by  a  train  of  decisions  contrary  to  his  own 
opinions?  Because  the  good,  the  peace,  and  tranquillity,  of  society,  require  it. 


368  BANK   OF   THE   UNITED    STATES. 

The  conduct  of  a  court,  as  well  as  every  department  of  Government,  must  be 
regulated  in  its  course,  in  some  measure,  by  a  regard  for  the  public  weal.  It 
is  worthy  of  remark,  that,  notwithstanding  all  the  fuss  about  implied  and  in- 
cidental powers,  if  you  except  the  sedition  law,  which  was  supposed  to  violate 
a  positive  provision  of  the  constitution,  the  same  practical  construction  has 
been  given  to  this  instrument  by  every  administration  of  the  Government. 
Indeed,  the  sphere  of  national  legislation  has  been  more  enlarged  under  Mr. 
Jefferson's  than  any  other  administration.  All  parties  have  found  that  the 
national  vessel  could  not  be  navigated  without  sails,  rigging,  and  every  thing 
necessary  and  proper.  Whence  was  derived  a  power  to  pass  a  law,  laying  an 
embargo,  without  limitation?  There  is  nothing  in  the  constitution  about  em- 
bargoes. Whence  did  we  derive  a  power  to  purchase  Louisiana,  and  incor- 
porate it  with  the  good  old  United  States?  There  is  no  express  delegation  of 
power  to  purchase  new  territory.  On  these  subjects,  the  constitution  is  silent. 
I  have  approved  both.  No  State  can  lay  an  embargo,  or  acquire  new  terri- 
tory. Our  power  to  perform  these  acts  results  from  the  nature  of  the  national 
sovereignty  created  by  this  constitution.  The  republican  administrations 
have  no  pretensions  to  the  approbation  of  the  People,  on  the  ground  of  having 
rest  rained  any  latitude  or  liberality  of  construction.  Their  claim  to  the  pub- 
lic confidence  is  founded  on  very  different  considerations.  They  have  repeal- 
ed the  internal  taxes,  paid  a  large  part  of  the  public  debt,  purchased  Louisi- 
ana, and  preserved  to  the  nation  the  blessings  of  peace.  For  these  acts  they 
have,  I  believe,  the  thanks  of  the  nation.  They  have  mine,  most  sincerely. 

Great  stress  is  placed  on  the  12th  article  of  the  amendments  to  the  consti- 
tution, which  declares,  the  powers  not  delegated  to  the  United  States  by  the 
constitution,  nor  prohibited  by  it  to  the  States,  are  reserved  to  the  States,  re- 
spectively, or  to  the  People.  I  must  confess  that  I  cannot  discover  what  in- 
fluence this  can  have  on  the  bill  under  consideration,  or  any  other  measure 
which  may  be  proposed.  It  appears  to  me  to  have  been  adopted  rather  to 
quiet  State  jealousies  and  popular  fears,  than  witli  a  view  to  produce  any  posi- 
tive effect:  for  the  inquiry  must  ever  be,  is  the  power  given?  And  if  granted, 
it  is  not  retained.  The  supporters  of  this  bill  do  not  pretend  to  usurp  any 
power  retained  by  the  States  or  the  People,  but  contend  that  the  power  to 
pass  the  bill  is  expressly  delegated,  if  the  facts  assumed  are  true. 

It  is  not  pretended  that  our  fiscal  concerns  can  be  managed  with  gold  and 
silver.  If  our  territory  was  of  no  greater  extent  than  Rhode  Island,  Dela- 
ware, or  the  city  cf  Philadelphia,  gold  and  silver  would  answer  the  purposes 
of  the  Government;  but  it  would  require  a  number  of  pack  horses  and  wagons 
to  transport  the  public  money  in  gold  and  silver  over  this  immense  country, 
to  the  different  places  where  it  is  wanting.  Our  extensive  commerce,  and  the 
great  extent  of  this  empire,  renders  a  paper  medium  necessary.  Is  the  power 
to  create  this  paper  medium  or  national  currency,  an  attribute  of  State  or  na- 
tional sovereignty?  I  put  the  question  to  the  candor  of  gentlemen,  and  solicit 
a  serious  answer.  The  argument  of  my  honorable  friend  from  Georgia,  against 
the  power  of  the  States  to  authorize  the  emission  of  bank  paper,  rounded  on 
that  part  of  the  constitution  which  declares,  that  "no  State  shall  emit  bills  of 
credit,"  acquires  great  additional  force,  when  these  bills  of  credit  are  made 
to  assume  the  character  of  money,  for  national  purposes.  In  the  same  arti- 
cle, the  power  to  coin  money  is  expressly  prohibited  to  the  States;  and  in  the 
catalogue  of  cardinal  powers  granted  to  this  Government,  is  that  to  coin 
money.  It  will,  perhaps,  be  contended,  that  this  only  applies  to  gold  and 
silver;  but  if  that  be  admitted  to  be  the  literal  meaning  of  the  words,  still  it 
is  evident,  that  what  shall  be  the  national  currency,  whether  specie  or  paper, 
is  a  proper  subject  of  national  legislation.  No  gentleman  will  be  so  absurd 
as  to  insist  that  any  State  or  States  ought  to  coin  the  current  money  of  the 
United  States.  That  the  power  of  the  States  to  establish  banks  may  be  ques- 
tioned, with  at  least  great  plausibility,  is  perfectly  clear;  but  as  this  banking 
power  has  been  so  long  exercised,  as  the  national  and  State  banks  have  con- 
ducted their  operations  very  harmoniously,  as  no  serious  evils  call  for  national 
interference,  1  am  not  for  disturbing  the  existing  state  of  things;  it  is  better, 


ON  THE  BILL  TO   KK.NKW   THE  CHARTER   OF    1791. 

perhaps,  that  the  banking  power  should  be  divided  between  the  States  and 
the  United  States.  That  bank  paper,  if  good,  is,  in  fact,  money,  although 
not  made  a  legal  tender,  cannot  be  denied.  The  currency  of  this  bank  paper 
of"  the  United  States,  although  made  by  law  receivable  in  payment  of  revenue, 
rests  upon  a  much  better  foundation  than  an  act  of  Congress;  its  national 
character,  the  extended  operations  of  this  bank  from  Boston  to  New  Orleans, 
have  given  it  credit  with  the  People  of  every  part  of  the  empire,  more  than 
the  bank  paper  of  any  particular  State  can  be  expected  to  have;  so  that,  by 
common  consent,  this  money  coined  by  the  National  Bank  has  become  the 
current  money  of  the  United  States.  1  hope  we  shall  never  be  driven  to  the 
necessity  of  compelling  our  citizens,  by  law,  to  receive  our  paper.  We  should 
so  guard  and  regulate  our  banking  operations  as  to  make  the  national  paper  at 
least  equal  to  §o1d  and  silver,  in  every  quarter  of  the  Union. 

If  this  bank  Is  removed,  the  Secretary  of  the  Treasury  must  nationalise  the 
bank  paper  of  the  great  importing  .States:  for,  I  presume,  Congress  will  never 
decide  what  State  paper  shall  be  used  by  the  officers  of  the  General  Govern- 
ment. Most  of  the  public  money  is  now  collected  and  deposited  in  the  Bank 
of  the  United  States;  if  that  is  destroyed,  the  Secretary  of  the  Treasury  is  to 
deposite  in  the  Slate  banks,  and  with  him  is  the  power  of  selection — a  power 
and  patronage  greater  than  any  ever  exercised  by  any  officer  in  this  nation. 
The  deposites  of  the  public  money  are  sought  after  with  great  avidity,  by  all 
the  State  institutions.  lie  can  deposite  the  whole  in  one,  or  divide  it  between 
two  or  three,  or  all  the  banks  in  any  one  place;  he  can  change  them  at  plea- 
sure; he  may,  with  great  apparent  lairness  and  propriety,  make  it  a  condition 
with  every  bank,  where  deposites  are.  made,  that  they  shall  appoint  a  certain 
portion  of  the  directors  of  his  nomination,  and,  throng))  them,  he  can  reach 
the  credit  of  any  man  who  may  have  accommodations  in  it.  It  is  true,  we  have 
now  a  man  at  me  head  of  the  treasury  who  may  not  be  disposed  to  abuse  this 
power;  but  we  may  riot  always  have  such  an  officer.  This  immense  power 
and  influence  may  be  exercised  in  an  invisible  manner,  and,  of  course,  with- 
out responsibility.  Is  this  republican?  It  was  not  a  few  years  ago.  I  have 
always  understood  that  one  of  the  strongest  and  most  popular  objections  to 
tiie.  Federal  Administration  was,  their  disposition  to  increase  Executive  pa- 
tronage. 

We  are  told  that  our  remittances  to  foreign  countries  and  to  different  parts 
of  the  United  States,  can  be  made  in  bills  of  exchange;  this,  to  be  sure,  is 
possible,  but  this  mode  is  less  convenient  and  more  hazardous.  I  believe  the 
Government  has  sustained  no  loss  in  the  remittances  made  to  Europe,  through 
the  agency  of  this  institution.  They  are  able,  through  the  medium  of  their 
several  branches,  to  ascertain  the  credit  and  solvency  of  every  commercial 
house  in  the  United  States,  and  thereby  to  purchase  bills  for  foreign  remit- 
tance;? with  safety.  The  great  punctuality  secured  to  the  Government  in  the 
payment  of  the  revenue,  by  their  agency,  is  also  an  object  of  some  consequence. 

Much  alarm  and  delusion  have  been  artfully  spread  through  the  country 
about  a  violation  of  the  constitution,  and  a  consequent  destruction  of  our  re- 
publican institutions,  I  fear  the  People  are  unfortunately  led  to  believe,  that 
the  security  of  their  liberties  depends  too  much  upon  paper  barriers,  and  too 
little  upon  their  own  virtue  and  intelligence.  It  appears  to  me,  that  the  con- 
stitution is  occasionally  made  a  mere  stalking  horse,  to  serve  the  purposes  of 
unprincipled  demagogues  and  pretended  lovers  of  the  People,  to  get  into 
power  to  the  exclusion  of  honest  men.  They,  with  great  address,  distract 
and  inflame  the  public  mind  about  some  nice  constitutional  question,  or  ab- 
stract proposition,  and  thereby  bring  the  People  to  decide,  not  which  candi- 
date is  the  most  entitled  to  their  confidence,  but  who  rides  the  finest  elec- 
tioneering hobby.  We  are  misled  very  much,  I  fear,  by  theories,  arid  terms, 
more  applicable  to  other  governments  than  our  own.  In  Great  Britain  they 
»peak,  with  great  propriety,  of  the  Government  and  People,  because  there  is, 
in  that  country,  an  immense  power,  independent  of  the  People.  But,  here, 
where  every  public  functionary  is  responsible  to,  and  the  Government  in  the 
hands  of,  a  majority  ot  the  People,  those  terms  do  not  appear  to  me  applicable, 
47 


370  BANK    OF  Till:    UNITED   STATES, 

in  the  sense  in  which  they  are  used  in  other  countries.  My  reflections  arid 
practical  observations  on  the  Government,  incline  me  to  the  opinion,  thai, 
with  regard  to  measures  of  general  policy — not  assailing  individual  liberty  or 
right,  or  the  independence  of  any  State — there  is  not  that  danger  to  be  appre- 
hended from  a  liberal  construction  of  the  constitution  which  gentlemen  seem 
to  imagine.  So  long  as  the  Government  is  in  the  hands  of  the  People,  mea- 
sures, affecting  the  whole  nation,  if  oppressive  or  inconvenient,  will  be  resist- 
ed and  corrected  by  the.  public  feeling  and  opinion.  This  is  not  mere  theory. 
Look  at  the  State  of  Connecticut,  one  of  the  best  regulated  democracies  m 
ancient  or  modern  times,  whose  Legislature  is  as  omnipotent  as  the  British 
Parliament. 

What  People  enjoy  more  real  liberty  and  independence!  In  what  country 
is  to  be  found  more  practical  intelligent  republicanism!  Those  principles 
which  secure  the  rights  of  the  citizen,  and  the  responsibility  of  their  public 
servants,  are  held  sacred;  but  the  Legislature  is,  I  believe,  unrestricted,  with 
regard  to  measures  of  general  policy.  It  is  a  truth,  which  ought  to  be  deeply 
impressed  on  the  American  mind,  that  the  preservation  of  this  republican 
system  depends  more  upon  the  virtue  and  intelligence  of  the  People,  and  the 
responsibility  of  their  public  servants,  than  paper  restrictions.  It  is  unfor- 
tunate, that  every  measure  calculated  to  advance  the  national  prosperity,  is 
arrested  by  some  constitutional  difficulty.  The  bills  respecting  the  Ohio  and 
Delaware  canalsr  which  passed  the  Senate,  have  been  opposed,  in  the  other 
House,  by  the  same  constitutional  obstacles  urged  against  this  bank.  I  may 
be  asked,  if  I  am  opposed  to  any  limitation  on  the  powers  of  the  Government? 
To  which  I  answer,  no.  I  think  the  nature  of  the  powers  to  be  exercised  by 
the  General  Government  ought  to  be  defined  with  as  much  precision  as  the 
imperfection  of  human  language  and  foresight  is  capable  of.  The  convention 
acted  wisely  in  giving  no  more  latitude  than  was  necessary  to  the  success  of 
the  experiment.  Not  because  I  think  them  so  essential  to  the  security  of  the 
rights  of  the  People,  as  to  prevent  unpleasant  and  dangerous  collisions  of  au- 
thority between  the  National  and  State  Governments.  In  the  application  of 
this  instrument  by  the  different  men  and  parties  to  the  ground  supposed  to  be 
embraced  by  it,,  some  trivial  variations  from  what  may  be  deemed  by  many 
the  true  political  meridian,  was  to  be  expected,  and  a  small  allowance  is  per- 
haps due  to  human  fallibility.  It  will  be  some  time  before  the  boundary  line 
will  be  plainly  marked  by  usage  and  practical  construction.  So  far  as  it  has 
been  ascertained,  and  any  question  of  power  settled  by  common  consent, 
every  consideration  connected  with  the  good  of  our  country  forbids  us  to  dis- 
turb it.  Gentlemen  endeavor  to  alarm  us  with  a  thousand  imaginary  dangers: 
they  say,  suppose  Congress  were  to  do  this,  that,  and  the  other  monstrous 
thing.  You  may  suppose  any  thing,  and  make  what  deductions  you  please. 
Suppose  the  People  were  to  destroy  their  own  liberties;  what  then?  Their 
liberties  would  be  destroyed.  Suppose  they  were  all  to  collect  on  the  bank 
of  the  Potomac,  plunge  into  the  stream,  and  drown  themselves;  why,  to  be 
sure,  they  would  be  drowned;  but  does  it  follow  that  there  is  any  danger  of 
their  doing  either?  All  this  supposing  seems  to  accord  better  with  a  senti- 
ment advanced  by  a  celebrated  Senator  a  few  years  since,  "  that  the  People's 
worst  enemies  are  themselves,"  than  the  generally  received  opinion  respect- 
ing the  nature  of  this  Government. 

This  billT  probably,  is  opposed  by  many,  under  an  expectation  of  a  new 
National  Bank.  As  this  question  will  at  least  appear  to  be  decided  on  con- 
stitutional ground,  their  expectations  will  hardly  be  realised.  Indeed,  it  is 
questionable,  whether  either  foreigners  or  our  own  citizens  will  again  vest 
money  in  a  National  Bank.  The  fall  of  this  will  throw  a  large  portion  of  the 
banking  capital  into  the  banks  of  the  great  commercial  States,  whose  influence 
and  hostility  will  be  increased  against  a  new  national  institution.  But  why 
put  down  one  National  Bank  to  raise  up  another?  How  are  the  People  to  be 
benetitted  by  it?  I  shall  be  told,  perhaps,  that  the  direction  ought  to  be 
changed.  And  what  will  be  this  change?  Why,  putting  out  one  set  of  mo- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      371 

n eyed  men  to  put  in  another,  who  will  very  soon  be  the  same.    If  this  be  the 
object,  I  will  only  observe, 

"  Strange  there  should  such  difference  be, 
"  'Twixt  tweedledum  and  tweedledee." 

It  is  but  the  difference  between  Hopkins  and  Sternhold,  and  Sternhold  and 
Hopkins.  A  new  National  Bank,  with  an  increased  capital,  would,  to  be 
sure,  open  a  new  field  of  speculation,  and  increase  that  influence  of  which 
^'iillemen  pretend  to  complain:  lor,  if  moneyed  men  retain  their  confidence 
in  our  institutions,  the  same  motives  which  induced  foreigners  to  purchase 
seven  millions  of  the  present  stock,  will  induce  them  to  purchase  the  stock  of 
the  new  bank.  I  hear,  with  some  astonishment,  gentlemen  opposed  to  this 
bill,  and  particularly  my  friend  from  Tennessee.  (Mr.  ANDERSON)  declaim, 
with  such  apparent  earnestness,  about  the  danger  of  this  institution,  with  a  ca- 
pital of  only  ten  millions  of  dollars,  when  I  recollectthe  partiality  they  mani- 
fested for  a  bill  before  us  last  year,  which  proposed  to  create  a  national  bank, 
with  a  capital  of  thirty  millions.  On  the  motion  to  postpone  that  bill  till  the 
iirsi  Monday  in  December  last,  in  substance  a  motion  to  reject,  it  will  be 
found  by  a  reference  to  the  journals,  that  most  of  those  opposed  to  this,  voted 
against  the  postponement.  If  this  bank  of  fen  millions  is  such  a  viper, a  thirty 
million  bank  would  indeed  be  a  monster.  Gentlemen  may  say,  that,  although 
they  voted  against  postponement,  they  intended  ultimately  to  vote  against  the 
j;e  of  tho  bill;  let  this  be  conceded,  and  still  their  votes  evince  a  decided 
preference  of  the  new  to  the  present  institution.  I  voted  for  the  postpone- 
ment, because  1  was  not  entirely  convinced  of  its  constitutionality — nor  \\-.\ •• 
i  satisfied  with  the  details.  The  banking  operations  of  the  present  institution 
are  confined  to  the  seaboard,  and  may  be  considered  a  necessary  and  proper 
mean — subordinate  to  the  end  of  aiding  the  finances;  but  the  bill  I  have  men- 
tioned contemplated  an  extension  of  branches  into  every  part  of  the  country, 
to  places  where  the  General  Government  had  no  revenue  to  collect,  and  the 
creation  of  it  might  perhaps  be  deemed  the  exercise  of  an  independent  original 
power,  transcending  the  limit  of  an  auxiliary  measure.  I  do  not  design  to  give 
a  decided  opinion  of  the  constitutionality  of  it  at  this  time;  other  substantial 
objections  to  that  bill  will  suffice  to  justify  my  vote,  if  necessary.  If  the  ob- 
ject of  gentlemen  was  to  eradicate  the  banking  system  from  the  country,  I 
might,  in  obedience  to  my  former  prejudices,  be  more  disposed  to  join  them. 
But  this  is  not  even  pretended.  1  he  sole  object,  in  the  death  of  this,  is.  to 
generate  more  of  these  vipers,  understate  or  Federal  authority. 

The  People  of  the  United  States,  through  the  medium  of  the  National  Go- 
vernment, have  within  their  control  that  portion  of  the  moneyed  capital  vested 
in  this  bank,  which  is  not  only  a  convenient  agent,  in  the  management  of  the 
finances,  but  furnishes  loans  to  the  Government,  to  answer  occasional  deli- 
ciences  in  the  revenue.  If  we  relinquish  entirely  our  po\yer  over  the  moneyed 
capital,  will  not  the  influence  of  the  interior  States  be  diminishd,  and  that  of 
the  commercial  States  increased?  The  importing  States  will  have  the  mo- 
neyed capital;  the  greater  part  of  our  revenue  will  be  collected  by  theirbanks, 
and  we  shall  not  only  be  dependent  on  them  for  loans,  but  they  can  at  any 
time  withhold  our  revenue,  without  the  interposition  of  force. 

The  sum  required  to  be  paid  by  the  stockholders,  is  strongly  objected  to. 
And  why,  sir?  Is  there  any  thing  unreasonable  in  this  provision?  The  privi- 
leges and  benefits,  to  be  enjoyed  by  them,  they  will  derive  from  the  People  of 
the  United  States:  ^for  which,  justice  requires  them  to  pay  the  People  an  equi- 
table equivalent.  This  sum  is  demanded  in  the  nature  of  a  tax  on  the  privi- 
lege granted.  The  premium  contemplated,  with  the  probable  advance  on 
the  five  millions  of  stock,  authorized  to  be  subscribed  by  the  United  States, 
will  amount  to  about  three  millions  of  dollars.  They  are  to  pay  three  per 
cent,  on  the  public  deposites,  which  will,  I  suppose,  without  pretending  to  have 
made  an  accurate  estimate,  amount  to  several  millions  more  during  the  term 
of  incorporation;  so  that  this  bill,  if  passed  into  a  law,  will  bring  into  the 
national  treasury  five  or  six  millions  of  dollars,  for  the  benefit  of  the  People 


372  BANK   OF  THE    UNITED    STATES. 

of  the  United  States;  and  what  are  we  about  to  do?  Why,  sir,  give  it  up  to 
the  large  States  on  the  sea  board,  in  whose  banks  we  are  told  by  gentlemen  on 
the  other  side,  this  very  dangerous  foreign  capital  will  be  vested,  and  our 
revenue  deposited.  Well  may  those  States  clamor  about  State  rights  and 
State  interests;  but  how  the  interest  or  importance  of  Kentucky  in  the  Union., 
or  of  any  other  State  where  none  of  the  national  revenue  is  collected,  is  to  be 
advanced  by  the  destruction  of  this  institution,  I  am  not  conjurer  enough  to 
discover. 

It  might  be  contended,  with  some  plausibility,  that  this  Government  is  under 
an  implied  obligation  to  continue  this  bank  upon  equitable  terms,  and  with 
reasonable  modifications.  The  present  stockholders,  both  citizens  and  fo- 
reigners, have  paid  for  every  100  dollars  they  own,  from  140  to  150  dollars. 
The  Government  sold  at  about  that  advance  a  few  years  ago.  When  the 
Congress  of  1791  passed  the  law  declaring  that  there  should  be  a  national 
bank,  did  they  intend  it  to  be  a  temporary  institution?  In  the  numerous  trans- 
fers of  stock  which  have  taken  place,  was  it  so  understood?  Could  it  have 
been  expected  that  a  Government,  which  declared  a  national  bank  necessary 
and  proper,  the  first  twenty  years  of  its  existence,  would  dispense  with  it 
afterwards?  The  limitation  of  the  corporation  to  that  period  was  very  proper. 
It  is  highly  expedient  that  these  charters  should  return  occasionally  into  the 
power  of  the  People,  to  afford  them  an  opportunity  of  revising  and  correcting 
them;  besides,  such  a  limitation,  by  increasing  their  dependence,  gives  some 
security  to  the  community  against  abuses.  Has  not  the  conduct  of  the  Go- 
vernment authorized  an  expectation  that  this  bank  would  be  continued? 
And  if  it  has,  are  they  not  bound,  by  the  rules  of  morality,  to  fulfil  that  expec- 
tation, unless  the  constitution  or  public  good  clearly  forbid  it? 

Although  this  subject  has  received  much  false  coloring  through  the  country, 
by  charges  of  British  influence,  &c.  I  did  not  expect  to  hear  it  from  an  ho- 
norable Senator  of  the  United  States;  it  has  not,  indeed,  been  positively  as- 
serted, but  hinted  in  such  a  manner,  as  to  make  an  impression  on  the  com- 
munity. Some  stale  circumstances  connected  with  the  British  treaty,  have 
been  very  unnecessarily  lugged  in,  to  increase  the  prejudices  against  this 
bill.  It  has  been  insinuated  that  British  influence,  operating  through  this 
institution,  has  prevented  the  Government  from  taking  strong  measures  against 
Great  Britain;  but  in  what  manner  this  has  been  effected,  gentlemen  have  not 
been  good  enoudi  to  explain.  Did  it  prevent  Mr.  Jefferson  from  taking  a  war 
course?  For  I  believe  it  is  generally  understood  that  he  was  opposed  to  a 
war.  Has  it  operated  upon  the  present  Executive?  Such  a  suggestion  will 
not  be  made.  I  have,  during  my  service  here,  given  a  fair  and  faithful  sup- 
port to  the  administration,  and  I  have  certainly  voted  for  stronger  measures 
than  they  were  willing  to  accept.  It  is  due  to  the  10th  and  llth  Congresses, 
who  have  been  so  much  abused,  to  state,  that  their  course,  as  regards  the 
question  of  peace  or  war,  has  been  in  perfect  unison  with  the  views  of  the  late 
and  present  Presidents.  Let  it  not  be  inferred  that  I  am  disposed  to  find 
fault;  I  believe,  when  we  consider  the  very  extraordinary  state  ot'the  foreign 
world,  and  retrospect  the  embarrassing  circumstances  which  have  surrounded 
us,  the  course  pursued  by  them  ought  to  be  deemed  substantially  correct, 
certainly  so  as  respects  their  leading  object,  which  has  been  to  avoid  making 
this  country  a  party  in  the  present  war.  If  I  was  disposed  to  censure,  it 
would  be  for  not  making  an  effort  to  chastise  some  of  the  British  armed  ves- 
sels, which  lay  in  our  waters  after  the  affair  of  the  Chesapeake,  in  open  con- 
tempt of  the  President's  proclamation;  if  a  single  vessel  had  been  driven  out 
or  compelled  to  strike  her  colors,  it  would  have  healed  the  wound  inflicted  on 
the  national  pride  and  feeling,  by  the  outrage  by  the  Leopard. 

That  this  Government  should  have  an  influence  with  foreign  Governments, 
proportioned  to  the  interest  their  subjects  have  in  our  funds,  is  probable,  but 
how  this  interest  gives  them  an  influence  here,  I  am  at  a  loss  to  perceive: 
foreigners  cannot  even  vote  in  the  appointment  of  directors.  If  there  is  any 
reality  in  this  idea  of  foreign  influence  through  this  institution,  why  did  gen- 
tlemen permit  the  present  stockholders  to  be  incorporated  into  the  bill  infro- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

duced  last  year?  And  why  was  not  a  provision  inserted,  to  prevent  foreigners 
from  purchasing  additional  stock? 

We  are  told  too  of  their  partiality  in  discounts.  I  might  answer  this  argu- 
ment, by  asking,  what  bank  or  what  administration  has  not  been  partial? 
What  member  of  this  Senate  has  never  used  his  influence  in  favor  of  his 
friends  against  men,  perhaps,  of  more  merit?  If  partial  evils  or  small  impro- 
prieties, are  to  authorize  a  war  of  extermination,  against  our  institutions,  none 
would  prove  so  immaculate  as  to  escape  the  general  catastrophe.  By  the  bill 
reported,  an  odious  feature  in  the  present  charter,  granting  an  exclusive  pri- 
vilege, is  expressly  repealed,  and  the  Government  authorized  to  subscribe 
stock  and  appoint  directors.  This  will  give  us  a  sufficient  control  to  guard 
against  all  the  evils,  real  or  imaginary,  which  have  been  complained  of.^  1 
have  heard  no  gentleman  advocate  a  simple  renewal  of  the  charter.  This 
charge  of  partiality,  on  the  score  of  party,  at  least  for  the  last  twelve  years, 
has  been  completely  repelled  by  the  deputation  of  five  from  the  mechanics 
and  manufacturers  of  Philadelphia,  and  let  it  be  remembered,  too,  that  these 
men  are  republicans  of  the  first  water.  We  are  arraigned,  sir,  for  the  great 
attention  and  respect  shown  to  the  two  deputations  from  Philadelphia,  oue  in 
behalf  of  the  mercantile,  the  other  of  the  manufacturing  interest;  from  the 
latter  we  derived  the  most  of  the  facts  which  have  been  detailed  to  the  Senate. 
They  did  not  come  armed  with  any  political  resolutions,  to  influence  our  deli- 
berations; no,  they  were  sent  to  represent  the  embarrassments  of  the  com- 
mercial and  manufacturing  classes  in  Philadelphia,  arising  from  the  appre- 
hended dissolution  of  the  bank.  And  was  it  improper  in  the  committee  to 
hear  them?  Their  candor  and  respectability  were  not  doubted  by  those  of  the 
committee  most  opposed  to  the  bank.  Is  any  thing  more  common  in  Kng- 
land  than  for  Parliament  to  hoar  witnesses,  and  even  counsel,  in  behalf  of  any 
class  of  men  whose  interest  is  supposed  to  be  affected  by  a  measure  depencf- 
ing  before  them?  And  shall  we  deny  to  American  citizens  privileges  enjoyed 
by  British  subjects? 

Gentlemen  say  the  embarrassments  in  Philadelphia  could  not  have^eenoc-  " 
casioned  by  the  Bank  of  the  United  States,  because  they  continue  to  dis- 
count as  usual.  If  I  recollect  the  evidence,  and  I  hope  to  be  corrected  if  I 
mistake  it,  it  was  this:  that  the  calling  in  of  ten  per  cent,  on  their  debts 
occasioned  such  a  pressure,  that  they  were  prevailed  upon  to  extend  their 
discounts,  until  the  ultimate  decision  of  Congress  should  be  known.  I  have 
heard  it  seriously  urged,  that  the  evils  and  inconveniences  to  be  expe- 
rienced from  its  dissolution,  prove  it  to  be  a  dangerous  institution;  the  same 
argument  would  prove  that  the  Government  ought  to  be  destroyed.  Nothing, 
indeed,  seems  too  absurd  for  the  human  mind  to  seize  upon,  when  under  the 
influence  of  passion  or  misguided  zeal. 

I  must  omit,  Mr.  President,  many  of  the  remarks  I  intended  to  offer  to  the 
Senate,  on  this  bill;  I  owe  it  to  other  gentlemen,  who  wish  to  express  their 
views.  Before  I  sit  down,  I  beg  leave  to  say  a  few  words  about  the  liberty  or 
tyranny  of  the  press.  Tyranny  is,  to  me,  sir,  a  hideous  fiend  in  every  possible 
form.  A  press,  well  conducted,  is  invaluable;  but  this  palladium  of  our  rights 
may,  if  permitted  to  exercise  an  undue  influence,  be  made  the  instrument  to 
entomb  the  liberties  of  this  People.  With  what  indignation  would  an  attempt, 
through  the  medium  of  the  press,  to  intimidate  a  court  or  jury,  in  relation  to  a 
controversy  while  pending,  be  viewed;  and  what  course  would  be  taken?  I 
need  not  answerthe  question.  And  is  it  not  equally  important  that  our  deli- 
berations should  be  free  from  any  improper  and  irresponsible  influence?  After 
I  have  given  my  vote,  I  am  ready  to  meet  investigation;  but  this  system  of 
abusing  and  denouncing  members  who  may  speak  or  vote  for  or  against  a  mea- 
sure depending  before  Congress,  is  a  monstrous  outrage  upon  the  indepen- 
dence of  the  National  Legislature;  and  every  attempt  ot  editors  to  influence 
their  decision  by  assailing  or  exciting  unfounded  prejudices  against  them  re- 
specting a  subject  upon  which  they  are  deliberating,  ought  to  be  reprobated  and 
resisted  by  every  friend  to  his  country. 


374  BANK  OF  THE  UNITED  STATES. 

If  it  is  once  understood  that  Congress  are  controlled  by  the  dictatorial  arro- 
gance of  the  press,  what  will  be  the  consequence?  However  pure  the  presses 
may  now  be,  if  it  should  beconie  an  object  with  a  foreign  nation  to  give  a  di- 
rection to  our  measures,  or  of  a  junto  of  assassins  behind  the  curtain  to  pro- 
scribe every  honest  independent  man  from  the  confidence  of  the  People,  a 
sufficient  number  of  them  will  be  purchased  at  any  price;  and  through  this 
medium,  if  wrell  combined  and  organized,  an  unseen  power  will  guide  our 
councils. 

My  honorable  friend  from  Georgia  has  been  reminded  of  the  Macedonian 
phalanx.  I  trust,  sir,  we  shall  ever  be  found  associated  with  a  phalanx,  Ame- 
rican, republican,  in  heart  and  in  sentiment.  I  will  not  sacrifice  the  interests 
of  my  constituents,  for  fear  of  being  called  hard  names.  The  epithets  of  quid  - 
ism,  quadroonism,  or  any  other  ism,  which  malice  or  policy  may  suggest,  shall 
not  drive  me  from  the  course  called  for  by  the  public  good.  I  am  proud  that 
I  represent  a  People,  just,  generous,  and  independent;  not  to  be  carried  a\yay 
by  unmeaning  clamor.  Before  they  discard  a  public  servant,  they  will  view 
him,  both  on  the  political  theatre,  and  in  the  walks  of  private  life.  They  know, 
too  well,  that  those  are  not  al  ways  the  best  Christians,  who  sing  hallelujahs  on 
the  house  top;  nor  have  they  forgotten  the  celebrated  Sempronius,  who,  on  the 
approach  of  Caesar,  thundered  war  in  the  Roman  Senate,  and  at  the  same 
time  was  secretly  co-operating  with  the  traitor  to  overthrow  the  liberties  of 
the  Roman  People. 

Deeply  impressed,  Mr.  President,  with  the  opinion,  that  the  rejection  of  this 
bill  will  give,  at  least,  a  temporary  check  to  the  prosperity  of  the  rising  State 
from  which  I  come,  I  shall  give  my  negative  to  the  motion  to  strike  out  the 
first  section.  Yes,  sir,  not  only  the  interest,  but  the  importance  of  that  State 
in  the  Union,  is  about  to  be  sacrificed.  When  I  look  beyond  the  mountain, 
and  remember  that  Kentucky  has  nurtured  me  almost  from  my  cradle — that 
she  has  bestowed  on  me  her  choicest  honors — my  bosom  is  filled  with  emotions 
of  gratitude,  which  impel  me  to  say,  on  this,  as  on  all  other  occasions,  Ken- 
tucky, I  am  only  thine! 

FEBRUARY  16,  1811. 

Motion  to  strike  out  the  first  section  of  the  bUl. 

Mr.  SMITH,  of  Maryland,  said,  that,  in  seconding  the  motion  to  strike  out 
the  first  section  of  the  bill,  he  had  pursued  a  course,  which,  in  his  opinion, 
was  the  most  correct.  When  I  first  took  a  seat  in  Congress  (said  he)  the 
course  of  proceeding  was  to  fix  the  principle  by  resolution,  and  that  once 
fixed,  to  send  it  to  a  committee  to  report  a  bill.  By  a  motion  to  strike  out 
the  first  section  the  principle  will  be  tried,  and  the  Senate,  if  the  motion  fails, 
will  go  into  a  discussion  of  the  provisions  of  the  bill.  This  I  conceive  a  bet- 
ter course,  than  for  the  Senate  to  go  into  discussion  of  the  details  of  a  subject 
which  would  probably  be  ultimately  rejected  on  the  general  ground  of 
principle. 

The  gentleman  who  introduced  this  subject  spoke  with  great  animation  and 
with  great  feeling  against  the  press  or  presses  which  have  undertaken  to  give 
their  opinions  upon  this  great,  and  important  question.  He  spoke  with  warmth, 
and  said  that  wnoever  knew  him  would  not  believe  that  he  would  permit  him- 
self to  be  driven  out  of  his  opinion  by  any  man  or  set  of  men.  There  is  no 
man,  sir,  the  least  acquainted  with  the  gentleman  from  Georgia  (Mr.  CRAW- 
FORD) but  will  believe  his  declaration.  But  another  result  may  be  appre- 
hended; that  those  who  feel  so  great  an  oftence  at  the  freedom  the  press  lias 
taken,  may  be  driven  into  the  opposite  course  by  the  irritation  ot  their  feelings. 
Certainly  those  feelings  must  have  been  extremely  strong  with  the  gentleman 
from  Kentucky  (Mr.  POPE)  to  have  induced  him  to  terminate  his  speech  with 
an  oration  hostile  to  the  liberty  of  the  press.  Are  the  gentlemen  from  Geor- 
gia and  Kentucky  the  only  Senators  who  have  had  their  feelings  wounded  by 
the  conduct  of  the  press  upon  this  subject?  Sir,  if  the  gentleman's  opinions 
and  sentiments  have  been  censured  by  one  description  of  presses,  he  may 
find  consolation  in  having  been  greatly  eulogized  by  others.  For  more  than  a 


ON    THE    BILL   TO    RF.NKW    THE   CHARTER    OF    1791.  375 

year,  those  on  the  same  side  of  this  question  with  myself  have  had  their  opin- 
ions tortured  into  every  shape,to  destroy  them  in  the  estimation  of  the  People; 
not  only  in  this  session  but  during  the  last.  Sir.  there  are  some  presses  in  the 
Union  which  could  not  exist,  whose  papers  would  not  be  read,  but  for  the  dis- 
cussion of  individual  character.  Is  any  advantage  to  be  derived  from  com- 
plaining of  this?  It  results  from  the  nature  and  temper  of  our  Government, 
and  the  best  way  I  have  ever  found  to  treat  it,  is,  with  silent  contempt,  lie 
who  does  otherwise  engages  in  the  contest  at  a  great  disadvantage,  and  will 
seldom  come  out  the  victor.  In  the  same  presses  of  which  those  gentlemen 
complain,  I  have  seen  them  botli  eulogised,  and  properly,  for  their  conduct  on 
the  subject  of  the  embargo  and  West  Florida  questions. 

If  the  press  be  an  evil  in  this  respect,  we  must  submit  to  it;  those  gentlemen 
who  take  a  high  and  prominent  stand  must  expect  to  be  noticed.  Sometimes 
gentlemen  will  be  put  down  by  the  press,  but  (their  conduct  being  correct) 
will  more  frequently  be  written  up  by  its  abuse. 

It  has  been   objected  that  this  question  is  discussed  on  the  ground  of  par- 
ty; and  the  gentleman  from  Georgia,  as  I  understood  him,  said,  that  this  had 
been  made  a  party  question  elsewhere,  and  might  be  so  here.  [Mr.  CRAWFORD 
said  he  had  mentioned  no  place,  but  had  said  that  this  might  be  made  a  par- 
ty question.]     I  understood  the  gentleman  to  say  (said  Mr.  S.)  that  this  may 
again  be  made  a  party  question.     But  for  this  obr.ervation  of  the  gentleman, 
the  subject  of  party  would  probably  not  have  been   introduced  at  all:  and  we 
must  indeed  shut  our  eyes,  or  we  cannot  avoid  seeing  that  this  is  made  a  party 
question,  at  least  on  one  side.     Do  you  see  on-*  gentleman,  one  solitary  gen- 
tleman of  one   party,  discriminated  generally  a-  federal,  who  does  not  vote 
for  this  measure  throughout?     1)  >  you  see  one  public  body  in  Philadelphia  or 
New  York,  which  has  a  majority  ot  federal  directors  or  agents,  which  has  not 
come  before  you  with  memorials  drawn  up  with  the  ingenuity  of  lawyers,  to 
impose  on  your  judgment?    Have  not  the  same  part)  prepared  memorials,  and 
got  the  subscription  of  every  one  of  their  caste,  bringing  forward  nearly  the 
same  number  of  petitioners  as  they  have  of  federal   voters?     Have  they  not 
done  so  in  Baltimore?    Of  that  city  I  Mould  say  as  little  as  may  be:  for,  being 
a  manufacturing  as  well  as  a  commercial  city,  it  has  stirred  up  an  animosity 
in  some  gentlemen  against  it,  not  easily  accounted  for.     In  Baltimore,  on  a 
warmly  contested  election,  the  federal  party  mustered  814  votes,  all  they 
could   parade   with  every  exertion.     To  the   petition  for  the  renewal  of  the 
charter  of  the  bank  there  are  810  odd  signatures!     They  have  gained  some 
few  since  the  last  contest.     Is  this   coincidence  of  numbers,  this  exclusively 
federal  petitioning,  no  mark  of  party?    They  have  also  got  one  public  body  in 
Baltimore  to  memorialise  in  favor  of  the  bank;  the  rest  were  not  to  be  intimi-       i 
dated  by  the  threats  of  the  Bank  of  the  United  States.     What,  sir,  have  the      / 
other  parly  done?     Have  they  disturbed  the  quiet  of  either  House?     Have 
they  brought  forward  tin1  mass  ni  th'/ir  voters  as  signers  to  petitions?    No,  sir, 
they  have  trusted  the  subject  to  their  Representatives,  confiding  in  their  dis- 
position and  ability  to  speak  their  sentiments.     The  representation  of  New 
York,  Philadelphia,  Baltimore,  Norfolk,  and  Chrrleston,in  the  other  House, 
have  opposed  the  renewal  of  the  charter.    Every  city,  high  in  estimation  as  a 
commercial  city,  is  opposed   to  the  renewal   of  the  charter,  except  Boston. 
This  speaks  with  a  strong  voice  what  are  the  feelings  of  the  People;  stronger 
evidence  cannot  be  presented  to  the  human  mind.     Far  be  it  from  me,  sir',  to 
endeavor  to  work  up  the  feelings  of  party  spirit  on  this  occasion;  but  the  thing 
itself  was  one  of  the  first  causes  which  created  the  present  parties,  and  sepa- 
rated man  from  man,  and  brother  from  brother.    This  measure  was  originally 
brought  forward  and  adopted  when  the  representation  in  Congress  was  not 
bottomed  on  an  actual  but  supposed  census  ot  the  People  of  the  United  States. 
Sixty-five  members  composed  Congress  then,  which  was  a  representation  ta- 
ken by  accident.     If  a  proportionate  representation  had  been  given  to  the 
States,  according  to  their  population,  the  law  probably  would  not  have  passed. 
The  States  of  North  Carolina  and  South  Carolina  had  each  five  representa- 
tives, being  thus  placed  on  an  exact  equality.  Now  North  Carolina  has  tidelvc. 


376  BANK    OF   THE    UNITED    STATES. 


South  Carolina  only  eight.  What  was  the  vote  then?  Out  of  sixty-five  mem- 
bers, thirty-nine  voteclTor  the  bill.  It  was  not,  as  my  friend  from  Kentucky 
said,  a  subject  not  fully  discussed  or  carried  by  a  tremenduons  majority. 

/The  bank  haying  been  formed,  it  may  not  be  improper  for  me  to  take  some 
view  of  its  beginning  and  its  operation.  At  first,  its  operations  were  con- 
fined to  Philadelphia;  it  extended  its  branches,  some  time  afterwards,  to 
Boston,  New  York,  Baltimore,  and  Charleston.  Wherever  it  extended  its 
influence,  dissension  commenced;  wherever  it  placed  its  foot,  it  became  abso- 
lutely necessary  for  the  States  to  erect  another  bank,  to  counterbalance  its  pe- 
cuniary and  political  influence.  In  Philadelphia  it  began  to  oppose  certain 
people,  and  turn  down  their  paper.  The  State  of  Pennsylvania,  in  defence  of 
its  own  citizens,  created  the  Bank  of  Pennsylvania.  Here  was  a  check  upon 
its  pecuniary  and  political  operations.  I  believe  1  am  not  mistaken  when  1 
say,  that,  soon  after  it  commenced  in  Boston,  a  new  bank  was  established  there, 
from  what  cause  I  know  not.  In  Baltimore,  sir,  it  soon  taught  us  a  lesson, 
and  we  met  the  lesson  as  other  States  had  done.  Charleston  and  New  York 
acted  in  a  similar  way.  Operating  as  the  bank  did  on  the  politics  of  the  coun- 
try, before  its  effects  were  neutralised  by  competition,  man  bein°;  man,  place 
him  where  you  will,  those  concerned  in  the  direction  of  the  bank  felt  power 
and  exercised  it.  When  the  British  treaty  was  pending  before  Congress,  the 
president  and  directors  (as  I  am  informed)  themselves,  carried  about  a  me- 
morial to  Congress  in  its  favor,  with  what  view,  and  with  what  effect,  may 
easily  be  conceived.  In  Baltimore  (until  we  were  able  to  check  them  by  other 
banks)  its  political  influence  was  great.  Prior  to  the  great  struggle  between 
the  parties,  in  1798,  they  did  permit  one  democrat  to  be  within  the  walls  of 
the  sanctuary,  (as  a  director)  a  gentleman  of  as  much  respectability  and  inde- 
pendence of  character  as  any  one  of  the  direction.  He  was,  however,  (immedi- 
ately after  daring  to  give  his  vote  in  favor  of  a  democratic  candidate)  put  out; 
and  since  that  time  no  man  of  democratic  principles  has  been  permitted  to  en- 
ter its  walls  as  a  director.  Men  must  shut  their  eyes  to  the  fact  of  this  being 
a  party  institution,  when  they  see  that  no  democrat  has  been  admitted  to  the 
direction  of  the  bank,  but  in  this  city,  and  New  York,  where  the  collector 
was  admitted  as  a  director,  for  the  purpose  of  protecting  the  rmblic  money,  at 
the  instance  (it  is  said)  of  the  Secretary  of  the  Treasury.  Can  we  shut  our 
eyes  so  as  not  to  see  that  men  hostile  to  the  democratic  party,  and  of  course 
to  the  success  of  the  administration  of  the  Government,  are  not  the  most  pro- 
per persons  to  have  charge  of  its  pecuniary  concerns?  I  would  have  been  ve- 
ry unwilling  to  have  gone  into  this  part  of  the  subject;  but  when  the  gentle- 
man from  Kentucky,  scarcely  able  to  retain  his  rage,  cried  out,  party!  party! 
L  I  was  bound  to  show  that  it  was  not  those  with  whom  I  act,  who  had  any 
^  agency  in  presssng  the  subject  of  party  into  the  present  discussion. 

s  The  gentleman  from  Kentucky  reprobates  the  system  of  petty  mischievous 
intrigue,  for  the  purpose  of  carrying  measures  through  Congress.  No  man, 
sir,  despises  or  contemns  such  conduct  more  than  I  do.  But  on  whose  side 
has  this  intrigue  been?  It  is  necessary  to  put  the  saddle  on  the  proper  horse. 
Have  we  gone  to  insurance  companies  or  corporations  of  one  kind  or  another? 
Have  we  intrigued  with  the  People,  to  induce  them  to  take  sides  with  us?  No, 
sir,  we  have  been  tranquil;  we  wanted  no  aid  of  that  kind.  Have  wre  sent 
persons  here  to  intrigue  with  members,  or  a  deputy  to  remain  here  the  whole 
of  the  last  and  present  session,  to  explain  to  Congress  the  effect  of  putting 
down  the  bank,  and  threaten  them  with  destruction  and  ruin  to  the  United 
States,  if  they  passed  the  measure?  No,  sir,  we  have  had  no  one  here.  Have 
we  stirred  up  the  People  in  town  meetings,  to  aid  us  by  memorials?  No  such 
thing,  sir.  Have  we  called  meetings,  and  induced  honest  mechanics  to  come 
here  to  influence  Congress  by  idle  fears,  impressed  upon  them  by  those  who 
are  interrested,  to  tell  a  tale  that  shall  answer  our  purposes?  No,  sir,  we  have 
pursued  no  such  course. 

Respectable  merchants,  I  observe,  form  a  part  of  the  bank  deputies— for 
what?  To  represent  the  late  fall  of  the  price  of  flour  as  a  consequence  of  the 
danger  of  the  bank  charter  not  being  renewed,  and  thereby  to  alarm  the  minds 


ON   THE   BILL  TO  RENEW    THE  CHARTER  OF   1791.  377 

nf  members.  I  am  sorry  that  men  of  such  respectable  character  did  permit 
themselves  to  come  here  on  such  an  errand.  I  think  I  have  seen  in  the  papers 
that  one  of  the  manufacturers  (now  here)  on  being  asked  to  sign  a  petition  for 
a  renewal  of  the  charter  for  twenty  years,  said,  he  would  rather  cut  oft  his 
right  hand  than  sign  it;  he  wished  for  a  renewal  for  a  short  time,  to  give  the 
bank  an  opportunity  to  wind  up  its  affairs.  If  this  statement  be  true,  and  of 
its  truth  1  have  no  cause  to  doubt,  it  shows  the  depth  of  that  intrigue  which 
sent  this  gentleman  here,  through  the  instrumentality  of  his  excellent  charac- 
ter, to  get  a  renewal  of  the  charter  for  a  period  which  he  never  contemplated. 
These  are  intrigues  for  which  men  ought  to  blush,  and  from  which,  I  thank 
God,  we  are  exempt.  At  the  time  these  deputies  arrived,  there  were  three 
mechanics  of  Baltimnre  here,  of  character  inferior  to  none,  and  of  wealth 
inferior  to  few  in  Philadelphia,  and  who  would  have  given  a  different  view  of 
the  subject,  if  they  had  been  asked  to  appear  before  the  committee.  I  thought 
it  unnecessary;  I  wanted  no  assistance  of  that  kind,  no  species  of  intrigue. 
They  did,  however,  declare,  sir,  that  granting  this  charter  \yould  be  a  death 
blow  to  the  politics  of  the  State  of  Maryland.  They  did  believe  the  renewal 
would  be  injurious  to  them:  for  neither  they  nor  many  of  the  manufacturers  of 
Baltimore  had  received  much  advantage  from  the  branch  bank.  They  had  their 
own  banks,  from  which  they  generally  received  accommodation.  Another 
species  of  intrigue  is  carried  on,  to  wit:  by  pamphleteering.  The  press  is  groan- 
ing with  pamphlets — for  what?  To  teach  the  minds  of  members,  on  this  ques- 
tion, the  necessity  of  renewal,  and  probability  of  destruction  to  the  nation,  if 
their  demands  are  not  complied  with.  Our  tables  are  covered  with  pamphlets 
of  that  tendency.  Has  tlu-re  been  any  thing  of  the  kind  on  our  part? 

I  will  now  talve  a  view  of  a  part  of  tne  subject,  into  which,  nermit  me  to  say, 
I  have  been  pressed  by  other  gentlemen,  to  wit:  What  has  been  the  operation 
of  the  bank,  in  regard  to  the  collection  of  duties,  prior  to  1800?  Prior  to  the 
institution  of  the  bank,  the  collectors  took  the  bonds  of  the  merchants  for  du- 
ties, received  the  money,  and  deposited  it  for  safe-keeping  in  the  State  banks, 
where  there  were  any.  Alter  the  bank  was  erected,  it  had  (for  some  time)  but 
two  branches;  still  the  revenue  was  as  well  collected,  (I  am  informed)  where 
the  branch  Banks  of  the  United  States  were  not,  as  where  they  were;  and  yet 
(it  is  said)  we  cannot  have  that  reliance  or  confidence  in  the  banks  of  the 
States  as  we  can  on  the  branches  of  the  Bank  of  the  United  States.  The  gen- 
tleman from  Massachusetts  told  us  that  in  five  New  England  States  there  was 
but  one  solitary  branch  bank;  and  I  could  not  find,  from  any  thing  that  the 
gentleman  said,  that  he  apprehended  any  distress  would  overtake  the  New 
England  States.  The  gentleman  from  Kentucky  (Ma.  POPE)  told  us  that,  in 
Boston,  the  branch  was  the  great  bank  of  deposite;  that,  in  the  trifling  out  ports, 
it  was  not  of  so  much  consequence  to  have  branches,  the  whole  collections  be- 
ing drawn  into  the  branch  bank  at  Boston.  In  order  to  show  that  there  is  an 
absolute  necessity  for  these  branch  banks  in  the  collection  of  the  revenue,  the 
gentleman  (MR.  POPE)  ought  to  show  that  the  company  can  place  a  bank 
wherever  money  is  to  be  collected,  without  enlarging  the  present  capital:  for, 
if  it  were  extended  beyond  its  present  amount,  his  concience  would  be  prick- 
ed: for,  (if  I  understood  him)  he  does  not  advocate  the- constitutionality  of  the 
bank,  if  its  capital  was  extended  beyond  what  he  supposes  to  be  necessary. 

[MR.  POPE  said  his  idea  was,  that  a  bank  of  thirty  millions  must  extend  its 
branches  where  there  was  no  necessity  for  them,  and  where  banks  of  another 
description  were  competent  to  all  the  ordinary  purposes  of  society.] 

And  of  coursej  said  Mr.  SMITH,  if  the  capital  extended  beyond  the  limits  of 
the  gentleman's  idea  of  necessity,  it  would  be  doubtful  whether  it  was  con- 
stitutional or  not.  Can  a  ten  millions  bank  extend  itself,  as  the  gentleman 
contemplates,  to  every  place  where  the  United  States  have  moneys  to  collect? 
In  the  State  of  Massachusetts  there  are  twenty-three  collection  districts;  Boston 
owns  83,000  tons  of  shipping;  the  only  branch  of  the  United  States'  Bank  in  the 

of 


378  BANK  OF  THE  UNITED  STATES. 

had  no  branch,  were  of  little  importance.  In  the  town  of  Salem,  where  there 
is  no  branch  bank,  there  is,  perhaps,  more  East  India  trade  than  from  any 
town  in  the  United  States;  the  town  of  Naritucket,  also,  is  a  great  trading 
place;  the  town  of  Portland  is  a  great  trading  town,  arid  there  are  a  number 
of  other  towns  of  great  commerce  in  Massachusetts,  none  of  which  have  a 
branch  bank;  and  yet  I  am  informed,  from  high  authority,  that  there  are  no 
towns  in  the  Union  where  the  revenue  is  better  collected  than  in  those  towns. 
The  branch  bank  at  Boston,  then,  may  be  considered  as  a  treasury  chesty 
and  has  nothing  to  do  with  the  collections;  an  office,  where  the  Secretary  of 
the  Treasury  keeps  an  account,  to  know  whether  the  State  banks  transmit 
the  money  properly  to  Boston  or  not.  I  have  been  informed,  sir,  by  the 
Comptroller  of  the  Treasury,  that  no  where  are  collections  better  made  than 
where  there  is  no  branch  bank.  It  is  among  the  most  ridiculous  of  all  ideas, 
to  say  that  the  bank  has  any  influence  on  the  payer  of  the  bond.  The  influence 
on  the  payer  is  this,  and  this  only,  that,  if  the  merchant  does  not  pay  his  bond 
when  due,  he  has  no  longer  credit  at  the  custom  house;  he  is  compelled 
thereafter  (and  until  his  bond  is  paid)  to  pay  the  cash  for  all  duties,  and  in 
that  way  only  does  he  suffer.  I  agree  with  the  Secretary  of  the  Treasury, 
that  the  creation  of  banks  has  contributed  to  produce  the  greater  punctuality 
of  payment;  but  this  arises  as  well  from  the  State  banks  as  from  those  of  the 
United  States.  A  note  given  to  an  individual  now,  must  be  paid,  or  the  credit 
of  the  signer  is  lost;  but  that  has  no  operation  as  to  the  .collection  of  the 
revenue.  In  case  of  non-payments  of  bonds,  what  course  does  the  bank 
pursue  in  relation  to  custom  house  bonds?  The  same  as  with  ordinary  notes. 
If  the  bond  be  not  paid  when  due,  the  cashier  returns  it  to  the  collector,  who- 
puts  it  in  suit.  The  bank  is  a  mere  place  of  deposite  for  the  safe  keeping  of 
the  bond,  and  has  no  farther  interest  in,  or  discretion  over  it,  after  its  pay- 
ment is  refused.  There  are  in  the  United  States,  including  the  territories, 
ten  banks,  emanating  from,  and  including  the  mother  bank  of  the  United 
States^  and  without  these  banks  we  are  told  the  revenue  cannot  be  collected. 
This  does  appear  to  me  to  be  one  of  the  most  extraordinary  arguments  that 
ever  entered  the  mind  of  man.  Let  us  examine  it.  In  the  State  of  Massa- 
chusetts there  is  but  one  bank  to  collect  from  three  and  twenty  ports,  pos- 
sessing, independent  of  Boston,  one-fifth  of  the  whole  tonnage  of  the  United 
States;  there  is  no  Bank  of  the  United  States  in  Connecticut,  and  yet  Con- 
necticut pays  her  duties  as  punctually  as  any  State  in  the  Union;  there  is  no 
branch  in  Rhode  Island,  and  whoever  heard  that  Rhode  Island  did  not  pay 
her  duties  punctually?  Maryland  has  eight  ports  and  but  one  branch.  Vir- 
ginia has  eleven  ports,  and  no  branch  but  a  little  one  at  Norfolk,  whose  opera- 
tion is  confined  within  the  limits  of  that  town.  Where  there  are  no  branch 
banks  of  the  United  States  in  the  ports  of  that  State,  (Richmond  and  Peters- 
burg  for  instance)  the  duties  are  better  paid  than  where  there  is  a  branch;  I 
am  authorized  to  say  so.  In  North  Carolina  there  is  no  branch  bank,  and 
yet  there  is  no  difficulty  whatever  in  the  collection  of  the  revenue.  South 
Carolina  has  a  branch  bank.  Georgia,  with  four  ports,has  but  one  branch.  My 
object  (it  will  be  observed)  is  to  show,  that  the  revenue  has  been  as  well  col- 
lected where  there  were  no  branch  banks,  as  where  they  have  existed.  Let 
me  tell  the  gentleman  (Mr.  POPE)  that  the  banks  of  the  United  States  afford 
no  facility  in  the  collection  of  the  revenue,  that  it  is  possible  for  them  to  avoid . 
I  state  this,  as  deducible  from  the  report  of  the  Secretary  of  the  Treasury. 
He  states  that  the  re  is  in  the  Bank  of  Manhattan  188,000  dollars  of  the  public 
money.  From  what  cause  did  it  get  there?  The  truth  (it  appears)  was,  that 
the  branch  bank  of  the  United  States  in  New  York  refused  to  receive  Con- 
necticut or  Rhode  Island  paper,  and  the  Secretary  of  the  Treasury  was  com- 
pelled to  deposite  it  in  the  Manhattan  Bank,  which  bank  had  agreed  to  receive 
that  paper.  Here,  then,  sir,  we  see  that  a  State  bank,  although  it  gains  no 
advantage  from  the  depesite  of  New  York,  yet  has  accommodated  the  treasury 
by  taking  and  accounting  for  the  bank  paper  of  Connecticut  and  Rhode  .Island, 
and  placing  it  in  a  situation  in  which  it  can  be  made  use  of  with  facility. 
Again  we  find  that,  in  Georgetown,  the  Bank  of  Columbia  has  a  cteposite  of 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     379 

115,000  dollars  of  public  money.  How  did  it  get  there?  The  Secretary 
informs  us,  in  his  report,  "  that  the  deposites  in  the  Bank  of  Columbia  arise 
from  occasional  drafts  on  some  collectors  in  Virginia,  and  from  the  receipt  of 
moneys,  paid  at  the  treasury  for  lands,  patents,  &c.  in  bank  notes  not  receiva- 
ble at  the  office  of  discount  and  deposite,  Washington."  That  is,  sir.  the 
branch  bank  of  Washington  refused  to  receive  Virginia  paper  from  those 
collectors,  and  refused  to  give  any  aid  or  assistance  in  the  collection  of  the 
revenue,  except  that  which  went  to  their  own  emolument.  Not  so  with  the 
Bank  of  Columbia.  It  opened  its  vaults  to  all;  and  if  any  man  desires  it,  he 
may  deposite  in  the  Bank  of  Columbia,  the  paper  of  Virginia,  Maryland,  or 
Pennsylvania,  and  the  cashier  will  give  him  a  check  on  some  one  of  the  banks 
of  those  States  for  the  amount.  This  they  will  not  do  in  the  branch  bank. 
Do  gentlemen  suppose  that  the  notes  of  the  United  States'  Bank  pervade  the 
whole  United  States?  No,  sir,  they  do  not.  Does  a  gentleman  representing 
Ohio  bring  bank  notes  of  other  States  to  pay  for  his  constituents  tor  land 
bought  of  the  United  States,  or  debts  due  in  Philadelphia?  Can  he  go  to  the 
branch  bank  and  pay  them?  No,  they  are  not  bank  notes  of  the  United 
States,  but  of  the  individual  States,  and  the  branch  bank  at  Washington  \vill 
refuse  to  receive  them.  The  Bank  of  Columbia  (on  the  contrary)  will  receive 
them,  and  will  (if  he  wishes)  pay  the  money  in  Baltimore,  Philadelphia,  or 
New  York,  or  \yill  pay  it  here  into  the  treasury.  WThatbank  is  it  that  collects 
the  revenue  derived  from  the  sales  of  western  lands?  Not  that  of  the  United 
States,  which  is  represented  as  indispensably  necessary  for  the  collection  of 
the  revenue.  No,  sir,  the  collection  is  made  by  the  Bank  of  Pennsylvania, 
which  bank  established  a  branch  at  Pittsburg,  and  collects  the  money  due  the 
United  States,  from  the  purchasers  of  public  lands,  as  stated  in  the  report  of 
the  Secretary  of  the  Treasury. 

There  has  been  one  great  mistake  entertained  by  a  gentleman,  (Mr.  LLOYD) 
with  respect  to  New  Orleans.  He  supposes  that  there  is  no  territorial  bank 
in  that  city,  and  asks  how  the  collection  of  duties  will  be  made  without  one. 
The  Bank  of  the  United  States  there,  has  a  capital  of  only  300,000  dollars; 
that  of  the  territory  has  600,000  dollars,  as  good  a  bank,  too,  as  any  in  the 
United  States.  And  (notwithstanding  what  has  been  said)  the  banks  of  New 
Orleans  are  in  as  good  credit,  and  have  more  specie,  in  proportion  to  the  popu- 
lation of  the  city,  than  any  banks  in  the  United  States.  If  we  should  be 
fortunate  enough  to  obtain  a  majority  for  destroying  this  bill,  the  gentleman 
need  be  under  no  apprehension  for  any  injurious  result  arising  at  New 
Orleans.  The  public  money  will  be  as  safe  there  as  in  any  bank,  and  we 
shall  find  as  honorable  men  directors  of  the  territorial  bank,  as  in  that  of  the 
branch  Bank  of  the  United  States  estabiished  in  that  city. 

There  is  scarcely  an  evil  which  has  not  been  attributed  to  the  embargo,  and 
which  is  not  now(with  as  little  justice)  attributed  to  the  expected  non-renewal 
of  the  bank  charter.  Great  failures  have  lately  taken  place  at  New  York;  bills 
of  exchange  on  London,  to  a  large  amount,  have  returned  protested,  and  the 
drawers  are  not  able  to  pay  the  holders;  and  to  the  present  critical  situation 
of  the  bank  some  gentlemen  attribute  the  distress  brought  upon  those  who 
have  suffered  by  these  failures  and  protests.  But,  Mr.  President,  what  is  the 
real  cause  of  those  failures?  They  are  confined  principally  to  New  York,  and 
may  be  attributed  to  the  following  causes:  It  is  natural  for  men  born  in  Great 
Britain  to  entertain  predilections  favorable  to  a  commerce  with  that  country; 
their  connexions,  as  well  commercial  as  of  family,  are  there;  their  credit  is 
there;  and  from  those  causes,  the  house  which  has  failed,  and  carried  so  many 
others  with  it  in  its  fall,  has  probably  directed  the  principal  part  of  its  com- 
merce to  England;  they  have  no  doubt  shipped  cotton  ana  tobacco,  the  trade 
in  which  being  in  a  great  measure  confined  to  Great  Britain,  the  natural  con- 
sequence has  been,  that  the  markets  of  England  were  completely  glutted;  to- 
bacco (except  the  very  fine  Virginia)  scarcely  paid  the  charges  of  freight  and 
commission,  and  the  loss  on  cotton  must  have  been  near  fifty  per  cent.  The 
consignees,  under  those  circumstances,  refused  to  pay  the  bills  drawn  upon 
shipment  of  those  articles.  The  bills  returned  protested,  and  ruin  to  the  Amer- 


380  BANK  OF  THE  UNITED  STATES. 

lean  shipper  has  been  the  consequence.  At  any  other  time,  the  English  mer- 
chants would  have  accepted  the  bills,  and  held  the  cargoes  for  a  better  market .  j 
but,  at  that  time,  ruin  stared  every  man  in  the  face.  No  man  in  London 
knew  who  to  trust,  and  very  few  would  enter  into  engagements  which  they 
saw  any  difficulty  in  meeting.  No  censure  ought  to  be  attached  to  the  Ameri  - 
can  shipper:  for,  by  the  usage  of  trade  between  the  U.  States  and  Europe,  the 
American  merchant  is  entitled  to  draw  for  two  thirds  the  amount  of  his  cargo, 
on  transmitting  invoices  and  bills  of  lading  with  orders  for  insurance.  Other 
causes  have  existed  to  cause  the  present  distress  in  New  York  and  elsewhere, 
to  wit:  the  seizure,  detention,  and  confiscation,  of  property  in  Denmark, 
Prussia,  and  France,  of  ships  and  cargoes  to  the  amount  of  many  millions,  on 
the  proceeds 'of  which  cargoes,  merchants  calculated  to  meet  their  engagements 
at  home,  and  to  meet  their  bills  drawn  on  London:  for,  sir,  the  merchants 
who  make  large  shipments  to  the  continent,  order  the  greatest  proportion  of 
their  proceeds  to  be  remitted  from  thence  to  London,  and  on  the  expectation 
thereof,  draw  bills  on  their  friends  there.  Disappointment  has  been  the 
consequence  of  such  seizures  and  losses;  protests  of  such  bills  and  ruin  has 
followed.  But,  Mr.  President,  we  might  (with  as  much  propriety)  attribute 
the  late  great  failures  in  England  arid  on  the  continent  to  the  expected  non- 
renewal  of  the  bank  charter,  as  those  which  have  happened  in  New  York,  or 
the  present  distress  of  the  merchants  in  the  United  States.  The  returns  of 
the  bills  protested  to  so  large  an  amount,  of  course  destroyed  the  merchant's 
credit  at  bank;  he  failed,  and,  by  his  fall,  has  caused  the  ruin  of  others. 
When  a  great  house  tails,  it  is  like  a  game  of  nine  pins;  knock  one  down,  and 
it  will  probably  carry  with  it  four  or  five  others. 

When  the  honorable  gentleman,  up  yesterday,  made  an  observation  on  the 
remarks  of  my  friend  from  Tennessee,  (Mr.  ANDERSON)  he  certainly  was  not 
warranted  in  what  he  said.  He  supposed  that  my  friend  from  Tennessee  gave 
a  vote  at  the'la^t  session  different  from  that  which  he  should  give  now.  I  can 
only  say,  for  hiito,  that  he  (Mr.  ANDERSON)  then  said,  uniformly,  "  make  your 
bill  as  good  as  you  can,  but  I  shall  vote  against  it  on  constitutional  grounds." 
He  wished  the  bill  perfect  if  it  should  pass,  though  he  was  fully  determined 
to  vote  against  it. 

We  have  been  told,  Mr.  President,  in  case  the  charter  should  not  be  re- 
newed, that  we  shall  find,  in  future,  great  difficulty  in  obtaining  loans.  What 
loans,  I  ask,  have  Government  ever  received  from  the  Bank  of  the  United 
States?  I  recollect,  when  I  first  entered  Congress,  that  Government  were 
indebted  for  loans  made  from  the  bank,  but  I  also  recollect,  that  the  bank 
complained  of  the  loans  as  an  inconvenience,  and  that  Congress  took  the  earli- 
est measure  in  their  power  to  pay  them  off,  and  have,  since  that  period,  made 
no  new  loan  from  the  bank,  until  that  made  payable  the  1st  of  January  last. 
I  will  not  inquire  whether  even  that  loan  was  necessary,  but  I  will  venture 


depc 

sand  dollars  of  the  public  money,  (the  amount  of  the  late  loan)  they  will  lend 
Government  to  the  same  amount,  and  thus  do  as  the  Bank  of  the  United  States 
has  done,  lend  you  your  own  money,,  and  very  kindly  receive  from  you  an  in- 
terest of  six  per  cent,  therefor.  We  are  told  that  the  bank  has  lately  lessen- 
ed the  discounts  of  individuals  10  per  cent,  and  that  the  merchants  are  thereby 
greatly  distressed.  Is  that  a  fact?  If  it  is,  and  great  distress  has  ensued 
therefrom,  what  will  be  the  distress  of  the  merchants  if  the  bill  now  before 
you  shall  pass,  and  if,  agreeably  to  its  provisions,  Congress  should,  at  any  time 
hereafter,  call  on  the  bank  for  the  loan  of  four  millions,  promised  by  the  bill 
If,  sir,  a  lessening  of  their  discounts  one-tenth  percent,  creates  distress,  what 
will  be  the  consequence,  when,  by  a  loan  of  four  millions,  called  for  from  the 
bank,  the  bank  shall  be  compelled  to  lessen  the  discounts  four-tenths? 

But,  sir,  the  promise  to  lend  four  millions  from  a  bank  of  ten  millions,  is 
idle;  it  is  worse,  it  is  deception  on  the  face  of  it     The  loan,  if  made,  would 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.  33! 

not  be  from  the  bank,  but  from  the  merchants,  whose  discounts  would  there- 
by be  lessened,  and  whose  ruin  would  follow. 

We  are  told  that,  if  the  charter  of  this  bank  be  not  renewed,  and  the  funds 
of  the  United  States  be  deposited  in  the  State  banks,  it  will  be  extremely 
unsafe,  because  it  is  said  we  can  have  no  control  over  them.  And  I  wish  to 
know,  sir,  what  control  we  have  over  the  Bank  of  the  United  States?  None, 
but  the  same  as  we  may  have  over  the  State  banks.  We  cannot  check  the 
operations  of  the  Bank  of  the  United  States;  and  if  they  obtain  this  charter, 
they  will  know  that  they  can  have  their  charter  renewed  whenever  they  please; 
so  that  the  fear  of  a  non-renewal  of  their  charter  will  have  no  operation  on 
them  in  future.  You  will  have  a  much  greater  control  over  the  State  banks,  be- 
cause you  are  under  no  obligation  to  put  money  in  them,  and  you  can  change 
them  whenever  you  think  proper;  the  danger  of  losing  the  public  deposites 
will  always  be  a  sufficient  control  over  their  conduct.  The  security  of  the 
State  banks  is  doubted,  however;  and  we  are  told,  very  gravely  indeed,  that 
there  is  much  more  security  in  the  mother  bank  and  her  nine  children,  than 
in  ten  independent  banks.  This  I  must  deny.  I  should,  as  a  merchant,  place 
more  continence  in  ten  independent  houses,  than  in  one  with  nine  branches. 

It  has  been  observed,  (said  he)  by  an  honorable  gentleman  from  Kentucky, 
(Mr.  POPE)  "that  the  question  on  the  Bank  of  the  United  States  was  not 
originally  a  party  question,  and  had  not  excited  much  sensibility  at  the  time." 
When  first  this  question  came  before  Congress,  sir,  it  excited  not  a  little 
sensation.  The  doings  of  the  convention  having  been  recent,  were  then 
fresh  in  the  minds  of  such  of  the  members  of  Congress  as  had  been  in  that 
body.  To  them  it  was  well  known,  that  an  unsuccessful  attempt  had  been 
mad?,  in  that  convension,  to  give  the  power  of  creating  charters.  The  subject, 
it  is  well  known,  was  very  fully  ami  amply  discussed,  on  the  passage  of  the 
charter.  The  honorable  gentleman  from  Georgia  has,  in  the  course  of  his  ar- 
gument, disclaimed  all  authority,  and  depends  (as  every  gentleman  should) 
on  a  fair  construction  of  the  instrument  itself.  Not  so  with  my  friend  from 
Kentucky,  (Mr.  POPE.)  He  bottomed  himself  on  authority,  and  called  to  his 
aid  the  great  name  of  Washington.  He  told  us,  also,  of  the  able  support  that 
measure  received  from  a  gentleman,  for  whose  virtues  and  talents  ne  always 
had  the  highest  respect,  although  generally  differing  from  him  in  politics — he 
meant  General  Hamilton.  He  also  called  into  his  aid  the  opinions  of  the  pre- 
sent Secretary  of  the  Treasury.  These,  sir,  are  powerful  authorities.  Gene- 
ral Washington,  it  is  true,  signed  the  charter,  and  gave  it  the  sanction  of  his 
name  and  authority.  But,  let  it  be  recollected,  sir,  that  General  Washing- 
ton demurred  on  the  bank  bill  till  the  last  hour  of  the  ten  days,  and  that  he 
signed  it  reluctantly  at  last.  He  took  the  opinion  of  the  then  Secretary  of 
the  Treasury,  Mr.  Hamilton,  on  the  subject;  it  was  an  able  one,  and  he  being 
at  the  head  ot  the  Treasury  Department,  it  had,  in  consequence,  a  powerful 
effect  on  the  mind  of  General  Washington.  It  was  as  ably  resisted,  in  point 
of  argument,  by  the  late  President  of  the  United  States;  and  however  high 
may  be  my  opinion  of  the  talents  of  General  Hamilton,  I  must  venture  to  be- 
lieve that,  in  point  of  a  discriminating  mind,  Mr.  Jefferson  was  no  ways  his 
inferior.  The  charter,  also,  was  opposed  by  the  then  Attorney  General  of  the 
United  States,  (Edmund  Randolph)  a  man  inferior  to  few  in  point  of  legal 
knowlege;  and,  but  for  the  impression  made  on  General  Washington  by  Ge- 
neral Hamilton,  (whose  being  at  the  head  of  the  Treasury  Department  added 
great  weight  to  his  opinion)  he  probably  never  would  have  signed  it.  In  the 
discussion  of  that  question,  a  very  able  part  was  taken  by  Mr.  Madison.  The 
name  of  that  gentleman,  as  President  of  the  United  States,  has  been  made 
use  of  by  the  gentleman  from  Kentucky;  I  am  not  certain  that  we  are  entirely 
in  order,  when  we  undertake  to  bring  into  debate  the  name  and  opinions  of 
the  President  of  the  United  States.  It  having,  however,  been  done,  I  pre- 
sume that  I  shall  not  be  out  of  order  in  pursuing  the  same  course.  The  argu- 
ments of  that  gentleman,  on  that  occasion,  add  another  wreath  to  his  fame. 
Neither  was  its  rejection  less  ably  advocated,  on  that  day,  by  my  friend  from 
Virginia,  Mr.  Giles.  In  point  of  authority,  I  produce  these,  as  at  least  equal 


382  BANK  OF  THE  UNITED  STATES. 

to  those  brought  forward  by  my  friend  from  Kentucky.  We  are,  therefore, 
left,  as  we  ought,  to  exercise  our  own  judgments  on  this  instrument  itself, 
the  authorities  being  counterpoised. 

I  have  already,  sir,  taken  a  short  view  of  the  course  of  the  proceedings  by 
the  bank  for  the  collection  of  the  revenue.  Permit  me  to  pursue  that  point. 
Prior  to  the  establishment  of  any  branch  bank  in  the  United  States,  the  collec- 
tors, as  I  have  already  stated,  did  collect  each  for  himself;  and  after  the 
money  had  been  so  collected,  they  paid  it  over  into  the  banks,  either  of  the 
States,  or  of  the  United  States,  where  it  was  deposited  for  safe -keeping,  the 
banks  being  accountable  to  the  treasury  for  the  amount.  There  was  no  dif- 
ficulty, at  that  time,  that  I  ever  heard  of,  in  conveying  the  public  money 
wherever  the  exigencies  of  the  country  might  require.  After  the  branch 
banks  were  extended,  no  use  was  made  of  them,  but  as  places  of  safe  keep- 
ing for  the  public  money.  They  had  no  instrumentality  whatever,  in  the  col- 
lection of  the  revenue,  prior  to  the  year  1800-  simply  treasure  boxes,  (if  you 
please)  in  which  the  public  money  was  deposited.  This  was  the  course  of  bu- 
siness for  nine  or  ten  years  after  the  charter  of  the  Bank  of  the  United  States 
had  been  created.  No  use,  I  repeat,  whatever,  (for  nine  years  of  its  existence) 
was  ever  made  of  the  bank  or  its  branches,  for  the  collection  of  the  revenue; 
they  were  mere  places  of  safe  deposite.  If  they  were  necessary  and  all-essential, 
why  were  they  not  necessary,  and  equally  essential,  at  all  times?  Was  not  the 
revenue  equally  as  well  collected,  for  the  first  nine  years  of  their  existence,  as 
it  has  been  since,  and  with  as  little  loss  to  the  public?  In  1800,  a  bill  was 
brought  in  and  passed.  If  my  recollection  serves  me,  I  was  the  author  of  it. 
My  object,  whether  I  was  the  author  of  it  or  not,  was  not  to  aid  the  collection 
of  the  revenue.  Such  an  idea  never  entered  my  mind.  I  knew  the  collection 
of  the  revenue  was  then  well  made.  What,  then,  induced  me  to  bring  in,  or 
advocate  that  bill?  It  was  this:  the  collectors  gave  bond  and  security  when 
they  entered  the  office;  I  feared  that  they  might  aid  those  gentlemen  who  be- 
came their  securities,  and,  from  time  to  time,  lend  to  them  (for  their  private 
uses)  the  public  money.  It  appeared  to  me  that  it  was  to  the  private  interests 
of  the  collectors,  as  well  as  the  public  interest,  to"  deposite  the  bonds  taken 
for  the  revenue,  in  the  great  towns,  within  the  banks  of  the  United  States. 
Prior  to  1800,  the  collectors  took  the  bonds  themselves,  and  kept  them  in 
their  offices.  To  put  it  out  of  their  power  (if  they  were  so  disposed)  to  lend 
their  friends  the  public  money,  I  was  induced  to  support  that  bill;  and  I  have 
no  doubt  that  it  did  save  the  public  money,  in  some  instances,  from  the  effects 
of  the  failures  in  1798.  The  bonds,  in  the  six  great  towns,  were,  after  that,  as 
the  law  of  1800  directed,  deposited  in  the  bank  and  its  branches,  and  collect- 
ed by  a  short  notice  being  sent  from  the  bank  to  the  merchant,  to  wit:  that  his 
bond  became  due  on  a  certain  day,  and  the  bonds  were,  ever  after,  paid  into 
those  banks.  The  banks  had  no  instrumentality  whatever  in  obtaining  (ex- 
cept in  that  way)  payment  of  those  bonds.  Compulsory  process  was  not  found 
in  the  Bank  of  the  United  States,  but  in  the  revenue  laws;  if  the  debtor  did 
not  pay  the  bond  when  it  became  due,  he  lost  all  credit  at  the  custom  house, 
and  must  therefore  pay  cash — he  is  put  under  the  ban.  This  is  a  lien  on  his 
punctuality,  and  it  is  such  a  lien  as  secures  to  Government  the  punctual  pay- 
ment of  the  revenue.  However  unable  the  merchant  may  be  to  pay  the  debts  due 
to  individuals,  every  exertion  will  be  used  by  him  to  pay  the  debts  due  to 
the  United  States,  for  his  bonds.  I  trust  that,  from  this  practical  exposition 
of  the  operation  of  the  banks,  (arid  as  far  as  my  information  goes,  I  am  bold 
to  say  it  is  a  correct  one)  that  no  gentleman  will  doubt  that  State  banks 
will  be  as  efficacious  in  the  collection  of  the  revenue  as  those  of  the  United 
States  have  been. 

But,  in  the  event  of  a  non-renewal,  we  are  asked  how  are  we  to  pay  the 
army  and  navy,  and  the  public  officers?  Precisely  in  the  manner  we  have  al- 
ways paid  them — through  the  instrumentality  of  the  banks.  At  New  Orleans, 
(where  a  great  part  of  our  army  now  is)  the  public  money  will  be  deposited 
in  the  bank  of  that  territory,  consisting  of  a  capital  of  $600,000— a  bank,  as 
well  and  as  honorably  conducted  as  that  of  the  United  States.  For  a  draft 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      333 

of  the  paymaster  of  the  army  of  the  United  States  on  that  bank,  the  deputy 
paymasters  will  have  the  option  to  take  either  paper  or  hard  dollar*.  I  may 
add,  that  the  territorial  bank  paper  is  as  well  received,  and  in  as  good  credit, 
as  the  paper  of  the  branch  bank  at  New  Orleans.  How  is  your  navy  generally 
paid  oft?  By  a  treasury  warrant  on  the  Bank  of  Columbia,  (which  is  not  a 
branch  bank)  and  which  is  paid  in  branch  or  other  paper,  at  the  option  of  the 
holder.  Would  this  paper,  by  such  means,  be  made  a  coin  of  the  United 
States?  No,  sir,  it  would  have  no  such  effect.  If,  however,  the  purser  of  the 
navy  should  ask  specie  for  his  treasury  warrant,  the  Bank  of  Columbia  would 
give  it  to  him:  it  is  at  his  option  to  take  the  one  or  the  other.  In  like  manner 
your  public  officers  will  be  paid. 

In  what  paper,  the  gentleman  asked,  will  your  duties  be  collected?  In  that 
kind  of  paper  which  the  collectors,  or  the  Secretary  of  the  Treasury,  will 
think  as  secure  as  that  of  the  United  States.  If  a  merchant  offers  to  pay  his 
bond  with  paper  not  approved  of  by  the  cashier  of  the  State  bank,  (where  the 
bonds  are  deposited)  he  will  refuse  to  receive  such  paper.  What  will  be  the 
consequence?  The  merchant  must  pay  approved  paper  or  specie,  or  his  credit 
will  be  lost  at  the  custom  house;  the  consequence,  I  have  already  stated.  As  I 
have  observed,  sir,  let  the  gentleman  look  into  the  repective  States,  among 
the  farmers,  merchants,  and  planters,  of  the  interior,  and  see  what  proportion 
of  the  paper  in  circulation  is  that  of  the  United  States.  I  venture  to  say,  not 
one  for  ten,-  and  it  arises  from  this  circumstance,  that  the  agents  and  factors 
of  the  farmers  and  planters  do  business  principally  with  the  State  banks. 

But,  Mr.  President,  some  kind  of  inconvenience,  it  is  thought,  will  result 
from  the  dissolution  of  the  bank,  because  its  paper  is  an  universal  medium. 
Sir,  there  will  be  an  understanding  between  the  banks  of  the  different  States; 
and  the  Secretary  of  the  Treasury  tells  you  that  arrangements  are  nearly  com- 
pleted to  attain  that  object;  the  Secretary  does  not  complain  of  the  inconve- 
nience that  some  gentlemen  appear  to  apprehend.  1  am  of  opinion  that 
the  more  accounts  the  treasury  opens  with  the  State  banks  the  easier  will  be 
the  transmission  of  the  public  money.  What  is  the  present  mode  of  making 
remittances,  by  individuals,  from  New  York  to  Richmond?  A  merchant  in 
New  York  wishes  to  purchase  five  hundred  hogsheads  ot  tobacco  in  Rich- 
mond. If  he  applies  to  the  branch  bank,  and  says  he  wishes  to  make  a  remit- 
tance for  the  purpose  of  purchasing  tobacco  at  Richmond,  the  branch,  bank  will 
not,  cannot  aid  him;  but  if  he  applies  to  the  Manhattan,  Farmers',  or  Me- 
chanics- bank,  they  will  take  his  money,  and  give  him  a  check  on  Richmond 
to  enable  him  to  make  his  purchase.  Here,  then,  is  a  convenience  not  afford- 
ed by  the  United  States;  Bank  and  its  branches.  In  the  same  way  will  the 
State  banks  act  in  relation  to  the  funds  of  the  Government.  The  Govern- 
ment wants  $100,000  in  New  York.  They  have  it  not  there,  but  have  it,  how- 
ever, in  Richmond.  All  the  Secretary  ol  the  Treasury  will  have  to  do,  will 
be  to  direct  the  cashier  of  the  Virginia  bank  to  send  $100,000  to  New  York. 
It  is  done  every  day  for  individuals,  and  no  inconvenience  is  experienced! 
Suppose  a  merchant  in  New  York  wants  to  buy  a  cargo  in  Baltimore;  he  ap- 
plies to  the  branch  bank  in  New  York,  takes  out  their  notes,  and  sends  them 
to  Baltimore  to  buy  his  cargo;  he  will  apply  to  the  branch  bank  of  Baltimore, 
and  say,  "  here  are  notes  of  the  branch  bank  of  New  York;  give  me  money 
for  them."  No,  sir,  the  cashier  will  not  receive  them;  the  branch  bank  will 

t  fair  A  ilip  nanm-  *>vmi   iif  t  Ko   mrtthof  H-inL-          TU/Mr  »,..,.   ,\~  ;±  *,..    ._>-!• 


not  take  the  paper  even  of  the  mother  bank.  They  may  do  it  to  oblige  parti  - 
cular  gentlemen,  but  they  are  not  obliged  to  do  it.  I  have  said  that  the  paper 
of  the  mother  bank  is  not  a  payment  to  the  branches;  nor  are  the  bank  notes 
of  the  branches  to  the  mother  bank.  Each  branch  is  bound  only  to  receive  its 
own  paper,  and  not  that  either  of  the  bank  or  any  of  its  branches.  For  in- 
stance, lately,  (as  I  am  informed)  the  branch  bank  of  Baltimore  being  called 
on  by  the  mother  bank  for  specie,  applied  to  the  Union  Bank  for  specie  for  a 
debt  due  by  that  bank  of  $50,000;  assigning  as  a  reason  that  they  were  called 
upon  for  specie  by  the  mother  bank.  The  cashier  of  the  Union  Bank  said  as 
was  natural,  we  have  notes  of  that  bank  to  the  amount  of  $100,000  we  will 
pay  you  in  them;  her  own  paper  will  certainly  be  as  good  a  payment  to  her  as 


384  BANK  OF  THE  UNITED  STATES. 

specie.  Aro,  was  the  answer;  you  must  give  the  specie;  and  the  specie  was 
paid.  The  Union  Bank  was,  in  consequence,  compelled  to  send  to  Phila- 
delphia, at  its  expense,  for  payment  of  the  notes  which  it  held  of  that 
very  bank.  A  similar  transaction  (I  have  been  told)  took  place  between  the 
Mechanics'  Bank  of  New  York  and  the  branch  bank  of  that  city.  I  state 
those  cases  to  show  that  the  paper  of  the  mother  bank  is  not  a  universal  me- 
dium, not  even  payment  to  her  own  branches:  whereas,  in  the  understanding 
which  exists  from  Richmond  to  the  Bank  of  Columbia,  from  the  Bank  of  Co- 
lumbia to  the  bank  in  Baltimore,  and  thence,  to  New  York,  the  paper  of  each 
will  be  received  by  each,  and  when  too  great  a  balance  exists  against  either, 
its  paper  is  sent  to  the  debtor  bank,  for  which  it  returns  specie.  I  cannot  be- 
lieve that  any  gentleman  can  seriously  suppose  that  bank  paper  can  be  con- 
sidered as  coin.  It  is  true,  that,  by  your  law,  all  the  paper  of  the  mother 
bank  and  its  branches,  is  receivable  in  payment  for  duties;  but  it  is  not  a  cur- 
rency in  all  cases,  because  it  is  not  a  tender  in  any,  except  for  duties,  and  if 
I  owe  a  note  at  the  branch  bank  of  Baltimore,  and  offer  to  pay  mother  bank 
paper,  it  is  optional  with  the  branch  whether  it  will  receive  it  or  not.  I  have 
no  wav  of  compelling  them  to  receive  it,  because  no  paper  is  a  tender  to  it  but 
that  of  its  own  branch,,  except,  as  I  have  said,  for  public  dues. 

I  have  been  referred  by  my  honorable  friend  from  Georgia  (Mr.  C.)  to  the 
late  letter  of  the  Secretary  of  the  Treasury.  I  have  been  told  by  my  friend 
from  Kentucky,  (Mr.  POPE)  that  he  is  willing  to  place  his  faith  on  the  great 
talents  of  the  head  of  the  treasury.  I  am  not  going  to  contest  the  talents  of 
the  Secretary  of  the  Treasury,  nor  have  1  the  smallest  objection  to  his  let- 
ter on  this  subject,  as  respects  the  information  it  lias  given.  I  respect  it  as 
that  of  one  of  the  high  officers  of  our  Government,  and  hope  I  never  shall  be 
found  (from  any  fortuitous  circumstances)  to  doubt  its  due  authority.  I  shall 
treat  it  as  I  would  all  the  reports  from  the  heads  of  departments,  with  re- 
spect; but  I  will  not  be  bound  by  the  report,  or  pin  my  faith  (as  my  friend 
from  Kentucky,  Mr.  P.  proposes  to  do)  on  the  sleeve  of  any  man  breathing. 
I  did  not  object  to  this  letter,  but  I  had  an  objection  to  bringing  in  by  com- 
mittees a  support  of  this  kind,  which  is  to  have  the  preponderating  force  of  a 
report  of  the  head  of  a  department,  to  the  aid  of  gentlemen  on  that  side  of  the 
question.  I  did  state,  and  now  repeat  it,  that,  in  1793  and  1794,  so  powerful 
an  instrument  did  such  reports  become,  in  support  of  improper  measures,  that 
the  House  was  offended,  and  the  Secretary  ot  the  Treasury  (Mr.  Hamilton) 
^vas  compelled  to  confine  himself,  ever  after,  to  the  handing  in  reports  stating 
facts,  without  being  allowed  to  give  opinions,  and  to  use  arguments  in  support 
of  them.  An  intimation  was  given  by  a  resolution  of  the  House,  and  we  had 
afterwards  no  arguments  sent  to  us  by  the  treasury.  We  received  (acts, 
statements,  and  documents,  and  were  permitted  to  Form  our  own  opinions. 
A  course,  however,  has  been  latterly  taken  in  our  proceedings,  which  fully  jus- 
tifies the  honorable  gentleman  from  Georgia  in  the  course  mat  he  has  pursued 
as  chairman,  and  will  also  justify  the  Secretary  of  the  Treasury  in  the  greater 
part  of  his  letter.  I  am  not  to  be  understood  as  having  (on  a  former  occasion) 
cast  censure  on  the  Secretary  of  the  Treasury  for  writing  the  letter;  it  be- 
came his  duty  to  answer  the  inquiries  of  the  chairman  of  the  committee;  he 
did  so.  But  the  letter  is  now  before  us,  and,  having  been  referred  to  by  the 


ate,  of  March  20, 1809,  expressed  my  opinion  in  favor  of  a  renewal  of  the  char- 
ter of  the  Bank  of  the  United  States,  an  opinion  which  remains  unchanged,  I 
can  only  add  a  few  explanatory  remarks  in  answer  to  the  inquiries  of  the 
committee,  as  stated  in  your  letter  ot  yesterday."  Here,  then,  sir,  he  bot- 
toms himself  and  his  opinions  on  the  report  of  1809,  for  a  national  bank — a 
bank  truly  national,  not  of  the  limited  capital  of  the  United  States  Bank, 
which  is  scarcely  enough  for  the  pocket  expense  of  the  merchants  in  a  single 
city:  not  a  ten  millions  bank,  which  was  adequate  to  all  the  purposes  Tor 
which  it  was  intended  twenty  years  ago;  but  not  now,  when  we  have  grown 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  l'/91.     335 

Yip  to  a  state  of  comparative  grandeur.  The  Secretary  of  the  Treasury  wants 
a  bank,  I  presume,  something  similar  to  that  which  was  proposed  at  the  last 
session;  to  which,  if  I  recollect  right,  my  friend  from  Kentucky  was  opposed. 
If  the  letter  of  the  Secretary  be  the  authority  on  which  my  friend  wishes  to 
bottom  himself,  he  ought  to  take  the  whole  of  it.  The  Secretary  does  not 
mean,  by  that  paragraph,  to  advocate  &  simple  renewal  of  the  charter,  but  a 
national  bank  capable  of  extending  its  ramifications  into  every  State,  and 
placing  branches  m  every  State  and  town  where  large  collections  of  public 
money  are  made.  That  being  the  view  of  the  Secretary  of  the  Treasury,  I 
wish  we  hud  known  how,  at  the  last  session,  to  have  drawn  out  his  aid  in 
support  of  his  own  measure.  Again,  the  Secretary  says,  "The  banking  sys- 
tem is  now  firmly  established,  and  in  its  ramifications  extends  to  every  part 
of  the  United  States.  Under  that  system  the  assistance  of  banks  appears  to 
me  necessary  for  the  punctual  collection  of  the  revenue,  and  for  the  safe 
keeping  and  transmission  of  public  moneys."  Here  the  Secretary  says,  the 
banking  system  has  extended  its  ramifications  in  every  part  of  the  United 
States,  True,  sir,  but  it  is  not  the  banking  system  of  the  United  States;  that 
system  only  affects  a  few  cities.  What  then  are  the  ramifications  he  alludes 
to?  The  State  banks,  through  whose  instrumentality  collections  have  been 
made  with  as  much  honor,  punctuality,  and  correctness,  as  by  the  Bank  of  the 
United  States,  and  with  more  facility  to  the  Government,  because  those  banks 
will  receive  the  paper  of  other  banks  in  payment;  whereas  the  branch  banks 
will  not. 

"  That  the  punctuality  of  payment  is  principally  due  to  banks  is  a  fact  gen- 
erally acknowleged."  That  is,  sir,  that  the  banking  system  has  introduced 
a  punctuality  between  man  and  man,  which  has  created  a  regularity  in  all  pe- 
cuniary transactions.  The  Secretary,  however,  certainly  cannot  mean  to 
attribute  that  punctuality  to  the  Bank  of  the  United  States,  but  to  the  gene- 
ral system  of  banking.  The  sentence  is,  however,  ambiguous. 

"  Its  punctuality  is,  to  a  certain  degree,  enforced  by  the  refusal  of  credit  at 
the  custom  house,  so  long  as  a  former  revenue  bond,  actually  due,  remains 
unpaid."  Here,  sir,  I  disagree  with  the  Secretary.  Punctuality  in  payment 
is  not,  in  a  certain  degree,  enforced  by  a  refusal  ot  credit  at  the  custom  house, 
but  by  that  alone.  The  refusal  of  credit  at  the  custom  house  is  alone  the  real 
enforcing  cause.  It  was  not,  therefore,  wise,  or  correct  in  the  Secretary  to  in- 
sinuate that  it  was  only  in  a  certain  degree.  The  loss  of  credit  at  the  custom 
house  will  always  compel  the  merchants  to  pay  their  bonds  to  the  United 
States,  however  they  may  deal  with  individuals. 

The  Secretary  then  goes  on  to  state,  that  "he  thinks,  nevertheless,  that,  in 
order  to  ensure  that  precision  in  the  collection?  on  which  depends  a  corres- 
ponding discharge  ot  the  public  engagements,  it  would,  if  no  use  was  made 
of  banks,  be  found  necessary  to  abolish  altogether  the  credit  now  given  on  the 
payment  of  duties."  If  no  use  was  made  of  banks,  credit,  he  thinks,  should 
be  abolished  at  the  custom  house:  and  gentlemen  who  read  this  cursorily 
will  be  apt  to  apply  the  remark  to  the  Bank  of  the  United  States.  Not  so  the 
Secretary  of  the  Treasury;  the  sentence  is  ambiguous,  but  he  must  mean  that, 
if  there  were  no  banks  ot  any  kind,  punctuality  between  man  and  man  would 
not  be  so  assured,  and  the  merchants  would  not  be  so  competent  to  meet  their 
engagements,  as  they  would  if  aided  by  banks. 

"  State  banks  may  be  used,"  says  this  report,  "  and  must,  in  case  of  a  non- 
renewal  of  the  charter,  be  used  by  the  treasury.  Preparatory  arrangements 
have  already  been  made  to  that  effect;  and  it  is  believed  that  the  ordinary 
business  will  be  transacted  through  their  medium,  with  less  convenience, 
and  in  some  respects  with  perhaps  less  safety  than  at  present,  but  without  any 
insuperable  difficulty;  nor  will  the  United  States  have  any  other  control  over 
the  manner  in  which  the  business  of  the  banks  may  be  conducted  than  what 
may  result  from  the  power  of  withdrawing  the  public  deposites." 

What  inconvenience  can  there  be?    None  that  I  can  imagine,  nor  will 
there  be  any.    The  safety  will  be  the  same:  for,  let  me  again  repeat,  that  the 
treasury  has  no  more  control  over  the  Bank  of  the  United  States,  under  the 
49 


386  BANK   OF  THE    UNITED    STATES. 

law  as  it  now  exists,  than  it  will  have  over  the  State  banks.  What  control 
(it  may  be  asked)  will  the  treasury  have  over  the  State  banks?  A  powerful 
one,  in  my  opinion.  If  it  does  not  appear  that  they  are  conducting  your  and 
their  affairs  safely,  the  Secretary  will  take  the  public  deposited  from  such,  and 
place  them  in  others;  you  can  thus  operate  powerfully  on  the  interest  of  those 
with  whom  the  public  deposites  are  made.  Have  you  more  control  now  over  the 
Bank  of  the  United  States?  No,  sir,  not  so  much:  for  the  law  compels  the 
Secretary  to  deposite  the  public  bonds  with  the  Bank  of  the  United  States  and 
its  branches,  and  he  has  nx>  power  to  withhold  them. 

I  am  bold  to  say,  sir,  that  the  State  banks  are  conducted  with  as  much 
prudence  and  ?s  much  security,  in  the  large  towns,  as  that  of  the  United  States. 
In  Virginia,  as  I  have  already  stated,  there  is  a  trifling  branch  of  the  Bank  of 
the  United  States,  of  300,000  dollars  capital.  That  branch  is  in  a  corner  of 
the  State  with  which  the  people  of  Virginia  have  very  little  intercourse.  Their 
great  intercourse  is  with  the  banks  of Tlichmond  and  Fredericksburg.  What 
is  the  state  of  the  specie  of  the  Bank  of  Virginia?  It  is  superior  to  that  of  the 
Bank  of  the  United  States.  I  believe  the  capital  of  the  Bank  of  Virginia  is 
one  and  a  half  millions  of  dollars;  it  has  near  two  millions  of  dollars  in  its 
vaults  at  present;  it  generally  divides  eight  per  cent. ;  the  last  dividend  was 
ten.  Here  then  is  a  dividend  greater  than  that  of  the  Bank  of  the  United 
States;  and  the  Bank  ofVirginia  has  none  of  that  check  from  the  United  States 
Bank  which  is  deemed  by  my  friend  from  Georgia  so  necessary  to  the  regu- 
larity of  State  banks.  [Mr.  CRAWFORD  explained  "  that  those  who  gave 
testimony  against  themselves  certainly  might  be  believed;  and  the  State  banks 
had  themselves  stated  that  they  were  Kept  in  a  salutary  check  by  the 
Bank  of  the  United  States.'5]  Mr.  S.  continued.  I  am  happy  to  learn,  sir, 
whence  the  gentleman  drew  his  conclusion  that  the  Bank  of  the  United 
States  was  necessary  to  keep  the  State  banks  in  check..  I  do  not  know  what 
species  of  directors  they  can  be  who  tell  us  that  it  is  absolutely  necessary  that 
we  should  have  the  United  Stales'  Bank  to  check  them,  and  keep  them  from 
injuring  themselves.  It  is  the  old  doctrine  of  Mr.  Morris,  revived  in  a  new 
form,  that  the  People  are  their  own  worst  enemies.  Can  it  be  believed  that  the 
directors  of  any  bank  would  state  that  the  Bank  of  the  United  States  was  ne- 
cessary to  check  them?  If  it  be  so  in  Philadelphia,  it  is  certainly  not  so  in 
Richmond,  where  they  have  uot  this  check.  So  far  from  the  branch  in  Vir- 
ginia keeping  the  State  banks  in  check,  the  Bank  of  Virginia  always  keeps  the 
branch  at  Norfolk  in  check. 

The  Secretary  does  not  give  his  positive  opinion  on  the  competency  of  State 
banks  to  the  transmission  of  revenue,  &c.  but  says,  "it  may  be  added,  that, 
even  for  ordinary  business  of  receiving  and  'transmitting  public  moneys,  the 
use  of  a  State  bank  may  be  forbidden  by  the  State,  and  that  loans  to  the  United 
States  are  by  many  of  the  charters  forbidden  without  a  special  {permission  trom 
the  State."  If  there  be  any  such  charters,  the  Secretary  of  the  Treasury 
need  not  make  use  of  the  banks  which  have  them;  he  may  find  enough  of  banks 
that  can  give  ample  security.  As  for  the  ordinary  and  extraordinary  busi- 
ness of  the  treasury  with  the  banks,  I  have  already  shewn  that,  for  the  ordi- 
nary business,  the  State  banks  can  do  it  as  effectually  and  with  as  much  secu- 
rity as  has  heretofore  been  afforded  by  the  branches.  The  Secretary  then 
goes  on,  sir,  to  give  his  opinion  in  direct  contradiction  to  the  bill  before  you', 
and  shows  that,  whatever  reliance  gentlemen  may  have  placed  on  his  authority, 
they  have  not  reported  a  bill  in  conformity  to  it.  "  It  does  not  seem  necessa- 
ry to  advert  to  the  particular  objections  made  against  the  present  charter,  as 
those  may  easily  be  obviated  by  proper  alterations.  What  has  been  called  a 
National  Bank,  or,  in  other  words,  a  new  bank  of  the  United  States,  instead 
of  the  existing  one,  may  be  obtained  by  such  alterations.  The  capital  may 
be  extended  and  more  equally  distributed;  new  stockholders  may  be  substi- 
tuted to  the  foreigners,  as  had  been  suggested  in  the  report  of  2d  March,  1809; 
and  any  other  modifications,  which  may  be  thought  expedient,  may  be  intro- 
duced, without  interrupting  the  operations  of  the  institution  now  in  force, 
and  without  disturbing  all  the  commercial  concerns  of  the  country."  This 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.  '';   337 

project,  sir,  was  tried  at  the  last  session.  We  unfortunately  did  not  get  the 
aid  of  my  friend  from  Kentucky.  //  was  then  agreed  to  merge  the  whole  capi- 
tal of  the  Bank  of  tlie  United  States  in  a  national  bank,  but  rejected  by  the 
bank  agent— a  bank  of  thirty  millions,  which  would  have  been  found  ^capable 
to  extend  its  ramifications  wherever  banks  might  be  wanted.  The  secreta- 
ly's  letter  speaks  of  the  plan  of  the  national  bank,  and  not  of  the  one  con- 
tained in  the  bill  presented  to  us.  The  Secretary  continues,  >4  >\  ithout 
dwelling  on  the  inconvenience  of  repaying  at  this  time  to  Europe,  a  capital  ot 
seven  millions,"  &c. 

The  Secretary,  Mr.  President,  is  considered  by  his  friends,  a  very  great 
man  in  fiscal  operations;  in  commercial  matters,  I  may  be  permitted  to  have 
opinions  of  my  own,  and  to  differ  from  him  (without  offence  to  my  friend  from 
Georgia)  on  a  question  simply  and  exclusively  commercial.  Now,  sir,  where 
is  the  difficulty  of  sending  these  seven  millions  (owned  by  foreigners}  to  Eu- 
rope? There  is  no  more  difficulty,  I  answer,  than  for  the  merchant  who  owes 
seven  thousand  dollars  in  England  to  remit  it  This  seven  millions  will  not 
be  taken  out  in  silver  or  gold,  to  send  to  England,  as  is  feared  by  gentlemen. 
No,  sir,  men  do  not  carry  political  enmities  to  the  extent  to  injure  their  own 
interests.  The  foreign  stockholders  will  not  remit  specie,  because,  if  theydo, 
it  will  cost  them  from  five  to  seven  per  cent.  If  they  do  not  remit  in  specie, 
how  will  their  funds  be  conveyed  to  England?  By  the  most  plain  and  simple 
mode  that  can  be.  The  agents  of  the  British  stockholders  will  do  one  of  two 
things:  they  will  vest  the  funds  in  the  State  banks,  or  funds  of  the  United 
States;  or  direct  their  agents  to  remit  the  amount  in  bills  of  exchange.  And 
how  will  that  be  done?  By  buying  bills  of  exchange,  which,  for  every  nine- 
ty pounds  paid  here,  will  yield  them  one  hundred  pounds  in  England,  because 
bills  of  exchange  are  ten  per  cent,  below  pur.  and  there  is  no  chance  of  their 
rising.  As  they  can  make  this  gain  by  bills,  does  any  man  conceive  that  they 
will  not  thus  remit  their  money,  if  remitted  at  all?  Well,  sir,  gentlemen  will 
perhaps  again  ask,  can  we  spare  this  money  from  the  United  States,  and  will 
it  not  injure  the  young  industrious  mechanics  and  ruin  the  agricultural  inter- 
est? Those  are  idle  fears;  an  exchange  of  property  will  take  place.  The 
American  merchants  have,  at  this  time,  more  than  double  the  amount  (of  the 
seven  millions)  now  in,  or  which  soon  will  be  in,  the  hands  of  the  English 
merchants,  which  they  will  be  glad  to  transfer  by  bills  to  the  British  stock- 
holder, for  his  funds  in  the  stock  of  the  Bank  of  the  United  States;  and  thus 
the  English  stockholder  will  receive  the  amount  of  his  stock  without  one  dol- 
lar of  specie  being  sent  out  of  our  country,  and  the  funds  of  our  merchants, 
now  in  England,  will  thus  replace  the  funds  of  the  English  stockholder. 

Here  follows  an  apprehension  of  the  Secretary,  founded  on  false  premises. 
He  says,  "  And,  without  adverting  to  other  possible  dangers  of  a  more  general 
nature,  it  appears  sufficient  to  state,  that  the  same  body  of  men,  who  owe 
fourteen  millions  of  dollars  to  the  bank,  owe,  also,  ten  or  twelve  to  the  United 
States,  on  which  the  receipts  into  the  treasury  for  this  year  altogether  depend; 
and  that,  exclusively  of  absolute  failures,  it  is  impossible  that  both  debts  can 
be  punctually  paid  at  the  same  time/'  Permit  me  here  to  observe,  that  I  dif- 
fer with  the  Secretary  on  the  question  of  fact.  I  cannot  believe  that  the  tea 
or  twelve  millions  due  by  the  merchants  for  duties  to  the  United  States,  are 
due  by  the  same  individuals  who  are  indebted  to  the  Bank  of  the  United  States, 
the  fourteen  millions  stated  by  the  Secretary;  because,  i  know  that  the  great 
body  of  the  merchants  who  owe  for  duties,  do  their  business  with  the  State 
-  banks,  and  of  course  cannot  be  those  who  are  stated  as  debtors  to  the  Bank  of 
the  United  States.  Some  of  my  friends,  for  whose  opinions  and  persons  I 
have  an  unbounded  respect,  are  still  apprehensive  that  great  distress  will  re- 
sult for  want  of  the  usual  discounts  to  the  merchants  of  the  United  States,  in 
case  of  a  non-renewal  of  the  bank  charter.  The  fear  is  an  idle  one;  it  will  be 
precisely  the  old  story  of  the  green  ass.  It  will  be  remembered  nine  days,  and 
not  much  longer.  The  course  of  proceedings  will  be  this:  The  Secretary  tells 
you,  that  arrangements  have  already  been  made  to  transfer  the  money  from 
the  Bank  of  the  United  States,  to  the  State  banks.  I  believe  they  are  in  full 


388  BANK  OF  THE  UNITED  STATES. 

operation.  He  will  take  three  millions  of  dollars  (the  public  money  now  Je* 
posited)  from  out  of  the  Bank  of  the  United  States,  and  put  it  into  the 
State  banks.  Add  thereto*  above  four  millions  ofdcpqsite,  the  property  of  the 
merchants,  which  will  also  be  taken  out  of  the  Bank  of  the  United  States,  arid 
put  into  the  State  banks.  That  is,  seven  millions  of  dollars  will  be  immedi- 
ately drawn  from  the  Bank  of  the  United  States,  and  placed  in  the  State 
banks.  Upon  this  money  the  State  banks  will  feel  themselves  justified  in  go- 
ing into  larger  discounts,  and  upon  such  funds,  will  be  able  to  take  up  all  good 
paper  thrown  out  by  the  United  States'  Bank,  in  consequence  of  the  non-re- 
newal of  its  charter.  Were  1  a  negotiator  in  the  Bank  of  the  United  States, 
and  had  I  great  discounts  in  that  bank,  and  were  the  moneys  transferred  as  1 
have  suggested,  I  should  have  no  apprehension,  and  should  put  my  paper  in 
the  State  banks  into  which  the  deposites  are  removed,  with  a  full  confidence 
that  it  would  be  discounted.  This,  then,  is  an  idle  phantom,  raised  to  deceive 
gentlemen,  who  are  not  particularly  acquainted  with  the  business.  What  is 
the  reason,  sir,  that  none  of  those  fears,  those  horrible  terrors,  (presented  to 
our  imagination)  are  felt  in  Baltimore?  The  merchants  there,  generally,  are 
of  the  republican  party,  and  feel  none  of  those  fears.  And  yet,  sir,  we  are 
told  of  the  great  distress,  and  almost  led  to  believe  that  universal  ruin  will 
ensue.  The  distress  will  not  be  felt  sixty  days  after  the  3d  of  March.  If 
felt  by  any,  it  will  be  by  those  who  can  now  pay  five  shillings  in  the  pound, 
and  who,  if  they  go  on  three  months  longer,  would  not  pay  sixpence.  We  are 
told  that  this  bank  has  been  honorably,  correctly,  impartially,  and  fairly  con- 
ducted. The  honorable  gentleman  who  made  this  declaration,  assureil  us 
that  he  was  not  versed  in  the  subject  of  banking;  and  this  was  at  once  giving 
a  most  convincing  reason  against  his  opinion.  He  receives  the  opinions  of  the 
gentlemen  who  are  most  fnendly  to  the  institution,  probably  from  gentlemen 
that  never  felt  a  partiality  for  any  other.  Let  the  gentleman  apply  to  mer- 
chants on  the  other  side  of  the  question,  and  he  will  receive  very  different  in- 
formation indeed.  In  Boston?  the  honorable  gentleman  from  Massachusetts 
told  us,  that  the  bank  has  for  its  President,  a  gentleman  of  high  talents,  great 
integrity  and  respectability,  and  he  did  not  depict  him  too  highly.  I  know 
him  well,  and  am  bound  to  believe  the  information  the  gentleman  has  given  as 
to  the  well  meaning  of  the  branch  bank  there.  By  the  well  management  of  a 
moneyed  institution,  we  understand  an  attention  to  the  advantage  of  the  stock- 
holders. In  that  point  of  view,  (no  doubt)  the  bank  has  been  well  managed. 
I  have  a  letter,  which  goes  to  prove,  to  my  satisfaction,  that  the  branch  at  New 
York  has  not  been  managed  with  all  that  impartiality  and  correctness  which 
has  been  stated  by  the  deputies  from  Philadelphia.  I  will  read  an  extract 
therefrom;  the  writer  is  a  gentleman  whom  I  highly  respect,  of  mild  manners, 
good  sense,  and  great  respectability.  He  says,  *'  I  can  speak  from  experience 
to  this  fact,  (impartiality. )  I  have  employed  a  capital  of  between  two  and 
three  hundred  thousand  dollars  in  trade  here,  (New  York)  for  several  years, 
and  from  being  considerably  engaged  in  navigation,  my  bonds  for  duties  to 
the  United  States  have  amounted  to  many  thousands  a  year;  yet  I  can  aver, 
that  the  branch  bank  has  never  aided  me  in  the  payment,  by  discounts  or  oth- 
erwise, whilst  the  Manhattan  Bank  has  freely  discounted  the  paper  which  the 
branch  rejected,  merely  by  reason  of  the  contamination  of  passing  through  re- 
publican hands."  I  know  nothing,  Mr.  President,  but  from  such  informa- 
tion, as  to  the  partiality  or  impartiality  of  the  bank  at  New  York,  except  from 
common  fame,  who  is  sometimes  said  to  be  a  common  liar;  still  some  confi- 
dence is  due  to  general  report.  In  Philadelphia,  it  is  said  that  the  bank  has 
been  impartially  and  honorably  conducted;  and  I  will  not  doubt  the  gentle- 
man's words.  I  do  not  know  what  it  has  done  lately,  but,  some  years  ago,  I 
heard  such  a  detail  of  its  conduct,  as  was  no  proof  of  the  allegation.  In  Nor- 
folk, I  will  venture  to  say,  that  the  conduct  of  the  bank  never  was  considered 
impartial;  and  I  had  a  letter  last  year,  from  a  highly  respectable  merchant  in 
that  place,  which  (if  now  in  my  possession)  would  have  proved  the  contrary. 
In  Baltimore,  sir,  we  have  heard  it  said  in  another  place,  that  the  bank  dis- 
counted as  much  for  republicans  as  for  federalists.  I  cannot  contradict  this; 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     339 

I  cannot,  because  I  have  not  seen  their  books;  but  I  believe  there  is  not  one 
republican  in  Baltimore  who  will  give  his  assent  to  that  information.  If  it 
were  the  case,  I  could  not  well  have  failed  to  know  it.  We  ought  not,  sir,  to 
place  entire  reliance  on  the  information  of  interested  men.  We  were  told, 
but  a  few  days  ago,  and  the  information  was  derived,  I  believe,  from  the  same 
identical  letter  as  the  stated  information,  "that  the  Union  Bank  of  Mary- 
land was  the  first  bank  which  refused  to  receive  foreign  gold."  I  have  in- 
quired into  that  fac*,  sir,  and  find  that  the  Union  Bank  never  refused  it,  ex- 
cept in  one  instance,  until  the  House  of  Representatives  rejected  the  bill 
from  the  Senate  on  the  subject  of  foreign  coin.  I  have  a  letter  from  the  cash- 
ier of  that  bank  in  my  hand.  He  writes,  "that  the  first  information  I  had 
respecting  foreign  gold,  was  from  the  cashier  of  the  Bank  of  Baltimore,  (Mr. 
Cox)  who  handed  me  the  proceedings  of  the  Banks  in  Philadelphia  on  that 
subject.  It  is  impossible  lor  me  to  say  which  was  the  first  bank  that  refused 
to  take  it;  and  can  only  state,  for  ourselves,  that  we  continued  to  receive  and 
pay  it,  at  its  usual  value,  (with  one  or  two  exceptions)  the  amount  not  exceed- 
ing two  or  three  hundred  dollars  difference,  until  the  House  of  Representa- 
tives refused  to  agree  to  your  resolution  on  that  subject  in  the  Senate.  On 
the  30th  of  October  last,  we  received  from  the  bank  of  Maryland  $10,000, 
without  deduction,  as  you  will  see  by  the  enclosed  certificate."  I  state  this 
fact,  sir,  at  this  time,  only  to  show  how  cautious  gentlemen  ought  to  be  in 
placing  reliance  on  information  of  this  kind.  It  is  impossible  for  me,  living 
as  I  do,  in  Baltimore,  to  believe  that  the  republicans  have  experienced  im- 
partial conduct  from  that  bank. 

We  have  been  told,  sir,  that  the  high  improvement  in  the  agricultural  State 
of  Pennsylvania  is  to  be  attributed,  in  a  great  measure,  to  banks,  particularly 
to  the  Bank  of  the  United  States. 

The  gentleman  (Mr.  POPE)  called  upon  us  to  remark  the  difference  in  the 
improvement  of  cultivation  between  that  State  and  others,  and  to  see  what 
the  State  owed  to  the  institution  of  banks.  I  have  no  doubt,  sir,  that  the  in- 
stitution of  banks  lias  contributed  as  well  to  the  prosperity  of  agriculture  as  of 
commerce;  but  this  effect  has  been  much  more  produced  by  the  State  banks 
than  bv  the  Bank  of  the  United  States.  Has  Connecticut  any  branch  of  the 
United  States?  None;  and  yet  the  honorable  gent  Ionian  from  Kentucky,  when 
he  travelled  through  that  country,  could  not  have  failed  to  see  as  high  a  state 
of  cultivation  there  as  in  Pennsylvania.  Now,  sir,  on  the  other  hand,  the 
State  of  Maryland,  which  has  the  enviable  ad  vantage  of  a  branch  Bank  of  the 
United  States,  in  addition  to  her  immense  capital  in  State  banks,  has  not  as 
yet  progressed  to  that  high  state  of  cultivation  witnessed  in  Pennsylvania. 
This  more  probably  proceeds  from  the  temper,  habits,  and  climate,  ol  her  po- 
pulation, than  from  the  cause  assigned  by  Mr.  P. 

We  are  told,  Mr.  President,  there  is  a  prodigious  scarcity  of  money  in  the 
great  cities.  Money,  Mr.  President,  like  every  other  commodity,  will  go 
where  it  finds  its  best  market;  and  if  in  the  State  of  Virginia  there  be  a  better 
market  than  in  Philadelphia,  there  will  it  go — and  there  it  has  gone.  In  Vir- 
ginia, they  have  what  will  command  money — wheat  and  tobacco;  and  the  mer- 
chants from  the  great  cities  were  obliged  to  go  there  for  those  products,  where 
they  could  buy  cheaper  than  they  could  at  home.  Wliat  was  the  consequence? 
Money  went  where  it  found  the  best  market,  and  that  was  in  Virginia;  the 
fact  is  proved  from  the  quantity  of  specie  in  their  bank.  There  is  no  scarcily 
of  money  in  South  Carolina,  where  merchants  were  obliged  to  carry  their 
money  tor  the  article  of  cotton.  A  scarcity  of  money  results  from  a  scarcity 
of  means  of  acquiring  it.  From  the  large  cities  we  have  exported  all  or  a 
great  proportion  of  pur  means,  and  we  cannot  get  back  the.  money  for  want  of 
the  usual  sale  of  bills  of  exchange;  and  thence  results  the  great  scarcity  of 
money  in  those  cities.  It  is  in  vain  to  tell  me,  as  I  have  heard  in  the  course 
of  the  discussion,  that  United  States'  paper  is  the  only  universal  medium.  In 
the  interior,  we  find  the  paper  of  the  State  banks,  and  of  the  State  banks 
alone,  in  circulation. 


390  BANK  OF  THE  UNITED  STATES. 

In  the  animadversions  of  the  gentleman  from  Massachusetts,  in  order  to 
enforce  his  argument,  and  show  the  danger  which  will  result  to  State  banks, 
he  brought  forward  an  example  very  strong  in  point,  viz:  that  an  agent  of  one 
of  those  banks,  sent  here  for  the  purpose  of  obtaining  those  deposites,  had  de- 
camped from  this  city  on  hearing  of  the  failure  of  a  great  broker,  which  en- 
dangered the  bank  of  which  he  was  a  director,  to  such  a  degree,  as  to  depre  • 
ciate  the  value  of  its  stock  twenty  per  cent.  [Mr.  LLOYD  said  he  had  stated  it 
is  a  rumor,  for  the  authenticity  of  which  he  would  not  vouch.  ]  I  was  going  to 
say  (observed  Mr.  SMITH)  that,  from  the  high  opinion  I  entertained  of  the  de- 
licacy of  that  honorable  gentleman  on  every  subject  touching  the  credit  of  a 
bank,  I  was  convinced,  that,  unless  he  had  proofs  as  strong  as  those  of  holy 
writ,  he  would  not  vouch  in  such  a  case;  that  he  would  be  cautious  in  giving 
such  a  thing  as  truth,  unless  he  knew  it  of  his  own  knowledge.  As  to  the 
statement  which  he  made,  there  must  have  been  some  mistake.  One  week 
before  the  gentleman  in  question  left  this  city,  he  gave  notice  that  he  should 
go  away  on  Thursday.  He  did  go  on  that  day,  and  had  previously  applied 
to  the  Secretary  of  the  Treasury  for  a  share  of  the  deposites  of  the  Govern- 
ment, and  produced  a  report  from  his  bank  to  show  the  substantial  character 
of  the  Mechanics'  Bank.  The  account  of  the  failure  of  the  broker,  Mr.  Judah, 
did  not  arrive  until  two  days  after  the  gentleman  alluded  to  had  left  this  city. 
He  could  not,  therefore,  have  returned  to  New  York  on  that  account.  What 
is  really  the  fact?  The  Mechanics'  Bank  of  New  York  stands  on  as  substan- 
tial a  foundation  as  any  bank  in  the  United  States,  and  has,  in  proportion  to 
its  stock,  more  specie  in  its  vaults  than  any  bank  I  know,  except  that  of  Vir- 
ginia. Mr.  Judah  did  fail;  but  the  stock  of  the  bank  did  not  experience  a 
more  unusual  fall  than  that  of  other  banks.  The  great  failures  at  that  time 
staggered  every  man  for  his  own  safety.  The  banks  looked  around  with 
caution.  The  value  of  the  stock  in  every  bank  experienced  a  depression. 
At  that  moment  the  Mechanics'  Bank  paid  its  dividend  of  4£  per  cent,  and 
the  stock,  which  wa&  worth  20  per  cent,  above  par,  did  go  down  to  15$  per 
cent.  What  was  the  loss,  at  any  rate,  sustained  by  this  great  broker?  The 
Mechanics'  Bank,  I  understand,  will  not  lose  2,000  dollars  by  all  the  failures; 
by  Mr.  Judah,  not  a  dollar.  On  the  contrary  they  have  money  to  pay  him. 
I  mention  this  fact  to  show  that  we  should  be  extremely  cautious,  indeed,  in 
placing  reliance  on  facts  of  this  kind,  from  sources  over  which  we  have  no 
control. 

We  are  called  upon,  sir,  to  believe,  that  the  borrowers  at  New  Orleans  are 
less  safe  than  elsewhere.  I  had  thought  they  were  more  safe,  because  they 
have  more  valuable  produce  to  export;  because  they  have  more  specie  among 
them  than  in  any  other  part  of  the  Union;  and  because  the  people  of  the  whole 
western  country  send  their  products  there  for  sale,  and  do  not  press  the  mer- 
chants too  much  in  return.  One  reason  has  been  assigned  (by  Mr.  LLOYD) 
why  we  should  renew  this  charter;  that,  in  this  city,  loans  have  been  made  to 
the  amount  of  400,000  dollars,  which  are  expended  in  canals,  houses,  bridges, 
and  improvements;  and  we  must  renew  the  charter  to  enable  those  people  to 
go  on.  That  reasoning,  sir,  has  no  influence  with  me.  There  has  been  one 
prodigious  mistake  in  all  this  business.  It  is  taken  for  granted,  that  the  mer- 
chants cannot  pay  their  notes  at  bank,  unless  they  obtain  new  discounts. 
This  would  be  to  say,  that  they  were  carrying  on  trade  without  any  other 
than  bank  capital.  The  loans  in  Baltimore,  on  made  paper,  are  a  mere  drop 
in  the  bucket,  compared  with  the  extensive  trade  of  that  city.  A  great  pro- 
portion of  the  notes  which  the  bank  reports  as  payable,  are  on  bona  tide  sales. 
The  borrower  does  not  depend  on  any  loans  from  banks  lo  meet  them,  but 
draws  on  his  own  means  to  pay  such  notes.  But  there  are  in  all  banks  what 
is  called  negotiable  paper.  We  borrow  from  the  bank  a  stipulated  sum,  and 
understand  that,  unless  the  bank  is  hard  pressed,  it  will  continue  the  renewal 
of  notes,  to  take  up  that  stipulated  sum.  A  note  is  signed  by  A,  and  endorsed 
by  B,  for  which  no  property  is  paid;  it  is  a  mere  note  of  accommodation. 
That  note,  when  it  comes  due,  is  not  expected  to  be  paid,  unless  by  a  renewal 
with  the  same  endorser,  or,  if  the  endorser  becomes  bad,  a  good  one.  Thus 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       39  ^ 

a  director  of  the  bank  will  have  discounts  to  the  amount  of  27,000  dollars  re- 
newable at  bank.  He  cannot  get  more  unless  on  real  paper.  Our  banks  do 
not  dare  to  discount  beyond  their  means,  because  they  are  obliged  to  pay  cash 
for  every  legal  demand.  The  gentleman  from  Kentucky  has  told  us,  that 
two  or  three  importing  States  may  be  benefitted  by  the  dissolution  of  the  bank. 
I  will  not  answer  the  argument;  it  is  such  a  one  as  can  go  only  to  disunite, 
to  create  envy  and  jealousy.  I  would  not  resort  to  that  kind  of  argument, 
and  I  will  not  permit  myself  to  answer  it. 

We  are  called  upon,  in  a  manner  extremely  impressive  indeed,  by  the  gen- 
tleman from  Massachusetts,  to  hearken  to  the  imlormation  received  from  the 
committee  of  mechanics  and  merchants  now  here,  from  Philadelphia.  I  am 
well  informed,  sir,  that  both  those  committees  were  composed  of  very  re- 
spectable men;  some  of  them  republicans;  and  it  is  said,  that  they  complained 
of  a  very  great  scarcity  of  money,  and  that  trade  was  not  brisk.  I  will  ask 
them,  sir,  if  they  ever  knew  trade  brisk  in  January  or  February?  It  is  pre- 
cisely the  same  at  Baltimore  as  at  Philadelphia;  when  the  rivers  are  frozen, 
we  wind  up  our  books  and  do  not  expect  to  do  business. 

One  of  those  gentlemen  stated,  that  he  always  found  a  convenience  in  hav- 
ing his  notes  discounted  in  the  Bank  of  the  United  States,  and  if  he  could  not 
get  it  there,  he  applied  to  a  friend,  who  discounted  notes  that  had  a  longer 
time  than  two  months  to  run.  It  is  a  possible  case,  that  these  persons  may 
have  been  very  much  employed  in  building  houses  for  one  of  the  directors  of 
that  bank.  It  may  have  been  the  case,  that  that  director  accommodated  him 
by  discounting  his  paper  at  a  longer  time  than  sixty  days.  This  kind  of  em- 
ployment between  man  and  man  has  a  wonderful  influence  on  the  mind  of 
man;  and  he  who  receives  a  benefit,  is  willing  to  return  it  in  some  way  or 
other.  Mr.  Grice  appears  to  be  a  very  worthy  mechanic;  but  I  am  sorry  that 
he  should  be  obliged  to  say,  that  those  who  contracted  with  him  were  afraid 
that  they  could  not  comply  with  the  contract  on  account  of  the  difficulty  oc- 
casioned by  the  non-renewal  of  the  charter;  and  yet  he  told  us,  that  the  Bank 
of  the  United  States  still  discounted  its  usual  quantity  of  paper.  I  am  sorry 
to  see  that  the  merchants  of  Philadelphia,  great  and  respectable  merchants 
as  they  are.  make  contracts  for  ships,  and  tell  the  ship  builder  that  they  are 
obliged  to  depend  on  discounts  for  payment  for  the  ships.  I  did  not  expect 
this  was  the  case  there;  and  will  venture  to  say,  it  is  not  the  case  in  many 
other  places. 

One  of  those  gentlemen  tells  us  he  had  to  pay  one  and  a  half  percent,  per 
month  for  money.  Sir,  he  got  the  money  very  cheap.  When  one  gets  into 
the  hands  of  the  shavers,  or  what  the  gentleman  calls  only  discounters,  if  he 
gets  out  for  one  and  a  half  per  cent,  per  month,  he  is  not  coarsely  shaved.  It  is 
not  an  uncommon  price.  Money  is  worth  what  it  will  sell  for;  and,  in  Phila- 
delphia, shaving  or  discounting  is  considered  as  honest  and  fair  as  any  other 
commercial  transaction;  that  is.  to  pay  and  receive  more  than  legal  interest. 
It  is  not  there  considered  as  dishonorable  or  improper,  whatever  it  may  be  in 
Baltimore. 

It  is  the  belief  of  this  committee  of  merchants  that,  in  consequence  of  the 
non-renewal  of  the  charter,  flour  fell  to  $7|  in  Philadelphia.  Now,  this,  sir, 
is  one  of  those  good  strokes,  those  excellent  things,  that  the  friends  of  the  bank 
use  to  deceive  and  influence  the  agricultural  interests  with.  It  is,  therefore, 
brought  home  to  the  farmers  in  Congress.  I  state  this  to  show  how  cautious 
gentlemen  ought  to  be  in  suffering  their  minds  to  be  impressed  with  these 
statements.  The  fact,  in  this  case,  it  not  as  stated.  The  moment  at  which  flour 
fell  was  on  the  receipt  of  an  account  from  Liverpool  of  its  having  fallen  to  565. 
per  barrel;  and  that  there  was  no  demand  for  consumption.  vVhat  was  the 
consequence?  Fifty-six  shillings  a  barrel  will  not  allow  more  than  $7£  to  be 
given  here;  so  the  price  of  flour  fell.  These  gentlemen  also  informed  our 
minds  further,  that  a  demand  from  a  British  house,  for  Lisbon,  was  not  ex- 
ecuted, by  a  house  in  Philadelphia,  from  the  want  of  funds.  This  may  be 
true;  but  a  great  portion  of  that  very  order  has  been  actually  executed  at  Bal- 
timore, at  ten  dollars  per  barrel,  payable  in  bills  of  exchange,  at  a  fair  discount 


392  BANK  OF  THE  UNITED  STATES. 

often  per  cent.  The  ramifications  of  commerce  arc  such  that  no  one  who  is 
not  daily  conversant  with  them  can  know  them.  There  was  no  occasion  for 
u  fall  of  flour,  because  the  ports  of  Cadiz  and  Lisbon  were  still  open;  but 
there  was  a  momentary  apprehension  that  Massena  had  got  into  Lisbon,  and 
commercial  men  for  a  moment  afraid  to  let  their  property  go  to  that  market. 
This  lasted  but  two  or  three  days;  it  lasted  just  as  long"  as  the  terror  of  the 
non-renewal  of  the  charter  of  the  Bank  of  the  United  States  will  last.  The 
gentlemen  who  were  sent  on  here  happened  to  come  at  a  favorable  moment  to 
scare  us  with  the  depression  of  the  price  of  flour.  But  before  the  question  is 
taken,  we  learn  its  rapid  rise  again  to  the  former  prices. 

Our  minds  have  been  alarmed  by  a  representation  of  the  immense  influence 
which  the  Secretary  of  the  Treasury  will  have  over  the  banks  to  whom  de- 
posites  are  given.  I  should  have  no  objections  whatever,  as  to  myself,  that  the 
collector  of  every  port  should  be,  exofficio.,  a  director  of  the  bank  in  which  de- 
posites  are  made;  and  as  to  the  argument  that  such  a  power  would  enable  a 
Secretary  of  the  Treasury,  if  he  were  a  bad  man,  to  injure  individuals,  it  is 
not  worthy  of  consideration.  No  Secretary  would  dare  to  take  such  a  course; 
the  thing  would  be  proclaimed  here  in  such  a  voice  as  would  made  the  often  - 
der  decamp  with  precipitation  from  his  office. 

The  report  of  Mr.  Orr,  one  of  the  mechanics,  I  had  like  to  have  forgotten. 
He  says,  all  confidence  between  man  and  man  is  destroyed.  My  letters,  sir, 
say  that  all  confidence  is  not  destroyed,  but  in  those  whose  rashness  has  been 
the  cause  of  their  forfeiting  all  title  to  it.  In  order  to  strengthen  Mr  Orr's 
argument,  we  are  told  that  the  price  of  hemp  is  fallen.  That  is  true;  but 
what  does  the  fact  prove?  Not  that  the  approaching  dissolution  of  the  Bank 
of  the  United  States  has  caused  it;  the  reason  is,  that  the  arrivals  from  Russia 
are  more  numerous  than  ever  before  recollected — every  vessel  that  comes 
from  Russia  brings  hemp.  Again,  our  good  friends  to  the  westward  and  in 
Virginia,  have  commenced  the  culture  of  hemp,  and  carried  its  production  to 
an  extent  nearly  equal  to  our  consumption.  Add  to  that  cause  that  the  demand 
is  much  lessened  by  the  destruction  of  our  shipping.  We  build  few  ships  now. 
We  ought  not  to  rely  on  these  facts;  they  result  not  from  the  dissolution  of 
the  Bank  of  the  United  States,  but  from  the  course  of  trade. 

I  have  before  taken  occasion  to  remark  that  certain  mechanics  were  here, 
respectable  men,  who  would  have  come  forward  if  I  had  wished  them;  they 
would  have  told  you  that  they  did  not  rely  on  the  Bank  of  the  United  States 
at  all,  but  on  the  State  banks,  for  accommodation.  I  stated  that  one  of  those 
gentlemen  thought  the  renewal  of  the  charter  would  have  an  unfortunate  ef- 
fect on  the  politics  of  the  State  of  Maryland.  The  party  to  which  they  be- 
longed had  twenty  years  ago  declared  the  charter  of  the  United  States'  Bank 
to  be  unconstitutional;  they  were  in  earnest  when  they  declared  so.  From 
these  circumstances,  a  renewal  of  the  charter  at  this  time,  would  go  to  con- 
vince the  People  that  the  struggle  of  parties  was  nothing  but  a  business  of  ins 
and  outs,  and  not  depending  on  principle.  For  myself,  sir,  the  question  never 
came  before  me  on  a  constitutional  argument  before;  and  I  do  confess,  as  my 
friend  from  Kentucky  says,  that  I  was  not  very  squeamish  on  the  subject. 
But  the  able  arguments  of  my  friends  from  Kentucky,  Tennessee,  and  Vir- 
ginia, have  made  a  very  serious  impression  on  me,  indeed,  and  have  almost 
brought  me  to  think,  that,  if  there  were  no  other  objections,  I  should  vote 
against  the  bill  on  the  constitutional  question  alone.  But  my  mind  has  re- 
ceived a  wonderful  impression  indeed  from  the  arguments  of  the  gentleman 
last  up,  (MR.  POPE.)  He  carried  his  doctrine  of  constructionjsofar,  that,  it  ap- 
peared to  me  that  he  regarded  no  other  part  of  the  constitution  as  binding 
but  the  preamble.  In  support  ot  his  doctrine  he  brought  forward  the  example 
of  the  State  of  Connecticut,  which  State  has  no  written  constitution.  It  ap- 
peared to  me,  sir,  that  the  gentleman's  arguments,  if  valid,  reduced  us  pre- 
cisely to  the  situation  of  Great  Britain — to  look  for  our  constitution  in  laws, 
precedents,  and  parliamentary  construction;  to  have  no  written  guide.  My 
mind  became  alarmed;  and  hereafter  I  shall  be  very  much  afraid,  indeed,  to 


ON   THE  BILL   TO  RENEW  THE   CHARTKIl  OF   1791.  393 

giveniy  consent  to  these  kind  of  constructions,  about  which  I  have  not  here- 
tofore, been  very  squeamish. 

I  have  taken  up  the  time  of  the  Senate  to  an  extent  at  least  equal  to  any 
thin01  T  had  intended,  and  beyond  that  which  many  gentlemen  no  doubt  think 
I  ought  to  have  occupied,  I  have  not  wished  to  prolong  my  discourse  to  an 
unreasonable  length,  and  shall,  therefore,  leave  untouched  some  points  1  had 
intended  to  have  noticed.  1  am  unwilling  to  trespass  on  the  patience  oi  the 
Senate,  because  I  am  well  aware  that,  unless  this  bill  passes  speedily,  it  can- 
not pass  at  all.  Aware  of  that,  I  was  willing,  for  one,  and  so  were  all  the  gen- 
tlemen with  whom  I  act,  to  take  a  silent  vote  on  the  principle,  so  as  to  have 
given  full  time  to  gentlemen  who  brought  forward  the  bill  to  have  gone 
through  with  its  provision-.  But  another  course,  that  of  discussion,  has  been 
thought  proper  to  be  pursued,  and  I  have  deemed  it  proper  to  express  my 
sentiments. 

Mr.  S.  concluded  with  hoping  that  he  had  not  said  any  thing  to  wound  the 
feelings  of  gentlemen  in  opposition  to  him,  for  whom  he  had  great  respect. 
If  any  thing  Tie  had  said  had  hurt  the  feelings  of  any  one,  he  hoped  to  be  be- 
lieved when  he  assured  them  that  such  was  not  his  intention. 

Mr.  POPE. — Mr.  President:  Instead  of  interrupting  the  gentleman  from 
Maryland,  I  preferred  to  correct  him  after  he  had  finished  his  speech.  Iha\e 
examined  the  journal,  and  cannot  lind  that  any  question  about  extending  a 
branch  to  Kentucky  was  made;  but  I  have  a  very  perfect  recollection  of  my 
views  and  impressions  in  relation  to  the  bill.  That  bill  provided  that  six  mil- 
lions of  the  capital  should  be  divided  among  the  States,  to  be  subscribed  and 
paid  by  the.  Stales  within  a  given  period.  Iwas  aware  that  the  rich  moneyed 
States  on  the  seaboard  would  subscribe,  but  did  not  believe  the  new  States 
would  tax  the  People  to  raise  the  money.  In  order,  therefore,  to  diffuse  the 
interest  and  influence  concentrated  in  this  moneyed  institution,  and  thereby 
preserve  to  each  State,  if  the  bill  passed,  her  due  weight  in  the  federal  Union, 
I  proposed  an  amendment  to  this  effect :  that  the  capital  should  be  limited  to 
twenty  millions;  that  is,  ten  millions  in  addition  to  the  present  stock,  four  of 
which,  as  provided  in  the  bill,  to  be  subscribed  by  the  United  States,  and  six 
millions  to  be  divided  among  the  States,  and  paiu  out  of  the  national  treasury. 
Jf  my  plan  had  been  adopted,  and  a  branch  extended  to  Kentucky,  the  divi- 
dends made  on  the  capital  employed  there,  would  have  gone  into  the  treasury 
of  the  State.  H  has  been  a  favorite  policy  with  me  to  produce  a  unity  or  con  - 
solidation  of  interest  in  this  nation.  With  that  view  I  have  advocated  the 
encouragement  oi  manufactures,  and  the  appropriation  of  a  portion  of  our  funds 
for  the  improvement  of  the  interior  by  roads  and  canals.  Upon  the  same  prin- 
ciple, if  the  bank  bill  had  been  permitted  to  assume  the  shape  1  proposed  to 
give  it,  I  should  not  have  been  hostile  to  its  passage.  A  consolidation  of 
interest  is  necessary,  perhaps  indispensable,  to  give  strength  and  permanency 
to  this  confederated  republic,  and  free  it  from  the  dangers  and  evils  consequent 
upon  a  consolidation  of  power.  I  have  several  times  expressed  my  opinion, 
on  this  floor,  in  relation  to  a  consolidation  of  power.  We  ought  to  guard 
against  it.  Under  this  impression,  I  have  been  opposed  to  extending  the 
coercive  agency  of  this  Government  upon  the  People  of  the  interior.  Upon 
the  same  principle,  I  have  approved  the  repeal  of  the  internal  taxes,  not  so 
much  on  account  of  the  sums  demanded  from  the  People,  but  because  I  think 
it  difficult,  if  not  impossible,  to  have  such  a  system,  requiring  so  much  federal 
agency,  well  managed  by  one  Government,  over  this  immense  country. 

FEBRUARY  18,  1811. 
Motion  to  strike  out  the  first  section  of  the  bill. 

Mr.  BRENT  said  he  had  not  the  vanity  to  believe,  after  the  subject  had  been 
so  fully  discussed,  that  he  should  be  able  to  shed  any  new  light  on  it;  but, 
having  been  instructed  by  the  Legislature  of  the  State  which  he  haxl  the  donor 
to  represent,  to  vote  on  constitutional  principles  against  the  bill  under  con- 
sideration, and  as  he  was  reduced  to  the  painful  necessity  of  going  counter  to 
50 


394  BANK   OF   THE   UNITED    STATES. 

those  instructions,  it  seemed  to  him  to  be  indispensably  necessary  that  he 
should  submit  to  the  Senate  the  grounds  on  which  lie  acted.  It  is  (said  he) 
a  most  painful  situation  in  which  I  stand  in  relation  to  the  Legislature  of 
Virginia,  in  being  compelled  to  vote  in  opposition  to  their  will,  more  especially 
as  it  is  a  prevalent  opinion,  with  many  whose  opinions  are  entitled  to  great 
respect,  that  instructions  are  obligatory  on  a  Senator.  This  question  is  one 
which  has  never  been  settled,  or  even  fully  deliberated  on.  Instructions, 
when  heretofore  given  to  Senators,  have  generally  been  in  accordance  with 
the  sentiments  of  the  Senators,  and  only  added  the  greater  weight  to  their 
opinions,  if  called  upon  definitely  to  pronounce  with  regard  to  instructions 
on  questions  of  expediency,  I  might  be  under  some  difficulty  as  to  what 
course  to  pursue;  because,  although  there  is  no  clause  in  the  constitution  to 
that  effect,  I  am  under  a  strong  impression  that,  according  to  the  principles 
of  our  Government,  there  is  much  reason  to  believe,  that  the  respective  State 
Legislatures  should  have  such]a  right;  but,  on  a  constitutional  question,  (what- 
ever may  be  the  right  of  the  State  Legislatures  in  other  instances)  the  right 
of  instruction  may  be  denied,  in  my  judgment,  that  is,  so  far  as  to  be  impera- 
tive on  the  Senator.  To  give  a  vote  in  such  a  manner  as  in  his  estimation  to 
inflict  a  vital  wound  on  the  constitution,  is  more  than  the  Legislature  of  Vir- 
ginia, or  any  other  State  Legislature  in  the  Union,  can  compel  me,  or  any 
other  Senator  of  the  United  States*  to  do.  The  resolution  of  Virginia  is 
bottomed,  not  on  the  ground  of  inexpediency,  but  on  the  principle  mat  the 
constitution  prohibited  Congress  from  granting  the  bank  charter  in  the  first 
instance;  that  it  now  prohibited  it;  and,  therefore,  because  it  was  unconsti- 
tutional, the  Legislature  have  instructed  their  Senators  in  Congress  to  oppose 
it.  Now,  sir,  although  1  shall  not  immediately  and  directly  violate  the  con- 
stitution by  voting  against  the  bank,  yet,  if  I  vote  against  it  when  I  believe  it 
constitutional  and  necessary,  it  must  be  known  that  1  vote  in  conformity  to 
the  instructions  of  the  Virginia  Legislature;  and,  so  far  as  my  vote  goes*  it  will 
warrant  and  sanction  that  interpretation  of  the  constitution  which  the  Legis- 
lature of  Virginia  lias  given;  which  interpretation  in  conscience  I  believe  to 
be  erroneous.  Therefore,  though  in  ordinary  cases  the  instructions  of  a 
Legislature  may  be  imperative,  (I  will  not  determine  that  question)  I  con- 
clude that  they  cannot  be  so  when  they  require  of  a  Senator  to  commit  either 
a  positive  or  implied  breach  of  the  constitution,  or  to  vote  in  such  a  manner 
as  to  warrant  such  interpretation  of  the  constitution  as  will  deprive  it  of  an 
essential  attribute.  Virginia  has  the  physical  force,  but  has  she  a  moral  right 
to  violate  the  constitution  of  the  United  States?  If  she  has  it  not,  can  she 
give  it  to  her  Legislature?  If  her  Legislature  possess  it  not,  can  they  give  it 
to  a  Senator?  Can  the  Legislature  give  me  a  moral  right  to  violate  the  con- 
stitution of  the  United  States,  which  I  have  sworn  to  support?  I  believe  not* 
sir,  and  that,  in  the  situation  in  which  I  stand,  their  instructions  ought  to 
have  no  operation  on  the  vote  I  am  to  give  on  the  subject  under  consideration. 
To  illustrate  this  question  more  fully,  let  me  inquire, if  a  State  Legislature 
should  instruct  its  Senators  to  vote  lor  a  law  to  take  away  the  trial  by  jury 
in  a  criminal  prosecution,  would  a  Senator,  thus  instructed,  who  has  sworn 
to  support  the  constitution  of  the  United  States,  consider  himself  conscien- 
tiously authorized  to  vote  for  such  an  unconstitutional  measure?  When  a 
Senator  is  elected,  he  is  entitled  to  hold  his  seat  for 'six  years.  Suppose  that, 
immediately  after  he  is  elected*  the  State  from  which  he  is  sent,  gets  into  a 
state  of  direct  opposition  to,  and  insurrection  against,  the  General  Govern- 
ment, and  should  continue  so  for  the  whole  six  years  for  which  the  Senator 
is  elected;  does  this  vacate  his  seat?  Will  he  not  still  remain  in  the  Senate 
of  the  United  States*  and,  if  he  does  his  duty,  vote  for  all  measures  that  may- 
be necessary  to  restrain  the  unconstitutional  acts  and  insurrection  committed 
by  his  State?  Either  instructions  on  constitutional  questions  to  a  Senator  are 
imperative  or  they  are  not.  We  admit  that  a  Senator  retains  his  seat  in  the 
Senate  even  while  his  State  is  engaged  in  actual  insurrection  and  rebellion, 
and,  consequently,  in  the  continued  violation  of  the  constitution  of  the  United 
States.  While  a  Senator  engages  in  the  deliberations  of  this  the  highest 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     395 

council  of  the  nation,  is  he  to  obey  the  instructions  of  a  State  Legislature, 
who  are  in  the  daily  violation  of  the  constitution  of  the  United  States,  and 
are  endeavoring  wholly  to  destroy  it  by  open  and  declared  insurrection,  and 
which  Legislature  will  consequently  instruct  their  Senators  to  pursue  such  a 
course  as  will  best  accomplish  the  object  it  has  in  view?  In  this  dilemma,  if 
instructions  are  imperative,  which,  if  obeyed,  violate  the  constitution,  a 
Senator  will  retain  his  seat  in  the  Senate  of  the  United  States  lor  the  express 
purpose  of  using  every  means  in  his  power  to  destroy  that  constitution  which 
he  has  .sworn  to  support.  Can  it  be  imagined  that  it  was  intended,  in  any 
state  of  things,  that  a  Senator  should  hold  his  seat  in  the  Senate  of  the  United 
States,  for  the  sole  purpose  of  doing  all  he  could  to  overthrow  the  constitu- 
tion? Since  so  absurd,  monstrous,  and  dangerous  a  principle  would  result, 
from  admitting  the  mandatory  influence  of  instructions,  when  they  touch 
constitutional  questions,  I  deem  it  my  duty  not  to  give  my  acquiescence  to,  or, 
by  my  example,  sanction,  a  doctrine  so  hostile  to  the  general  spirit,  and  so 
unfavorable  to  the  preservation  of  the  constitution  of  the  United  States. 

Much,  therefore,  as  I  respect  the  sentiments  of  the  Legislature  of  Virginia, 
and  much  as  it  distresses  me  to  go  in  opposition  to  them,  I  believe  I  shall  do 
so  on  the  present  occasion.  With  respect  to  the  alarm  expressed  by  some 
gentlemen,  from  the  large  States  coming  forward  and  instructing  Congress,  I 
am  satisfied  that  no  such  insidious  motives  are  justly  attributable  to  the  Le- 
gislature of  the  State  which  1  have  the  honor  to  represent.  I  ara  satisfied  that. 
us  motives  were  honorable,  pure,  and  patriotic;  and  this  measure  is  a  testi- 
mony of  the  consistency  of  character  of  the  State.  When  the  charter  of  the 
Hank  of  the  United  States  was  first  granted,  the  general  sentiment  of  Virginia 
was,  that  this  law  was  contrary  to  the  constitution  of  the  United  States.  /Un- 
der a  different  state  of  things,  and  under  the  domination  of  a  different  political 
party,  than  at  the  present  time  rules  the  affairs  of  this  country,  she  preserves 
a  consistency  of  character.  Believing  the  bank  to  be  unconstitutional  then, 
she  now  entertains  the  same  sentiment  as  when  in  (lie  minority;  and,  with  an 
honorable  consistency  of  character  and  anxiety  to  preserve,  the  constitution 
inviolate,  she  has  sent  forward  instructions  to  her  Senators  in  Congress. 
Whilst,  therefore,  I  appreciate  the  motive  which  gave  existence  to  these  in- 
structions, and  highly  respect  the  source  whence  they  coiixe,  and  the  high  con- 
sideration to  which  they  are  entitled  generally,  I  do  not,  on  the  present  oc- 
casion, consider  them  obligatory  as  to  the  vote  I  am  about  to  give. 

Jn  considering  this  question,  I  will  take  it  in  a  three-fold  view: 

1st.  Whether,  on  the  first  promulgation  of  the  constitution  of  the  United 
States,  a  right  did  appertain  to  Congress  to  establish  a  bank? 

2dly.  As  respects  the  constitutional  question,  whether,  on  an  adjudged 
case,  and  one  long  practised  on,  it  has  the  same  weight  as  it  original? 

3d.  Whether,  admitting  that,  at  first,  the  bank  was  improper,  because  not 
necessary,  it  be  not  now  proper,  if  it  can  be  proved  almost  indispensably  ne- 
cessary? 

The  first  question,  whether  the  General  Government,  when  it  first  came 
into  operation,  did  not  possess  the  power  of  creating  a  national  bank,  is  the 
primary  object  of  investigation.  In  objection  to  this,  it  has  been  said,  that,  to 
carry  into  effect  an  enumerated  power,  is  one  thing,  and  the  right  to  incorpo- 
rate a  bank  is  a  distinct  power.  Those  who  take  this  ground  say,  that  the 
creation  of  a  national  bank  is  an  original,  independent,  and  substantive  power. 
It  is  not  sufficient,  say  they,  to  show  that  it  is  a  convenient  instrument  to 
carry  into  effect  an  enumerated  power,  because  it  is  an  independent  authority 
of  itself,  and  the  genius  of  our  Government  prohibits  the  derivation  of  any 
powers  by  implication,  with  scrupulous  limitation.  It  is  true,  sir,  that  our 
Government,  being  an  emanation  from  the  existing  State  Governments,  the 
rational  construction  is,  that  all  power  riot  given  away  is  retained  to  them  or 
to  the  People.  If  that  construction  does  not  result,  then  a  positive  amend- 
ment, which  has  been  made  to  the  constitution,  has  infused  this  principle  into 
it.  1,  therefore,  admit,  in  its  fullest  latitude,  the  construction,  that  all  pow- 
ers, not  given  away,  are  still  retained:  yet,  I  still  co  itcr.d,  that,  even  in  a  go- 


596  BANK  OF  THE  UNITED  STATES. 

vernment  constituted  like  ours,  there  are  some  resulting  powers.     Or,  by 
what  right  do  we  create  a  military  school?     We  have  a  right  to  raise  armies; 
but  we  can  have  an  army  without  a  military  school.    Yet  it  is  constitutional  to 
create  such  an  institution,  because  every  given  power  implies  rights  inferior, 
appertaining  to  the  powers  granted.     We  lay  an  embargo — is  there  any  clause 
in  the  constitution  authorizing  us  to  lay  embargoes?    No,  sir;  we  have  a  right 
to  regulate  trade,  and  we  have  a  right  to  lay  embargoes  to  protect  it.     We 
have  a  right  to  provide  for  arming  and  disciplining  the  militia.     Under  this 
authority  we  build  armories.     Is  there  any  provision  in  the  constitution  di- 
recting it?    We  have  erected  forges,  and  even  purchased  ore  banks.    These 
are  interior  powers,  necessarily  resulting  from  the  greater  powers  granted. 
But  here  gentlemen  find  the  great  difficulty.    The  creation  of  a  corporation, 
say  they,  is  an  act  of  sovereignty  $  it  cannot  be  used  as  a  mean,  because  it  is  a 
sovereign  act.    Why,  sir?  every  law  passed  is,  quo  ad  hoc,  a  sovereign  act. 
A  law.  incorporating  a  military  school,  is  as  much  an  act  of  sovereignty,  as  to 
the  particular  subject  to  which  it  relates,  as  an  act  incorporating  a  bank.  We 
create  a  military  school — for  what  purpose?    Because  the  sovereign  authority 
has  power  to  establish  an  army,  and  the  power  to  create  a  military  school  is 
inseparably  connected  with,  and  necessarily  appertains  to,  it.    We  establish 
a  navy;  we  also  establish  a  marine  corps.     There  is  no  clause  in  the  consti- 
tution giving  that  power,  but  we  take  it,  as  inseparable  from  the  power  to 
create  a  navy;  because  the  exercise  of  the  greatest  implies  every  subordi- 
nate power  necessarily  connected  with  it.     The  great  stumbling  block,  how- 
ever, is?  that  this  is  one  of  those  independent,  original,  and  substantive  pow- 
ers, which  cannot  be  given  by  implication.   Blackstone  says,  "  municipal  law, 
thus  understood,  is  properly  denned  to  be  a  rule  of  civil  conduct  prescribed 
by  the  supreme  power  in  a  State,  commanding  what  is  right,  and  prohibiting 
what  is  wrong."    Agreeably  to  this  definition,  every  law  passed  by  a  delibe- 
rative body  is  an  act  of  sovereignty  as  to  the  subject  to  which  it  relates.     The 
establishment  of  a  marine  corps  is  as  much  an  act  of  sovereignty  as  an  act  in- 
corporating the  Bank  of  the  United  States.     The  only  question  is,  whether  it 
be  necessarily  incident  to  the  enumerated  power  given  to  the  General  Go- 
vernment.    Those  who  criticise  most  accurately  on  the  constitution,  and 
most  unwillingly  concede  resulting  powers,  will  admit  them  to  a  certain  ex- 
tent, even  in  our  Government.   _Tne  only  question  is  the  immediate  and  ne- 
cessary connexion  of  the  means  used  with  the  object  intended  to  be  attained. 
In  inquiring,  then,  sir,  whether  or  not,  at  the  first  promulgation  of  the  con- 
stitution, when  it  came  into  existence,  it  was  intended  that  Congress  should 
possess  the  power  of  incorporating  the  Bank  of  the  United  States,  let  us  in- 
quire whether  there  was  any  possibility  of  carrying  into  effect,  with  any  toler- 
able convenience  and  advantage,  the  several  provisions  of  the  constitution, 
unless  this  power  exists.    It  is  said  that  you  do  not  possess  the  power,  be- 
cause it  is  attempted  to  be  derived,  by  different  gentlemen,  from  so  many  dif- 
ferent parts  of  the  constitution.    Now,  Mr.  President,  I  have  never  before 
understood  that  a  capacity  to  derive  a  title  from  several  different  sources, 
gives  you  less  title  than  if  derived  from  one  source  alone.     I  derive  the  power 
from  the  whole  context  of  the  constitution,  although  gentlemen  seem  to  think 
that  the  title  is  invalidated  in  proportion  to  the  number  of  sections  in  the  con- 
stitution from  whence  we  derive  it.     In  order  to  avoid  confusion  of  argument 
in  examining  this  question,  I  will  derive  it  from  only  one  source,  at  present, 
though  I  believe  others  equally  give  it,  by  a  necessary  construction.    At  the 
time  the  constitution  came  into  existence,  I  believe  there  were  but  three 
banks  in  the  United  States;  none  south  of  Philadelphia,  and  all  of  very  limit- 
ed capital.    The  constitution  of  the  United  States  gives  the  power  to  levy  and 
collect  taxes.    Is  it  possible  to  imagine  any  system  so  convenient  for  the  col- 
lection of  this  revenue,and  sending  it  to  the  seat  of  Government,  as  that  of  the 
agency  of  banks?    I  am  not  inquiring  whether  the  State  banks  can  do  it;  but 
I  say  that  the  trainers  of  the  constitution  must  have  had  under  consideration, 
the  state  of  things  at  the  time  when  the  constitution  came  into  existence.     At 
that  time  there  was  not  one  bank  south  of  Philadelphia;  and  the  banks  which 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791. 

existed  were  very  limited  in  their  capital,  and  their  paper  of  limited  circulation. 
Congress,  in  such  a  state  of  things,  then,  has  the  power  of  levying  and  collect- 
ing taxes  conferred  on  it,  arid  yet  Congress  has  not  the  power  to  create  banks 
to  aid  in  the  collection  of  its  taxes,  notwithstanding  a  clause,  to  make  all  laws 
necessary  and  proper  for  that  purpose,  is  contained  in  the  constitution.  No 
gentleman  will  say  that  the  agency  of  banks  is  not  necessary,  in  some  way  or 
other,  in  collecting  the  revenue.  I  admit,  without  them  you  could  have  car- 
ried on  our  fiscal  arrangements  in  an  awkward  and  cumbrous  form;  but  was 
that  the  intention  of  the  constitution?  When  the  power  to  collect  taxes  was 
given,  it  was  intended  to  give  all  the  means  necessary  to  carry  this  power  into 
execution.  It  was  not  to  execute  this  power  in  a  cumbrous  form,  but  with 
the  greatest  facility  with  which  the  power  is  susceptible  of  being  wielded. 
Now,  is  it  possible  that  the  constitution  contemplated  that  the  revenue  should 
be  collected  and  transmitted  here,  subject  to  all  the  risks,  and  accidents,  and 
inconveniences,  that  attend  the  transportation  of  specie?  It  is  impossible. 
But  all  this  doubt  has  arisen  from  its  being  a  separate  and  independent  power, 
although  it  is  no  more  of  that  character  than  any  other  law  passed  to  execute 
the  enumerated  powers  of  Congress. 

In  a  word.  Mr.  President,  it  is  admitted  by  all  who  have  spoken  on  this 
question,  whether  for  or  against  the  bill  under  consideration,  that  the  agency 
of  a  bank  or  banks  affords  the  greatest  facility  and  security  of  any  mean  that 
can  be  devised  for  the  collection  of  a  revenue  and  for  its  transmission  to  your 
treasury. 

It  is  admitted  that  no  bank  or  banks,  of  a  capital,  or  of  sufficient  circulating 
paper,  throughout  the  United  States,  adequate  to  this  object,  did  exist,  when 
the  constitution  was  first  formed,  promulgated,  or  adopted.  It  is  admitted 
that,  to  levy  and  collect  taxes,  is  one  of  the  enumerated  powers  of  Congress. 
It  is  admitted  that  Congress  has  all  power  necessary  and  convenient  to  cany 
its  enumerated  powers  into  execution. 

It  is  admitted  there  is  no  express  clause  in  the  constitution  prohibiting  the 
establishment  of  a  national  bank. 

If  these  principles  and  facts  are  admitted,  does  it  not  demonstrate,  beyond 
the  possibility  of  doubt,  this  unquestionable  result,  to  wit:  That,  as  Congress 
i>  to  levy  and  collect  revenue;  that,  as  the  agency  of  banks  affords  the  most 
certain,  speedy,  and  convenient  means  by  which  a  revenue  can  be  collected; 
that,  as  neither  at  the  period  when  the  constitution  was  made,  promulgated, 
or  adopted,  banks  of  sufficient  capital  or  with  paper  of  sufficient  circulation 
existed  for  the  collection  of  the  revenue  and  its  transmission  to  your  treasury; 
that,  as  there  was  no  positive  clause  prohibiting  a  National  Bank  in  the  con- 
stitution; that,  as  Congress  was  to  have  all  power  necessary  to  carry  its  enu- 
merated powers  into  execution;  that,  as  the  convention  who  framed  and  the 
People  who  adopted  the  constitution,  must  have  had  in  view  our — the  existing 
institutions  and  the  then  general  state  of  society;  it  was  the  intention  of  the 
convention  who  formed  the  constitution,  and  the  People  who  adopted  it,  to 
give  to  Congress  the  power  of  establishing  a  national  bank.  If,  at  the  time 
of  adopting  the  constitution,  it  was  necessary  and  proper  that  Congress  should 
possess  it  for  the  exercise  of  any  of  its  enumerated  powers;  if  me  foregoing 
result  is  undeniable,  and  I  think  it  is;  I  would  interrogate,  if  Congress,  on  the 
adoption  of  the  constitution,  possessed  a  power  to  establish  a  national  bank, 
what  has  since  deprived  that  body  of  the  power?  I?  Mr.  President,  can  dis- 
cover nothing  which  has.  One  argument,  much  confided  in  by  gentlemen  who 
have  opposea  the  present  bill,  is  not  that  banks  are  not  necessary  to  the  col- 
lection of  the  revenue,  but,  that  State  banks  will  answer.  In  return,  I  insist 
that  no  State  banks  did  exist  when  the  constitution  was  first  formed,  there- 
fore, the  power  to  create  a  national  bank,  is  necessarily  given  in  the  power  to 
levy  and  collect  taxes.  To  this  it  is  replied,  that,  to  create  a  national  bank, 
is  to  legislate  by  implication;  it  is  a  separate,  substantive,  and  independent 
power;  to  levy  a  tax  is  one  thing,  to  make  a  bank,  another.  I  answer,  to  levy 
a  tax  is  one  thing1,  to  create  an  officer  for  its  collection,  another.  By  this  kind 
of  chop-logic,  we  may  prove  any  thing  unconstitutional.  1  ask,  when  you 


398  BANK  OF  THE  UNITED  STATES. 

levy  a  tax,  if  you  do  not  provide, officers  for  collecting  it?  I  levy  a  tax,  and 
create  a  bank,  through  whose  instrumentality  I  mean  to  collect  it;  from  the 
same  authority  by  which  I  appoint  a  collector,  I  have  a  right  to  create  a  bank, 
through  whose  instrumentality  I  mean  to  receive  and  transmit  it.  There  is 
no  clause  in  the  constitution,  saying  you  may  appoint  officers  for  the  collection 
of  the  revenue,  specifically;  but  the  right  to  appoint  officers  to  collect  revenue, 
is  derived  from  the  power  of  levying  a  tax,  from  which,  also,  may  be  derived 
the  power  of  establishing  a  bank,  if  it  be  the  best  mode  of  collecting  the  re- 
venue. It  is  said,  you  may  collect  this  tax  by  means  of  the  State  banks.  Very 
well,  sir;  I  say  you  may  collect  the  revenue  by  means  of  State  officers;  and, 
upon  the  principle  that  you  cannot  establish  a  bank  to  collect  the  revenue, 
because  the  Slate  banks  can  collect  it,  I  say  that  the  State  officers  can  collect 
our  taxes;  and  if  your  argument  is  just,  you  cannot  appoint  any  other  officers. 
The  constitution  authorizes  the  President  to  appoint  persons  to  fill  all  offices 
established  by  law,  but  says  not  a  word  about  appointing  officers  to  collect  the 
tax  you  levy,  specifically.  Upon  the  construction  gentlemen  contend  for, 
they  might  say,  because  no  power  is  expressly  given  to  appoint  officers  of  the 
customs  or  for  your  taxes,  and  it  is  possible  to  collect  the  revenue  by  the 
agency  of  the  State  Governments,  and  nothing  should  be  done  by  the  United 
States'  authorities  which  can  be  done  by  the  States,  therefore,  these  collectors 
of  the  customs  or  revenue,  should  be  such  as  are  appointed  by  the  States,  tor 
State  purposes.  This  kind  of  reasoning,  sir,  cannot  be  admissible,  and  is  in 
hostility  with  a  most  manifest  principle  of  the  constitution;  as  it  is  evidently 
a  prominent  feature  of  that  instrument  that  the  General  Government  should 
have  within  itself,  all  those  powers  necessary  and  convenient  for  the  execution 
of  its  enumerated  trusts,  entirely  free  and  independent  of  the  interference 
and  agency  of  the  States,  their  officers,  or  ministers. 

It  has  been  triumphantly  demanded  by  some,  whether  we  could  create  a 
trading  company.  I  have  not  a  doubt  on  the  subject.  If  it  can  be  demon- 
strated to  me,  that  commerce  would  be  benefitted  by  the  incorporation  of  a 
mercantile  company;  that  it  is  indispensably  necessary  to  do  it,  to  regulate  trade 
to  advantage;  under  such  circumstances,  I  have  no  doubt,  we  can  create  a 
company:  for  the  creation  of  a  company  is  no  more  the  exercise  of  a  sepa- 
rate independent  authority,  than  any  law  which  we  make  when  legislating 
under  our  enumerated  powers.  If  it  be  inquired,  whether  or  no  we  could 
incorporate  a  company  to  cut  canals  through  the  States,  I  answer,  that  there  is, 
in  the  constitution,  a  clause  authorizing  Congress  to  regulate  trade  between 
the  States,  and,  under  this  clause,  we  could  do  it  with  the  consent  of  the 
Stales.  We  could  not  do  it  without.  And  I  derive  this  construction  from 
the  constitution  itself.  It  is  a  fair  mode  of  construction,  laid  down  by  profes- 
sional men,  that,  where  there  is  intricacy  or  difficulty  in  the  construction  of 
any  legal  instrument,  you  must  take  the  context  together;  one  part  of  the 
instrument  must  be  used  to  elucidate  another;  the  different  parts  must  be 
compared,  and  the  true  construction  thereby  obtained.  In  the  8th  section  of 
the  hrst  article,  a  power  is  given  to  Congress  "  to  exercise  exclusive  legisla- 
tion, &c.  over  all  places  purchased  by  the  consent  of  the  Legislature  of  the 
State  in  which  the  same  shall  be,  for  the  erection  of  forts,  magazines,  arse- 
nals, dockyards,  and  other  needful  buildings."  I  discover  here,  that  the  con- 
stitution, in  order  to  preserve  the  sovereignty  of  the  State  Governments,  has 
been  exceedingly  vigilant  in  guarding  their  territorial  rights.  Therefore, 
\vhere  a  power  is  ^iven  to  the  General  Government,  interfering  with  the  ter- 
ritorial rights  of  the  States,  there  is  a  clause  in  the  constitution  saving  ter- 
ritorial rights,  and  requiring  the  consent  of  the  States  to  its  exercise.  If, 
therefore,  Government,  in  the  exercise  of  its  enumerated  powers,  is  restrained 
from  acting,  where  their  acts  affect  State  territory,  unless  with  the  consent  of 
the  States,  I  infer  that  we  have  not  a  right  to  incorporate  canal  companies 
without  the  consent  of  the  States  through  which  the  canal  is  to  go.  With 
this  limitation,  I  have  little  hesitation  in  saying  that  we  have  a  right  to  incor- 
porate canal  companies. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     399 

It  is  said,  (hat  the  corporation  which  it  is  proposed  to  re-charter,  indepen- 
dent of  the  facility  it  affords  to  Government  in  the  collection  of  the  revenue, 
has,  also,  particular  advantages  given  to  it;  that  it  is  a  monopoly.  And  what 
right,  it  is  asked,  has  Congress  to  grant  a  monopoly?  I  will  ask,  in  return, 
when  an  officer  is  appointed  to  collect  the  customs,  has  he  not  a  salary  and 
emoluments?  Is  riot  every  office  in  law  called  a  franchise  or  a  particular 
privilege?  If  the  officer,  who  has  these  emoluments,  privileges,  or  franchises, 
(call  them  what  you  will)  receives  these  in  consideration  for  his  services, 
have  you  not  the  power  to  hold  out  inducements  to  associated  bodies  of  men  to 
form  an  institution  from  which  the  public  may  derive  benefit,  not  with  a  view 
exclusively  to  their  monopoly  and  benefit,  but  on  account  of  the  advantages 
to  be  derived  from  it  by  the  public? 

If  it  is  urged  that,  instead  of  this  incorporated  company,  you  mi^ht  appoint 
officers  in  the  different  ports  of  the  States  in  which  the  greatest  duties  are  col- 
lected, and  issue  notes,  or  bills  of  credit,  which  are  made  current,  without 
creating  a  bank  authorized  to  make  discounts,  I  admit  we  might;  but,  if  we 
believe  it  not  so  convenient  and  safe  a  way  of  collecting  our  revenue,   as 
through  the  agency  of  a  bank,  we  have  the  right  to  associate  men  in  a  bank- 
ing company   for  this  purpose,  and  give  them  particular  privileges,  upon  the 
same  principles  that  we  give  privileges  or  franchises  to  every  officer  we  ap- 
point; and,  although  we  thus  confer,  in  both  instances,  privileges,  it  is  done 
for  the  public  good,  because  the  object  to  be  effected  can  be  accomplished  by 
no  other  means  so  effectually.     If  you  want  an  association  of  men  in  a  par- 
ticular manner,  to  make  them  subservient  to  some  political  use,  you  have  au- 
thority to  give  to  those  associating  men  whatever  privilege  may  be  sufficient  to 
induce  them  to  associate  for  this  purpose.     You  do  not  give  them  this  privi- 
lege for  their  own  individual  advantage,  but  as  the  lure,  the  bonus  for  asso- 
ciation, by   which  association  the  public  object  is   effected.     I  would  ask, 
whether  Congress  could  not,  to-morrow,  pass  a  law  authorizing  the  President 
to  open  a  negotiation  with  Hope  <S:  Co.^saying,  we  h;iye  full  confidence   in 
you,  and  you  shall  be  the  United  Stares*  bankers?     This  may  be  said  to  be  a 
monopoly;  but,  if  Congress  were  convinced  that  this  was  the  safest  means  of 
collecting  the  revenue,  J  ask,  where  is  the  clause  of  the  constitution  which, 
in  substance,  or  words,  prohibits  Congress  from  adopting  such  a  measure? 
If  there  be  no  clause  to  prohibit  this,  there  is  no  prohibition  to  the  passage  of 
a  law  for  incorporating  individuals  in  an  association  from  \\hich  the  greatest 
possible  facility  in  the  collection  of  the  revenue  is  expected.     In  a  word,  sir, 
it  appears  to  me  that  the  only  rule,  in  an  instance  of  this  kind,   is,  to  take 
care  that  the  means  used  have  a  necessary  reference  to  the  object  of  the 
po\yer.     AVhen  legislating  on  the  enumerated  powers  of  Congress,  the  only 
limitation  is,  an  inquiry  whether  the  means  we  are  about  to  use,  necessarily 
relate  to  the  effectuation  of  the  object  in  view.     For  instance,  1  should  con- 
sider it  a  violation  of  the  constitution^' Congress,  under  the  power  *'  to  make 
rules  for  the  government  of  the  land  and  naval  forces,"  should  pass  a  law  re- 
gulating military  testamentary  devises;  because  the  incident  is  too  remote,  it 
is  too  great  a  stretch  of  power,  the  constitutionality  or  unconstitutionally 
being  regulated  by  the  relation  of  the  means  to  the  object  to  be  effected.     If 
this  reasoning  be  just,  then  this  question  is  not  soluble  by  the  mere  determi- 
nation of  the  question,  whether  or  not  this  is  the  best  system  by  which  our 
revenue  can  be  collected;  we  must,  to  ensure  its  rejection  on  constitutional 
grounds,  prove  that  the  power  of  establishing  a  bank  is  so  remote  from  the 
object  of  collecting  the  revenue,  as  to  have  no  connexion  with  it.     Admit  that 
a  better  system  of  collecting  the  revenue  can  be  devised,  than  by  the  esta- 
blishment of  a  bank;  it  does  not  follow  that  the  bank  is  unconstitutional.    The 
only  question  is,  whether  it  is  so  remote  as  that,  by  no  satisfactory  process  of 
reasoning,  you  can  prove  its  analogy  to  the  collection  of  the  revenue.    If  it  be 
shown  that  a  better  system  could  be  adopted,  it  only  proves  that  this  is  inex- 
pedient, not  that  it  is  unconstitutional;  and,  sir,  it  has  been  a  matter  of  as- 
tonishment to  n:e,  that,  notwithstanding  it  was  so  universally  believed,  some 
time  since,  that  the  agency  of  the  bank   was  excessively  conducive  to  the 


400  BANK  OF  THE  UNITED  STATES. 

prompt  and  regular  collection  of  the  revenue,  it  is  no\y  discovered  that  its 
agency  is  unnecessary.  The  gentlemen  who  are  now  of  this  opinion,  thought 
otherwise  formerly,  and  the  Secretary  of  the  Treasury,  who  is  best  enabled 
to  decide  the  question,  is  of  a  different  opinion  from  them. 

In  answer  to  those,  sir,  who  say  that  State  banks  afford  the  facility  neces- 
sary to  the  collection  of  the  revenue,  I  would  ask,  is  the  General  Govern- 
ment to  be  dependent  on  the  State  banks  for  the  collection  of  the  revenue  ? 
Or,  do  gentlemen  believe  they  would  be  as  secure  and  responsible  as  the  Bank 
of  the  United  States  ?  As  to  the  remark,  that,  in  those  States  where  there 
are  no  banks,  the  revenue  is  collected  with  as  much  facility  as  where  there, 
are  banks,  I  would  reply,  that,  where  there  are  no  banks,  there  is,  neverthe- 
less, bank  currency  in  circulation.  Where  the  States  have  no  banks  of  their 
own,  the  notes  of  the  Bank  of  the  United  States  are  in  circulation,  and  the 
customs  paid  in  those  notes.  A  national  bank,  I  am  under  a  strong  convic- 
tion, is,  if  not  indispensable,  highly  conducive  to  a  convenient  collection  of 
the  revenue;  and  if  this  bank  be  put  down  to  day,  before  a  long  interval  of 
time  we  fehall  have  another  bank.  In  my  estimation,  there  ought  to  be  a  bank, 
whose  paper  circulates  freely  throughout  the  States;  other  paper  will  not  an- 
swer the  same  purpose.  I  recollect  to  have  been  travelling  where  I  had  in  my 
pocket  book,  five  hundred  dollars  in  good  bank  notes;  and  yet  I  was  com- 
pelled to  trespass  on  another  gentleman,  in  company  with  me,  to  bear  my  ex- 
penses. If  the  notes  I  had  with  me  had  been  notes  of  the  Bank  of  the  Unit- 
ed States,  they  would  have  circulated  freely,  because  the  merchants  gladly 
receive  them  from  the  planters,  for  the  purpose  of  remittance,  &c.  But  it  al- 
ways will  be  otherwise  with  State  banks;  from  their  nature  they  cannot  give 
that  general  circulation  which  is  derived  from  a  general  bank. 

The  honorable  gentleman  from  Kentucky,  (Mr.  CLAY)  with  his  usual  inge- 
nuity, spoke  of  the  enormous  evil,  and  the  danger  to  our  liberties,  that  is  to 
be  anticipated  from  giving  the  power  to  erect  corporations,  which,  he  says,  is 
an  original  power,  and  has  given  being  to  institutions  which  have  swelled  to 
an  enormous  magnitude.  The  example  of  the  East  India  Company  and  the 
South  Sea  Company  were  spoken  of  in  an  alarming,  impressive,  and  inge- 
nious manner.  ]3ut,  I  ask,  sir,  if  the  State  Governments  do  not  possess  this 
gigantic  power  ?  I  see  nothing  to  restrain  them,  more  than  the  General  Go- 
vernment. I  see  that  the  only  supervisors,  as  to  the  State  Governments,  are 
the  People  themselves,  who  are,  also,  the  supervisors  of  Congress,  who  have, 
also,  the  invidious,  jealous  eyes  of  the  State  Governments  constantly  upon 
them,  as  is  illustrated  in  the  conduct  of  some  of  the  States  on  this  very  ques- 
tion, and  who,  combined,  would  guard  this  power  from  abuse  by  the  General 
Government,  much  more  than  the  People  atone  will  guard  against  abuses  by 
the  States.  It  is  a  visionary  mode  of  reasoning,  to  argue  against  the  posses- 
sion of  power  from  the  abuse  of  it.  The  gentleman  may  as  well  tell  us  that 
AVC  may  raise  armies  to  so  monstrous  an  extent  as  to  crush  our  liberties,  and 
therefore,  we  ought  not,  on  any  emergency,  to  raise  an  army.  He  may  as 
well  say,  the  creation  of  a  military  school,  which  is  as  much,  and  no  more,  a 
resulting  power  than  the  one  in  question,  is  giving  to  Congress  a  great  sub- 
stantive independent  power  to  create  a  vast  engine,  under  the  name  of  a  mili- 
tary school,  which  may  swell  to  such  immense  importance  as  to  make  it  an 
instrument  to  swallow  all  the  liberties  of  the  country.  So,  as  respects  sites 
for  forts  and  armories,  and  ore  banks — powers  exercised  by  implication.  The 
gentleman,  from  the  unlimited  indulgence  he  gives  to  a  gloomy  and  forebod- 
ing imagination,  may  say  you  may  purchase  the  territorial  rights  of  the  States, 
until  you  destroy  their  sovereignty.  There  is  no  end  to  me  extent  of  such 
reasoning.  We  must  rely,  in  some  degree,  on  ourselves,  on  the  vigilance  of 
the  State  Governments,  and  on  the  discretion  of  the  People.  When  the  whole 
body  politic  is  so  corrupt  that  there  are  no  eyes  on  our  rulers,  to  see  when 
they  transcend  the  powers  of  the  constitution,  all  is  lost,  and  no  paper  reser- 
vations can  save  us. 

From  this  reasoning,  sir,  I  again  reiterate,  that  I  C9nclude  that,  when  the 
constitution  was  formed  and  promulgated,  it  was  the  intention  of  the  framers 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     4Q1 

of  the  constitution,  and  of  those  who  adopted  it,  in  the  powers  they  gave  to 
the  Congress  of  the  United  States,  to  include  that  power,  and  establish  a  bank, 
if  such  an  institution  was  considered  convenient,  necessary,  and  proper,  to 
carry  into  execution  any  one  of  the  enumerated  powers  conceded  to  the  Ge- 
neral Government;  anu,  if  it  was  constitutional  then,  it  was  equally  so  now. 

In  the  course  of  the  very  elaborate  and  able  speech  delivered  by  my  col- 
league a  few  days  past,  on  this  subject,  he  stated  these  two  positions:  that  a 
right  to  grant  charters  of  incorporation  is  not  of  a  description  of  character 
similar  to,  and  has  no  analogy  with,  any  of  the  enumerated  powers  of  Con- 
gress. 

2d.  That  the  right  to  grant  charters  of  incorporation  was  a  distinct  and 
sovereign  power,  equal  in  itself  to  any  of  the  enumerated  powers  granted  to 
Congress. 

As  to  the  first  position,  that  the  right  of  creating  corporations,  or  banks,  has 
no  analogy  to  the  enumerated  powers  of  Congress,  permit  me  to  observe,  this 
is  begging  the  question,  or,  rather,  entirely  evading  it.  If  it  is  admitted  by 
every  one  (and  this  has  been  admitted)  that  banks  afford  the  greatest  facility 
of  collecting  your  revenue,  and  you  have  a  right  to  avail  yourself  of  the  best 
means  to  carry  into  execution  your  enumerated  powers,  the  right  to  create 
banks  has  an  immediate  connexion  with,  and  grows  out  of,  the  power  to  levy 
and  collect  taxes,  which  brings  this  merely  to  a  question  of  expediency. 

His  second  position  was,  that  the  right  to  create  corporations,  or  banks,  was 
a  distinct  and  sovereign  power,  equal,  in  itself,  to  any  other  of  the  enumerat- 
ed powers  of  Congress;  that  it  wants  that  connexion,  affiliation,  and  subser- 
viency, to  some  enumerated  power,  which  is  necessary  to  give  a  power  by  im- 
plication. I  know  not  that  a  law,  granting  a  charter  of  incorporation,  is  more 
an  act  of  sovereignty,  than  a  law  passed  on  any  other  subject.  That  it  is  a 
power  original,  independent,  and  of  itself  equal  to  any  one  of  the  enumerat- 
ed powers,  cannot  be  admitted,  because  it  has  not  been  contended  by  any 
that  Congress  possess  the  power  of  creating  corporations  at  all  times,  and  in 
all  instances.  It  is  only  contended  to  be  proper,  and  constitutional,  when  it 
is  used  in  subserviency  to  the  enumerated  powers  of  Congress,  as  the  means 
best  calculated  to  carry  any  enumerated  power  into  execution.  The  right  of 
creating  incorporations  for  this  purpose  only,  and  under  this  limitation,  can 
never  make  it  a  power  equal,  in  character  and  magnitude,  to  any  one  of  our 
enumerated  powers,  because,  if  it  is  used  as  a  mere  subservient  instrument  to 
them,  in  that  point  of  view — if  it  can  be  demonstrated  that  they  are  a  conve- 
nient means  to  eftect  a  legitimate  object — my  colleague  must  admit  their  con- 
stitutionality, because  he  nas  emphatically  dwelt  on  that  clause  of  the  consti- 
tution which  gives  to  Congress  the  power  to  make  all  laws  necessary  and  pro- 
per; and  to  those  who  apprehend  that  this  power  may.be  abused,  and  Con- 
gress may  attempt  to  exercise  it  in  instances  not  within  the  pale  of  their  le- 
gitimate authority,  I  answer,  they  may  also  abuse  any  other  power  they  pos- 
sess. The  only  preservation  is  the  virtue  of  our  Legislature,  and  the  vigilance- 
of  our  People. 

The  next  point  which  remains  to  be  investigated  is,  whether  the  constitu- 
tionality of  the  bill  under  consideration  receives  any  support  from  its  princi- 
ples having  been  sanctioned  by  any  former  laws  and  measures  of  the  Govern- 
ment. 

Mr.  President,  I  am  ready  to  admit  that,  where  a  measure  obtains,  that  in- 
flicts a  violation  on  our  constitution,  that  is  unquestionable,  palpable,  and 
notorious,  however  frequently  and  however  solemnly  this  measure  had  been 
sanctioned,  however  long  it  had  been  submitted  to  and  endured,  would  not 
be  considerations  with  me  of  any  importance,  or  create  one  moment  of  doubt. 
Error,  however  repeated  and  submitted  to,  is  error  still,  and  every  occasion 
should  be  sought  to  get  rid  of  it;  but,  on  an  occasion,  in  the  origin  of  which  the 
constitutional  question  was  doubtful,  when  men  of  the  purest  integrity  and 
most  illumined  intelligence  might  pause,  and  differ,  and  doubt,  I  should  ima- 
gine that  such  case,  once  acted  on,  should  never  again  be  touched, unless  con- 
siderations of  irresistible  importance  lead  to  such  a  measure;  and  I  imagine 
51 


402  BANK  OF  THE  UNITED  STATES. 

that  every  man  of  candor  and  intelligence,  who  weighs  with  due  deliberation 
the  question  under  consideration,  will  at  least  adinit?  if  the  measure  is  riot 
certainly  constitutional,  it  is  at  least  of  that  description  of  character  I  have 
last  mentioned.  In  such  an  instance  as  this,  will  it  be  said  that,  after  this 
measure  has  been  sanctioned  by  Congress,  on  full  deliberation  and  debate  j  after 
the  bill  establishing  this  bank  had  received  the  approbation  of  the  President, 
who  reserved  his  signature  to  it  till  the  last  moment  permitted  by  the  constitu- 
tion; and  after  he  had  viewed  the  question  with  all  its  bearings  in  every  atti- 
tude it  could  be  presented;  after  full  consultation  with  his  cabinet  ministers, 
and  others  of  high  intellectual  character;  after  the  law,  thus  sanctioned  by  the 
Legislature  and  the  President,  has  been  acquiesced  in  and  practised  on  for  the 
space  of  twenty  years;  when  it  has  been  considered  inviolable,  and  corrobo- 
rating laws  passed  during  the  administration  and  legislation  of  different  domi- 
nant political  parties;  when  those  laws  have  been  sanctioned  by  the  solemn 
adjudication  ot  all  our  judges,  both  of  the  General  and  State  Governments; 
to  suppose  that  all  these  considerations  arc  to  have  no  influence  as  to  putting 
to  rest  a  constitutional  question,  which  was  doubtful  in  its  origin,  is  to  be 
sceptical  and  scrupulous  beyond  all  reasonable  bounds.  If  Congress  have  no 
right  to  incorporate  a  bank,  was  it  not  an  act  of  usurpation  in  the  President 
and  Congress  to  pass  laws  punishing  individuals  for  the  forgery  of  its  paper? 
Nay,  more,  Mr.  President,  when  we  inflict  death  for  the  support  of  institu- 
tions Congress  had  no  right  to  create,  and  for  the  violation  of  laws  the  con- 
stitution prohibits  that  body  from  enacting1,  (and  under  the  denomination  of 
each  of  the  political  sects  into  which  this  country  is  divided,  agreeable  to  the 
principles  now  contended  for  by  gentlemen,  such  laws  have  been  passed)  are 
not  the  Excutive  which  sanctions,  the  Congress  which  passed,  and  the  whole 
body  of  our  judiciary,  both  of  the  General  and  State  Governments,  which  en- 
force such  unconstitutional  measures,  and  under  their  surreptitions  authority 
inflict  death  upon  our  citizens,  worse  than  usurpers?  Are  they  not  murderers? 
Yes,  Mr.  President,  I  reiterate,  are  they  not  murderers?  And  are  we  pre- 
pared to  pronounce  so  heavy  a  denunciation  on  our  predecessors,  on  ourselves, 
and  the  great  departments  of  our  Government?  Are  we  ready  to  inform  the 
American  People  that  this  body,  and  all  their  constituted  authorities,  have 
sported  with  the  lives  and  illegally  shed  the  blood  of  our  citizens?  My  col- 
league was  foreman  of  the  jury  that  pronounced  sentence  or  that  found  a  ver- 
dict on  the  famous  or  rather  infamous  Logwood,  for  forgery  of  the  paper  of  the 
Bank  of  the  United  States.  This  verdict  was  confirmed  by  the  judge  of  the  court, 
and  the  criminal  punished  agreeably  to  the  judgment.  Is  a  measure  of  such 
weighty  and  awful  import,  so  solemnly  and  deliberately  acted  on  and  decided, 
and  multifarious  other  decisions  of  the  same  description,  to  have  noinfluence  on 
the  decision  we  are  about  to  give  respecting  the  constitutionality  of  establish- 
ing a  national  bank  ?  If  they  are  not,  then  gentlemen  view  the  subject  through 
a  very  different  medium  than  that  through  which  it  is  presented  to  my  vision. 
Then,  in  my  judgment,  Mr.  President,  our  situation  is  alarming  indeed. 

This  vibrating  constitutional  doctrine,  to  day  one  thing,  tomorrow  another, 
as  the  domination  of  one  party  or  the  other  or  the  passions  of  the  moment  shall 

?revail,  will  reducepur  constitution  to  nothing,  or  render  it  a  mere  instrument 
DF  depraved  men,  it  sach  should  get  into  power,  to  acomplish  their  wicked 
purposes,  and  to  destroy  the  liberties,  and  oppress  the  virtuous  People,  of  this 
country.  It  is  a  wise  maxim  of  our  municipal  law,  that,  in  novelty,  there  Ls 
danger,  but  antiquity  of  law  sanctifies  error.  If  this  principle  is  just,  as  it 
respects  municipal  law,  (and  of  this,  in  my  judgment,  there  can  be  no  doubt) 
it  is  infinitely  more  so  when  applied  to  fundamental  and  constitutional  prin- 
ciples, which,  when  once  fixed,  on  all  questions  of  a  doubtful  nature,  should 
never  again  be  agitated.  The  influence  which  the  decision  of  the  judiciary 
may  have  on  settling  the  constitutionality  of  the  law  incorporating  the  Bank  of 
the  United  States  is  not  intended  to  be  urged  by  me  as  an  argument,  which,  in 
my  judgment,  ought  to  be  relied  on,  because  I  conceive  it  the  duty  of  the  ju- 
diciary merely  to  expound  what  is  the  law  of  Congress;  and  to  determine  be- 
tween a  law  and  the  constitution  is  assuming  to  the  judiciary  a  power  not  ap- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     4Q5 

pertaining  to  it— a  power  inconsistent  with  the  genius  of  our  constitution,  and 
such  a  one  as,  if  exercised  by  any  judiciary,  under  a  popular  Government, 
will  ultimately  destroy  the  Government  itself.  The  inference,  therefore,  which 
is  derived  from  the  reasoning  above  insisted  on,  from  the  decisions  of  the 
judiciary,  is  intended  for  those  who  insist  that  your  federal  judiciary  have  a 
right  to  decide  on  the  constitutionality  of  any  lavy  passed  by  Congress  which 
comes  under  its  cognizance.  The  aid  I  myself  derive  from  the  source  of 
precedent,  to  support  the  constitutionality  ot  this  measure,  is  solely  from  the 
reiterated  acts  of  different  Congresses,  and  the  approbation  of  different  Presi- 
dents, and  the  concurrence,  under  them,  for  the  space  of  more  than  twenty 
years,  during  the  prevalence  of  different  political  parties.  An  attempt  has 
been  made,  by  the  honorable  member  from  Tennessee,  and  others,  to  inva- 
lidate the  accuracy  of  the  inference  drawn  from  this  principle  of  rjrecedencv, 
by  insisting  that  the  bank  law  was  in  the  nature  of  a  contract  with  individuals, 
by  which  private  rights  became  vested,  and  therefore  the  Government  was 
bound  to  carry  it  into  effect.  The  gentleman  from  Tennessee  imagines  that, 
during  the  period  of  the  republican  administration  and  majority  in  Congress, 
which  acted  upon  this  bank  law,  it  was  considered  in  the  nature  of  a  contract, 
and  as  such,  Government  determined  to  carry  it  into  effect  with  good  faith, 
and  with  that  view  passed  the  several  corroborating  lavVs  which  have  been 
from  time  to  time  enacted.  But  this  reasoning,  sir,  of  the  gentleman  from 
Tennessee,  has  been  so  fully  refuted  by  my  honorable  colleague,  in  the  very 
able  speech  he  delivered  on  this  question,  some  days  past,  as  to  obviate  the  ne- 
cessity of  further  commenting  on  it.  I  will  only  repeat  one  remark  that 
was  made  by  my  colleague.  If  the  bank  law  was  unconstitutional  at  first,  it 
could  not  give  any  legal  corporate  existence  to  any  body  of  men  to  form  a 
legal  contract  in  a  corporate  character  which  had  no  such  existence.  There- 
fore there  existed  no  leaal  contract;  the  faith  of  Government  was  not  pledged; 
it  was  like  a  contract  with  a  married  woman  or  an  idi9t;  it  was,  ipsofacto,  void. 

To  recapitulate,  I  derive  the  power  to  create  a  national  bank,  when  this  con- 
stitution came  into  existence,  from  the  situation  of  society,  and  our  legal  in- 
stitutions at  that  time,  and  the  difficulty,  as  things  existed,  that  the  revenue 
could  be  collected  with  advantage,  in  any  other  way  than  by  the  agency  of  a 
bank.  If  this  reasoning  be  deemed  erroneous,  t  insist  that  the  constitutional 
power  of  Congress  to  create  a  bank  was,  in  the  first  instance,  doubtful,  and 
the  principle  having  been  recognised,  and  having  received  every  sanction  the 
Government  could  give,  and  practised  on  for  more  than  twenty  years,  is  not 
now  to  be  called  in  question. 

Admitting  that,  on  both  these  points,  my  views  are  erroneous;  say  that  the 
establishment  of  the  bank  at  its  commencement  was  improper?  still,  if  it  be  de- 
monstrated that  the  existence  or  re-chartering  of  the  bank  is  indispensable, 
or  highly  expedient,  at  present,  to  the  due  exercise  of  enumerated  rights  of 
Congress,  that  which  was  improper,  or,  even,  perhaps,  unconstitutional,  at  first, 
because  it  was  not  necessary,  becomes  constitutional  and  proper,  because  now 
expedient  or  essential.  Congress  are  clothed  by  the  constitution  with  a  va- 
riety of  delegated  rights.  Now,  admitting  that  the  establishment  of  a  bank,  in 
the  first  instance,  was  not  necessary  for  the  due  exercise  of  the  legislative 
rights  bestowed  in  any  one  of  these  enumerated  powers,  if  pur  predecessors 
in  office,  by  the  creation  of  a  bank,  which,  at  best,  was  an  improper  institu- 
tion, because  not  necessary,  have  placed  our  fiscal  concerns  in  such  a  situa- 
tion that  it  cannot  be  put  down  without  great  injury  to  the  revenue,  which 
Congress  is  bound  to  levy  and  collect — without  injuring  our  commerce,  with- 
out impairing  our  public  credit,  without  lessening  the  public  welfare,  all  of 
which  Congress  is  bound  to  provide  for  and  protect — if  this  can  be  demon- 
strated to  be  the  probable  result  of  pulling  down  the  bank  at  this  period,  I 
would  ask,  whether  that  institution  which  was  improper  at  first,  because  not 
necessary,  does  not  become  proper,  because  almost  indispensable  at  present? 

In  construing  the  constitution  of  the  United  States,  when  legislating  on  the 
enumerated  powers  of  Congress,  I  lay  down  this  rule  of  construction:  that  the 
only  limitation  to  the  power  of  Congress  is,  either  some  positive  or  implied 


404  BANK   OF   THE  UNITED   STATES. 

prohibition  in  the  constitution  itself,  or  the  exercise  of  an  honest  and  sober 
discretion.  If,  therefore,  there  is  any  reason  to  believe,  at  the  present  periodr 
and  existing  state  of  things,  that,  by  putting  down  the  bank,  your  revenue  will 
be  greatly  impaired,  your  commerce  will  be  injured,  the  public  credit  lessen- 
ed—all of  which  Congress  is  to  protect— does  not  such  a  state  of  things  make  it 
proper  that  that  bank,  which  ought  not  to  have  been  created,  because  not  ne- 
cessary, now  ought  to  be  continued,  because  indispensable?  It  may  here  be 
said  that  I  am  varying  the  constitution,  if  I  say  that  a  thing  is  proper  to  day, 
which  was  not  proper  five  and  twenty  years  ago;  that  this  vibration  will  al- 
ways keep  the  constitution  in  an  uncertain  state.  I  say  no.  My  doctrine  is 
subject  to  no  such  accusation;  the  principles  of  the  constitution  are  uniform 
and  unalterable.  It  is  an  uniform  and  unalterable  principle,  that  Congress- 
have  the  povyer  to  lay  and  collect  taxes;  they  have  the  same  positive  un- 
changeable right  to  exercise  all  the  enumerated  powers,  the  only  rule  of  con- 
struction relating  to  them  being,  that  the  means  you  use  have  a  necessary  re- 
lation to  the  power  on  which  you  legislate.  If  the  means  be  not  enumerated, 
you  exercise  discretion  as  to  the  means,  having  a  regard  to  the  existing  state 
of  things  when  you  legislate  concerning  them.  The  same  means  may  be  ne- 
cessary and  proper  now  which  would  not  have  been  twenty  years  ago;  you 
change  the  means  to  attain  the  end,  but  the  end  itself,  the  enumerated  power 
in  the  constitution,  remains  unchanged.  As  long  as  the  constitution  exists, 
you  must  select  the  means  most  proper  for  executing  the  enumerated  rights,. 
at  the  precise  moment  at  which  you  legislate  respecting  them.  If  this  be  the 
true  construction  of  the  constitution  respecting  the  re-chartering  of  the  bank, 
the  question  merely  resolves  itself  into  an  inquiry  how  tar  such  a  measure  is, 
at  present,  expedient.  To  determine,  at  this  moment,  whether  or  not  it  be 
constitutional,  or,  in  other  words,  expedient,  to  incorporate  the  Bank  of  the 
United  States,  I  am  to  say  whether,  under  existing  circumstances,  in  the 
present  state  of  society,  situation  of  trade  and  revenue,  the  preservation  and 
continuance  of  this  institution  is  essentially  necessary.  If  it  be  essentially 
necessary,  we  have  a  right  to  re-charter  the  bank.  1  have  been  precise  in 
stating  this  view  of  the  subject,  because  it  has  not  before  been  taken  by  any 
other  gentleman. 

With  respect  to  the  expediency  of  re-chartering  this  institution,  lam  some- 
what surprised  that  any  doubt  should  be  entertained.  It  appears  to  me  that 
gentlemen  have  become  incredulous,  beyond  all  possible  bounds.  I  believe, 
sir,  it  was  a  wise  saying  of  the  sage  Plato,  that  incredulity  is  the  fountain  of 
knowledge.  But,  even  to  this  maxim,  there  must  be  some  limit,  as  seems  to 
be  illustrated  on  the  present  occasion,  when  incredulity  has  been  carried  be- 
yond all  reasonable  bounds.  When  general  distress  is  in  view;  when  alt 
around  us  is-  proof  of  the  fact;  when  men  in  the  best  credit,  men  who  have 
heretofore  had  the  greatest  command  of  money,  now  feel  the  want  of  it;  when 
there  is  a  general  cry  of  distress  from  your  large  towns;  when  our  table  is 
loaded  with  petitions  from  all  orders  of  people  in  our  country,  depicting,  in 
the  most  vivid  colors,  their  present  sufferings  and  gloomy  anticipations;  when 
the  surrounding  banks  are  curtailing  one-half  of  their  accommodations;  when 
our,whole  commerce  is  paralyzed  by  the  various  aggressions  it  has  experienced, 
and  by  the  shock  which  the  agitation  of  this  question  has  already  given  it;*— for 
gentlemen  to  shut  their  eyes  to  the  effects  of  the  dissolution  of  this  institution,, 
is.  to  me,  astonishing.  In  another  point  of  view,  how  can  it  be  questioned? 
The  honorable  gentleman  from  Maryland,  whose  knowledge  we  have  all  bene- 
fitted  by,  and  acknowledged  on  various  occasions,  has  said,  what  is  most  un- 
questionably true*  that  money  is  like  any  other  article  of  trade,  valuable  in 
proportion  to  its  abundance  or  rarity.  Then,  if  you  strike  out  of  circulation 
the  increased  capital  circulated  by  the  Bank  of  the  United  States,  is  not  a 
relative  scarcity  to  be  expected?  But,  it  is  not  merely  to  the  extent  of  the  in- 
creased capital  circulated  by  the  Bank  of  the  United  States,  that  money  will 
be  driven  out  of  circulation.  Those  gentlemen  who  tell  you  that  the  State 


banks,  in  this  period  of  calamity  and  distress,  can  afford  sufficient  accommo- 
dation, are,  in  my  estimation,  infinitely  mistaken. 


The  State  banks  will,  in 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     4Q5 

the  first  instance,  frequently  tend  to  increase  the  evil.  The  same  men  who 
have  accommodation  in  the  Bank  of  the  United  States,  very  frequently  have 
it,  also,  in  the  State  banks.  The  Bank  of  the  United  States,  finding  it  neces- 
sary to  settle  its  accounts,  is  anxiously  employed  in  drawing  into  its  vaults  all 
the  money  it  can,  to  settle  its  affairs.  The  State  banks,  knowing  there  will 
be  a  run  upon  them,  are  also  drawing  in  the  money  due  them  by  the  very  in- 
dividuals whom  it  is  imagined  they  can  accommodate  by  extended  loans. 
Those  State  banks,  which  were  to  relieve  the  merchants,  &c.  will  join  in  the 
pressure;  in  order  to  secure  themselves,  they  must  produce  the  same  curtail- 
ment to  their  customers  which  is  used  by  the  Bank  of  the  United  States.  So, 
that,  not  only  will  the  amount  of  the  capital  circulated  by  the  Bank  of  the 
United  States  be  driven  out  of  circulation,  but  much,  also,  for  a  time,  of  that 
paper  which  the  State  banks  were  in  the  habit  of  issuing  to  individuals.  It  is 
impossible  to  say  to  what  extent  the  circulating  medium  will  be  diminished; 
that  it  will  be  to  a  great  extent,  for  a  short  time,  there  can  be  no  sort  of  doubt. 
And  the  depression  of  the  price  of  flour,  at  this  period,  is  proof  that  the  present 
apprehensions  have  already  produced  this  effect:  for,  although  I  would  yield 
much  to  the  superiority  ot  information  of  the  gentleman  from  Maryland  on 
mercantile  affairs,  as  on  most  others,  yet,  in  this  instance,  his  information  is 
not,  in  my  estimation,  correct.  It  is  a  notorious  fact,  that  flour  is  DOW  in  as 
great  demand  as  ever  it  has  been,  in  Cadiz,  Lisbon,  and  Gibraltar,  It  is  not 
long  since  I  saw  an  account  of  flour  having  sold  at  twenty  dollars,  at  Gibral- 
tar. Now,  sir,  if  a  merchant  here  knew  he  could  get  this  price  there,  of  from 
eighteen  to  twenty  dollars,  as  is  unquestionably  the  fact,  would  a  temporary 
depression  of  the  prices  at  Liverpool,  as  has  been  imagined  by  the  gentleman 
from  Maryland,  have  any  effect  nere?  None  at  all.  tf  our  merchants  could 
get  eighteen  or  twenty  dollars  at  Lisbon,  the  depression  of  price  at  Liverpool 
would  not  have  the  least  operation  here;  it  is  an  unquestioned  fact,  that  the 
price  in  the  ports  1  have  mentioned  is  constantly  kept  up;  and  yet  the  price 
did  fall,  at  the  moment  the  bank  question  was  thought  to  be  decided:  I  think 
it  fell  two  dollars  immediately;  and  it  was,  no  doubt,  from  the  difficulty  of 
obtaining  money,  which,  it  was  supposed,  would  result  from  the  dissolution 
of  the  Bank  of  the  United  States,  that  this  article  fell.  AVhen  you  diminish 
the  quantity  of  money  which  is  to  represent  the  articles  of  trade  brought  to 
market,  I  do  not  want  the  gentleman's  mercantile  knowledge  to  inform  me. 
It  is  a  plain  proposition,  that  such  a  measure  goes  to  depress  the  price  of  the 
article  brought  to  sale.  That  the  destruction  ot  the  Bank  of  the  United  States, 
as  it  will  lessen  the  circulating  currency,  for  a  time,  must  go  to  depress  the 
price  of  produce,  is  unquestionable,  and  will  also  diminish,  for  a  time,  the  cir- 
culation of  the  notes  of  other  banks,  because  they  must  reduce  their  discounts. 
This  effect  may  be  but  temporary,  but  will  exist  to  a  certain  extent. 

The  gentleman  from  Maryland  has  observed,  that  no  apprehensions  are  en- 
tertained by  the  people  of  Baltimore,  on  account  of  the  dissolution  of  the 
United  States'  Bank.  !  think  I  have  been  informed  that  one  of  the  most 
wealthy  men  in  that  town  has  said  he  had  a  vessel  to  load,  and  knew  where 
he  could  send  her,  so  as  to  clear  six  dollars  per  barrel  on  flour;  for  that  flour, 
at  this  period,  could  be  purchased  here,  at  eight  dollars,  and  might  be  sold 
abroad  for  eighteen;  but,  in  consequence  of  the  entirejimpossibility  of  obtain- 
ing money  from  the  banks  at  present,  from  the  fear  entertained  respecting  the 
dissolution  of  the  Bank  of  the  United  States,  it  was  not  in  his  power  to  load 
his  vessel.  Such,  sir,  1  have  been  advised,  is  the  situation  of  one  of  the  weal- 
thiest men  of  that  town.  The  Bank  of  Columbia  has,  at  one  stroke,  lessened 
its  discounts  fifty  per  cent,  in  consequence  of  the  apprehension  entertained 
respecting  the  dissolution  of  the  Bank  of  the  United  States.  What  has  the 
gentleman  from  Massachusetts  told  you?  That  $400,000  dollars  are  loaned 
to  the  people  of  this  District,  by  the  Bank  of  the  United  States.  What  will 
be  the  effect,  in  this  little  District,  of  drawing  three  or  four  hundred  thousand 
dollars  out  of  circulation?  Sir,  to  tell  me  that  the  reduction  of  circulating 
medium  will  not  produce]  (it  may  be  but  for  a  short  time)  a  correspondent 
reduction  of  the  prices  of  produce,  is  to  tell  me  that  I  cannot  se«  the  noon- 


406  BANK  OF  THE  UNITED  STATES. 

day  sun.     How  long  this  reduction  of  the  circulating  medium,  and  the  conse- 
quent depression  of  prices,  may  last,  it  is  difficult  to  say. 

When  the  numerous  late  failures  and  bankruptcies  are  spoken  of,  what  is 
the  reply?  That  they  do  not  proceed  from  a  want  of  bank  accommodation, 
but  from  the  protesting  of  bills  abroad;  that  our  merchants  have  much  pro- 
perty abroad,  but  the  difficulty  of  obtaining  returns  for  it,  has  been  such  as  to 
embarrass  our  strongest  houses.  Is  this  a  reason  why  we  should  accumulate 
difficulties  on  our  merchants?  Fifteen  or  twenty  millions  are  said  to  be  tied 
up  in  foreign  countries,  more  especially  in  England,  and  such  is  the  situation 
of  England,  that  we  cannot  get  remittances  from  there.  This  is  an  admira- 
ble reason,  sir,  indeed,  for  selecting  this  particular  moment  for  calling  on  the 
merchants  to  make  an  immediate  payment,  to  the  amount  of  fourteen  millions, 
vyhichthey  owe  this  institution,  and  which,  if  put  down,  it  is  reasonable  to  be- 
lieve, will  require  immediate  payment. 

This  is  regulating  trade  with  a  witness.  By  the  annihilation  of  the  Bank  of  the 
United  States,  a  considerable  portion  of  our  circulating  medium  is  destroyed. 
At  the  same  period,  our  merchants  are  called  on  to  pay  their  debt  to  the 
United  States'  Bank,  to  the  amount  of  fourteen  millions,  and  their  revenue 
bonds  amount  to  about  twelve  millions.  This,  too,  at  a  period  when  the 
funds  of  our  merchants,  to  a  great  extent,  are  in  England,  and  cannot  be 
withdrawn. 

To  me  it  appears  that  the  situation  of  the  country;,  as  respects  commerce, 
and  every  thing  else,  makes  it  important,  at  this  criss,  above  all  others,  that 
this  institution  should  be  preserved. 

But  gentlemen,  and  very  intelligent  gentlemen,  tell  us,  this  is  a  mere  mo- 
mentary pressure;  that  the  money  in  the  Bank  of  the  United  States,  and  the 
revenue,  as  collected,  will  be  deposited  in  other  banks,  who  will  issue  paper 
or  specie,  in  proportion  to  the  additional  capital  in  their  banks;  that  there  will 
be  a  mere  temporary  vacuum,  which  will  soon  be  filled.  If  I  am  to  be  placed 
jn  an  apartment,  from  which  all  respirable  air  is  exhausted,  and  for  a  very 
short  time  to  remain  there,  but  till  all  vitality  is  extinguished,  it  will  truly 
be  a  delightful  consolation,  previously,  to  advise  me  that  this  vacuum  is  tem- 
porary, and,  after  I  am  destroyed,  the  equilibrium  will  be  restored,  and  fresh 
air  admitted.  Precisely  of  this  nature  is  the  consolation  afforded  to  your  ru- 
ined merchants  and  others.  What  avails  it,  if  the  cause  be  momentary,  but 
the  effect,  as  to  them,  be  permanent?  This  awful  moment  will  bring  perma 
nent  destruction  to  thousands.  And,  for  what  purpose  do  we  produce  this 
destruction?  To  get  rid  of  the  foreign  influence  produced  by  the  stock  held 
by  foreigners.  Yet,  sir,  this  foreign  capital  is  one  of  the  most  beneficial  con- 
sequences attending  the  bank  institution. 

In  a  new  country,  constantly  developing  new  resources  of  every  descrip- 
tion, an  increasing  population,  increasing  commerce,  agriculture,  manufac- 
tures, and  multiplied  objects  on  which  capital  can  be  employed  to  great  ad- 
vantage, to  develop Jhe  wonderfully  increasing  energies  and  resources  of  our 
young  country,  we  can  afford  to  pay  foreigners  good  interest  for  the  use  of 
their  capital.  This  is  one  of  the  great  reasons,  with  me,  in  favor  of  the  bank. 
We  are  admonished,  that  this  foreign  capital  gives  to  foreigners  a  dreadful 
political  influence.  Admit  the  assertion;  which,  however,  is  not  true.  Who 
invited  it  here?  The  Government  itselL  We,  ourselves,  sold  this  stock  to 
foreigners.  Our  Secretary  of  the  Treasury,  with  the  knowledge  and  consent 
of  the  Government,  bargained  and  tranferred  great  part  of  it.  Is  this  good 
faith,  is  it  honorable  and  just?  After  we  have  received  a  bonus  for  the  trans- 
fer of  the  stock  to  individuals,  under  the  idea  that  the  charter  was  inviolable 
and  secure,  to  destroy  the  institution  to  get  rid  of  this  foreign  capital,  which 
we  ourselves  had  invited  here?  If  these  moneyed  banking  institutions  are 
those  horrid  engines  of  political  influence  and  corruption  some  have  contend- 
ed for,  the  only  way  to  obtain  any  good  they  afford,  and  yet  avoid  their  dele- 
terious effects,  is  to  get  foreigners  to  send  their  money  hew.,  and  invest  it  in 
our  funds.  We  get  the  benefit  of  their  money,  while  we  are  so  far  removed 
from  them  that  they  can  have  no  operation  on  us:  for,  sir,  it  is  notorious  to 


ON   THE   BILL   TO    RENEW   THE  CHARTER   OF    1791.          497 

those  who  are  informed  on  the  subject,  that  we  feel  less  inconvenience  or  po- 
litical influence  from  foreigners  who  hold  stock,  than  from  natives  who  possess 
it.  This  inference  must  be  obvious,  when  I  state,  that  foreigners  who  hold 
stock,  have  no  vote  in  the  choice  of  directors. 

Again,  sir,  is  not  the  critical  situation  in  which  we  stand  in  respect  to  our 
foreign  relations,  a  particular  reason  why  we  should  not,  at  this  time,  make 
experiments  which  may  injure  the  public  revenue?  If  we  enforce  our  non-in- 
tercourse law,  and  England  attempts  to  resist  it,  and  force  her  imports  into 
our  country  by  Florida,  and  our  southern  frontiers  on  one  side,  and  Canada 
and  Nova  Scotia  on  the  other,  it  is  at  least  questionable,  whether  our  revenue 
will  not  be  greatly  diminished.  In  our  present  unsettled  situation,  with  our 
merchants  staggering  under  the  weight  of  the  non-intercourse,  embargo,  and 
foreign  spoliation;  is  this  a  moment  to  try  experiments,  that  may  have  the  ef- 
fect of  reducing  our  revenue,  by  crippling  our  mercantile  enterprise,  and 
forcing  our  merchants  to  withdraw  their  funds  from  commerce,  in  order  to 
pay  their  bonded  duties  and  bank  debts?  But,  will  the  destruction  of  this 
bank  rid  us  of  the  dreaded  influence  of  foreign  capital?  No,  you  get  in  its 
stead  an  influence  infinitely  worse;  you  encourage  speculation,  which  will 
produce  an  evil  of  an  infinitely  more  pestiferous  kind.  If  this  bank  be  put 
down,  another,  ere  long,  I  have  no  doubt,  will  be  created:  for,  that  another 
bank  must  and  will  be  created,  is  avowed  by  many  who  vote  against  continu- 
ing this;  and  whenever  this  takes  place,  a  scene  of  stockjobbing  will  ensue, 
to  an  extent  which  cannot  be  now  calculated.  When  a  new  bank  and  a  new 
stock  is  created,  although  by  prohibiting  foreigners  to  be  subscribers  in  the 
first  instance,  it  wilTat  first  be  taken  up  by  our  own  citizens,  yet,  if  the  Eu- 
ropean capitalist  finds  it  to  his  advantage  to  have  money  here,  he  comes  and 
purchases  our  stock;  our  citizens,  in  the  subscription  to  the  new  stock,  engage 
in  a  scene  of  the  most  debasing  speculation;  our  citizens  afterwards  sell  this 
stock  to  foreigners,  whose  foreign  influence  we  wish  to  avoid;  and  after  having 
gone  this  vicious,circle,  we  arrive  precisely  at  the  point  where  we  started.  The 
same  foreigners  who  now  have  so  much  of  this  bank  stock,  will  re -invest  their 
money  in  the  stock  of  the  new  bank  to  be  created.  This  dissolution  of  the 
bank,  then,  is  trying  wild  visionary  experiments,  possibly,  in  its  consequences, 
convulsing  society  to  its  centre,  sporting  with  the  feelings  and  happiness  of  the 
country,  impairing  mercantile  credit  and  enterprise,  injuring  the  tranquillity 
of  many  of  our  most  meritorious  citizens,  who  see  ruin  hovering  over  them 
from  the  measure  we  seem  like  to  adopt;  and,  after  all  this  is  done,  we  come 
round  to  the  precise  point  from  which  we  commenced. 

It  has  either  suggested  itself  to  my  mind,  upon  reflection  on  the  subject,  or 
it  is  an  idea  suggested  by  some  political  writer,  (and  I  think  the  latter  is  the 
case)  either  Hume,  or  Smith,  or  both,  that  a  gradual,  silent,  and  almost  im- 
perceptible increase  of  money,  or  circulating  medium,  has  the  happiest  effects 
on  society,  and  operates  as  the  most  saluary  stimulus  to  the  exertions  and  in- 
dustry of  a  nation,  because  it  operates  as  a  gradual,  though,  perhaps,  nomi- 
nal premium  to  industry,  by  increasing  the  price  of  every  article  that  is 
brought  into  market;  and  the  influence  which  the  discovery  of  the  mines  of 
South  America  had  on  the  European  world,  by  bringing  into  circulation  an 
increased  quantity  of  the  precious  metals,  is  instanced,  as  well  as  I  recollect, 
by  some  of  the  economists,  as  an  illustration  of  this  observation:  for  the  in- 
crease of  industry,  of  the  arts,  and  of  all  social  comforts,  which  soon  follovyed 
this  event,  has  been  remarked  by  several  political  writers.  If  this  invisible 
increase  of  the  circulating  currency  of  a  nation  is,  from  the  causes  above- 
mentioned,  productive  of  such  happy  effects,  will  not  the  immediate  extin- 
guishment of  a  great  national  bank,  and  the  consequent  diminution  of  the  cir- 
culating currency  of  your  country,  have  an  immediate  opposite  and  baneful 
operation  upon  society?  Will  it  not  produce  a  temporary  depression  of  prices 
of  many  of  the  necessaries  and  luxuries  of  life,  and,  to  a  certain  extent,  lessen 
and  benumb  the  vigor  and  exertions  of  our  citizens?  It  is  true,  this  effect  may 
be  temporary,  because  new  banks  will  remove  the  evil;  but  is  there  any  rea- 
son to  produce  this  evil  even  for  a  moment?  or,  in  other  words,  should  we  pro- 


408  BANK   OF  THE   UNITED   STATES. 

duce  this  deleterious  effect,  for  one  moment,  by  the  destruction  of  one  bank, 
that  we,  or  the  States,  by  the  erection  of  new  banks,  may  remove  the  evil  we 
ourselves  have  created?  This  seems  to  be  producing  a  calamity,  that  we  may 
either  remove,  or  mitigate  it. 

The  bank,  it  has  been  objected,  has  been  used  as  an  instrument  of  improper 
political  influence. 

Let  it  be  remembered,  Mr.  President,  that  I  am  not  advocating  the  mere 
renewal  of  the  charter  of  the  Bank  of  the  United  States.  I  am  only  for  re- 
chartering  it  on  certain  conditions,  or,  in  other  words,  with  a  view  that  it  may 
subscribe  to  the  amount  of  its  capital  to  a  newly  created  bank,  on  different 
principles,  of  larger  extent  of  capital,  and  with  a  portion  of  the  directors  ap- 
pointed by  the  Government.  This,  sir,  will  effectually  prevent  the  directors 
from  using  the  bank  as  a  political  engine  against  the  Government  itself,  and 
obviates  every  objection  on  this  head.  Witness  the  Bank  of  Virginia;  how 
effectually  is  such  an  operation  guarded  against,  there,  by  such  a  provision. 

I  have  no  sympathy  for  the  directors  of  this  bank,  who  are  said  to  have  im- 
properly exercised  this  political  influence;  all  my  sympathies  are  in  opposition 
to  them.  It  is  not  for  the  benefit  of,  or  tenderness  for,  these  directors,  that  1 
advocate  the  bill  on  your  table.  I  know  none  of  them,  nor  care  any  thing 
about  them,  further  than  not  to  do  them  injustice.  They  may  have  conducted 
themselves  exceedingly  improperly — I  believe  they  have  done  so,  many  years 
past,  on  some  occasions— but  this  is  not  the  way  to  seek  redress  for  their  mis- 
conduct. Sir,  I  have  heard  of  a  man,  who,  when  irritated,  in  order  to  obtain 
satisfaction,  would  seat  himself  on  a  chafing  dish  of  hot  coals.  The  mode  which 
is  proposed  to  punish  the  directors  for  their  real  or  supposed  misconduct  is 
equally  wise  in  this  instance.  I  would  not  injure  the  public  welfare,  and  heap 
ruin  on  very  many  innocent  men,  for  injuries  long  since  committed,  if  at  all, 
by  these  directors,  and  which  never  can  be  revived.  Besides,  this  evil  is 
gradually  correcting  itself.  When  there  was  only  the  Bank  of  the  United 
States,  or  very  few  others,  the  consequence  was,  that  it  was  a  species  of  favor- 
itism to  get  into  the  banks,  and  a  privilege  extended  only  to  particular 
friends. 

But,  at  the  extent  to  which  banks  are  carried  at  present,  in  the  northern  and 
middle  States,  to  which  the  operation  of  the  Bank  of  the  United  States  is 
principally  confined,  it  is  not  a  species  of  favoritism  to  obtain  bank  accommo- 
dation. In  the  city  of  Philadelphia,  before  the  late  alarm,  produced  by  agita- 
ting the  question  we  are  now  discussing.,  every  man,  who  could  produce  good 
paper,  might  get  as  much  accommodation  as  he  pleased;  and  to  this  extent 
banks  should  always  be  carried,  if  once  commenced.  This  is  a  remedy  for 
favoritism,  and  prevents  the  bank  from  being  formidable  as  a  political  engine. 
If  we  go  to  banking  at  all,  let  it  be  so  that  alj  good  paper  can  be  accommodat- 
ed. When  the  banks  compete  for  paper,  it  is  then  not  a  system  of  favoritism. 
They  rather  seek  for  customers  than  select  them.  Such  was  the  situation  of 
Philadelphia.  What  is  the  consequence  of  a  contrary  system?  in  Richmond? 
In  consequence  of  the  erection  of  a  bank  there,  with  a  little  pitiful  capital,  the 
discounts  got  into  the  hands  of  a  few  favorites,  and  Richmond  is  stated  by 
some  to  have  almost  become  a  nest  of  shavers.  Those  persons  who  are  fa- 
vorites, go  into  the  bank,  get  accommodated  with  large  discounts,  on  the 
strength  of  which  they  shave  the  paper  of  others;  but,  in  Philadelphia  ,the  situ- 
ation is  essentially  different,  from  the  redundancy  of  banking  capital.  Thus 
the  evil  of  political  oppression  and  intolerance,  to  which  the  Bank  of  the  Unit- 
ed States  is  said  to  be  instrumental,  is  cured  by  the  establishment  of  other 
banks;  but  it  is  possible  that,  to  a  certain  extent,  the  undue  influence  of  banks 
generally  may  be  revived,  by  putting  down  the  Bank  of  the  United  States, 
and  creating  a  want  of  ban  king  capital  in  the  community.  If  there  be  a  greater 
demand  for  discounts  than  can  be  met  by  the  remaining  banks,  after  that  of 
the  United  States  is  destroyed,  then  you  revive,  with  the  remaining  banks, 
that  power  of  political  influence  and  favoritism  which  you  are  so  anxious  to 
avoid,  and  increase  the  calamity  you  deprecate,  by  the  very  means  you  take 
to  avoid  it. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     4QQ 

In  a  perfectly  well  regulated  state  of  society  it  seems  to  me  things  should 
be  so  ordered,  if  it  can  be  effected,  that  every  individual  of  the  community 
should  obtain  loans  of  money  on  reasonable!  nterest,  to  any  extent  for  which  he 
ca  n  give  ample  security,  In  such  a  state  of  things  an  opportunity  is  afforded 
to  bring  into  action  and  to  develop  all  the  resources  of  the  nation,  to  im- 
prove its  agriculture,  its  manufactures,  its  commerce,  and  all  the  social  arts, 
to  the  greatest  possible  extent.  Such  was  the  state  of  Holland,  such 
the  state  of  England,  before  the  present  disturbances  in  Europe;  and  mark 
the  result.  Each  country  polished  and  improved  like  a  garden,,  their  com- 
merce extending  over  the  world,  and  all  the  discoveries  and  arts  which  en- 
rich and  adorn  social  life,  carried  almost  to  the  utmost  limits  of  perfec- 
tion. This  state  of  things  can  be  effected  in  this  country  only  by  the  agency 
of  banks;  as  we  Tire  every  day  increasing  our  population,  commerce,  andagn- 
culture,  &c.>  and  bringing  into  action  an  increased  quantity  of  objects  on 
which  money  can  be  advantageously  employed,  a  proportioiiably  increased 
quantity  of  circulating  medium  or  of  banking  capital  is  necessary,  to  keep  pace 
with  the  improvements  and  progress  of  society.  If  this  reasoning  is  just,  it 
is  surely  improper  to  destroy  our  greatest  moneyed  institution,  and  consequent- 
ly banish  from  circulation  a  portion  of  the  circulating  medium,  at  a  period 
when  the  state  of  the  nation  is  capable  of  employing,  to  useful  purposes,  a 
larger  capital  than  at  a  former  period.  If  it  is  apprehended  that,  by  affording 
this  facility  of  borrowing  money  to  the  extent  I  have  insisted  on,  to  every  in- 
dividual who  can  give  security,*  incautious  men  will  ruin  themselves,  I  an- 
swer, they  will  do  this  in  any  state  of  things.  To  argue  against  the  use  of  an 
institution  from  the  possible  abuse  of  it,  is  not  a  just  mode  of  reasoning.  A 
sensualist  may  destroy  himself  by  excesses  in  the  enjoyment  of  the  table;  yet 
more  temperate  men  will  eat  their  dinner.  That  society  should  be  deprived 
of  the  use  of  an  institution  from  which  its  prudent  members  can  obtain  great 
advantage,  because  imprudent  people  will  be  ruined  by  it,  is  to  tax  the  valu- 
able members  of  the  community  for  the  benefit  of  the  unworthy.  I  am  in- 
formed, Mr.  President,  that,  for  some  years  past,  in  the  State  of  Pennsyl- 
vania, any  citizen  of  that  State  could  obtain,  on  good  security,  from  the  banks, 
as  much  money  as  he  wanted.  Sir,  what  astonishing  progress  has  she  made 
in  every  kind  of  improvement  and  in  eveiy  species  of  wealth.  Look  at  the 
State  which  I  have  the  honor  to  represent,  whose  apprehensions  about  bank- 
ing institutions  have  made  her  averse  to  the  extension  of  such  establishments. 
The  result  has  been,  that,  notwithstanding  she  is,  perhaps,  the  greatest  agri- 
cultural State  in  the  Union,  furnishing  more  copiously,  (and  the  most  valu- 
able) articles  of  export,  and  possessed  of  all  the  materials  of  commerce,  she 
is  destitute,  in  a  comparative  degree,  of  commerce  itself.  When  cargoes  of 
wheat,  flour,  or  tobacco,  are  wanted  in  Europe,  a  merchant  of  Philadelphia  is 
applied  to  to  furnish  these  articles,  though  they  are  to  be  purchased  in  Vir- 
ginia. Wherefore?  Because,  having  no  banks  in  Virginia  that  are  adequate 
to  the  wants  of  society,  our  merchants  cannot  afford  to  advance  the  money, 
purchase  the  cargo,  and  draw  for  the  amount  On  the  contrary  hand,  the 
Philadelphia  merchant  can  go  into  a  bank,  get  as  much  money  as  he  wishes 
to  purchase  a  cargo  with,  send  it  on  to  Virginia  and  make  the  purchase,  and, 
after  the  vessel  is  loaded,  draw  on  the  owner  for  the  amount  of  the  cargo  and 
his  commission.  Comparatively  speaking,  all  mercantile  profit  is  drawn  from 
us;  our  produce  is  exported  and  our  imports  imported  by  the  merchants  of 
other  States,  who  derive  all  the  profits  ot  our  commerce,  which,  in  a  differ- 
ent state  of  tilings,  would  remain  with  us,  and  constantly  increase  the  wealth 
and  resources  ot  the  State.  I  have  been  induced  to  enter  into  this  train  of 
reasoning  and  statement  of  facts,  in  order  more  clearly  to  illustrate  this  posi- 
tion, to  wit:  that,  in  order  to  prevent  a  banking  institution  or  its  directors 
from  having  a  political  or  other  improper  influence,  it  was  not  necessary  to 
destroy  an  institution  which  was  in  itself  useful,  but  to  correct  its  abuses  by 
extending  the  banking  principle  till  all  good  paper  could  be  accommodated. 
I  have  stated  that,  in  Pennsylvania,  until  the  present  alarm  which  this  dis- 
cussion has  produced,  any  person  deserving  credit,  could  obtain  it  to  any  ex- 
52 


410  BANK  OF  THE  UNITED  STATES. 

tent  he  wished.  The  banks,  in  such  a  situation,  compete  for  customers,  and, 
in  such  a  state  of  things,  their  political  influence  is  gone.  In  Virginia,  on  the 
contrary,  in  consequence  of  the  limited  capital  of  the  bank  being  very  inade- 
quate to  the  demands  of  society,  it  is  a  matter  of  special  favor  to  get  into 
the  bank.  A  banking  capital,  to  this  limited  extent,  is  an  injury  to  the  com- 
munity: for,  in  such  a  state,  the  bank  not  being  able  to  accommodate  all,  must 
select  its  favorites,  which  gives  to  them  particular  advantages,  which  others 
do  not  possess,  and  enables  them  to  apply  to  usurious  purposes  the  money  they 
get  out  of  the  bank,  by  lending  it  to  others,  who,  if  there  was  a  sufficiency  of 
banking  capital,  would  themselves  go  into  the  bank  and  be  accommodated 
with  that  very  money  for  which  they  now  pay  an  usurious  interest.  Such  a 
bank  is  an  evil,  and  in  such  a  state  of  society,  where  there  exists  such  a  diffi- 
culty of  loaning  money,  a  man  worth  $20,000  may  have  his  fortune  sacrificed 
to  pay  5,000.  This  statement  will  clearly  illustrate  the  object  I  have  in  view, 
which  is  to  show  that,  by  extending  the  banking  system  to  the  proper  extent, 
if  you  once  commence  it,  you  destroy  its  political  influence,  and  prevent  it 
from  being  an  instrument  of  either  public  or  private  oppression.  Such  is  the 
situation  of  the  Bank  of  the  United  States  at  present.  Whatever  may  be  the 
disposition  of  their  directors,  they  are  incompetent  for  all  the  purposes  of  in- 
fluence. 

[Mr.  GILES  said  it  was  with,  regret  he  interrupted  his  friend;  but  he  seemed 
to  suppose  that  the  banking  capital  at  Richmond  was  so  small  as  to  convert 
that  city  into  a  society  of  shavers.  This  was  not  correct.  He  (Mr.  G.)  had 
a  conversation  with  the  president  of  the  bank,  from  whom  he  understood  that 
the  bank  could  do  more  paper  than  was  offered  to  it.] 

Mr.  BRENT  said  he  had  heard  no  positive  information  as  to  the  fact  he  stat- 
ed; but  it  was  well  known  that  men  as  good  as  any  in  the  United  States  had 
not  been  able  to  get  their  paper  accommodated.  He  knevy  the  president  of 
the  bank,  for  whom  he  had  a  sincere  veneration  and  affection;  no  blame  at- 
tached to  the  bank.  He  said  that  the  establishment  of  a  bank  any  where, 
however  pure,  provided  it  was  not  adequate  to  the  wants  of  society,  would 
produce  shaving. 

Mr.  B.  said  he  had  many  other  remarks  which  he  wished  to  submit,  but  the 
hour  was  so  far  advanced  he  would  not  trespass  further  on  the  attention  of 
the^  Senate  at  present.  If  a  fit  opportunity  should  hereafter  occur,  he  might 
again  take  the  liberty  of  making  a  few  observations  on  this  subject;  but  he 
would  avail  himself  of  this  occasion  to  say,  that  he  did  not  mean  to  make  any 
reflection  on  the  directors  of  the  Bank  of  Virginia — they  were  not,  in  the 
smallest  degree,  censurable.  He  believed  the  affairs  of  the  bank  were  ably 
and  honorably  conducted  by  them. 

FEBRUARY  19,  1811. 
Motion  to  strike  out  the  first  section. 

Mr.  TAYLOR. — Mr.  President:  Although  much  time  has  been  consumed  in 
the  discussion  of  the  subject  before  us,  and  the  ground  completely  occupied 
by  those  who  have  gone  before  me,  yet  the  importance  of  the  subject,  the  im- 
mense magnitude  of  the  unhappy  consequences  likely  to  result  to  the  nation 
from  the  rejection  of  the  bill  on  your  table,  compel  me  to  offer  to  it  all  the 
support  in  my  power.  Indeed,  sir,  to  this  sense  of  duty  to  the  nation  is  super- 
added  a  very  sacred,  and  to  me  dear  and  indispensable  duty — my  duty  to  the 
State  which  1  have  the  honor  in  part  to  represent — as  well  as  another  duty 
which,  from  the  course  which  the  debate  has  taken,  is  not  to  be  disregarded— I 
mean,  sir,  the  duty  which  I  owe  to  myself. 

I  cannot,  as  other  gentlemen  have  boasted  they  can,  put  my  hand  into  my 
drawer,  and  pull  out  the  instructions  by  which  I  am  to  be  directed  on  this  im- 
portant subject. 

The  State  of  South  Carolina  is  a  very  large  stockholder  in  some  of  her 
State  banks;  and  if  a  selfish  policy,  contracted  to  the  narrow  sphere  of  the 
unique  advantage  in  dollars  and  cents  of  the  Government  of  that  State,  in  con- 


ON   THE    BILL  TO  RENEW    THE  CHARTER   OF   1791. 

tradiction  and  disregard  of  the  interests  of  the  great  body  of  her  own  citizens, 
and  the  citi/.ens  of  the  rest  of  the  States  in  the  Union,  could  have  weighed  a 
moment  with  her  Legislature,  I  too  might  have  been  instructed.  Let  me  not  be 
Understood,  Mr.  President,  as  drawing  any  comparison  between  the  conduct 
of  the  State  of  South  Carolina  and  the  conduct  of  great  and  leading  States, 
who  have  acted  otherwise;  but.  I  must  and  will  tell  of  the  things  that  I  do 
know.  I  rejoice,  sir,  that  the  State  which  1  come  from  has.  in  this  instance, 
been  actuated  by  that  magnanimity  and  patriotism  which  on  all  former  occa- 
sions has  distinguished  her  conduct;  that  neither  selfishness  nor  party  rage,  nor 
a  spirit  of  intolerance,  has  induced  her  to  counteract  or  embarrass  the  National 
Legislature  in  its  pursuit  of  the  great  object  of  its  institution— Me  good  of 
the  ?,'7/c/e. 

I  hope  it  will  not  he  considered  as  savoring  of  egotism,  when  I  say  that 
my  appointment  to  the  very  honorable  station  1  now  hold  was  unsolicited  by 
me.  That  my  sentiments  on  the  subject  now  under  consideration  had  been, 
by  me,  unequivocally  expressed  at  the  last  session  oi'Congress,  and  were  well 
known  to  those  who  appointed  me;  nay,  further,  after  my  venerable  and  re- 
spected predecessor  had  resigned  his  seat  here,  and  had  declined  also  his  ap- 
pointment lor  the  ensuing  six  years,  pending-  the  election  of  a  successor  to 
nim,  and  when  my  name  was  held  in  nomination,  a  resolution  was  offered, 
similar  to  those  which  we  have  heard  so  much  talk  about,  proposing  to  instruct 
the  Senators  of  that  State  to  oppose  ih<-  renewal  of  the  charter  of  the  Bank 
of  the  Tinted  States.  This  resolution,  as  I  am  informed,  lay  on  the  Speaker's 
table  when  tin*  election  W;H  gone  into.  I  was  elected:  and  the  proposers  of 
the  resolution  had  not  power  or  influence  enough  to  raise  it  from  the  table  on 
which  it  lay,  and  it  died  tifi/t  l;nm  at  -ion;  and  if  I  were 

to  make  an  inference,  at  all.  on  these  transaction?,  I  should  suppose  I  was 
tacitily  instructed  to  \<;tc  for  the  renewal  of  the  hank  charter.  But  I 
seek  not  the  avoidance  of  responsibility.  It  is  here,  sir,  (in  my  own  bo- 
som) J  have  instructions  paramount  to  all  others:  my  beloved  country  has 
rested  the  matter  here,  and  my  gratitude  is  superadded  to  all  other  moral  obli- 
gations operating  on  me  to  perform  this  trust  and  toexcute  this  duty  with  faith- 
fulness. I  find  the  authority  of  (  n»  irr.int  this  charter  in  the  same 
sections  of  the  constitution  which  the  getlemen  wha  have  gone  before  me  have 
pointed  out  to  you.  In  section  7th,  clause;  1st,  pmvc.r  is  given  to  Congress 
*4  to  lay  and  colled  frm'.v,  duties,  imposts,  and  excises,  to  pay  the  debts  and 
provide  for  f  fie  ronnnnn  ({(fence  ;md  general  welfare  of  the  United  States;  but 
all  duties  shall  b?  uniform  throughout  the  United  States." 

Clause  2d  gives  the  power  "to  borrow  money  on  the  credit  of  the  Unit- 
ed States."  And  in  the  last  clause  of  said  section,  power  is  also  given  to 
make  all  laws  which  shall  be  necessary  and  proper  for  carrying  into  execution 
the  foregoing  powers,  vested  by  this  constitution  in  the  Government  of  the 
United  States,  or  any  department  or  officer  thereof. 

Let  us  understand  the  meaning  of  the  words  necessary  and  proper,  in  the 
last  quoted  clause:  for,  upon  a  correct  knowledge  of  these  depends,  in  my  opi- 
nion, the  correctness  of  our  conclusions  on  this  subject.  The  word  necessary, 
in  its  technical  and  legal  sense,  in  the  meaning  affixed  to  it  in  common  par- 
lance, established  by  usage,  custom,  reason,  and  the  common  law  of  the  land, 
is  different  and  distinct  from  the  signification  of  the  same  adjective  derived 
from  the  substantive  necessity, as  used  by  Hobbs,  Hutchinson,  Hume,  andthe 
other  metaphysicians  of  the  last  century*  It  is  well  known  that  they  used  the 
substantive  necessity  as  synonymous  to  the  word  fate:  and  which  necessity,  ac- 
cording to  the  opinions  of  one  party,  controlled  omnipotence  itself.  This  neces- 
sity was  supposed  by  them  co-existent  with  the  Deity  itself — not  prospective 
nor  discretionary;  bending  in  one  way,  and  in  one  way  only,  all  substance,  all 
matter,  and  all  spirit.  This  meaning  of  the  word  is  only  to  be  found  with  these 
metaphysicians  and  philosophers:  but, in  our  law  books,  in  the  daily  and  hourly 
use  of  the  word  in  common  conversation,  it  has  no  such  meaning.  When  the 
old  Congress  passed  the  conditional  charter,  (which  I  admit  they  had  not  a 
delegated  power  to  grant)  but  which  is  fully  in  point,  both  as  to  the  signifies 


412  BANK  OF  THE  UNITED  STATES. 

tion  of  the  word,  and  also  of  their  opinion  of  the  necessity,  and  even  of  tfoe 
indispensableness  of  a  bank  for  administering  the  fiscal  concerns  of  the  nation, 
in  the  conclusion  of  the  preamble  they  say,  that  the  exigencies  of  the  United 
States  render  it  indispensably  necessary  to  pass  the  act,  &c. ;  and  in  the  laws 
passed  during  that  period,  when  this  Government  was  in  the  habit  of  following 
the  English  custom  of  beginning  the  laws  by  a  preamble,  you  find  the  word 
necessary  used  as  synonymous  to  expediency,  practical  expediency,  (see  laws 
of  the  United  States,  vol.  1,  page  247;  idem,  276.)  In  fact,  among  frail  mortals, 
with  fallible  judgments  like  ours — with  any  beings  endued  with  less  than  om- 
niscience— the  word  necessary  must  be  only  applicable  to  the  honest  judgment 
we  can  make  up  concerning  the  subject  to  which  we  apply  it;  in  other  words, 
it  is  resolvable  into  that  sound  discretion  with  which,  as  moral  agents,  we  are, 
in  the  first  instance*  entrusted  by  our  Maker,  and,  in  the  instance  now  before 
us,  we  are  entrusted  with  by  the  constitution  and  by  the  citizens  yvhohave  sent 
us  here  to  transact  their  business.  But  the  rigid  necessity  which  our  oppo- 
nents wish  to  enforce  on  us,  this  metaphysical  necessity,  must,  from  its  very 
nature,  be  immutable;  it  must  be  unique;  and  could  not  exist  in  a  greater  or 
less  degree;  and,  therefore,  the  word  joined  to  it  in  the  constitution,  proper* 
could  have  no  meaning  at  all.  The  laws  to  be  passed  must  be  necessary,  is 
the  only  way  given,  under  heaven,  by  which  you  are  to  effect  the  end  desired; 
in  other  words?  the  law  must  be  imposed  by  fate.  It  is  perfect  nonsense  to 
say  that  there  is  a  latitude  left  with  us  to  judge  whether  such  a  law  is  proper 
or  improper.  I  have,  I  think,  brought  the  meaning  of  the  word  necessary  to 
the  level,  and  within  the  comprehension  of  frail  human  intellect.  The  significa- 
tion of  the  word  proper  I  take  to  contain  the  description  of  the  measure  or  law 
to  which  it  is  applied  in  the  following  respects:  whether  the  law  is  in  conform- 
ity to  the  letter,  the  spirit,  and  meaning,  of  the  constitution;  whether  it  will 
produce  the  good  end  desired,  in  the  most  ready,  easy,  and  convenient  mode, 
that  we  are  acquainted  with.  Let  us  apply  these  definitions  to  the  matter  in  hand . 

Our  opponents  have  admitted,  that  banks  are  necessary  to  receive  and  take 
care  of  the  revenue  of  the  nation.  They  have,  by  their  statements,  shown, 
that  there  is  little  more  than  one  half  of  the  amount  of  specie  in  the  country 
which  the  national  revenue  rises  to,  annually;  and  the  burthen  of  the  song  is, 
that  State  banks  will  do. 

Banks  are  then  necessary  and  proper  for  the  collecting,  transmitting,  and 
safe  keeping  of  the  revenue.  Banks  are  created  by  law.  Congress,  by  the 
constitution,  have  the  right  of  passing  laws  necessary  and  proper  for  the  fore- 
going purposes.  Banks  are  necessary  and  proper  for  these  purposes;  there- 
lore  Congress  have  the  right  of  passing  a  law  to  make  a  bank  or  banks.  But 
the  power  of  granting  charters  and  creating  corporations  is  the  exercise  of  the 
highest  act  ot  sovereignty,  say  our  opponents.  I  know  of  no  scale  by  which 
these  acts  of  sovereignty  are  graduated;  the  power  of  legislation  implies  sove- 
reignty; and  the  description  ot  a  high  law  and  a  low  law  is  hardly  to  be  found  in 
any  book  I  have  yet  met  with.  I  will  not  dwell  on  this  topic.  The  arguments 
of  the  gentleman  from  Virginia  (Mr.  BRENT)  on  this  point,  are  unanswerable. 
It  is  curious  to  observe  the  extremes  to  which  some  of  our  statesmen  carried 
their  doctrine,  twenty  years  ago,  on  this  subject  of  charters  and  corporations; 
and  I  have  recently  met  with  some  who  deny  that  any  government  has  the 
right  to  grant  them.  Our  little  town  corporations,  and  our  city  corporation  in 
the  State  I  live  in,  have  had  to  pass  through  the  legal  ordeal  to  satisfy  the 
doubts  of  those  who  entertain  this  opinion.  But  now,  all  the  States,  undoubt- 
edly, exercise  it,  or  rather,  they  have  continued  to  exercise  it  from  their  first 
existence.  So  have  we,  in  legislating  for  this  territory.  If  this  power  is  de- 
rived from  the  broad  terms  of  the  grant  to  pass  laws  for  this  District,  in  all 
cases  whatsoever;  and  if  the  unlimited,  unrestricted  grant,  thus  made,  is  sup- 
posed to  dub  us  with  the  higher  or  quintessential  sovereignty,  I  think  it  would 
not  be  a  difficult  matter  to  prove,  that  this  broad  grant  is,  in  fact,  as  much 
limited  and  restricted,  according  to  its  nature,  as  the  grant  of  power  in  the 
concluding  clause  of  the  8th  section  which  I  have  before  cited. 

Can  Congress  even  pass  a  law  respecting  the  territory  of  Columbia,  which, 


ON  THE  BILL  TO   RENEW  THE  CHARTER  OF  1791. 

according  to  their  opinions,  shall  not  be  necessary  and  proper?  The  well-being 
of  its  citizens  or  the  well-being  of  the  citizens  of  the  whole  nation,  (for  even 
legislating  the  territory  into  non-existence,  if  we  could  do  so)  these  would 
be  the  motives;  in  fact,  the  Legislature  must  be  non  compos  mentis,  who  could 
or  would  assign,  as  a  general  reason,  for  any  of  its  acts,  one  opposite  to  this 
one  of  its  being;  necessary  and  proper. 

Great  stress  is  laid  on  that  amendment  of  the  constitution,  which  says  that 
all  power,  not  expressly  granted,  shall  be  retained,  &c.  Either  the  general 
clause  I  have  relied  on  gives  power,  or  it  does  not;  if  it  did  not  give  po\yer, 
why  was  this  amendment  made?  And  if  it  did,  and  this  power  was  offensive, 
why  was  it  not  stricken  out  when  the  amendment  was  made?  But  if  it  ex- 
pressly gave  power,  which  I  contend,  its  being  suffered  to  remain  is  proof  that  • 
it  was  not  the  design  of  the  amendment  to  take  away  the  power  given.  Gould 
not  the  territory  of  Columbia  have  been  governed  without  erecting  a  single 
corporation  in  it?  I  don't  mean  well-governed?  But  was  there  that  fatal  ne- 
cessity, that  command  from  Jove, 

"  Ye  fates  fulfil  it  and  ye  poweis  approve," 

To  erect  corporations.  This  legislation  to  erect  corporations  being,  according 
to  our  opponents,  sui  generis,  not  of  the  ordinary  kind,  and  only  to  be  exer- 
cised where  the  express  authority  is  given  by  the  constitution,  I  ask  gentlemen 
to  shew  the  clause  in  the  constitution  which  expressly  gives  us  the  power  to 
perform  this  sublimated  act  of  legislation  in  this  territory,  any  more  than  in 
any  other  part  of  the  United  States; and  yet,  at  this  very  session,  we  have  sent 
an  armful  of  these  high  acts.  The  shelves  of  the  office  of  the  Secretary  groan 
under  the  pile  of  charters  we  have  grunted. 

I  said  it  was  easy  to  prove  that  the.  broad  grant  given  to  Congress  to  legis- 
late for  this  territory,  in  all  cases  whatsoever,  was  restricted  and  paled  in  by 
the  constitution.  Congress  cannot  make  the  duties  here  on  imports  less  or 
greater  than  elsewhere  in  the  United  States — imports  and  taxes  must  be 
equal,  &c. — nor  deprive  the  citizens  thereof  of  the  right  to  a  trial  by  jury, 
nor  grant  them  titles  of  nobility;  and  yet  the  incidents  here  alluded  to  would 
come  under  the  description,  in  the  clause,  "  of  all  cases  whatsoever."  In  truth, 
sir,  there  is  not  a  scintilla  of  the  spirit,  nor  a  single  word  or  letter  of  the  con- 
stitution, that  loses  its  power  and  sanction  upon  our  conduct  in  legislating  in 
this  particular.  There  is  no  more  a  power  given  us  to  legislate  ad  libitum,  on 
this  territory,  nor  to  derive  therefor,  powers  by  implication,  than  is  given  us 
in  the  laws  we  pass  for  the  whole  nation;  and  if  this  power,  sui  generis,  of 
creating  corporations,  is  properly  defined  by  our  opponents,  they  ought  to  §o 
back  to  the  works  of  yesterday  as  well  as  to  those  of  twenty  years  standing,  in 
order  to  introduce  their  new  order  of  things.  I  might  here  draw  a  comparison 
of  the  tried  scheme  of  using  the  United  States'  Bank,  and  the  untried  scheme 
of  using  State  banks,  in  aid  of  the  operations  of  the  national  treasury;  but  I 
should  only  be  saying  with  less  force  what  has  been  so  fully  and  so  conclu 
sively  said  by  the  gentlemen  who  have  preceded  me.  Suflice  it  to  say,  that, 
for  safe-keeping,  for  transmission  and  payment  of  the  funds  to  any  part  of  the 
nation,  and  for  enforcing  the  punctual  payment  bv  the  debtors  to  the  customs, 
by  addressing  to  those  debtors  the  arguments  to  the  sense  of  honor  and  shame, 
and  also  to  their  interest,  to  wit:  by  denying  them  credit  in  the  bank,  on  failure 
of  punctuality — all  these  have  been  afforded  to  the  Government  without  its 
incurring  therefor  one  cent's  expense.  Are  we  sure  the  State  banks  can  or 
will  do  this? 

I  beg  pardon  of  the  Senate  for  detaining  them  on  topics  not  new.  As  this  is 
made  a  case  of  conscience,  I  deemed  it  necessary  to  be  thus  particular.  I 
have  no  hesitation  in  saying,  we  have  the  right  to  act  on  this  subject,  inasmuch 
as  I  think  the  bank  is  both  necsssary  and  proper  for  the  purposes  above  re- 
ferred to. 

To  me  it  appears  that  this  power  is  expressly  granted — we  derive  it  not  by 
implication;  but  our  opponents  in  fact  are  pressed  to  the  necessity  of  using  im- 
plication to  come  at  the  denial  they  set  up  against  the  exercise  by  Congreitj  of 
this  power. 


414  BANK  OF  THE  UNITED  STATES. 

I  say,  further,  that  this  institution  is  necessary  and  proper  for  carrying  into 
effect  another  general  power,  viz.  the  power  to  borrow  money  on  the  credit 
of  the  United  States. 

I  am  one  of  those,  Mr.  President,  who  have  always  thought  a  superabundant 
treasury  was  no  national  blessing.  It  is  very  easily  to  be  demonstrated  that, 
as  to  the  effect  of  accumulating  national  wealth,  one  dollar  in  the  pockets  of 
our  citizens  would  add  twice  as  much  to  the  common  stock  as  the  same  sum 
taken  from  them  and  lodged  in  the  strong  box  of  the  treasury.  None  but  the 
nerve  of  a  rigorous  and  miserly  despot,  such  as  was  the  father  of  Frederick 
the  Great  of  Prussia,  could  ever  keep  it  together  after  it  was  collected.  1 
fear  that  we  republicans  are  so  generous  in  our  natures,  that, in  some  way  or 
other,  for  some  favorite  project  of  a  fortification  or  fortifications,  whether  by 
land  or  water,  we  should  let  it  go,  and  think  too  we  were  doing  the  greatest 
possible  good  with  it.  For  sudden  emergencies,  then,  I  conclude,  while  our 
Government  lasts,  we  shall  have  to  anticipate  by  loans,  taking  care,  as  I  hope 
we  always  shall,  and  as  we  have  done,  to  provide  for  trie  early  release  of  the 
Government  from  such  obligations,  which  the  necessary  or  sudden  emergen- 
cies are  not  to  be  suffered  to  accumulate.  The  Bank  of  the  United  States 
serves  for  effecting  both  objects— quick  and  reasonable  loans.  One  clause  ot 
the  bill  compels  the  bank  to  loan  to  the  United  States  the  amount  of  half  its 
capital;  and  the  form  ot  these  loans,  as  heretofore  practised  by  the  Government, 
is  by  a  mere  entry  in  the  bank  books,  and  in  the  books  of  the  treasury  of  the 
United  States,  of  the  money  borrowed,  and  the  interest  stated  which  is  payable 
thereon;  in  other  words,  there  is  no  transferable  stock  delivered  out,  and  which 
the  Government  cannot  redeem  whenever  it  pleases-  1  ask  gentlemen,  if  the 
Government  is  not  bound  to  provide  the  means  necessary  and  proper  of  exer- 
cising this  power  of  borrowing,  and  whether  there  can  in  any  way  be  devised  a 
more  proper  mode  for  the  advantage  of  the  nation  than  the  plan  proposed;  and 
will  not  this  ready  resource,  which  we  shall  have  for  five,  six,or  seven  millions  of 
dollars,  serve  to  keep  off  the  pressure  and  the  combination  of  individual  rapa- 
city and  of  individual  concert  and  cabal,  with  which  your  efforts  to  borrow 
may  be  met  by  the  large  capitalists,  and  give  to  the  Government  time  to  bor- 
row even  from  foreigners,  if  with  them  we  can  make  a  better  bargain  for  the 
nation?  I  know  some  gentlemen  talk  largely  of  the  vast  sums  of  money  which 
our  citizens  have  ready  to  pour  into  the  lap  of  the  Government,  if  to  them  it 
should  apply  for  a  loan.  The  same  boasting  took  place  at  the  time  this  Go- 
vernment made  its  only  experiment  to  borrow  money  from  its  citizens.  Yes, 
sir,  when  there  was  a  mighty  rage  against  France,  and  the  Government  was 
urged  into  the  expensive  measures  of  that  day,  the  experiment  was  made,  and 
we  had  to  give  usury;  sir,  we  had  to  give  an  interest  of  _two  per  cent,  more 
than  the  legal  interest  in  the  States  where  the  loan  was  effected.  The  present 
crisis  is  an  avyful  one.  The  system  of  non-importation  is  now  in  operation, 
which  hermetically  seals  the  lid  of  your  treasury  box  to  the  admission  of  reve- 
nue. It  is  known  we  shall  have  to  borrow  money.  And  after  you  put  down 
this  bank,  where  is  the  loaning  capital  of  the  nation  to  be  found?  I'll  tell  you 
where;  it  is  under  the  management  of  the  State  banks;  and  those  State  banks, 
at  least  in  the  largest  money  holding  State  in  the  Union,  (Pennsylvania) 
are  precluded  from  loaning  to  the  United  States,  unless  by  consent  of  the 
Legislature.  Will  you  go  to  those  gentle  and  good  souls,  who  give  to  the  dis- 
tressed the  good  bargains  which  the  gentleman  from  Maryland  (Gen.  .SMITH) 
told  us  o!'?  Will  you  apply  to  the  mercy,  and  kindness,  and  patriotism,  of 
those  ravenous  sharks  and  shavers,  who  are  even  considered  as  acting  very 
moderately  when  they  take  from  the  distressed  their  one  and  a  half  per  cent, 
per  month,  or  eighteen  per  cent,  per  year,  for  the  use  of  their  money?.!  don't 
expect  much  patriotic  support  from  such  men  as  these;  they  would  spurn  you 
with  contempt,  if  you  offered  them  your  pitiful  and  beggarly  six  per  cent. 
But  the  State  banks  are  the  panacea  for  all  diffiulties;  they  may  lend  you  the 
money  you  want,  provided  you  get  the  consent  of  the  State  which  granted 
their  charters.  But  all  the  States  have  not  restricted  their  banks  from  lend- 
ing money  to  the  United  States.  I  am  contemplating  this,  not  for  a  day  only. 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791.  4^5 

Do  you  believe  that  New  York  or  Maryland,  after  experiencing  the  effect 
which  this  controlling  power  of  the  State,  over  the  money  of  its  citizens,  shall 
have  on  the  General  Government,  will  act  so  unwisely  as  to  forego  the  ad- 
vantage of  influence  in  the  Union  derived  from  their  dollars  and  eagles,  and 
act  so  unjustly  to  themselves  as  not  to  follow  the  example?  Why,  sir,  not 
for  selfishness  sake,  but  for  the  sake  of  fair  play,  they  ought  and  would  do  it. 
The  States  ought  as  little  to  disparage  us,  in  "the  exercise  of  our  legitimate 
functions,  as  we  them;  yet,  by  the  operation  of  these  State  charters,  millions 
of  money  are  put  out  of  our  reach  unless  by  their  consent;  when,  by  the  con- 
stitution, we  are  undeniably  permitted  to  borrow  money.  Are  we  come  to 
this,  that  this  meagre  and  grim  demon,  this  Dr.  Snatchaway,  who  not  only 
denies  the  powers  derived  incidentally,  (although  we  have  exercised  them 
thousands  of  times)  but  before  whom  withers  and  perishes  the  powers  ex- 
prosly  granted — that  this  Devil  Doctor  is  even  row  about  to  renew  to  us  the 
distress  of  the  honest  Governor  described  by  the  inimitable  Cervantes? 

I  beseech,  gentlemen,  not  to  bring  on  a  premature  old  age  in  this  our  Go- 
vernment: 1  beseech  them  not  to  disfranchise  the  Government  of  the  neces- 
sary powers  for  carrying  it  into  effect;  and  not  to  throw  away  the  experience 
and  the  acquiescence  of  the  nation  for  twenty  years' duration;  and  I  most 
fervently  beg  that  this  power  should  not  be  surrendered  to  thegr^at  and  lead- 
ing States,  because  they  have  inconsiderately  asked  for  it;  that  Congress  will 
not,  in  imitation  of  the  good  old  Lear,  yield  to  the  members  of  our  family 
what  is  wholesome  and  neci»aiy  for  supporting  our  own  household.  Soon, 
very  XHHI.  the  eyes  and  ears  of  one  or  more  of  the  members  of  our  family 
may  be  offended  at  the  sight  of  our  committees,  our  mendicant  missions 
lounging  about  the  lobbies  and  galleries  of  the  State  Legislatures,  as  some  of 
us  have  been  offended  at  the  presence  of  the  missionaries  lounging  about  our 
galleries.  We,  who  are  now  supplicated,  will  then  he  BUppltcaforft  While  v>  e 
succumb  to  the  views  or  prejudices,  or  State  policy,  of  each  particular  State, 
from  whence  we  implore  the  permission  to  borrow,  we  may  succeed;  but  act 
independently,  run  counter  to  their  local  feelings,  they  will  not  lend  you  a 
doit.  Think  you,  sir,  that  the  State  of  Pennsylvania  would  have  consented 
to  your  making  a  loan  from  its  banks  at  the  period  at  which  General  Bright 
was  in  battle  array  against  your  authority?  Think  you  that  Massachusetts 
would  have  treated  your  beggars  kindly  during  the  embargo  ferment?  Would 
the  gentleman  from  Maryland,  with  his  high  standing  in  that  State,  the  turn 
of  whose  politics*  he  says,  may  depend  upon  the  continuing  of  this  bank — 
could  he,  sir,  with  all  his  commercial  knowledge  and  the  eloquence  he  dis- 
plays, have  obtained  the  giant  of  a  favor  to  the  Government  of  the  United 
States  about  two  years  ago?  Ah!  no. sir.  When  civil  broils,  when  political 
intolerance  and  party  rage,  shall  pervade  a  Legislature,  they  will  act  as  other 
men;  and  if  excited  only  to  the  height  to  which  the  newspapers  seem  anxious 
to  excite  them  on  the  present,  occasion,  there  might  be  rashness  enough  found 
to  induce  them  to  ur?e  your  messenger  as  was  used  the  good  old  Kent,  when 
supplicating  in  the  cause  of  his  houseless  master.  The  gentleman  from  Vir- 
ginia (Mr.  GILES)  has  called  the  attention  of  the  Senate  to  the  9th  article  of 
the  amendments  of  the  constitution,  viz.  "*  the  enumeration  in  the  constitution 
of  certain  rights  shall  not  be  construed  to  deny  or  disparage  others  retained 
by  the  People."  Now  Congress  have  the  power  to  borrow  money;  and  from 
plain  and  necessary  implication,  though  not  by  express  delegation,  (such  as  is 
required  by  gentlemen  in  the  instance  before  us)  we  have  the  power  to  fix  the 
rate  of  interest  to  be  given;  yet  the  State  Legislatures  have  the  power  of  fixing 
the  rate  of  interest  which  their  citizens  lending  money  shall  receive,  and  have 
fixed  and  established  that  rate,  and  enforced  the  provisions  on  this  subject  by 
severe  penalties.  I  know  not  how  Mr.  Adams  found  the  States  so  much 
asleep  to  their  rights  when  he  tempted  their  citizens  to  become  usurers,  and 
this,  too,  in  denial  and  disparagement  of  State  powers  actually  exercised.  If 
the  present  vigilance  had  then  been  exerted,!  should  suppose  he  was  very 
lucky  that  he  was  not  as  much  harassed  as  were  some  of  the  victims  under 
his  sedition  law.  Carry  this  doctrine  of  rigid  construction,  in  respect  to  this 


416  BANK  OF  THE  UNITED  STATES, 

instance  ot  collision  of  State  and  United  States'  authorities,  to  the  extent  con- 
tended for  by  the  opposers  of  the  bill;  enforce,  to  the  fullest  extent,  according 
to  its  obvious  meaning,  the  amendment  last  quoted;  and  we  shall  be  surround- 
ed with  powers  which  we  dare  not  use.  We  may  borrow;  but  the  citizens 
will  not  lend  tor  the  legal  interest  established  by  law.  The  States  prohibit 
them  lending  at  an  usurer's  interest,  and  impose  heavy  penalties  if  they  do; 
or,  to  embarrass  the  General  Government,  the  States,  or  some  of  them,  hold- 
ing the  moneyed  capital,  may  prohibit  individuals,  as  they  have  prohibited  the 
banks,  from  lending  to  us;  and  thus  benumb  all  our  energies.  In  fact,  sir, 
the  doctrines  and  notions  I  have  heard  enforced  here,  seem  calculated  to 
place  us  in  the  situation  of  the  miserable  Tantalus;  the  limpid  and  whole- 
some stream  is  within  our  reach,  but  we  dare  not  reach  out  our  hands  to  take 
up  a  drop  to  cool  our  tongues,  destined  to  the  sufferance  of  eternal  thirst. 
Let  me  now  inquire  how  the  destruction  of  this  bank  is  to  operate  on  the  na- 
tion at  large.  By  the  minute  detail  of  the  honorable  Senator  from  Maryland, 
(General  SMITH)  ot  the  mode  and  manner,  and  by  what  commercial  opera- 
tions, the  foreign  capital  in  this  bank  is  to  find  its  way  out  of  the  country,  I 
take  it  to  be  one  of  nis  motives  for  putting  down  this  bank,  that  the  foreign 
capital  should  be  drawn  out  of  the  country.  Indeed,  if  this  were  not  his 
object,  I  cannot  see  why  his  heaviest  artillery  was  brought  to  bear  upon  the 
foreign  influence,  which  he  alleges  this  foreign  capital  brings  into  the  country; 
and  yet  neither  he,  nor  any  one  who  has  cried  aloud  against  this  sin,  has  pro- 
duced a  single  instance  of  a  foreign  stockholder  having  exerted  his  influence 
against  the  Government  of  this  country.  [Barings  book,  on  American  af- 
fairs, might  be  adduced  as  an  instance  of  the  opposite  effect  produced.! 

The  farthest  that  the  assertions  go,  is,  that  our  own  citizens,  federal  bank 
directors,  may  have  exerted  their  influence;  and  they  and  their  money,  which 
is  not.  proposed  to  be  annihilated  by  this  bill,  may,  and  probably  will,  be 
brought  to  bear  against  us  again  and  again;  and  the  only  remedy  I  see  would 
be  to  kill  them  and  take  their  money.  This  would  effectually  destroy  their 
influence.  To  return,  sir,  to  the  grand  object  of  drawing  out  seven  millions 
and  upwards  of  foreign  capital  from  this  country.  I  know  that  some  have 
asserted,  with  great  confidence,  that  the  section  of  the  Union,  north  and  east 
of  this,  is  saturated  with  a  moneyed  capital,  domesticated,  sufficient  for  all 
the  purposes  of  its  citizens.  1  cannot  prove  that  this  is  incorrect,  but,  from 
the  anxiety  shown  by  those  People,  (on  the  subject  now  before  us)  by  the 
moderate  18  per  cent,  loans  we  have  heard  of,  I  should  remain  a  perfect 
Thomas  as  to  the  correctness  of  this  assertion.  Let  me  speak  of  those  States 
concerning  which  I  am  better  informed:  I  begin  with  Virginia,  because  it  is 
nearest.  This  State  is  indented  with  the  finest  bays  and  rivers  in  the  world, 
her  shores  are  bold,  and  her  waters  deep,  affording  ports  and  harbors  in  more 
abundance  than  are  to  be  found  in  any  State  of  the  Union;  look  at  the  weight 
of  tonnage  employed  in  carrying  to  the  old  world  the  immense  proceeds  of 
this  productive  country;  their  citizens  equal  in  intellect  and  enterprise  to  any 
in  the  world.  What  is  the  reason  that  they  pay  a  transit  duty,  annually,  to 
New  York,  Philadelphia,  and  Baltimore,  to  more  than  double  the  amount  of 
their  State  bank  stock,  in  profits  to  the  shipping  merchants  in  these  cities,  in 
freights  coastwise  of  the  produce,  and  in  the  freight,  also  coastwise,  of  Euro- 
pean supplies?  Does  this  evidence  no  want  of  commercial  moneyed  capital 
within  the  reach  of  the  citizens?  Travel  through  it,  compare  it  with  the 
Northern  States;  at  every  step  you  see  apparent  the  disadvantages  it  labors 
.jiuder  in  this  respect.  Why.  sir,  the  circumstance  of  the  basin  at  Richmond, 
with  a  fall  of  nearly  one  hundred  feet,  remaining  for  ten  years  a  stagnant  pool 
within  the  heart  of  her  capital  city,  when,  with  this  power,  more  machinery 
than  is  to  be  found  in  half  the  manufacturing  towns  of  England  might  be  pro- 
pelled— tells  the  secret. 

It  is  a  well  known  fact,  that  the  trade  of  North  Carolina,  with  the  excep- 
tion of  a  few  vessels  with  naval  stores  and  lumber,  makes  its  humble  attorn- 
ment  to  the  city  of  New  York.  South  Carolina  and  Georgia  have  a  small 
portion  of  their  commerce  direct  with  Europe;  but  the  thousands  of  bags  of 


ON   THE   BILL  TO   RENEW   THE  CHARTER   OF   1791. 

cotton  shipped  from  the  ports  of  Philadelphia,  New  York,  and  Boston,  the 
circumstance  of  there  being  eleven  packets  constantly  trading  to  New  Y9rk, 
alone,  from  Savannah,  and  as  many,  or  more,  from  Charleston,  show  plainly 
that  this  transit  duty  is  paid  by  us  also.    The  French  emperor  knows  this  as 
well  as  we  do  ourselves,  and  his  provision  for  admitting  cotton  from  New 
York  is  not  because  he  did  not  know  the  article  did  not  grow  there,  but  be- 
cause he  knew  the  capital  there  acted  like  a  loadstone,  and  drew  the  article 
from  the  States  in  which  it  grew.    I  do  not  mention  these  things  invidiously; 
I  wish  prosperity  to  these  cities  as  well  as  to  the  whole  Union;  but  protract 
not  the  growth  of  other  parts  of  the  United  States,  by  driving  out  the  means 
from  the  country  by  which  they  have  grown,  and  which,  if  let  alone,  might 
be  extended  to  us  also.    No  man  who  has  attentively  considered  the  rise,  pro- 
gress, and  growth  of  these  States,  from  their  first  colonization  to  the  present 
period,  can  deny  that  foreign  capital,  ay,  British  capital,  has  been  the  pap 
on  which  we  first  fed;  the  strong  aliment  which  supported  and  stimulated  our 
exertions  and  industry,  even  to  the  present  day;  the  Southern  People,  although 
they  have  received  the  goods,  and  sold  their  crops  to  British  agents  and  Bri- 
tish factors,  whether  in  their  own  cities  or  those  further  North,  are  not  the 
less  republican,  nor  the  less  independent  in  their  politics,  nor  the  less  free 
from  foreign  partialities.    I  will  here  mention  a  fact,  which  I  happen  to  re- 
member, which,  among  ten  thousand  other  instances,  might  be  mentioned,  of 
the  benefit  derived  to  the  country  by  the  use  of  this  detested  foreign  capital. 
In  the  progress  of  the  digging  of  the  Santee  canal,  the  greatest  work  of  the 
kind  in  America,  the  expense  so  far  exceeded  the  calculations  of  the  com- 
pany who  had  undertaken  it,  that  many  of  the  stockholders,  like  all  sanguine 
calculators,  were  straightened  in  paying  up  their  instalments  as  they  became 
due;  these  obtained  accommodation  at  the  bank:  but,  even  then,  it  was  found 
difficult  to  progress,  and  at  length  the  company  actually  borrowed  of  the 
branch  bank  the  funds  to  complete  it;  and,  unless  it  has  been  very  lately  paid, 
the  company  still  owes  a  very  considerable  sum  to  the  Bank  of  the  United 
States;  and,  but  for  this  accommodation,  it  is  more  than  probable  that  this 
great  work,  which  is  capable  of  facilitating,  to  a  most  convenient  degree,  the 
transportation  of  the  products  of  nearly  naif  the  State  of  South  Carolina, 
might  never  have  been  accomplished.     We  have  heard  much  of  parties  ana 
party  spirit  in  this  discussion.     I'll  tell  you,  sir,  who  will  compose  the  parties 
in  the  immediate  concussion  about  to  be  be  produced  by  the  downfal  of  this 
bank — the  withdrawal  ot  fifteen  millions  of  circulating  medium,  cither  in  actual 
paper  bills,  or  in  bank  credits,  answering  the  full  purpose  of  circulating  me- 
dium, while  the  merchants  are  under  distress  from  foreign  aggression,  and 
while  the  Government  has  commenced  its  restrictive  system  on  mercantile 
operations;  while  it   will    make  the  money  more  scarce,  will  make  it  more 
dear,  and  of  course  will  make  property  more  cheap;  produce  will  fall;  it  has 
fallen  in  consequence  of  the  anticipations  on   this  subject — the  small  trader, 
and  the  young  industrious  and  enterprising  mechanic  and  manufacturer,  whose 
stock  (and  it  is  the  best  stock  in  the  world)  is  his  honesty  and  fair  reputation, 
and  on  which  the  banks  have  advanced  him  money,  must  pay  off  at  any  and 
every  loss,  or  perhaps  buy  his  money  at  the  moderate  premium  of  one  and  a 
half,  two,  or  three  per  cent,  a  month.    These  men,  such  as  the  worthy  sup- 
pliants from  Philadelphia  represent,  will  be  delivered  over  to  be  devoured  by 
the  sharks  and  shavers,  who  are  now  prowling  for  their  prey,  among  the  dis- 
tresses and   calamities  you  are  about  to  inflict  on  that  class  of  citizens,  the 
most  worthy  the  care  of  a  wise  government.     The  parties  are  the  rich-cash- 
in-hand  men  on  the  one  side,  and  the  great  agricultural  and  manufacturing  in- 
terest, and  the  small  traders  on  the  other.    If  I  had  only  heard  and  not  seen 
the  gentleman  from  Tennessee,  (Mr.  ANDERSON)  when  delivering  his  oration 
in  praise  of  republican  simplicity,  I  should  have  thought  we  had  another 
Diogenes  preaching  from  his  tub;  but  there  needs  no  oratory  to  convince  the 
mission  in  your  gallery,  and  their  friends  behind  them,  that,  after  the  big  fish 
have  eaten  the  little  ones,  they  will  neither  have  motives  or  means  for  depart- 
ing from  the  chaste  frugality  and  republican  simplicity  of  manners,  recom- 
53 


418  BANK   OF   THE   UNITED    STATES. 

mended  by  the  words  of  the  gentleman;  it  will  be  only  those  who  have  fat- 
tened upon  the  spoil  who  can  indulge  in  the  simple  style  and  plain  and  humble 
habiliments  of  our  modern  Diogenes. 

I  have  said  I  rejoice  in  the  prosperity  of  every  part  of  our  Union.  But,, 
either  the  gentleman  or  I  have  proceeded  together  upon  very  mistaken 
grounds.  I  thought  the  seizing  of  West  Florida  was,  among  other  objects,  to 
answer  the  purpose  of  giving  an  outlet  for  the  products  of  Tennessee  and  the 
other  Western  States;  1  thought,  too,  the  purchase  of  Louisiana,  at  fifteen  mil- 
lions, to  be  paid  by  the  whole  nation,  was  for  this  object  also;  and  I  cannot 
suppose  that  the  effecting  of  this  object  would  tend  to  make  the  People  poor* 
or  preserve  among  them  this  reoublicn  simplicity  of  manners;  on  the  contrary,. 
I  do  hope  and  expect,  that  it  will  tend  to  promote  the  industry  and  enterprise 
of  the  citizens,  and  develop  the  vast  resources  of  wealth,  profit,  and  strength, 
of  our  Western  brethren.  Perhaps  the  resolution  on  our  tables  for  imposing 
additional  duties  on  hemp  and  hempen  manufactures  is  also  designed  to  pro- 
mote the  wise  project  of  keeping  our  Western  brethren  from  growing  too 
rich,  and  thereby  preserving  our  republican  simplicity. 

I  have  not  yet  done  treating  this  as  a  party  subject.  1  did  not,  it  is  true, 
come  here  to  legislate  for  a  party,  or  for  any  particular  administration;  but 
where  I.  think  a  measure  is  subversive  of  the  interest  of  the  nation,  and  sub- 
versive of  the  party  to  which  I  am  attached,  it  is  not  unfair  to  take  this  lat- 
ter aspect  into  view  also.  Let  it  be  recollected  that  the  present  administra- 
tion have  not  a  single  leading  (for  they  arrogate  the  term  as  well  as  the  States) 
paper,  republican  or  federal,  in  the  nation,  except  the  paper  edited  here, 
(which  is  mild  in  its  tone,  and  not,  as  yet,  disposed  to  rush  into  the  fire  to  de- 
fend the  powers  that  be) — I  say  let  it  be  recollected  that  there  is  none  of 
these  irresponsible  dictators  to  public  opinion,  who  lift  a  quill  in  our  cause. 
The  constant  theme  is  the  baseness  and  tergiversation  of  the  tenth  and 
eleventh  Congress,  and  the  wickedness  and  corruption  of  the  servants  of  the 
public,  and  ever  and  anon  their  lash  reaches  beyond  our  shoulders,  and  strikes 
the  Executive  also.  But  kmore  is  coming  yet  from  them;  they  have  shown 
iheir  teeth.  It  is  true  we  may  follow  those  calling  themselves  republican  in 
the  vote  which  we  are  now  about  to  give.  But,  do  you  think,  for  this  act, 
that  they  will  come  back  to  your  aid — that  they  will  take  us  for  better  for 
worse?  No,  sir;  when  the  evils  which  will  be  produced  by  the  rejection  of 
this  bill;  when  private  distress  and  public  embarrassment  shall  raise  the  out- 
cry; they  will  ride  on  the  winds,  and  direct  the  storm,  and  will  be  the  first  to 
cry  out  there  is  no  energy  in  us,  and  to  join  any  intrigue  to  hurl  us  from  our 
seats.  It  is  easily  to  be  demonstrated  that,  by  the  details  of  the  bill  on  your 
table,  if  its  friends  were  suffered  to  perfect  it,  it  would  produce,  say  in  the 
bonus.,  one  and  a  fourth  millions  at  least,  perhaps  two  millions  of  dollars; 
premium  on  the  five  millions  of  stock  to  be  created  two  and  a  half  millions; 
in  the  whole,  at  the  lowest  calculation,  three  and  three-fourths  millions  of  dol- 
lars, which  will  be  given  up,  lost  ,and  abandoned,  by  us.  Will  gentlemen  re- 
collect that  only  halt  of  this  sum,  taken  from  the  People  by  the  direct  tax,  hur- 
ried Mr.  Adams  and  his  friends  to  their  political  death?  And  the  People  are 
not  such  fools  as  not  to  see  that  what  is  taken  away  from  the  treasury  is 
taken  from  their  pockets;  you  may  disguise  it  as  you  will,  by  procrastinating 
loans,  it  will  not  escape  their  detection. 

And  for  whom  is  this  mighty  sacrifice  to  be  made?  If  the  ministering  to  the 
treasury  of  the  United  States  is  worth  to  the  Bank  of  the  United  States  so 
much  that  it  will  accept  the  terms  abovementioned,  and  you  resolve  to  em- 
ploy others  to  do  the  same  thing,  in  this  office,  worth  so  much  to  the  Bank  of 
the*  United  States,  \yorth  less  to  them  ?  This  is  the  lever.  Here  the  real  par- 
ties are  apparent.  The  nation — the  great  agricultural  interest,  the  solid  yeo- 
manry of  the  country,  on  one  side;  and  the  city  influence,  the  London  and 
Paris  influence,  on  the  other.  The  advantage  palpable  of  nearly  four  millions 
of  dollars,  wrested  from  the  Government,  and  of  course  from  the  People,  and 
sent  to  whom?  To  the  great  capitalists,  monopolists  of  State  banks,  to  the 
Leaden  Hall  Street  gentry,  whose  insatiate  maws  could  not  be  glutted  by  the 


ON  THE    BILL   TO  RENEW  THE  CHARTER   OF    1791.  4J9 


plundering  of  an  empire.  Do  you  believe,  sin,  that  the  great  body  of  the 
pie,  who  are  actuated  by  the  impulse  of  feeling,  and  who  may  not  indulge  in 
the  nice  distinctions  we  have  drawn  here  about  the  constitution,  but  who  have 
experienced  the  convenience  of  a  circulating  medium,  current  over  the  whole 
extent  of  the  Union,  and  who  have  witnessed  your  numberless  acquiescences 
to  the  legality  of  this  institution,  and  read  your  laws  for  punishing  those  evad- 
ing its  rights,  and  your  numerous  laws  for  trusting,  trading,  borrowing,  and 
receiving  favors  from  this  bank—  will  this  your  recent  discovery  of  its  uncon- 
stitutionally be  an  excuse  for  giving  away  twenty  per  cent,  on  all  their  produce, 
and  for  the  giving  away  double  the  amount  of  that  tax,  for  the  imposing  of  which 
they  condemned  your  predecessors  ?  I  fear  for  the  safety  of  the  constitution 
itself.  It  has  been  denounced  by  those  who  have  denounced  us.  The  feeling 
is  quickly  transferred  from  the  ministers  under  the  constitution  to  the  consti- 
tution itself.  The  clamor  has  gone  forth  that  we  want  energy;  that  the  con- 
stitution wrnts  energy;  and  avast  remedy  has  already  been  proposed  by  the 
Aurora  itself:  to  give  Congress  the  power  to  lay  an  export  duty  upon  the  pro- 
ductions of  the  country  —  more  of  your  London  and  Paris  influence;  to  lay 
the  agricltural  interest  under  the  ban  of  the  empire.  Consolidation  is  the 
watchword.  Preserve  your  constitution  without  abandoning  its  legitimate 
powers,  such  as  you  have  prospered  in  the  exercise  of,  and  I  fear  not  this  hob- 
goblin; but  weaken  it,  place  it  to  lean  upon  or  revolve  round  any  local  State 
policy,  and  to  obey  the  beck  and  call  of  any  one  or  of  ail  the  leading  States, 
and  the  rights  and  interests  of  the  State  1  represent,  and  all  the  other  smaller 
States  in  the  Union,  could  not  be  very  much  affected  by;  any  change. 

It  is  acknowledged  on  all  hands  that  there  is  not  specie  enough  in  the  na- 
tion, if  applied  solely  to  that  purpose,  to  pay  our  annual  impost.  The  opera- 
tions of  the  Bank  of  Columbia  in  transferring  the  revenue  derived  from  a  part 
of  Virginia  (and  of  the  land  funds  from  the  westward)  and  of  the  Manhattan 
Bank,  in  performing  the  same  office  in  respect  to  the  collections  in  Connecti- 
cut, have  beien  dwelt  upon  by  the  honorable  Senator  from  Maryland,  (Gen. 
SMITH.)  His  arguments,  drawn  from  the  facts  would  have  been  more  ccmclu- 
sive,  if  he  could  have  instanced  the  same  facilities  afforded  to  the  Govern- 
ment between  banks  disconnected  by  the  effect  of  that  neighborhood  circula- 
tion and  of  that  course  of  trade  very  apparent  in  the  instances  he  has  produced. 
But  it  is  not  conclusive  at  any  rate.  There  is  a  neighborhood  medium  of  cir- 
culation (the  State  bank  paper)  and  there  is  a  national  medium  (the  United 
States'  paper.)  The  latter,  under  the  present  state  of  things,  corrects  the 
operations  of  distant  banks,  and  renders  their  transfers  easy;  but,  deprived  of 
this,  would  any  of  them,  situated  at  four  or  five  hundred  miles,  or  at  1000 
miles  distance,  agree  to  make  these  transfers  for  the  Government  free  of  ex- 
pense? Could  thev,  for  instance,  transfer  the  solid  bullion,  belonging  to  the 
U.  States,  from  Orleans,  to  Boston  or  Philadelphia,  without  our  affording  com- 
pensation for  freight,  insurance,  &c.  I  have  witnessed  the  advantages  of  this 
national  medium  in  the  State  1  live  in;  and  in  the  months  of  autumn,  when 
strangers  are  fearful  of  venturing  to  Charleston,  our  Western  friends,  rather 
than  carry  the  hard  dollars,  are  in  the  habit  of  giving  two  or  three  per  cent. 
for  bills  of  the  Bank  of  the  United  States.  Destroy  this  national  medium,  you 
insulate  the  State  banks,  which  are  so  far  asunder  as  not  to  be  within  the  in- 
fluence of  the  neighborhood  medium  of  circulation.  The  stroke  of  our  dread- 
ful wand  disconnects  the  ligament  by  which  they  are  bound  together  in  their 
distant  operations. 

Gentlemen  tell  us  we  must  use  the  State  banks,  and  of  consequence  the 
State  bank  notes.  Some  of  these  notes  happen  to  be  worth  nothing;  Glouces- 
ter bank  notes  for  instance;  and  they  are  graduated  in  different  parts  of  the  con- 
tinent, from  par,  down  to  twenty  or  twenty  -five  per  cent,  below  par,  and  the 
market  value  is,  in  some  instances,  perpetually  changing;  our  treasurer  must, 
if  he  can,  separate  the  sheep  from  the  goats;  and  this  is  to  be  perpetual  labor. 
Even  good  notes,  at  par,  when  received,  may  be  useless  to  the  public  credi- 
tor, who  is  to  receive  them.  '  A  Portland  bill,  for  instance,  would  not  get  me 
a  meal's  victuals  from  this,  home;  and  an  Augusta,  or  Savannah,  or  New  Or- 


420  BANK  OF  THE  UNITED  STATES. 

leans  bank  bill,  would  not  have  its  value  understood  in  New  England.  In- 
deed, Mr.  President,  this  chaos,  this  confusion,  about  to  be  introduced  in 
our  treasury,  and  the  legitimate  exercise  of  our  constitutional  powers  as  a 
government,  is  likely,  too  likely,  again  to  exhibit  to  the  world  the  distractionT 
and,  perhaps,  dispersion,  (which  God  forbid)  which  the  seed  of  Noah  expe- 
rienced at  the  Tower  of  Babel- 

I  have  given,  candidly,  my  honest  views  of  the  subject  before  us,  meaning 
no  uncharitableness  to  those  honorable  gentlemen  in  the  Senate  who  differ 
with  me,  and,  infinitely  rather  would  1,  that,  after  the  trial,  and  after  long 
experience  to  come,  all  that  I  have  said  should  be  discovered  to  be  founded 
in  error — the  effect  of  a  heated  imagination — than  that  my  country  should  suf- 
fer a  single  pang,  though  in  fulfilment  of  the  things  I  have  this  day  uttered. 

FEBRUARY  20,  1811, 
Motion  to  strike  out  the  first  section  of  the  bilL 

Mr-  PICKERING. — Mr.  President:  Having  received,  from  the  House  of  Re- 
presentatives of  Massachusetts,  an  instruction,  in  the  form  of  a  request,  "  to 
oppose  the  renewal  of  the  charter  of  the  Bank  of  the  United  States,."  and 
some  other  members  of  the  Senate  having  received,  from  their  respective 
States,  instructions  to  the  same  effect,  I  will  make  a  few  observations  on  the 
subject  of  instructions.. 

I  was  pleased  to  hear  the  gentleman  from  Virginia,  over  against  me,  (Mr. 
GILES)  after  reading  his  instructions  from  that  State,  express  his  opinion  de- 
cisively, that  instructions  from  constituents  were  not  binding  on  their  legisla- 
tive Representatives.  Concurring  entirely  in  this  opinion,  1  will  offer  some 
reasons,  to  show  that  they  are  erroneous  in  principle,  that  they  infringe  the 
rightful  independence  of  Representatives,  and,  in  respect  to  members  of  Con- 
gress, that  t)iey  violate  the  constitution  of  the  United  States. 

In  a  small  communityr  where  all  its  members  can  meet  together  and  consult 
on  the  measures  necessary  and  proper  to  promote  their  common  interests, 
their  decisions  are  the  result  of  deliberation,  of  reasoning,  and  of  the  inter- 
change of  sentiments.  When  the  members  become  too  numerous,  or  are  too 
widely  extended  to  admit  of  their  personal  attendance  in  a  general  assembly, 
it  seems  to  be  a  very  natural  provision  to  select  a  convenient  number  of  then* 
to  meet  together  to  manage  their  common  concerns,,  in  the  same  manner  they 
were  before  conducted  by  the  whole  community.  And  thus,  from  the  very 
nature  of  this  institution,  it  becomes  the  duty  of  the  persons  composing  the 
representative  body,  to  consult,  deliberate,  and  mutually  communicate  their 
reasons  and  opinions,  and.  thereupon,  finally  to  decide  on  the  measures  re- 
quisite to  be  adopted  for  the  welfare  of  the  community.  Hence,  it  follows, 
mat  all  peremptory  instructions,  or  naked  requests,  designed  to  control  or  in- 
fluence the  votes  of  the  Representatives,  are  subversive  of  the  fundamental 
principle  of  a  representative  government. 

Such  instructions,  or  requests,  addressed  to  members  of  Congress,  do,  also,, 
violate  the  constitution  of  the  United  States*  The  first  sentence  in  that  con- 
stitution is  in  these  words:  "  All  legislative  powers, herein  granted,  shall  be 
vested  i»  a  Congress  of  the  United  States,  which  shall  consist  of  a  Senate  and 
House  of  Representatives."  Now,  therefore,  if  State  Legislatures  undertake 
to  dictate,  by  their  instructions,  or  by  requests  which  are  intended  to  operate 
equally  with  instructions,  what  votes  shall  be  given  on  any  question,  by  their 
Representatives  in  Congress,  they  so  far  assume  the  powers  vested,  by  the 
constitution,  exclusively  in  Congress.  And  if  their  instructions,  or  requests, 
are  obeyed,  then  the  State  Legislatures,  and  not  Congress,  enact  laws  for  the 

If,  indeed,  a  State  Legislature  should,  in  the  form  of  instructions  or 
requests,  enter  into  a  train  of  reasoning,  and  present  arguments  which  should 
convince  my  understanding  that  any  measure  under  consideration  in  Con- 
gress, was,  or  was  not,  consistent  with  the  constitution,  and  exhibit  facts 


ON  THE  BILL  TO  RENEW  THE  CHARTER    OF    1791. 

which  proved  its  utility,  or  injurious  effects,  then  I  should  yield  obedience 
accordingly;  but  to  what?  To  instructions  or  requests?  No:  but  to  REASON 
and  to  TRUTH. 

In  another  respect,  such  instructions  and  requests  violate  the  constitution, 
in  regard  to  the  members  of  this  body.  Senators  are  chosen  for  six  years. 
This  was  intended,  by  the  framers  of  the  constitution,  to  give  them  that  inde- 
pendence which  should  secure  freedom  in  thinking  and  acting.  But,  if  Senators 
were  bound  to  obey  the  instructions  of  their  respective  State  Legislatures, 
that  independence  would  be  wholly  destroyed.  Indeed,  it  would  put  Senators 
as  absolutely  in  the  power  of  their  constituents,  as  if  the  State  Legislatures 
had  the  right  to  recall  and  dismiss  them  at  pleasure. 

I  will  now,  Mr.  President,  make  some  observations  on  the  main  question 
under  consideration — whether  Congress  have  the  power,  by  the  constitution, 
to  renew  the  charter  of  the  Bank  of  the  United  States. 

It  has  been  said  that  the  power  to  incorporate  a  bank  for  the  United  States, 
is  a  substantive  and  original,  and  not  a  derivate  or  implied  power.  This  has 
been  repeated;  but  I  have  heard  no  arguments  in  support  of  the  position;  it 
is  a  naked  assertion. 

It  has,  also,  been  called  "  an  act  of  sovereignty;"  as  if  to  alarm  and  deter  us 
by  its  awful  magnitude.  But,  sir,  the  sovereign  power  of  Congress  is  sometimes 
exercised  on  subjects  of  comparatively  little  moment.  A  tew  days  since  we 
passed  a  bill  to  authorize  the  erection  of  a  bridge;  and  another  to  change  the 
name  of  an  individual,  to  enable  him  to  inherit  an  estate.  The  power  of 
Congress  is  sovereign  to  all  the  purposes  of  the  constitution/  They  can  lay 
and  collect  taxes,  duties,  imposts,  and  excises;  borrow  money;  regulate  com- 
merce; and  make  all  needful  rules  and  regulations  respecting  the  territory 
and  other  property  of  the  United  States.  And  they  have  power  to  make  all 
laws  necessary  and  proper  to  cany  the  foregoing,  and  all  other  constitutional 
powers,  into  execution.  When  proposing  to  exercise  this  general  power,  in 
any  case  not  expressly  mentioned,  we  have  to  consider  whether  it  be  k4  ne- 
cessary and  proper."  It  has  been  said  that  "  necessary"  here  means  indis- 
pensable; something  without  which  a  particular  power,  expressly  granted, 
cannot  be  carried  into  execution.  But,  sir,  I  see  no  ground  for  this  interpre- 
tation. In  the  affairs  of  a  nation  or  other  community,  whatever  the  public 
good  requires  to  be  done*  is  necessary  and  proper  to  be  done.  It  is  a  moral, 
not  an  absolute  necessity.  It  is  necessary  for  me  to  be  here,  in  my  place, 
because  it  is  my  duty  to  be  here.  Necessary  and  proper  are  opposed  to  unne- 
cessary and  improper.  Congress  should  do  no  act  unnecessary  and  improper; 
but,  like  State  Legislatures,  do  whatever  is  necessary  and  proper  to  attain  the 
objects  for  which  they  are  respectively  constituted. 

In  determining  whether  any  proposed  measure  be  necessary  and  proper  to 
carry  into  execution  any  power  expressly  given  to  Congress,  we  have  to 
consider  whether  that  measure  has  a  just  or  useful  relation  to  the  end.  For 
instance,  the  constitution  having  prescribed  no  mode  of  collecting  the  revenues, 
it  rested  in  the  decision  of  Congress  to  adopt  such  a  mode  or  such  modes  as 
should  appear  to  them  best  adapted  to  that  object.  Instead  of  appointing 
custom  house  officers  in  the  large  commercial  cities  and  towns,  where  a  bank- 
ing establishment  could  be  supported,  Congress  might  there  have  erected 
banks — the  most  certain,  punctual,  and  cheap  mode  of  collection.  Suitable 
officers  of  a  bank  might  have  performed  all  the  duties  of  entering  and  clearing 
vessels,  and  all  other  duties  pertaining  to  the  custom  house,  without  any  charge 
to  the  public:  the  deposites  of  the  public  moneys,  so  collected  in  those  banks, 
upon  which  the  usual  banking  operations  might  be  carried  on,  yielding  an 
adequate  compensation  for  all  the  services  so  performed. 

The  public  revenues,  when  collected,  must  also  be  safely  kept.  And  expe- 
rience has  demonstrated,  that,  of  all  depositories,  banks  are  the  safest.  And 
the  same  experience  has  shown,  that,  as  the  public  moneys  are  required  to  be 
frequently  transferred,  for  the  public  expenditures,  from  one  State  to  another, 
the  Bank  of  the  United  States,  with  its  branches,  has  furnished  the  best  mode 


422  BANK   OF  THE    UNITED    STATES. 

of  transfer;  it  being  effected  with  despatch,  with  certainty,  and  without  any 
risk  or  expense  to  the  United  States. 

The  gentleman  from  Kentucky  (Mr.  CLAY)  asked,  if  banks  are  necessary 
for  collecting  the  public  revenues,  why  give  them  any  other  power?  The 
answer  is,  that  it  is  the  essential  nature  of  banks  which  renders  tnem  so  pecu- 
liarly fit  to  collect  the  revenues.  The  merchants,  whose  bonds  are  lodged  in 
the  banks  for  collection,  are  also  borrowers  of  money  from  the  banks;  and  if 
they  fail  of  paying  their  bonds  as  they  become  due,  their  credit  will  fail;  they 
can  obtain  no  more  loans  until  their  bonds  are  paid.  This  has  been  pre- 
sented to  our  view,  in  the  most  striking  manner,  by  my  colleague. 

"To  borrow  money,"  is  another  of  the  great  powers  expressly  vested  in 
Congress.  And  in  this,  as  in  the  power  first  considered,  no  mode  of  borrowing 
being  prescribed  in  the  constitution,  Congress  are  to  devise  and  provide  the 
means  in  their  judgment  most  sure,  expeditious,  and  ample,  to  obtain  loans. 
And  this  was  one  of  the  great  objects  for  which  the  Bank  of  the  United  States 
was  originally  incorporated.  The  gentleman  from  Virginia,  near  me,  (Mr. 
BRENT)  and  the  gentleman  from  South  Carolina,  (Mr.  TAYLOR)  have,  in 
very  forcible  language,  displayed  the  impolicy  of  depending  on  State  banks, 
or  individuals,  for  loans,  in  public  emergencies.  At  such  times,  these  banks 
and  individuals  may  be  most  hardly  pressed  by  their  usual  customers.  To 
suffer  the  Bank  of  the  United  States  to  dissolve,  and  to  have  recourse  to  State 
banks,  will  be  so  far  going  back  to  the  condition  of  the  United  States  under 
the  articles  of  confederation;  when  our  Union  was  but  a  rope  of  sand.  When 
the  pressure  of  the  Revolutionary  war  was  over,  indeed,  while  that  pressure 
remained,  Congress  in  vain  made  requisitions  on  the  individual  States;  no 
money,  or  none  in  any  measure  adequate  to  the  public  exigencies,  could  be 
obtained.  After  the  war,  when  the  public  treasury  was  empty,  Congress 
importuned,  implored  the  States,  individually,  to  grant  the  power  to  raise  a 
revenue  from  commerce,  to  defray  the  current  expenses  of  the  General 
Government,  and  to  fulfil  the  public  obligations;  but  the  power  could  not  be 
obtained.  States,  deriving  large  revenues  from  commerce,  chose  to  retain 
them  for  their  own  treasuries. 

It  was  this  helpless,  forlorn  condition  of  our  country,  which  forcibly  con 
vinced  the  nation  of  the  necessity  of  forming  a  new  system  of  Government; 
and  our  present  Government  was  the  fruit  of  that  necessity. 

"  To  regulate  commerce,"  is  a  third  great  power  vested  m  Congress.  And 
it  is  conceived,  that  the  exercise  of  any  power  well  adapted  to  give  safety, 
facility,  and  prosperity,  to  commerce,  must  be  comprised  in  the  power  to  regu  - 
late  it.  Hence  the  erecting  of  light  houses  has  been  mentioned  as  an  instance 
in  which  an  implied  power,  incidental  to  the  regulating  of  commerce,  has  been 
exercised.  But  it  has  been  said,  that  this  power  is  expressly  given,  in  another 
part  of  the  constitution;  th it  by  which  Congress  is  vested  with  exclusive 
legislation  over  the  district  which  is  the  seat  of  Government,  and  over  places 
ceded  to  the  United  States,  "  for  the  erection  of  forts,  magazines,  arsenals, 
dockyards,  and  other  needful  buildings."  But  if  .we  had  no  commerce,  no 
navigation,  light  houses  would  not  be  "needful  buildings;"  they  would  be  of 
no  use  whatever.  Hence,  it  is  clear,  that  they  have  a  direct  relation  to  com- 
merce, and  to  nothing  else;  and,  therefore,  the  erecting  of  them  is  properly 
adduced  as  an  instance  of  the  exercise  of  a  power  implied  in  the  general 
express  power  to  regulate  commerce. 

The  safety  and  facility  of  commercial  operations,  was  also  greatly  to  be 
promoted,  by  means  of  a  general  currency,  which  should  have  equal  credit 
throughout  the  Union.  This  has  been  accomplished  by  the  notes  issued  from 
the  Bank  of  the  United  States,  under  the  authority  of  Congress,  exercising 
the  power  incidental  to  that  of  regulating  commerce. 

A  fourth  great  power  which  I  mentioned  to  have  been  vested  in  Congress, 
is  that  of  "  making  all  needful  rules  and  regulations  respecting  the  territory 
and  other  property  of  the  United  States."  This  "other  property"  consists 
partly  of  money.  And,  as  Congress  have  power  to  make  any  regulations  con- 
cerning it  which  are  needful,  that  is,  whicn  may,  in  their  opinion,  best  pro- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     423 

mote  the  general  welfare;  this  money  may  be  (as  some  of  it  has  been)  vested 
in  bank  stock;  and,  with  the  truest  regard  to  its  safety  and  good  management, 
in  the  stock  of  a  bank  erected  by  Congress,  of  which  they  may  have  a  suitable 
inspection;  and  where  it  may  safely  deposite  the  public  revenues,  there  to 
await  the  public  demand;  and,  in  the  mean  time,  usefully  aid  those  banking 
operations  which  give  facility  to  commerce  and  to  public  loans. 

But,  as  an  evidence  that  the  constitutionality  of  the  act  to  incorporate  the 
Bank  of  the  United  States  was  at  least  doubtful,  we  have  been  told  by  the 
gentleman  from  Maryland,  (Mr.  SMITH)  that  President  Washington  doubted; 
that  his  mind  was  in  suspense  to  the  last  moment,  when  the  act  was  to  be  ap- 
proved or  disapproved.  That,  while  the  then  Secretary  of  the  Treasury, 
(Mr.  Hamilton)  a  very  great  man,  maintained  the  constitutional  power  of 
Congress  to  erect  that  bank,  another  man,  (Mr.  Jefferson)  equally  great,  then 
Secretary  of  State,  and  the  Attorney  General,  (Mr.  Randolph)  a  distinguish- 
ed lawyer,  maintained  the  contrary  doctrine,  that  Congress  had  not  that  pow- 
er. It  is  true,  sir,  that  Washington,  cautious  and  circumspect  beyond  any 
man  I  ever  knew,  did  suspend  Tiis  decision  to  the  last  day  allowed  him  by 
the  constitution.  The  confidence  with  which  the  Secretary  of  State  and  At- 
torney General  supported  their  opinions  on  this  Question,  was  sufficient  to 
excite  in  the  President  the  greatest  caution.  Both  were  lawyers,  and  they 
raised  many  legal  objections"  The  written  opinions  of  these  gentlemen  were 
(as  I  have  been  well  informed)  put  into  the  hands  of  the  Secretary  of  the 
Treasury,  two  days  before  it  was  necessary  for  the  President  to  decide.  And 
the  reasoning  of  Mr.  Hamilton,  in  his  written  argument,  enabled  the  Presi- 
dent to  decide  with  satisfaction,  with  a  full  conviction  of  the  constitutionality 
of  Ihe  act. 

The  folle  wing  are  some  of  the  objections  offered  by  the  Secretary  of  State: 
He  said  "  that  the  proposed  incorporation  (of  the  bank)  undertakes  to  create 
certain  capacities,  properties,  or  attributes,  which  are  against  the  laws  of 
alienage,  descents,  escheat  and  forfeiture,  distribution  and  monopoly.  And 
that  nothing  but  a  necessity,  invincible  by  other  means,  can  justify  such  a 
prostration  of  laws,  which  constitute  the  pillars  of  our  whole  system  of  juris- 
prudence, and  are  the  foundation  laws  of  the  State  Governments. "  Wash- 
ington, sir,  was  not  a  lawyer.  And  who  can  wonder  that  his  fair  mind  was 
alarmed  by  such  a  solemn  declaration?  That  it  was  kept  in  suspense  by  the 
assertion,  that  the  act  for  establishing  the  bank  would  overturn  the  pillars  of 
our  whole  system  of  jurisprudence,  and  the  foundation  laws  of  the  State  Go- 
vernments? But,  sir,  it  required  only  the  knowledge  of  a  lawyer,  at  once  to 
overturn  these  objections.  The  following  are  some  of  the  remarks  of  the 
Secretary  of  the  Treasury:  "  If  (says  he)  these  are  truly  the  foundation  laws  of 
the  several  States,  then  have  most  of  them  subverted  their  own  foundations. 
For  there  is  scarcely  one  of  them  which  has  not,  since  the  establishment  of 
its  particular  constitution,  made  material  alterations  in  some  of  those  branch- 
es of  its  jurisprudence,  especially  the  law  of  descents.  But  it  is  not  con- 
ceived how  any  thing  can  be  called  the  fundamental  law  of  a  State  Govern- 
ment, which  is  not  established  in  its  constitution,  unalterable  by  its  ordinary 
Legislature. 

14  To  erect  a  corporation,  is  to  substitute  a  legal  or  artificial  for  a  natural 
person;  and,  where  a  number  are  concerned,  to  give  them  individuality.  To 
that  legal  or  artf/zem/ person,  once  created,  the  common  law  of  every  State, 
of  itself  annexes  all  those  incidents  and  attributes  which  are  represented  as  a 
prostration  of  the  main  pillars  of  their  jurisprudence.  It  is  certainly  not  ac- 
curate to  say,  that  the  erection  of  a  corporation  is  against  those  different  heads 
of  the  State  laws;  because  it  is  rather  to  create  a  kind  of  person,  or  entity, 
to  which  they;  are  inapplicable,  and  to  which  the  general  rule  of  those  laws 
assigns  a  different  regimen.  The  laws  of  alienage  cannot  apply  to  an  artifi- 
cial person,  because  it  can  have  no  country.  Those  of  descent  cannot  apply 
to  it,  because  it  can  have  no  heirs.  Those  of  escheat  are  foreign  from  it,  for 
the  same  reason.  Those  of  forfeiture,  because  it  cannot  commit  a  crime. 
Those  of  distribution,  because,  though  it  may  be  dissolved,  it  cannot  die," 


424  BANK  OF  THE  UNITED  STATES. 

Sir,  I  beg  leave  to  add  a  few  explanations.  By  the  laws  of  most,  perhaps  of 
all  the  States,  aliens  are  not  permitted  to  hold  real  estate;  but,  in  all,  they 
are  free  to  hold  personal  property  of  every  kind,  and  particularly  bank  stock. 
The  law  of  escheat  relates  to  the  property  of  a  citizen  who  dies  without  heirs, 
near  or  remote,  and  without  a  will.  In  such  case,  his  property  falls  to  the 
State.  But  instances  of  escheat  do  not  occur  perhaps  twice  in  a  century,  in 
any  State;  and  consequently,  is  of  trifling  moment.  Although  a  corporation 
cannot  commit  a  crime,  it  may  violate  the  rules  prescribed  in  the  law  for  its 
establishment;  and  thus  incur  an  immediate  forfeiture  of  its  charter.  Or,  if, 
for  such  a  violation  of  its  fundamental  law,  or  any  mismanagement  of  the  in- 
stitution to  the  public  injury,  its  charter  be  not  forthwith  taken  away,  the 
State  may  refuse  to  renew  it.  As  to  the  law  of  distribution,  that  operates 
when  a  person  dies  intestate.  But,  though  a  corporation  cannot  die,  yet  the 
individuals  to  whom  its  property  belongs,  will  die;  and  their  bank  property, 
equally  with  their  other  property,  becomes  liable  to  the  law  of  distribution. 

One  gentleman  has  imagined,  that,  if  Congress  have,  and  exercise  the  pow- 
er of  erecting  corporations,  it  will  operate  as  a  monopoly;  and  may,  in  the 
end,  destroy  all  the  powers  belonging  to  the  individual  States.  But  there  is 
here  no  ground  for  alarm.  The  act  of  Congress  which  established  the  Bank 
of  the  United  States,  did  not,  and  could  not  affect  the  rights  of  the  States  to 
erect  banks.  Accordingly,  we  have  seen,  after  the  Bank  of  the  United  States 
had  been  erected,  and  the  profitable  operations  of  banks  to  their  proprietors 
were  known,  that  State  banks  sprang  up  in  abundance. 

It  has  been  said,  by  more  than  one  gentleman,  that  the  greater  portion  (as 
far  at  least  as  seven-tenths  of  the  whole)  of  the  stock  of  the  United  States' 
Bank  being  owned  by  foreigners,  and  these  chiefly  Englishmen,  there  is  dan- 
ger of  a  foreign  influence  in  the  country,  and  that  such  an  influence  has  been 
manifest.  This,  sir,  appears  to  be  an  extraordinary  remark.  In  what  has 
this  influence  been  manifested?  Has  the  Government,  have  individuals, been 
in  any  degree  restrained  in  the  expression  of  their  resentments  against  Great 
Britain?  Or,  in  adopting  any  measure  deemed  advisable  towards  that  country? 

One  of  the  injurious  consequences  of  destroying  the  Bank  of  the  United 
States,  has  been  stated  to  be,  the  withdrawing  of  seven  millions  of  dollars 
from  the  active  capital  of  the  United  States,  and  transmitting  it  to  Europe, 
where  that  portion  of  the  bank  stock  is  owned.  To  this,  it  has  been  answered 
by  the  opposers  of  the  bank,  that  these  millions  will  not  be  withdrawn,  but 
transferred  from  the  United  States'  Bank,  to  banks  of  the  several  States. 
How,  then,  sir,  shall  we  get  rid  of  that  dangerous  influence  of  foreign  stock- 
holders, which  the  same  gentlemen  urge  as  a  reason  for  not  renewing  the  char- 
ter of  the  Bank  of  the  United  States?  Sir,  it  is  well  known,  that  money  in 
Europe  is  less  valuable  than  in  the  United  States;  that  moneyed  men  there, 
are  glad  to  loan  their  money  at  an  interest  of  five  per  cent.,  or  less;  while  in 
these  States,  the  legal  interest  is  six  per  cent.  And  a  multitude  of  our  citi- 
zens find  their  account  in  employing  that  foreign  capital,  paying  an  interest  of 
six  per  cent.,  by  which,  in  the  course  of  trade,  they  gain  ten,  fifteen,  or  twen- 
ty per  cent.;  that  foreign  capital,  in  the  hands  of  our  merchants,  has  resem- 
bled the  five  and  the  ten  talents,  wherewith  they  have  gained  other  five  and 
other  ten  talents. 

The  distresses  which  will  follow  the  dissolution  of  the  Bank  of  the  United 
States,  especially  in  the  great  commercial  cities,  have  been  forcibly  described 
h  the  plain  testimonies  of  the  committee  of  mechanics  and  manufacturers 
horn  Philadelphia — a  committee  selected  wholly  from  the  democratic  party; 
distresses  which  were  sufficient  to  move  a  heart  of  stone.  And  why  should 
this  bank  be  dissolved?  It  has  been  said  that  the  State  banks  are  competent 
to  all  the  necessary  operations  of  the  general  bank.  If  the  contrary  had  not 
been  shown,  it  might  be  answered,  that  the  Bank  of  the  United  States  was 
incorporated  when  there  were  only  three  banks  in  the  United  States*  one  in 
Philadelphia,  one  in  New  York,  and  one  in  Boston.  These  were  inadequate 
to  the  necessities  and  accommodation  of  the  General  Government,  and  of  the 
citizens.  To  supply  this  deficiency,  it  was  necessary  to  erect  the  national 


'ON  THE    BILL  TO  RENEW   THE   CHARTER  OF   1791. 

bank:  and  the  dignity,  honor,  good  faith,  and  credit  of  the  United  States, 
stand  pledged  for  the  renewal  of  its  charter.  The  institution  haying  been 
well  conducted,  and  found  in  the  highest  degree  useful  and  beneficial  to  Go- 
vernment, and  to  the  citizens  at  large,  it  ought  to  be  continued.  Individual 
citizens  and  foreigners  became  stockholders,  on  a  well  grounded  expectation 
of  the  stability  of  the  Government,  It  was  in  this  just  expectation  that  fo- 
reigners. Englishmen,  purchased  of  our  Government  itself,  its  remaining 
shares  of  the  public  stock  in  the  Bank  of  the  United  States,  and  at  an  ad- 
vance of  forty-five  per  cent,  so  that  for  every  hundred  dollars  laid  out  by  the 
Government  in  the  purchase  of  bank  shares,  the  United  States  received  of 
these  foreigners  one  hundred  and  forty-five  dollars.  And  ho\y  was  it  possible 
for  these  foreigners  to  conceive  the  Government  capable  of  destroying  the 
work  of  its  own  hands,  and  of  reducing  their  property  to  one  hundred  dollars 
a  share,  for  which,  but  eight  years  before,  they  had  paid  the  same  Government 
one  hundred  and  forty-five  dollars? 

In  limiting  the  duration  of  the  charters  of  banks  to  twenty  years,  no 
wise  Government  ever  contemplated  their  destruction  at  the  end  of  that  term. 
Known  to  be  useful  institutions,  the  proprietors  have  well  founded  claims  to 
their  continuance;  which  the  public  good  also  requires.  But,  in  the  course  of 
twenty  years  some  inconveniences  may  be  experienced,  which  ought  to  be  re- 
medied, and  some  improvements  discovered  which  ought  to  be  adopted.  Be- 
sides, being  profitable  to  the  proprietors,  they  can  well  afford,  once  in  20  years, 
to  give  to  the  Government  considerable  sums  of  money  in  acknowledgment  for 
the  benefits  derived  Iron  the  acts  of  incorporation. 

But,  sir,  in  respect  to  the  English  stockholders  in  the  Bank  of  the  United 
States  (and  the  foreign  stockholders  are  chiefly  Englishmen}  we  are  under 
special  obligation^  by  the  treaty  with  Great  Britain,  in41794.  'Ihe  tenth  article 
being  permanent,  is  still  in  force,  and  in  these  words: 

'  Neither  the  debts  due  from  individuals  of  the  one  nation  to  individuals  of 
the  other,  nor  shares,  nor  moneys  which  they  may  have  in  the  public  funds, 
or  in  public  or  private  banks,  shall  ever,  in  any  event  of  war  or  national  dif- 
ferences, be  sequestered^or  confiscated,  it  being  unjust  and  impolitic  that  debts 
and  engagements  contracted  and  made  by  individuals,  having  confidence  in 
each  other  and  in  their  respective  Governments,  should  ever  be  destroyed  or 
impaired  by  national  authority,  on  account  of  national  differences  and  discon- 
tents." 

Sir,  this  is  the  very  time  when  the  equitable  obligation  of  this  treaty  (and 
as  a  matter  entitled  to  consideration  in  equity  I  introduce  it)  applies  with 
force.  We  now  have  national  differences  with  Great  Britain,  and  a  stock  of 
•discontents  sufficiently  strong  and  extensive.  By  "  destroying"  the  Bank  of 
the  United  States  (and  to  refuse  to  renew  its  charter  is  to  destroy  it)  we  es- 
sentially "impair"  the  ^engagements,"  not  of  individuals  only,  of  the  one 
nation  with  individuals  of  the  other,  but  the  "  engagements"  of  our  Govern- 
ment'itself  with  some  of  those  individuals.  AVhen  the  Barings  purchased  of 
our  Government  two  thousand  and  two  hundred  and  twenty  shares  of  stock 
in  the  Bank  of  the  United  States,  for  vyhich  they  paid  one  million  two  hun- 
dred and  eighty- seven  thousand  and  six  hundred  dollars,  would  they  have 
made  the  purchase  if  the  Government  intimated  its  intention  to  destroy  the 
bank  in  eight  years?  No  sir.  By  the  dissolution  of  the  bank,  the  stock  so 
purchased  being  reduced  from  145  to  100  dollars  in  value  for  each  share,  a 
difference  is  made  to  the  Barings  of  three  hundred  and  ninety-nine  thousand 
and  six  hundred  dollars,  which  they  lose. 

Sir,  I  have  no  personal  interest  in  the  Bank  of  the  United  States.  I  am  no 
stockholder.  I  have  not  the  means  of  being  one.  Nor  is  the  branch  at  Bos- 
ton of  equal  import  to  the  citizens  of  Massachusetts,  with  the  bank  itself  and 
its  branches  to  the  inhabitants  and  commercial  cities  of  other  States;  although 
the  withdrawing  of  seven  or  eight  hundred  thousand  dollars  from  the  banking 
capital  at  Boston,  would  undoubtedly  produce  some  serious  inconveniences. 

But,  sir,  1  consider  the  Bank  of  the  United  States,  with  its  branches,  of 
immense  importance  to  the  citizens  of  the  United  States,  and  a  necessary  in- 
54 


426  BANK  OF  THE  UNITED  STATES. 

strumeiit  in  the  hands  of  the  Government,  in  the  management  of  our  great 
national  concerns.  I  shall,  therefore,  give  my  vote  for  the  renewal  of  itfc 
charter. 

Mr.  BRENT. — Mr.  President:  Having  been  prevented  from  finishing  the  re- 
marks which  I  had  intended  to  make,  on  the  subject  under  discussion,  when 
I  last  had  the  honor  to  address  this  body,  from  the  late  hour  of  the  day  to 
which  it  was  detained,  1  will  avail  myself  of  this  opportunity  to  make  a  few 
desultory  observations,  which  the  want  of  time  prevented  me  from  heretofore 
submitting  to  your  consideration.  I  formerly  remarked  that  many  gentlemen 
had  avowed  that  the  principal  cause  that  induced  them  to  vote  against  this  bill 
was  the  large  portion  of  the  stock  of  the  Bank  ot  the  United  States  which  was 
held  by  foreigners,  which  caused  a  foreign  influence  to  exist  in  this  country, 
which  was  incompatible  with  its  safety,  and  that,  after  the  termination  of  this 
bank,  they  were  willing  to  join  in  the  creation  of  another,  in  which  our  own  ci- 
tizens only  would  be  interested.  I  insisted  that,  if  it  was  desirable  to  get  rid 
of  foreign  stockholders,  (which  I  did  not  believe)  this  could  not  be  effected 
by  the  destruction  of  that  bank,  for  the  reasons  I  then  had  the  honor  to  suggest. 
I  will  here  add  one  or  more  additional  reasons  why  I  entertain  this  opinion. 
If  foreigners  can  employ  their  capital  here  to  greater  advantage  than  in  their 
own  country,  it  will  be  impossible  to  prevent  them  from  subscribing  to  the 
shares  of  the  new  bank  you  create.  If  you  propose  to  do  so  by  prohibiting 
them  from  being  stockholders,  the  law  will  be  avoided  by  the  subscription 
being  made  in  the  name  of  our  own  citizens,  who  will  hold  it  for  foreigners,  or 
even  if  the  shares  should  be  wholly  taken  by  our  citizens  they  would  after- 
wards sell  to  foreigners — so  that  the  same  foreign  influence  exists,  (if  such  is 
the  effect  of  stock  being  held  by  foreigners.)  Nor,  sir,  is  this  apprehended  for- 
eign influence  in  any  degree  diminished  if  this  bank  is  destroyed  and  a  new 
bank  should  not  be  created.  In  such  a  state  of  things  those  foreigners,  who,  it" 
there  existed  a  Bank  of  the  United  States,  would  have  invested  their  money 
in  its  stock,  now  invest  the  same  quantity  of  money  in  the  State  banks.  Of 
course  the  same  extent  of  foreign  influence  (as  far  as  foreigners  holding  our 
stock  produces  this  result)  in  either  state  of  things  exists.  This  reasoning, 
Mr.  President,  is  addressed  to  those  only  who  are  so  very  apprehensive  of 
the  dangerous  influence  which  the  investment  of  foreign  capital  here  produces. 
For  myself  I  entertain  no  such  fears;  and  for  the  reasons  I  have  heretofore  had 
the  honor  of  stating,  do  very  much  question  whether  it  is  not  most  advanta- 
geous that  foreigners  should  hold  extensively  the  stock  of  our  banks. 

Some  gentlemen  are  anxious  for  the  dissolution  of  the  bank,  because  they  are 
of  opinion  that  banks  of  every  kind,  and  under  every  modification,  are  injurious. 
Perhaps  they  may  be  so.  But  does  the  destruction  of  this  bank  remove  or 
diminish  the  evil  society  is  to  suffer  from  the  existence  of  banks?  If  this  bank 
is  dissolved,  the  State  banks  will  exist,  and  new  ones  be  created  to  fill  up  the 
vacuum  of  bank  circulating  paper  which  is  produced  by  the  dissolution  ot  this 
bank.  If  the' community  is  to  be  oppressed  with  such  institutions  as  banks> 
to  the  same  extent,  whether  or  not  there  exists  a  national  bank,  is  it  not  better 
to  have  a  national  bank  than  to  put  the  Government  to  the  necessity  of  carry- 
ing on  its  fiscal  arrangements  by  the  co-operation  of  State  banks,  which  are 
in  no  respect  under  its  control  ? 

Among  other  reasons  urged  by  the  honorable  gentleman  from  Maryland 
why  there  would  be  no  inconvenience  attending  the  dissolution  of  the  Bank 
of  the  United  States—indeed  why  there  would  almost  be  an  advantage  from 
such  a  measure — he  insists  there  is  at  this  time  about  20,000,000  of  dollars 
due  our  merchants  from  those  of  England;  and  such  was  the  deranged  state  of 
the  commercial  resources  in  that  country,  that  our  merchants  could  not  now 
obtain  payment  of  their  British  debts;  but  that,  on  the  dissolution  of  the  Bank 
of  the  United  States,  this  seven  millions  of  stock,  which  was  held  by  foreigners, 
would  be  applied  in  part  payment  to  our  merchants,  of  the  debt  due  to  them 
from  the  British;  so  that  this  money  would  not  go  out  of  the  country,  but 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     427 

would  be  immediately  paid  to  our  merchants  and  go  to  that  extent  in  the  in- 
crease of  their  resources. 

Now,  Mr.  President,  it  appears  to  me,  notwithstanding  the  high  respect  I 
entertain  for  the  honorable  gentleman's  mercantile  and  political  knowledge, 
that,  in  this  instance,  his  opinion  is  not  accurate.  Either  the  British  merchants 
that  are  indebted  to  ours  are  solvent,  or  otherwise.  If  the  first,  they  can  pay 
our  merchants  the  $20,000,000  they  owe  them,  in  the  present  state  of  things; 
if  they  are  not  solvent,  is  it  to  be  believed  that  the  stockholder?,  after  receiv- 
ing money  from  the  bank  to  the  amount  of  their  stock,  will,  with  this  money, 
purchase  bills  which  will  be  protested  for  non-payment?  For  such  must  be 
the  result,  if  the  British  merchant  is  not,  at  present,  able  to  pay  his  debts  to 
our  merchant.  To  me  it  seems  mast  probable  that,  on  the  dissolution  of  the 
bank,  one  of  two  events  will  take  place.  Either  the  seven  millions,  the 
amount  of  foreign  stock,  will  be  invested  in  our  State  banks,  or  it  will  be  re- 
mitted to  Europe  in  actual  specie.  If  it  should  be  invested  in  our  State  banks, 
the  same  extent  of  foreign  influence  remains  in  our  country  which  we  are  so 
anxious  to  get  rid  of;  and,  so  far  as  relates  to  this  difficulty,  the  dissolution 
of  the  present  bank  has  no  operation.  If  these  seven  millions  are  not  invest- 
ed in  State  bank  stock,  and  good  bills  cannot  be  obtained  to  transmit  it,  as  is 
clearly  deducible  from  the  statement  of  the  gentleman  from  Maryland,  then 
it  must  go  in  actual  specif.  An  honorable  gentleman  from  Massachusetts,  of 
ureat  and  unquestionable  mercantile  information,  has  supposed  there  is  not  in 
the  Tinted  States  more  than  ten  millions  of  dollars  in  specie.  If,  by  the  dis- 
solution of  the  bank,  seven  of  these  ten  millions  are  to  be  exported  from  our 
country,  will  it  not  be  attended  with  serious  consequences,  more  especially, 
since  it  has  already  been  discovered  that  the  quantity  of  the  precious  metals 
in  the  United  States  has,  for  SOUK-  years  past,  been  diminishing,  tosuch  an  ex- 
tent, that  it  has  been  thought  by  several,  important  that  Congress  should  take 
some  steps  to  guard  against  the  continuance  of  this  evil?  Another  reason 
which  might  induce  the  holders  of  this  stock,  when  the  amount  is  paid  off.  to 
transport  the  specie  instead  of  purchasing  bills,  is  the  great  and  increasing  dif- 
ference in  value  between  the  actual  value  of  the  same  nominal  amount  of  pa- 
per and  specie  in  England.  In  the  remarks  which  I  heretofore  had  the  honor 
to  submit  to  the  Senate,  I  suggested  that  it  was  more  than  probable  that  the 
dissolution  of  the  Bank  of  the  United  States  might  seriously  affect  our  reve- 
nue. In  addition  to  the  reasons  then  insisted  on  as  leading  to  this  con- 
clusion, permit  me,  Mr.  President,  to  remark,  that  if,  at  the  same  moment 
you  diminish  the  circulating  medium  of  the  nation,  (which,  to  a  certain  extent, 
is  effected  by  destroying  the  Bank  of  the  United  States)  and  call  upon  your 
merchants  immediately  to  pay  fourten  millions  of  dollars,  the  amount  of  the 
debt  they  owe  the  banks,  and,  at  the  same  time,  to  pay  twelve  millions  to  the 
Government,  which  is  the  amount  of  the  bonded  revenue,  at  a  period  when  our 
commerce  has  been  struggling  for  many  years  with  the  accumulated  difficul- 
ties produced  by  spoliations,  by  embargo,  and  non-intercourse  laws — I  say, 
Mr.  President,  under  such  circumstances,  is  it  unreasonable  to  entertain 
some  apprehension  that  our  merchants,  finding  themselves  unable  to  surmount 
all  the  difficulties  with  which  they  are  surrounded,  will,  in  their  choice  of  dif- 
ficulties, pursue  the  common  dictates  of  prudence,  and, choose  the  least?  Is 
it  not  probable  that  they  will,  in  the  first  instance,  take  every  step  to  secure 
their  bank  endorsers,  by  settling  their  debts  with  the  bank,  andleave  the  Go- 
vernment to  bring  suit  on  their  revenue  bonds?  Such  an  event  is  the  more  to 
be  deprecated,  as  this  is,  of  all  others,  a  period  when  we  should  be  cautious 
about  adopting  any  measure  which  would  diminish  the  receipts  of  our  trea- 
sury, already  much  curtailed  by  our  late  embargo,  and  which  will  be  consider- 
ably affected  by  our  non-importation  law. 

The  remark  I  made  some  days  past,  in  relation  to  a  supposed  incapacity  of 
the  Bank  of  Virginia  to  the  wants  of  the  country,  was,  that  it  had  been  sug- 
gested to  me  that  it  had  produced  in  Richmond  a  great  deal  of  usury,  or,  as 
it  is  commonly  called,  money  shaving.  In  making  this  observation,  Mr.  Pre- 
sident, it  was  not  my  intention  to  reflect,  in  the  most  distant  manner,  on  the 


428"  BANK  OF  THE  UNITE1>  STATES. 

president,  or  any  of  the  directors  of  that  bank.  I  know  not  the  name  of  any 
one  gentleman  in  the  direction.  For  all  that  I  know  or  have  heard,  the  affairs 
of  that  bank  are  as  ably  and  as  honorably  conducted  as  those  of  any  bank  in 
the  United  States,  or  elsewhere.  The  tact  which  I  stated  was  one  which  I 
suppose  to  be  an  unavoidable  result  when  you  go  into  the  banking  system,  and 
do  not  create  a  banking  capital  adequate  to  the  wants  of  society.  If  you  es- 
tablish a  bank  with  an  adequate  capital,  favorites  go  into  the  bank,  get  the 
money  out  of  it,  and  apply  it  to  usurious  purposes;  it  is  no  reflection  on  a 
bank,  to  say  that  it  has  its  favorites.  When  tmore  applications  are  made,  or 
more  good  paper  offered  than  can  be  accommodated,  a  selection  must  be  made, 
and  some  applicants  remain  unaccommodated,  who  will  be  compelled  to  give 
usurious  interest  to  those  who  have  been  accommodated  for  the  very  money 
which  this  accommodation  has  supplied  them  with.  My  honorable  colleague 
is  of  opinion  that  the  bank  of  Richmond  has  a  capital  of  sufficient  extent,  and 
that  all  who  deserve  accommodations  there  can  obtain  them.  I  can  only  say 
that  I  have  repeatedly  heard  a  very  different  statement,  in  Richmond  and  else- 
where. Another  fact,  too,  I  beg  leave  to  mention.  I  am  well  acquainted  with 
a  very  intelligent  officer  of  the  branch  bank  at  Petersburg,  who  has  informed 
me  that,  almost  always,  more  good  paper  is  offered  to  the  board  of  directors 
than  could  be  accommodated,  from  the  limited  extent  of  their  banking  capi- 
tal; and  it  would  seem  an  extraordinary  phenomenon,  that,  when  Richmond 
and  Petersburg  are  onlyjtwenty-five  miles  distant,  there  should  be  a  redundan- 
cy of  banking  capital  at  the  former,  and  such  a  deficiency  at  this  latter. 

I  now,  Mr.  President,  approach  the  discussion  of  a  question  which  excites 
with  me  more  sensibility  than  is  produced  by  any  considerations  connected  with 
the  subject  now  deliberated  on.  It  is  principally  with  a  view  to  investigate  this 
delicate  and  interesting  question  that  I  have  been  induced  at  the  present  hour 
to  solicit  the  attention  of  this  honorable  body.  We  are  told  that  this  question 
concerning  the  re-chartering  of  the  Bank  of  the  United  States  is  a  party  ques- 
tion, and,  from  the  vociferous  and  earnest  reiteration  of  this  assertion^  it  is  evi- 
dent that  this  invidious  inference  is  intended  to  be  derived  from  it,  to  wit:  that,, 
at  the  first  establishment  of  the  Bank  of  the  United  States,  it  was  contested  on 
constitutional  grounds;  and  that  its  favorers  orits  opposers marked  the  federal  or 
republican  character,  and  designated  the  individuals  who  formed  the  body  of 
these  two  great  political  sects;  that  the  same  characteristic  adheres  to  the  bill 
now  before  us,  and  that  such  of  those  who  have  heretofore  been  considered  as 
appertaining  to  the  republican  party,  as  give  give  their  sanction  to  this  bill,  must 
hereafter  be  considered  as  apostatizing  from  that  political  sect  with  which  they 
have  heretofore  been  arranged.  I  will  hrst  inquire  into  the  justice  of  this  asser- 
tion, as  it  relates  to  the  matter  of  fact,  at  the  first  establishment  of  the  Bank  of 
the  United  States;  and  next,  as  to  the  honorable  and  generous  inference  which 
these  magnanimous  asserters  attempt  to  derive  from  it.  [Mr.  SMITH  wholly 
denied  that  he  had  ever  called  thisaparty  question,  or  viewed  it  in  this  light.] 
Mr.  BRENT  said  that  he  had  never  heard  the  honorable  gentleman  make  such 
an  assertion,  but  he  had  been  informed  it  was  attributed  to  him.  The  hon- 
orable gentleman's  declaration  is,  however,  perfectly  satisfactory  to  me;  I 
am  satisfied  that  he  is  incapable  of  making  so  invidious  and  unfounded  an  ac- 
cusation. I  am  too  well  acquainted  with  that  honorable  gentleman's  good 
sense  and  liberality.  He  will  therefore  be  so  good  as  not  to  consider  any  re- 
marks I  shall  make  on  the  particular  question  that  I  am  now  investigating  as 
applying  to  him,  but  to  others  who  act  with  him,  as  to  the  generafond  ultimate 
fate  of  the  bill  under  consideration.  That,  among  the  great  mass  of  the  Peo- 
ple in  some  sections  of  the  Union,  particularly  the  State  I  represent,  this 
measure  establishing  the  Bank  of  the  United  States,  was  taken  up  as  a  party 
question,  may  be  admitted;  but  that  it  was  viewed  in  this  light  in  either  House 
of  that  Congress  which  passed  the  law;  that  the  votes  which  were  given,  either 
affirmatively  or  otherwise,  were  the  test  to  ascertain  who  was  of  the  republi- 
can and  who  of  the  federal  party,  is  an  assertion  destitute  of  all  foundation: 
for  whoever  will  examine  the  yeas  and  nays  of  both  Houses  of  Congress,  \yill 
find  some  of  our  most  distinguished  republican  patriots  voting  for  the  bill. 


ON  THE_BILL  TO  RENEW  THE  CHARTER  OF  1791. 

while  others,  equally  eminent  and  zealous  in  the  federal  ranks,  will  be  found 
in  hostility  to  it.  Sir,  the  journals  of  Congress,  testimony  derived  from  sol- 
emn and  unquestionable  records — a  species  of  evidence  which  the  laws  of  our 
country,  and  the  practice  of  our  courts,  in  the  gradation  of  the  different  spe- 
cies of  testimony,  places  in  the  higest  station,  and  considers  as  of  the  most  im- 
posing authority— demonstrate  that  the  assertion,  that  the  question  concerning 
the  establishment  of  the  Bank  of  the  United  States,  in  the  first  instance,  was 
entirely  a  party  question,  is  destitute  of  all  foundation.  That  an  assertion  so 
susceptible  of  refutation,  by  testimony  so  irresistible,  should  have  been  made, 
is  evidence  to  me  of  the  unjustifiable  length  to  which  some  gentlemen  will 
permit  their  zeal  to  transport  them.  Nay,  Mr.  President,  let  me  call  your 
attention  to  the  only  member,  as  I  believe,  of  this  honorable  body,  who  was 
a  member  of  Congress  when  the  law  establishing  a  Bank  of  the  United  States 
took  place,  (I  mean  the  honorable  Mr.  OILMAN.)  This  gentleman  is  known 
to  be  a  republican;  yet  the  journals  will  assure  us,  that  he  voted  for  the  bill 
establishing  the  bank. 

If  the  opinion  of  the  constitutionality  or  otherwise  of  the  Bank  of  the  United 
States  is  the  criterion  by  which  the  estimate  is  to  be  made  of  the  political  sect 
to  which  each  individual  belongs,  what  shall  we  say  of  Mr.  Jefferson,  and  the 
majorities  of  the  two  Houses  of  Congress  during  his  administration,  who,  by 
repeated  acts,  recognised  the  legality  and  constitutionality  of  this  institution? 
Shall  we  say  that  he  and  they  have  apostatized  from  the  republican  cause?  Do 
the  presumptuous  and  daring  asserters  pretend  to  impose  upon  us  a  belief 
thai,  during  a  period  which  we  have  hitherto  supposed  \vas  the  proudest  tri- 
umph of  republicanism,  those  of  the  dominant  party  had  apostatized  from  the 
republican  cause?  Are  we  to  believe  that,  during  the  administration  of  Mr. 
Jefferson,  the  great  apostle  of  republicanism — one  with  whose  name  republi- 
canism has  been  supposed  to  be  identified — arc  we  to  believe  that  he  has  apos- 
tatized from  his  political  party?  Are  there  any  so  presumptuous  as  to  ima- 
gine they  can  impose  upon  the  public  mind  or  upon  this  honorable  body  so 
monstrous,  so  absurd  a  belief?  Can  you  be  induced  to  select  that  moment 
which  has  hitherto  been  imagined  most  auspicious  to  republican  principles,  as 
the  one  when,  above  all  others,  there  was  a  total  apostacy  from  them?  No, 
sir,  every  effort  is  vain  which  is  made  to  impose  upon  us  so  irrational  a  belief. 
On  the  contrary  hand,  we  will  account  for  the  conduct  of  Mr.  Jefferson,  and 
the  republican  majorities  in  Congress,  during  his  administration,  when  they 
sanctioned,  by  repeated  laws,  the  constitutionality  of  the  Bank  of  the  United 
States,  by  the  considerations  I  proceed  to  enumerate.  Whatever  might  have 
been  the  abstract  opinion  of  Mr.  Jefferson  respecting  the  constitutionality  of 
the  bank,  on  its  first  institution,  it  is  now  immaterial  to  inquire.  He  saw, 
vyhen  he  came  into  the  Presidency,  that  this  was,  in  its  origin,  not  a  party  ques- 
tion; but  that  the  journals  of  Congress  would  evince  that,  on  the  vote  which 
first  gave  a  sanction  to  this  measure,  all  party  distinction  was  confounded; 
that  it  was  one  of  those  questions,  which,  when  first  agitated,  was  calculated 
to  produce  a  diversity  of  opinion  among  men  of  the  purest  intentions  and  of 
the  most  luminous  understandings;  that  it  was  one  of  those  doubtful  questions 
\vhich,  when  once  settled  by  precedent,  should  never  again  be  agitated;  that 
this  measure  had  been  sanctioned,  after  the  fullest  deliberation  had  been  be- 
stowed upon  it;  and  that  we  had  so  incorporated  this  bank  establishment  with 
our  fiscal  and  other  governmental  arrangements,  that  it  could  not,  at  that 
time,  be  put  down  without  impairing  the  public  credit,  and  without  being  like 
(in  various  other  points  of  view)  to  be  productive  of  very  serious  and  nume- 
rous calamities  to  the  community.  From  all  those  various  considerations,  Mr. 
Jefferson,  when  he  came  into  the  administration,  as  also  a  majority  of  Con- 
gress during  that  period,  considered  the  question  respecting  the  Bank  of  the 
United  States  as  a  settled  and  adjudicated  one,  which  was  now  to  be  acqui- 
esced in,  and  pursued  a  system  of  policy  in  conformity  with  this  sentiment. 
On  any  other  principle,  the  conduct  of  Mr.  Jefferson  and  of  Congress  would  not 
only  not  be  justifiable,  but  would  be  criminal  in  the  highest  sense.  If  they 
had  considered  this  a  party  question — a  measure  which  the  federal  party,  dur- 


430  BANK  OF  THE  UNITED  STATES, 

ing  its  ascendancy,  had  established,  contrary  to  the  manifest  and  unquestion- 
able principles  of  the  constitution,  (as  some  gentlemen  now  contend)  every 
step  that  was  taken  to  sanction  this  unconstitutional  measure  was  inflicting 
a  new  wound  on  the  constitution,  and  a  violation  of  the  sacred  oaths  they  had 
taken  to  support  it.  To  say  that  it  was  done  for  the  support  of  public  faith, 
because  the  law  incorporating  the  bank  had  made  a  contract  with  individuals, 
is  irrational  and  fallacious,  because  no  unconstitutional  law  can  pledge  the 
faith  of  Government.  An  unconstitutional  lavy  incorporating  a  body  ot  men 
can  give  them  no  legal  existence  which  can  be  binding  on  a  subsequent  legisla- 
ture. It  is,  as  was  well  observed  by  my  colleague,  to  enter  into  a  contract  with 
an  idiot  or  married  woman.  The  contract  is,  ipso  facto,  void.  If  an  uncon- 
stitutional law  cannot  pledge  the  faith  of  Government  or  a  subsequent  legis- 
lature— nay,  more,  if  it  is  incumbent  on  a  subsequent  legislature  to  repeal 
such  unconstitutional  law — then  the  law  establishing  the  Bank  of  the  United 
States,  if  it  is  of  this  description,  (that  is,  evidently  unconstitutional)  impos- 
ed no  other  obligation  on  Mr.  Jefferson  and  his  republican  majority,  than  im- 
mediately to  repeal  it,  and  to  restore  to  its  original  purity  that  constitution 
they  had  sworn  to  support;  but  when  the  very  opposite  conduct  is  pursued, 
we  must  presume  it  was  done  from  an  idea  that  the  constitutionality  of  the 
bank,  in  its  origin,  was  one  of  those  questionable  principles  which  might  cre- 
ate doubt  between  individuals  of  all  parties,  and  on  which  men  of  the  best 
understanding  might  pause  and  hesitate;  but  being  once  determined  on,  was 
to  be  considered  as  an  adjudicated  case,  which  the  repose  of  society  made  it 
proper  should  never  again  be  drawn  into  discussion.  This,  sir,  I  think,  is  a 
justifiable  inference.  Are  we  not  then  warranted  in  saying,  that  the  assertion 
that  this  is  a  party  question,  with  all  the  bearings  it  is  intended  to  have,  is 
destitute  of  all  foundation?  That  the  law  concerning  the  Bank  of  the  United 
States  was  not,  in  its  origin,  a  party  question,  is  demonstrated  by  the  journals 
of  Congress.  Whenever  this  measure  was  agitated,  during  the  administration 
of  Mr.  Jefferson,  it  was  not  taken  up  as  a  party  question,  because  all  parties 
gave  it  their  concurrent  support.  It  remains  to  be  inquired  whether,  on  the 
present  occasion,  the  bill  under  your  consideration  is  to  be  viewed  as  a  party 
question.  In  order  to  ascertain  the  character  of  a  question,  that  is,  whether 
it  is  a  party  one  or  not,  it  is  first  necessary  to  ascertain  who  are  the  different 
individuals  that  constitute  the  different  parties,  and  how  these  individuals 
stand  in  relation  to  the  question  to  be  decided  on-  If  all,  or  almost  all  of  each 
political  sect  are  arranged,  one  for,  the  other  against,  the  measure,  then  it  may 
be  deemed  a  party  question;  but  if  a  very  large  portion  of  one  of  your  political 
parties,  carrying  with  it  some  of  your  most  distinguished  members,  is  found 
opposed  to  another  portion  of  its  own  party,  you  can  no  longer  call  this  a  party 
question.  Each  portion  of  this  divided  party  may  claim  its  exclusive  identi- 
fication with  the  party  itself,  and  upbraid  the  other  with  the  epithet  of  apos- 
tate; but  their  pretensions  will  not  be  admitted  unless  supported  by  higher 
authority  than  that  which  is  derived  from  the  arrogance  of  one  section  of  this 
divided  party. 

When  I  view  the  journals  of  the  House  of  Representatives,  and  cast  my 
eyes  over  the  yeas  and  nays  on  this  question,  as  decided  there  some  days  past, 
and  find  some  of  the  most  zealous  and  distinguished  republicans  in  the  affirm- 
ative; when  I  reflect  on  the  number  and  great  weight  of  character  of  the  re- 
publican members  of  this  honorable  body,  who  concur  with  me  in  opinion  that 
it  is  proper  the  rei incorporation  of  the  bank  should  prevail;  I  consider  it 
as  the  height  of  arrogance,  and  the  most  baseless  of  all  unfounded  pretensions, 
in  those  of  the  republican  party  who  are  opposed  to  this  measure,  to  call  this 
a  party  question;  to  identify  themselves  exclusively  with  the  republican  party; 
and  to  insinuate  that  such  republicans  as  vote  for  this  bill  have  abandoned 
their  political  principles.  By  what  authority  can  those  republican  gentlemen, 
who  oppose  this  bill,  appropriate  exclusively  to  themselves  the  character  of 
republicans?  Are  there  not,  among  those  of  the  republicans  who  are  in  favor 
of  this  measure,  men  of  as  great  weight  of  character  as  those  who  are  opposed 
to  them?  Men,  who  can  offer  as  distinguished  anil  as  proud  and  elevated  pre- 


ON  THE  BILL  TO   RENEW   THE  CHARTER  OF   1791. 

tensions  tor  the  zeal,  the  diligence,  the  fidelity,  and  the  fortitude  (hey  dis- 
played in  the  republican  cause,  during  the  period  of  its  adversity,  as  any  this 
country  contains?  Who,  sir,  in  the  hour  of  difficulty,  at  that  period  which 
tried  men's  souls — when  republicanism  meant  more  than  a  name,  and  its  advo- 
cates were  stigmatised  as  factious  demagogues,  and  upraided  with  every 
odious  epithet — who,  sir.  at  this  inauspicious  moment,  occcupied  a  more  emi- 
nent and  distinguished  station  in  the  republican  ranks,  than  the  present  Secre- 
tary of  the  Treaury,  who  is  the  first  to  recommend  this  measure?  And  is  Al- 
bert Gallatin,  one  of  those  who  pre-eminently  contributed  to  form  the  Atlas, 
on  whose  shoulders  the  fate  of  republicanism  rested,  at  the  moment  when  it 
u;i-  surrounded  with  such  numerous  and  ferocious  assailants — is  he  not  a  re- 
publican? Nay,  Mr.  President,  are  there  none  in  this  body  of  the  veteran  po- 
liticians who  contributed  to  form  that  Spartan  band  who  so  nobly  defended 
the  republican  cause  when  it  exposed  its  advocates  to  every  species  of  obloquy 
and  political  persecution — are  mere  none  of  that  description  in  this  body  tnat 
mean  to  vote  tor  this  bill?  It  will  with  justice  not  be  denied.  Mr.  President, 
who  are  the  characters  who  have  proclaimed  this  to  be  a  party  question?  Does 
my  colleague,  who  was  inferior  in  zeal  and  efficiency  to  no  one  in  the  councils 
of  our  country,  at  the  awful  crisis  I  have  been  speaking  of—does  he  call  this 
a  party  question?  Does  the  honorable  gentleman  from  Maryland,  who  also 
bore  his  share  in  the  honorable  conflict  for  republican  principles — does  he  call 
this  a  party  question?  No,  *ir:  they  each  know  the  reverse,  and  are  too  honor- 
able and  just  to  make  such  an  insinuation.  It  is  not,  sir,  from  those  political 
veterans,  whose  standing  might  justify  them  for  making  some  pretension,  thai 
this  exclusive  claim  to  republicanism  is  in>i>ted  on,  both  within  and  without 
our  doors.  It  is  made  by  characters,  that,  at  the  period  of  republican  adver- 
sity, were  nor  known  in  the  councils  of  our  nation,  or  were,  perhaps,  in  most 
instances,  boys  at  school.  And  are  these  unfledged,  fair-weather  politicians, 
in  these  halcyon  days  of  republicanism,  to  attribute  to  themselves  the  exclusive 
monopoly  of  republican  principles,  and  stigmatize  as  apostates  those  veteran 
politicians  to  whose  persecutions  and  exertions  the  triumph  and  preservation 
of  republican  principles  can  alone  be  attributed?  These,  sir,  are  modest  pre- 
tensions, and  the  public  will  duly  appreciate  them  when  they  learn  the  source 
from  v,  hence  they  come,  and  the  characters  to  whom  they  are  to  be  applied.  If 
to  be  of  an  opinion  that  there  is  a  constitutional  power  in  the  General  Govern- 
ment to  establish  a  national  bank,  is  an  apustacy  from  the  republican  cause, 
then  Mr.  Jefterson  and  the  two  houses  of  Congress  during  his,  administration, 
who  considered  this  a  settled  and  an  adjudicated  point,  and,  in  repeated  in- 
stances, legislated  on  this  principle,  and  passed  laws  recognizing  the  consti- 
tutionality of  such  an  institution — then,  sir,  I  say,  Mr.  Jefterson,  and  the  ma- 
jority-of  the  two  houses  of  Congress,  during  his  administration,  have  aposta- 
tized, as  also  has  Albert  Gallatin,  who,  relying  on  the  score  of  precedent,  has 
considered  this  as  an  adjudicated  question,  and,  in  his  report,  recommended 
its  adoption — he  also  has  apostatized  from  the  republican  party.  Mr.  Presi- 
dent, I  remember  to  have  heard  an  instance  mentioned,  when  a  gloomy  and 
ferocious  fanatic  was  pronouncing  eternal  damnation  on  all  who  died  without 
the.  pale  of  his  church,  that  a  more  benevolent  and  liberal  person,  who  heard 
him,  in  order  to  obviate  such  monstrous  doctrine,  enumerated  a  great  many  of 
the  most  amiable  of  their  common  acquaintance,  and  even  relatives,  whom  the 
hand  of  death  had  taken  from  them,  that  were  not  of  the  same  religious  tenets 
with  this  fanatic,  and  interrogated  him  what  had  become  of  each  of  these  ami- 
able and  dear  friends  and  relations?  The  fanatic  replied,  they  were  all  in  hell; 
to  which  the  interrogate!'  rejoined,  that  he  also  would  go  to  hell,  for  he  was 
sure,  if  the  information  he  had  just  received  was  true,  he  should  find  better 
company  there  than  in  any  other  region  he  could  repair  to.  With  the  same 
desire  to  get  into  good  company,  if  Mr.  Jefferson,  and  the  majorities  of  Con- 
gress during  his  administration,  and  Albert  Gallatin,  have  apostatized  from 
the  republican  party,  I  also  am  content  to  be  an  apostate.  I  am  sure  I  know 
of  no  political  sect  that  have  manifested  opinions  so  congenial  with  my  own 
as  they  have  done,  and  with  them  I  wish  to  be  associated. 


432  BANK  OF  THE  UNITED  STATES. 

Mr.  President,  I  will  beg  leave  to  remind  these  new-born,  unknown,  self- 
created,  exclusive  republicans,  who  hurl  apostacy  and  other  denunciation  with 
such  liberality  against  all  that  will  vote  for  this  bill,  that  many  of  their  own 
party — many  of  those  who  vote  with  them — avow  a  belief,  that  Congress  has 
the  power  to  create  a  bank,  but  they  do  not  think  it  expedient  at  present  to 
recharter  this  bank.  1  understand  the  honorable  member  from  Maryland  has 
candidly  and  honorably  avowed  this  opinion;  many  others  are  known  to  enter- 
tain the  same  sentiments  (though  they  will  not  acknowledge  them  with  the 
same  candor)  who  have  and  wilt  vote  against  this  bill.  To  those  who  enter- 
tain this  sentiment,  how  can  this  be  a  party  question?  The  only  incident  which 
gives  it  the  character  of  a  party  question  is,  the  opinion  that  such  a  law  is 
constitutional  or  otherwise;  and  a  determination  to  vote  in  the  affirmative  or 
negative,  as  that  opinion  shall  dictate.  Now,  to  such  gentlemen  as  believe  the 
law  constitutional,  and  yet  vote  against  it,  it  cannot  be  a  party  question. 
Those  who  are  in  this  situation,  and  endeavor  to  overthrow  the  bill  by  the. 
prejudices  they  may  create  against  it,  by  affecting  to  call  it  a  party  question, 
though  secretly,  and  in  their  own  minds,  they  entertain  no  such  belief— such 
gentlemen,  Mr.  President,  as  act  in  this  manner,  fight  under  false  colors. 

Mr.  President,  it  is  painful  for  any  gentleman,  when  addressing  this  House, 
to  speak  of  himself,  and  to  make  his  past  political  conduct  the  theme  of  his 
observations;  but,  in  an  instance  like  this,  when  insinuations  are  made,  so 
calculated  to  excite  the  most  poignant  sensibility;  when  a  charge  of  inconsist- 
ency and  dereliction  of  former  political  principles  is  made;  it  is  pardonable  to 
take  a  review  of  our  past  political  conduct,  for  the  purpose  of  repelling  charges 
which  create  emotions  proportioned  to  the  ardor  and  fidelity  with  which  we 
are  conscious  of  cherishing  those  principles  which  we  are  accused  of  having 
abandoned.  During  the  most  arduous  conflicts  of  the  republican  party,  at  a 
time  when  it  was  borne  down  by  domineering  and  tyrannical  majorities,  al- 
though I  occupied  no  prominent  station,  it  certainly  was  not  my  fortune  to 
repose  upon  a  bed  of  roses.  It  was  at  this  most  inauspicious  period,  as  it  re- 
spected the  fortune  of  the  party  to  which  I  was  attached,  that  I  first  acquired 
a  seat  in  the  other  branch  of  the  National  Legislature.  The  four  years  during 
which  1  retained  it  may  be  considered  as  the  very  time  when,  above  any 
other,  party  intolerance  was  carried  to  the  greatest  excess;  when  a  republican 
was  almost  hunted  down  in  the  streets  of  Philadelphia,  where  Congress  then 
sat;  when  the  republican  members  were  reduced,  in  Congress,  on  great  and 
critical  questions  which  served  most  precisely  to  designate  the  two  parties,  to 
a  very  inconsiderable  body;  when,  to  be  called  a  republican,  was,  in  the  esti- 
mation of  the  dominant  party,  to  promulgate  outlawry  against  you  in  the  code 
of  humanity,  and  to  cut  you  oft'  from  almost  all  the  charities  of  life.  At  this 
period,  sir,  it  was  my  fortune  to  represent  the  only  federal  district  in  the  State 
of  Virginia  (and  to  be  the  only  republican  representative  that  this  district, 
either  before  or  after,  elected  to  Congress. )  It  was  my  fortune  to  receive, 
during  this  adverse  and  tempestuous  period,  almost  innumerable  addresses 
from  my  constituents,  which  I  was  made  the  organ  to  present  to  the  President 
of  the  United  States,  stigmatizing  with  the  severest  animadversions  my  politi- 
cal conduct,  and  that  of  the  party  with  which  I  thought  and  acted.  Let  the 
journals  of  the  House  of  Representatives,  during  this  alarming  and  eventful 
crisis,  be  examined,  and  let  the  recorded  votes  of  that  body  be  resorted  to,  in 
order  to  ascertain  whether  I  was  inferior  in  promptitude,  fidelity,  and  ardor, 
for  the  republican  cause,  to  any  member  of  that  republican  party.  During  the 
whole  of  this  period,  I  was  suffering  under  the  most  painful  state  of  ill  health; 
yet,  such  was  my  anxiety  to  show  my  disapprobation  of  the  ruinous  measures 
pursued  by  the  then  dominant  and  infatuated  party,  that  1  occupied  my  seat 
in  Congress  in  very  many  instances  when,  if  1  had  attended  to  my  own  ease 
and  health,  I  should  have  confined  myself  to  the  bed;  and  I  challenge  the 
most  minute  and  accurate  investigator  to  point  out  one  instance  where  any 
measures  were  taken  in  Congress,  calculated  to  interest  party  feeling,  when  I 
was  absent  from  my  post,  or  failed  to  attest,  by  my  vote,  the  sincerity  of  my 
devotion  to  the  republican  cause.  Under  these  circumstances,  I  had  nattered 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     435 

myself  that  I  had  some  humble  pretensions  to  the  public  confidence,  when  I 
professed  my  early  and  continued  devotion  to  the  principles  of  republicanism: 
but  I  discover  that  I  am  mistaken,  and  that  a  new  order  of  fortunate  pohtf- 
cians  have  come  into  existence,  in  the  present  propitious  hours  of  republican- 
ism, and  have  so  exclusively  engrossed  the  whole  of  this  precious  commodity, 
that  they  will  not  permit  their  elder  order  of  political  men,  to  whose  exertions 
it  is  indebted  for  its  very  existence,  to  have  one  particle  pt  it.  If  this  new 
created  order  of  patriots  will  banish  me,  and  all  who  think  with  me  on  this  occa- 
sion, from  the  republican  ranks,  they  cannot  deprive  us  of  this  consolation, 
that,  in  the  state  of  exile  and  denunciation,  they  place  us  in  company  at  least 
as  respectable  as  that  from  which  we  are  driven.  If,  to  be  associated  in  the 
same  political  class  with  the  late  President,  with  the  majorities  of  Congress 
during  his  administration,  and  with  the  Secretary  of  the  Treasury,  in  contra- 
distinction to  this  new  order  of  exclusive  republicans,  is  the  result  of  these 
denunciations,  I  am  willing  to  encounter  their  consequences. 

Mr.  President,  if  I,  and  those  of  the  republican  party  who  act  with  me,  on 
the  present  occasion,  have  apostatized  from  our  former  political  principles,  I 
can  say  with  truth,  so  far  as  the  charge  respects  myself,  that  the  motive  by 
which  I  am  actuated,  must  not  only  be  disinterested,  but  very  different  from 
that  which  generally  operates  on  the  human  mind.  In  the  most  gloomy  hour 
of  republican  adversity,  during  the  severest  denunciations  and  persecutions 
which  it  experienced  at  an  hour  when  our  political  hemisphere  was  pregnant 
with  a  tempest  which  threatened  destruction  to  all  its  votaries;  when  I  repre- 
sented the  only  federal  district  in  the  State  of  Virginia,  and  my  constituents 
were  constantly  sending  on  loyal  addresses,  in  the  most  pointed  manner,  ani- 
madverting on  the  party  with  whom  I  was  associated:  under  all  these  adverse 
circumstances,  1  was  not  inferior  to  any  one,  in  fidelity  and  zeal  for  the  re- 
publican cause.  But  at  this  period  of  republican  triumph,  when,  to  be  asso- 
ciated with  that  party,  is  the  best  passport  to  all  the  honors  and  offices  of  our 
country,  when  I  am  elected  to  a  seat  in  this  very  elevated  and  honorable  body 
by  the  vote  of  a  republican  Legislature,  of  one  of  the  most  uniformly  and  una- 
nimously republican  States  in  the  Union;  in  such  a  crisis,  and  in  such  a  state 
of  things,  I  nave  abandoned  the  republican  party!  If  the  charge  be  just,  I  can 
only  repeat,  that  I  must  be  actuated  by  motives  very  different  from  those 
which  generally  operate  on  the  human  bosom.  No  consideration  of  pecuniary 
aggrandizement  could  have  had  any  operation  on  me  in  relation  to  the  sub- 
ject under  consideration;  any  other  than  a  wish  to  advance  the  general  hap- 
piness of  society :  for,  1  never  had  a  bank  share  in  any  bank  whatever,  nor  have 
I  ever  had  any  negotiation  with,  or  requested  or  obtained  a  loan  for  one  penny 
from,  the  Bank  of  the  United  States,  or  any  ot  its  branches.  I  must  here  re- 
mark, if  this  abandonment  and  tergiversation  of  political  principles  is  justly 
attributable  to  me,  I  am  not  conscious  of  the  motive  which  produced  it.  Whe- 
ther I  shall  be  considered  faithful  to  republican  principles,  my  country  must 
determine — arid  to  this  tribunal  I  cheerfully  appeal;  but  whether,  in  the  vote 
I  am  about  to  give,  I  shall  evince  uniformity  ot  political  principles,  is  not  a 

?uestion  that  I  will  submit  as  a  matter  of  doubt,  for  the  decision  of  any  one. 
t  is  a  matter  of  fact,  susceptible  of  immediate  and  conclusive  demonstration. 
The  first  time  I  was  a  candidate  for  a  seat  in  the  House  of  Representatives, 
a  gentleman  who  was  a  competitor  with  me  for  that  station,  published  a 
lengthy  address  to  the  freeholders  of  the  district,  which  we  each  wished  to 
represent,  which  was,  in  some  measure,  a  profession  of  political  faith,  and 
seemed  to  call  on  me  to  make  public  a  similar  exposition  of  my  political  sen- 
timents. The  question  concerning  the  Bank  of  the  United  States  was  then 
a  topic  more  generally  adverted  to  than  it  has  been  for  some  years  past;  it 
was  of  course  dilated  on  in  the  address  of  my  competitor,  which  imposed  an 
obligation  on  me  to  express  my  sentiments  on  this  subject,  in  the  answer  which 
I  published  to  this  address.  I  have  no  copy  of  my  answer  in  my  possession, 
nor  have  I  seen  it  for  several  years;  but  I  have  no  doubt  but  some  copies  of 
it  are  to  be  found,  and,  if  they  can  be  found,  it  will  be  seen  that  I  therein 
waive  all  considerations  respecting  the  original  constitutionality  of  the  bank, 
55 


434  BANK  OF  THE  UNITED  STATES. 

and,  after  making  some  remarks  respecting  it,  which  I  do  not  now  recollect, 
conclude  with  observing,  that,  however  inexpedient  at  first,  it  cannot  now  be 
touched  without  impairing  public  credit,  and  shaking  our  constitution  to  its 
base.  These,  I  think,  are  the  very  words  used  in  my  answer.  Thus,  sir, 
recorded  evidence  may  be  produced,  that,  in  the  very  first  act  of  my  political 
life,  (as  relates  to  the  General  Government)  on  the  'first  promulgation  of  my 
political  sentiments,  when  I  was  a  very  young  man,  I  avowed  the  sentiments 
I  now  profess,  and  in  conformity  with  which,  I  now  act.  If  I  was  a  repub- 
lican at  the  time  T  published  this  answer;  if  the  sentiments  it  contained  con- 
signed me  in  the  public  estimation  to  the  republican  party;  if  I  acted,  and  shall 
act,  in  my  political  career,  in  conformity  to  these  sentiments;  I  have  some 
latent  suspicions  that  I  should  have  some  pretensions  to  the  character  of  a  re- 
publican, if  it  were  not  discovered  that  a  new  order  of  patriots  has  lately 
arisen,  which  has  exclusively  appropriated  to  itself  every  republican  attribute, 
and  will  not  permit  any  of  its  benign  influence  to  animate  the  bosoms  of  those 
who  have  preceded  them  in  the  theatre  of  public  life,  though  it  is  exclusively 
owing  to  the  exertions  of  the  latter  that  its  genial  and  hallowed  flame  has 
not  been  entirely  extinguished.  From  the  exposition  I  have  just  made,  what- 
ever may  be  the  political  sect  with  which  I  and  many  others  of  my  more 
illustrious  political  associates  are  arrayed,  I  hope  it  will  «at  least  be  admitted, 
that  I  have  acted  with  consistency,  and  in  conformity  with  my  earliest  pro- 
fessions. I  am  conscious  of  possessing  but  little  political  merit,  and  my 
anxiety  to  have  credit  for  what  little  I  do  possess,  is  augmented  from  my  con- 
sciousness of  the  scantiness  of  the  general  stock.  When  we  possess  but  little, 
that  little  is  our  all,  and  its  value  is  proportionally  enhanced  from  this  con- 
sideration. Consistency  of  political  opinion,  and  steady  adherence  to  those 
tenets  with  which  I  had  commenced  my  political  life,  was  one  of  those  hum- 
ble recommendations  for  public  confidence,  to  which  I  flattered  myself  I 
could  make  some  just  pretensions;  nor  will  the  review  1  have  just  taken  of  the 
commencement  and  progress  of  my  political  life,  diminish  these  pretensions. 
Whether  this  new  order  of  exclusive  republicans,  who  have  made  their  ap- 
pearance upon  the  theatre  of  public  life  more  recently  than  it  was  my  fortune 
to  do,  shall  succeed  in  excluding  from  the  republican  ranks  the  late  President 
of  the  United  States,  and  the  majority  of  Congress  during  his  administration, 
as  also  the  Secretary  of  the  Treasury,  and  all  the  republican  members  of  Con- 
gress who  vote  for  the  bill  under  consideration — I  say,  Mr.  President,  whe- 
ther this  is  effected  or  not,  in  either  case,  the  charge  of  apostacy  or  derelic- 
tion of  political  principles  cannot  apply  to  me,  because  I  now  act  in  strict 
conformity  with  the  profession  of  political  faith  which  I  made  at  the  com- 
mencement of  my  public  life,  (in  relation  to^the  Government  of  the  United 
States.)  With  whatever  political  sect  I  may  be  associated,  in  consequence 
of  the  affirmative  vote  I  shall  give  to  the  bill  now  deliberated  on,  from  the  con- 
siderations already  enumerated,  I  shall  at  least  stand  absolved  from  all  im- 
putations of  inconsistency,  insincerity,  or  apostacy.  My  candor  cannot  be 
impeached;  I  cannot  be  accused  with  advocating  now  a  doctrine  I  once  re- 
probated; nor  of  vibrating  in  my  political  opinions,  with  a  vibrating  state  of 
things.  Nor  has  any  one  a  right  to  question  the  sincerity  of  the  solemn  decla- 
ration I  now  make,  that  I  every  day  cherish  with  a  fonder  affection  my  attach- 
ment to  those  just  and  leading  political  principles  to  which  I  was  attached, 
and  which  I  professed  at  the  commencement  of  my  political  life,  because 
every  passing  day's  experience  serves  more  firmly  to  convince  me  of  their 
accuracy  ana  superlative  excellence;  and  that  the  preservation  of  those  prin- 
ciples, in  their  utmost  purity,  is  best  calculated  to  preserve  the  liberty,  and 
promote  the  general  welfare  of  the  nation. 

Mr.  CRAWFORD  said  he  regretted  extremely,  that,  at  so  late  an  hour,  he  was 
constrained  to  throw  himself  upon  the  indulgence  of  the  Senate,  especially 
as  the  subject  was  so  much  exhausted,  by  the  able  and  animated  discussions 
which  had  for  so  many  days  attracted  their  attention.  Before  I  enter  upon 
the  few  remarks  which  I  feel  it  my  duty  to  make,  in  reply  to  the  numerous 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791.  435 

comments  which  have  been  made  upon  the  observations  which  I  had  the  honor 
to  submit  to  the  consideration  of  the  Senate,  at  the  commencement  of  this 
discussion,  permit  me,  sir,  to  acknowledge  the  liberality  and  indulgence  with 
which  those  observations  have  been  generally  treated.  In  the  course  of  the 
few  observations  to  which  I  intend  to  confine  myself,  it  shall  be  my  endeavor 
to  exercise  that  indulgence  towards  others,  which  has  been  extended  to  me. 
The  gentleman  from  Kentucky  (Mr.  CLAY)  complains  of  the  committee,  be- 
cause they  have  listened  to  the  representations  of  two  delegations  from  the 
city  of  Philadelphia,  who  presented  memorials  to  the  Senate,  who  referred 
them  to  the  committee;  and,  because  the  committee  have,  in  his  opinion,  given 
adventitious  importance  to  their  representations,  by  the  minuteness,  and  by 
the  pomp  and  parade,  with  which  they  have  been  detailed  to  the  Senate, 
will  be  recollected  that  the  committee  did  not  seek  the  post  which  has  been 
assigned  them  by  the  Senate,  nor  did  they  desert  it,  after  it  was  assigned  to 
them.  The  object  of  referring  petitions  to  committees  is  to  collect  mat  in- 
formation which  the  Senate  ought  to  have,  before  it  acts,  and  which,  in  its  col- 
lective capacity,  it  cannot  Obtain.  It  has  always  been  the  practice  of  com- 
mittees to  permit  the  petitioners  to  be  present  at  their  meetings,  to  make 
such  explanations,  and  to  give  such  information,  touching  the  subject  of  their 
petition,  as  they  think  connected  with  it.  It  is  the  duty  of  committees  to 
detail  to  the  Senate,  the  information  which  they  collect,  to  enable  the  mem- 
bers to  take  a  full  view  of  the  subject  upon  which  they  are  called  upon  to  act. 
The  committee,  in  the  present  case,  has  done  all  this,  and  it  has  done  nothing 
more.  Had  it  puraaed  a  different  course,  it  would  have  justly  subjected  it- 
self to  the  animadversions  of  the  Senate.  To  the  information  collected  by 
the  committee,  from  these  delegations,  and  laid  before  the  Senate,  my  friend 
from  Maryland,  (Mr.  SMITH)  has  opposed  a  statement  of  facts,  and  his  opinion, 
founded  upon  those  facts.  As  the  situation  and  talents  of  that  gentleman  en- 
title his  statements  and  opinions  to  sreat  weight;  as  it  is  more  than  probable 
that  the  votes  of  several  members  will  ultimately  rest  upon  the  weight  of  his 
authority;  my  honorable  friend  from  Maryland  (Mr.  SMITH}  will  pardon  me 
if  I  should  examine  his  observations  rather  according  to  me  rules  of  evi- 
dence, than  those  of  logic.  In  making  this  declaration,  I  wish  to  be  explicit- 
ly understood  as  excluding  eyeiy  idea  of  charging  that  gentleman  with  having 
made  statements  which  he  did  not  believe,  or  with  having  given  opinions  he 
did  not  entertain.  1  have  no  doubt  but  that  he  sincerely  believes  in, the 
correctness  of  his  statements,  and  in  the  accuracy  of  his  opinions;  but  if,  in 
the  course  of  my  observations,  I  shall- prove,  incontestibly,  mat  he  is  mistaken 
in  soine  of  his  statements  and  opinions,  it  will  teach  the  Senate  the  necessity 
of  weighing  the  remainder  of  them  with  great  circumspection.  If  I  shall  be 
able  to  shesv  that  he  is  mistaken  in  a  case,  the  evidence  of  which  is  matter  of 
record,  that  circumstance  alone  will  induce  the  Senate  to  reject  all  idea  of  re- 
ceiving his  statements  and  opinions,  with  implicit  confidence.  But,  sir,  be- 
fore I  proceed  further  in  my  observations,  permit  me  to  notice  an  expression 
which  fell  from  the  gentleman  from  Tennessee,  on  my  right,  (Mr.  WHITE- 
SIDES.)  I  understood  that  gentleman  to  say,  that  those  republicans  who  thought 
the  law  incorporating  the  bank  was  unconstitutional,  had  been  guilty  of  apos- 
tacy.  I  hope  I  misunderstood  the  gentleman;  if  I  am  mistaken,  it  will  afford 
me  great  pleasure  to  be  corrected,  because  the  declaration  made  a  very  strong 
impression  upon  my  mind,  and  excited  the  most  unpleasant  sensations. 

[Mr.  W.  explained.  He  said,  an  impression  had  been  made  upon  his  mind, 
that  the  bank  charter  was  unconstitutional,  but  that  he  had  never  examined 
the  subject  minutely,  until  it  had  become  his  duty  to  do  it.  That  that  exami- 
nation had  convinced  him  that  it  was  unconstitutional,  and  that  those  republi- 
cans who  now  supported  the  renewal  must  have  apostatized.] 

Then,  sir,  I  say  that  this  is  language  which  no  gentleman  ought  to  use  to- 
wards any  member  of  this  honorable  body;  and,  sir,  it  is  language  which  no 
gentleman  shall,  withoutthe  walls  of  the  .Senate,  use  tome,  with  impunity. 


436  HANK  OF  THE  UNITED  STATES. 

[Mr.  W.  explained,  by  saying,  that  he  did  not  say  that  gentlemen  had  apos- 
tatized, but  that  he  had  only  said,  in  his  opinion  they  had  apostatized.] 

I  wish  the  gentleman  had  been  able  to  make  a  satisfactory  explanation  of 
his  unwarrantable  declaration.  What  right  has  he  to  make  his  opinion  of 
the  constitution  the  test  of  other  men's  republicanism?  By  what  authority 
does  he  erect  his  opinion  as  the  standard  of  republican  orthodoxy?  As  the 
standard  by  which  the  republicanism  of  other  gentlemen  is  to  be  tried?  The 
gentleman  has  mistaken  his  standing  in  the  republican  party.  I  disclaim  all 
authority,  in  a  case  of  this  kind,  and  more  especially  the  authority  of  the 
gentleman  from  Tennessee* 

Mr.  President,  the  honorable  gentleman  from  Maryland  has  declared,  that 
the  act  incorporating  the  Bank  of  the  United  States  was,  in  is  origin,  a  party 
question. 

[Mr.  SMITH  explained.  He  did  not  say  it  was  a  party  question,  but  that  it 
had  given  rise  to  party.] 

If  I  have  mistaken  what  fell  from  the  honorable  gentleman  from  Marylandy 
I  am  not  in  what  fell  from  the  gentleman  from  Tennessee,  on  my  right,  (Mr. 
WHITESIDES.)  Sir,  the  assertion  is  not  only  without  proof,  but  it  is  contra- 
dicted by  matter  of  record.  A  reference  to  the  yeas  and  nays  upon  the  bill, 
in  both  Houses  of  Congress,  will  prove  that  many  of  our  most  distinguished  re- 
publicans voted  for  our  bill,  and  some  of  the  most  respectable  federal  mem- 
bers voted  against  it.  In  the  observations  which  I  made,  when  1  had  the  honor 
of  addressing  the  Senate,  at  the  opening  of  this  discussion,  I  attempted  to 
show,  that  the  idea  of  party,  as  now  known,  did  not  then  exist  in  the  United 
States.  That  the  parties  then  known  were  those  who  were  the  friends  of  the 
federal  constitution,  and  those  who  were  opposed  to  it.  Nothing  which  I  have 
heard  advanced  upon  this  subject,  in  reply  to  my  observations, lias  made  the 
slighest  impression  upon  my  mind,  against  the  correctness  of  the  opinion 
which  1  then  advanced^  I  understood  the  gentleman  from  Maryland  to  say,, 
that  the  Congress  which  passed  the  bill  to  incorporate  the  bank,  was  capri- 
ciously apportioned  r  and  consisted  of  sixty -five  members;  and  that,  of  that  num- 
ber, only  thirty-nine  voted  for  it.  That,  if  the  members  had  been  apportioned 
as- the  constitution  directs,  upon  the  principles  of  population,  in  his  opinion 
the  bill  never  would  have  been  passed.  Sir,  let  us  examine  the  correctness 
of  this  opinion.  Every  member  present  but  one,  from  the  States  of  New 
Hampshire,  Massachusetts,  Rhode  Island,  Connecticut,  New  York,  New 
Jersey,  Pennsylvania,  and  Delaware,  voted  for  the  bill,  together  with  two 
from  the  State  of  Maryland,  two  from  the  State  of  North  Carolina,  and  one 
from  the  State  of  South  Carolina.  The  eight  States  who  voted  unanimously 
for  the  bank,  one  only  excepted,  upon  the  apportionment  under  the  first  enu- 
meration, give  a  nett  gain  of  twenty  members,  while  the  other  few  States,  most 
of  whom  voted  against  the  bank,  give  a  nett  gain  of  sixteen  members.  Thus,, 
sir,  if  we  may  judge  of  the  conduct  of  members  in  a  geographical  point  of  view, 
there  can  be  no  doubt  that  the  friends  of  the  bank  would  have  been  consi- 
derably increased  by  a  correct  apportionment.  The  vote  in  the  House  of  Re- 
presentatives, on  the  final  passage  of  the  bill,  was  thirty-nine  to  twenty.  In 
the  Senate,  the  yeas  and  nays  were  taken  on  two  questions,  during  its  pen- 
dency there.  Upon  the  first,  the  yeas  were  sixteen;  the  nays  six.  Upon  the 
motion  to  strike  out  the  12th  section,  which  restrains  the  right  of  Congress  to. 
create  any  other  bank  during  the  existence  of  that  about  to  be  created,  the 
yeas  were  five,  and  the  nays  eighteen.  The  opinion,  then,  is  wholly  incorrect, 
and  yet  the  evidence  upon  which  this  opinion  ought  to  have  been  formed  was 
matter  of  record.  Sir,  the  gentleman  from  Maryland  has  said  that  this  bank 
has  been  mischievous  in  its  consequences,  and  that,  wherever  it  has  established 
a  branch,  it  has  immediately  produced  a  necessity  for  creating  other  banks. 
I  would  ask  what  has  created  the  necessity  of  establishingbanks  in  New  Hamp- 
shire, Vermont,  Rhode  Island,  Connecticut,  New  Jersey,  Delaware*  North 
Carolina,  and  the  Western  States?  This  bank  has  never  established  a  branch 
bank  in  any  one  of  these  States,  and  yet  they  have,  without,  I  believe,  a  sin- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     437 

gle  exception,  established  banks;  while  the  State  of  Georgia,  where  a  branch 
bank  has  been  long  established,  has  not,  until  within  a  few  months  past,  esta- 
blished a  single  bank.  What  cause  is  it  that  has  influenced  the  Legislatures 
of  Maryland,  Pennsylvania,  and  several  other  States,  to  create  so  many  banks 
within  a  few  months  past?  Is  it  owing  to  the  mischievous  effects  of  the  Bank 
of  the  United  States?  Sir,  the  facts  I  have  stated  show,  conclusively,  that 
the  cause  assigned  by  my  honorable  friend  from  Maryland  cannot  be  the  one 
which  has  produced  this  multiplication  of  banks.  Some  other  cause  must  be 
sought  for,  and,  in  my  opinion,  a  more  rational  one  is  ready  at  hand.  The  ef- 
fects of  the  bank,  and  of  its  branches,  wherever  established,  upon  the  prosperi- 
ty of  the  People,  and  of  the  commerce  of  the  place,  removed  the  long  rooted 
objections  which  existed  against  banks,  and  hence  their  great  increase  in  all 
the  States. 

The  gentleman  from  Maryland  has  stated  several  cases  in  which  the  State 
banks,  and  the  banks  of  this  territory,  have  accommodated  the  Government, 
where  the  United  States  had  refused.  The  cases  stated  prove  nothing,  and 
ought  to  have  no  influence  with  this  Government,  in  establishing  a  permanent 
system  of  revenue.  Jf  the  State  and  territorial  banks  have,  upon  several  oc- 
casions, received  the  bills  of  other  State  banks,  to  accommodate  the  Go- 
vernment, it  was  because  it  suited  their  convenience  at  the  time.  It  was  a 
mere  temporary  transaction,  and  forms  an  exception  to  the  general  rule.  The 
charter  ot  no  bank  in  the  United  States  compels  them  to  take  the  paper  of 
other  banks;  and  whether  they  do  receive  it  or  not,  will  depend  upon  con- 
tingent circumstances,  or  upon  whim  and  caprice.  No  reliance,  therefore, 
ought  to  be  placed  upon  the  duration  of  any  regulation  which  is  not  enforced 
by  their  charters.  The  gentleman  from  Maryland  thinks  that  the  United  States 
will  have  the  same  influence  over  the  State  banks,  that  it  has  had,  and  will 
have,  over  that  of  the  Bank  of  the  United  States.  If  he  is  correct  as  to  the  ex- 
tent of  that  influence,  his  conclusion  may  be  correctly  drawn.  But,  sir,  is  it 
true  that  the  National  Government  has  no  other  influence  over  this  bank  than 
that  which  can  be  produced  by  withdrawing  of  its  deposites?  If  it  is  so,  then 
it  must  be  admitted  that  the  United  States  will  have  the  same  influence  over 
the  State  banks  that  they  will  have  over  one  of  their  own  creation,  because 
they  can  as  easily  withdraw  their  deposites  from  the  one  as  the  other.  But, 
sir,  the  United  States  have  an  influence  over  the  Bank  of  the  United  States, 
which  is  wholly  independent  of,  and  unconnected  with,  the  right  of  withdraw- 
ing their  deposites  from  its  vaults.  The  bank  is  dependent  on  them  for  its  ex- 
istence. By  renewing  the  charter  for  short  periods  of  time,  you  create  a  state 
of  dependency  upon  the  Government,  which  will,  at  all  times,  make  the  bank 
completely  subservient  to  all  the  legitimate  objects  for  which  it  was  created. 
How,  sir,  is  it  with  the  State  banks?  Upon  whom  are  they  dependent  for  legal 
existence,  and  for  length  of  days?  Upon  the  State  Governments.  Suppose  the 
authority  from  which  they  derive  their  existence  should  place  itself  in  oppo- 
sition to  the  Government  of  the  United  States;  and  suppose  that  this  state  of 
hostility  should  happen  a  year  or  two  before  the  time  at  which  their  charters 
were  to  expire,  and  the  State  Legislature  should  direct  them  to  hold  the  de- 
posite  of  public  moneys  against  the  demand  of  the  National  Government; 
what  course  would  they  pursue,  under  such  circumstances?  Sir,  the  case 
which  I  have  stated  is  not  a  mere  possible  case.  The  history  of  several  of  the 
large  influential  States  proves,  that,  this  state  of  hostility,  which  1  have  sup- 
posed, is  not  an  imaginary  one.  Make  yourselves  dependent  upon  the  State 
banks  for  the  collection  and  transmission  of  your  revenue,  and  that  opposition, 
which  has  but  seldom  happened,  will  become  more  frequent.  Their  disposi- 
tion to  control  the  operations  of  the  National  Government  will  increase  with 
every  increase  of  the  means  of  annoyance,  which  the  folly  and  improvidence 
of  Congress  may  throw  into  their  hands.  For  whose  benefit,  sir,  is  the  Go- 
vernment to  strip  itself  of  this  right,  so  essential  for  the  due  administration  of 
its  finances?  Is  it  for  the  benefit  of  the  great  nfess  of  the  American  People? 
No;  not  one  in  an  hundred  of  them  have  any  interest  in  the  State  banks. 
They  feel  no  interest  in  the  question;  their  true  interest  is  more  effectually 


438  BANK  OF  THE  UNITED  STATES. 

subserved  by  the  operations  of  the  Bank  of  the  United  States,  than  it  can  pos- 
sibly be  by  the  State  banks.  This  bank  affords  them  a  portable  currency, 
which  is  of  equal  value  in  every  part  of  the  United  States,  while  the  credit 
and  currency  of  the  State  bills  is  local. 

Mr.  President,  the  honorable  gentleman  from  Maryland,  (Mr.  S. )  says, 
that  the  Bank  of  the  United  States  does  not  facilitate  the  collection  of  there- 
venue.  If  I  understood  the  gentleman  from  Massachusetts  (Mr.  LLOYD)  and 
the  gentleman  from  Maryland  correctly,  human  imagination  cannot  devise  a 
system  so  peculiarly  calculated  to  ensure  the  speedy  collection  of  your  reve- 
nue, as  that  which  is  furnished  by  banks.  Sir,  I  know  nothing  of  the  details 
of  the  banking  system;  I  never  was  inside  of  a.  bank,  except  two  or  three  times 
in  the  branch  bank  which  has  been  established  in  this  city;  but  I  understood 
the  gentleman  from  Massachusetts  to  say,  that  when  a  revenue  bond,  even  of 
$50,  was  deposited  in  the  bank  for  collection,  if  it  was  not  discharged  when 
due.  that  the  obligor  was  refused  all  further  accommodation  in  that  bank,  and 
that,  if  his  accommodations  amounted  to  100,000  dollars,  he  was  called  upon 
to  discharge  his  notes  as  they  became  due,  the  right  to  renew  them  being  for- 
feited by  this  act  of  default.  I  understood  the  gentleman  from  Maryland  to 
say,  that,  whenever  any  person  was  known  to  be  in  default  at  any  bank,  that 
all  the  banks  of  the  place  immediately  refused  him  credit,  and  demanded  the 
payment  of  his  notes  as  they  became  due,  by  excluding  him  from  the  right  of 
renewing  them.  [Both  gentlemen  assented  to  the  correctness  ef  the  state- 
ment.] I  have  then  understood  both  gentlemen  correctly.  This  simple  state- 
ment proves,  beyond  the  possibility  of  doubt,  that  the  bank  is  the  most  pow- 
erful engine  in  the  collection  of  your  revenue,  which  human  ingenuity  can 
devise.  Credit  is  the  true  basis  ot  commerce.  By  placing  your  revenue  bonds 
in  the  bank,  the  want  of  punctuality  in  a  single  case,  towards  the  Govern- 
ment, shuts  the  door  of  every  bank  to  which  the  defaulter  had,  before,  had 
access,  and  also  of  every  other  bank  of  the  city  in  which  his  commercial  trans- 
actions have  been  carried  on.  And  yet,  we  are  seriously  told  that  the  ope- 
rations of  the  bank  have  no  influence  upon  the  prompt  and  secure  collection 
of  the  national  revenue.  It  is  impossible  to  resist  the  conviction,  that  the 
prompt  and  secure  collection  of  our  revenue  is  principally  owing  to  the  in- 
fluence of  the  bank.  But,  sir,  the  bank  has  another  direct  influence  upon  the 
collection  of  your  revenue.  By  the  rules  established  in  the  bank  at  Philadel- 
phia, every  person,  whose  bond  to  the  Government  is  deposited  there,  has  a 
right,  upon  getting  an  additional  endorser,  to  claim  a  discount  for  half  of  the 
amount  of  his  bond,  and  the  part  so  discounted  is  immediately  carried  to  the 
credit  of  the  United  States,  and  the  bank  takes  upon  itself  the  risk  of  the  ul- 
timate collection.  In  this  way,  sir,  one  half  of  the  bond  is  collected  at  the 
sole  risk  of  the  bank,  without  any  possibility  of  loss  on  the  part  of  Govern- 
ment. And  yet,  sir,  it  is  contended  that  the  bank  has  nothing  to  do  with  the 
collection  of  the  public  revenue.  The  gentleman  from  Maryland  says,  that 
the  scarcity  of  money,  and  the  alarm  and  dismay  which  the  delegation  of  me- 
chanics had  represented,  as  existing  in  Philadelphia,  could  not  be  the  effect  of 
the  contraction  of  discounts  by  the  Bank  of  the  United  States,  because  that 
bank,  as  well  as  the  State  banks,  are  going  on  with  their  ordinary  discounts. 
This  is  true;  but  the  gentleman  from  Maryland  has  forgotten,  that  this  dele- 
gation stated  that  the  bank,  upon  the  rejection  of  their  memorial  by  the  House 
of  Representatives,  had  contracted  their  discounts,  and  that  a  corresponding 
contraction  had  taken  place  in  the  discounts  of  the  State  banks,  which  had 
produced  the  pressure;  and  that  that  pressure  had  spread  alarm  and  dismay 
through  the  city.  That,  before  they  left  the  city,  the  directors  of  the  Bank  of 
the  United  States  had  come  to  an  understanding  with  the  directors  of  the 
State  banks,  all  of  whom  had  determined  to  resume  and  continue  their  ordi- 
nary discounts  until  the  last  hour.  Notwithstanding  the  banks  had  resumed 
their  ordinary  discounts,  the  panic  which  had  been  produced  did  not  cease, 
and  the  scarcity  of  money,  and  the  distrust  which  had  taken  place,  still  con- 
tinued to  exist  in  Philadelphia.  The  gentlem£p  from  Marylard  admits,  ex 
pressly,  that  the  transmission  of  your  public  money  for  the  payment  of  the  ar- 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       439 

my  and  navy  must  be  effected  through  the  agency  of  banks,  but  contends 
that  that  object  can  be  effected  as  well  by  the  State  banks  as  by  a  Bank  of 
the  United  States.  My  friend  from  Kentucky  (Mr.  POPE)  said,  that  the  great 
characteristic  difference  between  the  present  Government  and  that  which  ex- 
isted under  the  old  articles  of  confederation,  is,  that  the  present  Government 
has,  within  itself,  the  means  of  executing  its  own  measures,  without  relying 
upon  the  State  Governments;  whereas  the  old  Congress  had  to  rely  upon  the 
States  for  the  execution  of  the  measures  which  it  had  previously  devised  and 
adopted. 

This  opinion  is  substantially  correct:  for  the  constitutional  dependence  of 
the  present  Government  of  the  United  States,  upon  those  of  the  States,  is 
confined  to  its  organization,  and  not  to  the  execution  of  its  constitutional 
powers  after  it  is  organized.  The  gentleman  from  Tennessee  (Mr.  WHITE- 
SIDES)  has  said,  that  we  argue  this  question  as  though  Congress  was  wholly 
independent  of  the  State  Governments.  When,  sir,  I  had  the  honor  of  sub- 
mitting rny  reasons  to  the  Senate,  upon  a  former  day,  1  expressly  stated  the 
cases  in  which  the  National  Government  was  dependent  upon  those  of  the 
States,  and  proved,  by  referring  to  the  constitution  itself,  that, in  every  case  of 
that  kind,  the  constitution  imposed  upon  the  States  the  highest  obligation  to 
perform  the  acts  for  which  the  Government  of  the  United  States  was  depen- 
dent upon  them.  The  constitution  having  defined  the  cases  in  which  this 
Government  shall  be  dependent  upon  the  State  Governments,  I  did  not  hesi- 
tate to  declare  it  to  be  unwise  and  improvident  to  increase  that  dependence  by 
legislative  acts,  when  we  were  unable  to  impose  any  obligation  on  the  States 
to  perform  the  act.  The  same  gentleman  has  said,  that  the  objection  to  em- 
ploy the  State  banks,  was  the  result  of  a  distrust  in  the  State  Governments, 
rather  than  in  the  State  banks:  and  that  this  distrust  was  unreasonable,  be-' 
cause  the  State  Governments  were  composed  of  the  same  description  of  men 
who  composed  the  National  Government.  If  this  be  called  argument,  and  is 
entitled  to  any  weight,  it  is  a  two  edged  sword,  which  cuts  both  ways.  It 
equally  proves  the  unreasonableness  of  the  distrust  which  is  felt  against  the 
Government  of  the  United  States,  in  relation  to  the  exercise  of  the  right  to 
incorporate  a  bank.  But,  sir,  to  all  this,  the  most  satisfactory  answer  is,  that 
I  will  trust  no  man  to  do  for  me  what  I  can  do  so  much  better  for  myself. 
Why  trust  any  man,  when  there  is  no  necessity  or  reason  for  trusting  him? 

The  gentleman  from  Maryland,  in  speaking  of  the  means  which  have  been 
resorted  to,  to  procure  the  renewal  of  the  charter,  says  that  we  have  not  pro- 
cured memorials  to  be  presented  to  Congress,  praying  the  charter  might  not 
be  renewed;  ive  have  not  procured  pamphlets  to  be  written,  published,  and 
laid  upon  the  tables  of  members,  proving  the  unconstitutionality  and  inutility 
of  the  bank;  we  have  not  imposed  upon  the  credulity  of  honest  mechanics 
and  manufacturers,  and  by  that  means  procured  delegations  to  be  sent  to  pray 
for  the  rejection  of  the  bank  memorial.  Surely,  sir,  the  gentleman  did  not, 
by  these  declarations,  mean  to  insinuate  that  any  one  of  those  gentlemen  who 
support  the  bill  upon  your  table  have  had  any  agency  in  procuring  any  appli- 
cation to  be  made  injfavor  of  the  bank.  I  know,  that  gentleman's  respect  for 
himself;  his  respect  for  the  Senate;  his  respect  for  the  individual  members  of 
this  body,  as  well  as  his  respect  for  the  general  rules  of  propriety,  exclude  the 
possibility  of  his  making  such  an  insinuation.  [Mr.  SMITH  explained,  by 
saying,  I  exclude  every  idea  of  such  an  insinuation.]  Sir,  1  will  tell  the  ho- 
norable gentleman  from  Maryland,  what  has  been  done  by  those  who  are  op- 
posed to  the  renewal  of  the  charter.  1  do  not  mean  the  members  of  the 
Senate  who  are  opposed  to  it,  but  those  who  have  attempted  to  inflame  public 
opinion  upon  this  question.  Letters,  sir,  have  been  written  from  this  place, 
to  induce  the  State  Legislatures  to  instruct  their  members  to  oppose  the  re- 
newal of  the  charter  of  the  bank.  I  will  ask  the  honorable  gentleman  from 
Maryland,  whether  he  does  not  know  that  letters  have  been  written  for  that 
purpose? 

Ihe  gentleman  from  Maryland  has  said,  and  I  am  extremely  sorry  that  he 
has,  that  the  Bank  of  the  United  States  had  their  agents  in  this  city,  for  two 


440  BANK  OF  THE  UNITED  STATES. 

sessions,  intriguing  with  members  of  Congress  to  obtain  a  renewal  of  their 
charter.  1  can  assure  that  gentleman  that  I  have  had  as  little  to  do  with  the 
agents  of  the  bank  as  he  has  had.  If,  sir,  I  was  disposed  to  retort  upon  those 
who  are  opposed  to  the  renewal  of  the  charter,  I  would  ask  if  they  have  not 
seen  published  in  the  democratic  papers  of  Pennsylvania,  Maryland,  and  Vir- 
ginia, extracts  of  letters  said  to  be  written  in  the  city  of  Washington,  charg- 
ing the  members  of  Congress,  who  are  in  favor  of  it,  with  bein^  bribed  and 
corrupted,  and  with  being  disposed  to  sell  the  sovereignty  of  the  nation  to 
British  capitalists?  Have  they  not  seen,  in  the  same  papers,  conversations 
detailed  with  great  minuteness,  which,  it  is  pretended,  have  passed  between 
members  of  Congress,  calculated  to  excite  public  odium  and  indignation 
against  the  friends  of  the  bill  now  under  consideration?  Sir,  I  will  not,  for  a 
moment,  indulge  an  idea,  that  these  letters  have  been  written  or  these  con- 
versations detailed  by  any  member  of  this  body.  The  idea  that  such  has 
been  the  fact,  is  too  humiliating,  too  degrading,  not  only  to  this  honorable 
body,  but  to  human  nature  itselt,  to  be  entertained  but  for  one  moment.  And 
yet,  sir,  the  author  of  a  charge,  as  base  as  it  is  false,  against  my  honorable 
friend  from  Kentucky,  (Mr.  POPE)  has,  day  after  day,  occupied  a  seat  in  a 
gallery  of  the  Senate,  to  which  no  person  has  a  right  of  access,  but  by  an  in- 
troduction of  one  of  the  members  of  this  body.*  Sir,  the  highway  robber, 
when  compared  with  the  infamous  fabricator  of  this  base  attempt  to  assassinate 
the  reputation  of  this  honorable  member,  becomes  a  virtuous  and  estimable 
character.  Such,  sir,  has  been  the  warfare  which  has  been  waged  against  the 
renewal  of  the  charter.  Denunciations,  and  charges  of  political  apostacy,  are 
the  measures  by  which  we  have  been  assailed  from  without  and  from  within. 
Sir,  I  have  shown  that  the  bank  question  was  no  party  question  in  its  origin; 
that  it  was  a  question  upon  which  an  honest  difference  of  opinion  always  has 
existed,  and  does  now  exist.  And,  shall  I  be  charged  with  deserting  the  stan- 
dard of  the  People,  while  I  am  treading  in  the  foot  steps  of  the  great  father 
of  his  country?  Shall  I  tremble  at  the  charge  of  apostacy  which  has  been 
denounced  against  me  by  the  gentleman  from  Tennessee,  (Mr.  WHITESDES) 
while  I  am  pursuing  the  course  which  has  been  approved  by  a  Gerry,  a  Lang- 
don,  and  a  Washington — men  whom  the  wise  and  virtuous  have  delighted  to 
honor?  No!  While  treading  in  the  foot  steps  of  these  well  tried  patriots 
and  enlightened  statesmen,  I  will  advance  with  a  firm,  undeviating  step,  unap- 
palled  by  the  howling  of  party  rage,  more  terrific  than  the  yell  of  the  abori- 
ginal savage. 

The  gentleman  from  Maryland  (Mr.  SMITH)  has  said  that  he  has  under- 
stood that  a  proposition  was  made  in  the  Federal  convention,  to  vest  Congress 
with  power  to  create  corporations  generally,  and  without  limitation.  Had  I 
been  a  member  of  that  convention,  I  should  most  certainly  have  voted  against 
the  proposition,  because  it  would  have  been  unreasonable.  Why  should  such 
a  power  be  delegated?  Not  certainly  as  necessary  to  execute  the  delegated 
powers,  because  they  are  very  limited.  A  general  power  to  create  corpora- 
tions would  have  enabled  Congress  to  have  created  them  ad  libitum,  where 
there  was  no  possible  relation  between  them  and  any  one  of  the  delegated 
powers.  The  vote  upon  the  bill  incorporating  the  bank  proves,  that,  if  such  a 
proposition  had  been  submitted,  it  must  have  been  rejected,  under  a  conviction 
that  the  power  to  create  corporations  is  incident  to  such  of  the  general  powers 
as  might  require  an  act  of  incorporation  completely  to  execute  them,  and 
fairly  vested  by  the  constitution  in  Congress;  because  ten  of  the  members  of 
that  convention  were  in  Congress,  and  voted  for  that  bill;  because  General 
Washington  signed  that  bill;  because  the  only  member  of  that  convention, 
now  in  Congress,  voted  for  the  bill,  and  is  now  in  favor  of  renewing  the  char- 
ter; and  because  there  were  but  eight  members  in  that  convention,  in  Con- 
gress, who  voted  against  it. 

*Mr.  C.  did  not  intend  to  intimate  that  General  Smith,  of  Maryland,  introduced  the 
person  alluded  to,  into  that  gallery,  nor-does  he  believe  that  he  did  introduce  him. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1T91. 

Mr.  President,  I  will  now  proceed  to  examine  the  objections  which  have 
been  offered  to  the  construction  which  1  have  given  to  several  clauses  of  the 
constitution.  In  the  observations  which  I  made  upon  this  part  of  the  question, 
when  1  was  up  before,  I  endeavored  to  prove  that  every  construction  which 
had  been  given  to  this  instrument,  upon  the  idea  of  its  being  perfect,  was  like- 
ly to  be  erroneous.  The  gentleman  from  Virginia,  (Mr.  G.)  and  the  gentle- 
wian  from  Tennessee,  (Mr.  W.)  still  view  it  as  the  model  of  perfection. 
They  are  certainly  at  liberty  still  to  entertain  that  opinion.  Every  man 
has  a  right  to  erect  his  idol  in  this  land  of  liberty,  and  to  fall  down  and  wor- 
ship it,  according  to  the  dictates  of  his  own  conscience.  I  endeavored  also 
to  prove,  that,  it  we  applied  the  same  rule  of  construction  to  that  clause  of 
the  constitution  from  which  we  endeavor  to  derive  the  right  to  create  a  bank, 
which  has  been  applied  to  that  from  which  the  power  to  erect  a  light  house 
has  been  derived,  the  constitutional  difficulty  at  once  disappears.  Until  my 
friend  from  Virginia,  (Mr.  G.)  and  my  friend  from  Tennessee.  (Mr.  ANDER- 
SON) had  otherwise  declared,  I  had  always  understood  the  right  to  erect  light 
houses  had  been  exercised  as  incidental  to  the  power  to  regulate  commerce. 
It  seems,  however,  that  I  am  mistaken,  and  that  this  right  is  incidental  to 
that  clause  whichgives  Congress  the  right  to  exercise  exclusive  legislation  in 
certain  places.  Tne  clause  reads  in  the  following  words: 

"  To  exercise  exclusive  legislation,  in  all  cases  whatsoever,  over  such  district  (not 
•exceeding-  ten  miles  square)  as  may,  by  cession  of  particular  States,  and  the  accept- 
ance of  Congress,  become  the  Seat  of  the  Government  of  the  United  Statts,  and  to 
exercise  like  authority  over  all  places  purchased  by  the  consent  of  the  Legislature  of 
the  State  in  which  the  same  shall  be,  for  the  erection  of  forts,  magazines,  arsenals, 
dock  yards,  and  other  needful  building's,"  8cc. 

Now,  says  my  friend  from  Tennessee,  this  clause  gives  the  right  to  erect 
dock  yards^  and,  as  dock  yards  must  be  on  the  sea  coast,  therefore,  Congress 
has  the  right  to  erect  light  houses,  because  they  must  also  be  on  the  sea  coast. 
This  argument  is  extremely  logical,  nay,  syllogistical,  in  form,  but  it  is  ex- 
tremely illogical  in  substance.  The  conclusion  drawn  from  the  premises  is 
^as  necessary  as  though  I  were  to  say  that,  because  two  and  two  make  four, 
therefore  five  and  five  make  twelve.  The  conclusion  in  the  latter  case  is  as 
necessary  as  in  the  former.  But  my  honorable  friend  from  Virginia  (Mr.  G.) 
derives  it  from  the  authority  given  in  this  clause,  to  erect  other  needful  build- 
ings. But  the  question  recurs,  needful  for  what?  Why,  certainly  for  the 
purposes  before  specified.  What  are  they?  Forts,  magazines,  arsenals,  and 
dock  yards.  If  tnis  clause  gives  any  authority  to  erect  forts,  magazines,  arse  - 
nals,  and  dock  yards,  the  other  needful  buildings  spoken  of  must  be  needful 
for  these  specified  purposes.  I  should  suppose  that  no  man,  who  spends  only 
a  few  days  in  this  city,  can  be  at  a  loss  to  determine  what  is  comprehended 
tinder  the  term,  "  other  needful  buildings."  Let  him  go  to  the  clock,  yard,, 
nicknamed  a  navy  yard,  in  this  city,  and  he  will  there  find  a  little  town  "  of 
other  needful  buildings,"  in  the  words  of  the  constitution.  But,  sir-.  1  deny 
that  this  clause  of  the  constitution  expressly  gives  any  right,  but  that  of  exer- 
cising exclusive  legislation  in  the  places  to  be  accepted  or  purchased  for  the 
purpjoses  therein  specified.  The  right  to  erect  forts,  magazines,  and  arsenals, 
is  fairly  incidental  to  the  right  of  declaring  war,  and  of  raising  armies;  and 
the  right  to  erect  dock  yards  is  fairly  incidental  to  the  right  of  providing  and 
maintaining  a  navy.  But  if,  for  the  sake  of  argument,  I  should  admit  that  the 
right  to  erect  forts,  &c.  is  given  in  this  clause,  how  can  it  be  proved  that  the 
right  to  erect  a  light  house  is  also  given?  Forts,  magazines,  arsenals,  and 
dockyards,  are  enumerated;  and,  as  the  constitution  says  that  all  powers, 
not  expressly  given,  are  retained,  if  the  right  to  erect  forts,  magazines,  &c.  is 
siven  in  this  clause,  most  clearly  the  right  to  erect  light  houses  is  retained  by 
the  States,  because  it  is  not  to  be  found  in  the  enumeration  contained  in  the 
clause.  When  1  had  the  honor  of  addressing  the  Senate,  before  I  questioned 
the  authority  of  the  State  Governments  to  create  banks,  I  then  stated,  and  I 
again  explicitly  state,  that  it  is  with  reluctance  that  I  have  felt  it  my  duty  to 
56 


442  BANK   OF  THE   UNITED   STATES. 

make  any  inquiry  into  the  constitutional  right  of  the  State  Governments  t(? 
incorporate  banks.  The  State  Legislatures  ought  to  have  recollected  the 
Spanish  proverb,  which  says,  that  those  who  live  in  glass  houses  ought  not  to 
throw  stones.  Before  they  undertook  to  question  the  constitutional  authority  of 
Congress,  they  ought  to  have  thoroughly  examined  the  foundation  upon  which 
their  own  right  rested.  The  honorable  gentleman  from  Virginia  (Mr.  GILES) 
says,  that  the  construction  which  I  have  given  to  that  part  of  the  constitution 
which  prohibits  the  States  from  emitting  bills  of  credit,  would  apply  equally 
to  promissory  notes  given  by  one  individual  to  another,  under  the  laws  of  a 
State,  as  to  a  bank  bill.  Permit  me  to  inquire  of  that  gentleman,  whether  he 
ever  saw  a  law  authorizing  one  man  to  give  another  his  promissory  note?  He 
may  search  the  pandects  'of  Justinian;  he  may  turn  over  the  leaves  of  the 
musty  volumes  written  upon  the  common  law,  from  the  days  of  Bracton  and 
Fleta,  down  to  the  present  day,  and  his  search  will  be  in  vain:  for  the  right 
to  make  contracts,  the  right  to  give  promissory  notes,  is  antecedent  to,  and 
indepent  of,  all  municipal  law.  The  gentleman  will  find  laws  and  decisions 
in  abundance,  regulating  the  effect  of  endorsements,  and  other  collateral  cir- 
cumstances, and  prescribing  the  manner  of  enforcing  the  payment  of  promis- 
sory notes,  but  he  will  never  find  a  law  giving  the  right  to  execute  a  promis- 
sory note.  But  it  is  said  that  the  bills  of  credit,  which  the  States  are  prohi- 
bited from  emitting,  must  be  bills  of  credit  emitted  on  the  credit  of  the  State, 
If  this  distinction  should  be  well  founded,  many  of  the  State  banks  are  still 
subject  to  the  charge  of  unconstitutionally;  because,  in  many  of  them,  the 
States  are  directly  interested,  and  wherever  that  is  the  case,  their  bank  bills 
are  bills  of  credit  emitted  on  the  credit  of  the  State.  But  the  correctness  of 
this  distinction  may  well  be  denied,  because  the  restriction  is  as  general  as  it 
could  possibly  be  made.  But  it  is  said  that  this  restriction  applies  only  to 
bills  of  credit  which  are  made  a  legal  tender  in  the  payment  of  debts;  that 
bills  of  credit,  designated  in  the  constitution,  are,  ex  vi  termini,  a  legal  ten- 
der. For  the  correctness  of  this  exposition,  an  appeal  is  made  to  the  restric- 
tion which  immediately  follows  it,  which  restrains  the  right  of  the  States  to 
make  any  thing  but  gold  and  silver  a  legal  tender  in  the  payment  of  debts. 
It  appear  to  me  that  the  latter  restriction  excludes,  most  emphatically,  the 
construction  contended  for.  If  the  States  are  prohibited  from  emitting  bills 
of  credit,  it  would  have  been,  to  say  the  least  of  it,  wholly  nugatory  to  say 
they  should  not  make  them  a  legal  tender.  If  the  bills  are  not  emitted,  it  is 
impossible  that  they  can  be  made  a  legal  tender.  To  suppose  that  the  restric- 
tion upon  the  right  of  the  States  to  make  any  thing  but  gold  or  silver  a  legal 
tender  has  any  connexion  with,  or  influence  upon,  the  restriction  to  emit  bills 
of  credit,  is  as  absurd  as  to  suppose  that  the  decalogue,  after  having  declared, 
that  "  thou  shalt  do  no  murder,"  should  have  added,  but,  if  you  will  mur- 
der, you  shall  not  rob  and  strike  the  dead.  The  construction  of  the  re- 
traint  upon  the  right  to  make  any  thing  but  gold  or  silver  a  tender,  is,  that 
they  shall  not  make  specific  articles,  as  tobacco  or  cotton,  a  tender,  as  was 
the  case  in  some  of  the  States. 

But  it  is  said  that  the  history  of  the  States  will  show  that  the  bills  of  credit, 
specified  in  the  constitution,  were  those  only  which  were  a  legal  tender  in 
the  payment  of  debts.  Let  us  examine  this  point,  according  to  the  rule  of 
construction  applied  to  another  clause  in  the  constitution  by  a  large  majority 
of  both  Houses  of  Congress,  during  the  present  session.  Another  clause  in 
the  constitution  gives  Congress  the  power  to  admit  new  States  into  the  Union, 
under  two  limitations.  1st.  That  no  new  State  shall  be  formed  within  the 
limits  of  any  State,  without  the  consent  of  the  State;  and  2d.  That  no  new 
State  should  be  formed  by  the  junction  of  two  or  more  States,  without^  the 
consent  of  such  States,  and  also  of  Congress.  These  limitations  prove  that 
the  formation  of  new  States,  within  the  limits  of  the  United  States,  was  in 
the  view  of  the  convention  at  the  time  that  this  clause  was  adopted;  and  the  sub- 
sequent clause,  which  gives  Congress  the  power  to  make  rules  for  the  govern- 
ment of  its  territories,  proves  that  these  territories  were,  at  that  moment, 
under  consideration.  In  addition  to  these  reasons,  for  believing  that  the 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.       443 

framers  of  the  constitution  had  no  idea  of  forming  new  States,  beyond  the 
limits  of  the  United  States,  those  who  were  opposed  to  the  admission  of 
Orleans  as  a  State,  contended  that  the  history  of  the  United  States  proves, 
that  the  power  to  erect  new  States,  and  admit  them  into  the  Union,  was 
intended  to  be  confined  to  new  States  within  the  limits  of  the  United  States 
at  the  formation  of  the  constitution,  and  that  a  different  construction  would 
disparage  the  rights  of  the  original  States,  and  of  course  be  a  violation  of  the 
constitution.  What  reply  did  the  majority  of  Congress  give  to  this  train  of 
reasoning?  They  said  that  the  right  to  admit  new  States  cannot  be  subject  toany 
other  limitations  or  restrictions  than  those  which  are  contained  in  the  clause 
which  gives  the  right:  and  as  there  is  no  restriction  upon  the  right  to  erect 
new  States  without  the  then  limits  of  the  United  States,  Congress  have  an 
unlimited  right  to  erect  and  admit  them  into  the  Union.  Let  us  apply  the 
same  rule  ot  construction  to  the  restriction  of  the  right  of  the  States  to  emit 
bills  of  credit.  The  restriction  is  a  general  one;  it  has  no  exceptions;  and 
every  attempt  to  make  exceptions  ought  to  be  repelled  by  the  answer  which 
was  given  to  those  who  opposed  the  right  of  Congress  to  admit  the  territory 
of  Orleans  into  the  Union  as  a  State.  The  construction  I  have  contended 
for,  gains  additional  weight  when  we  consider  the  restriction  which  imme- 
diately precedes  that  under  consideration.  No  State  shall  coin  money,  emit 
bills  of  credit,  &c.  Bills  of  credit  are  but  the  representatives  of  money.  The 
constitution  gives  Congress  the  right  to  coin  money,  and  to  regulate  its  value. 
It  takes  from  the  States  the  right  to  coin  money,  and  to  emit  hills  of  credit. 
Why  give  to  Congress  the  tfght  to  coin  money,  and  regulate  its  value? 
Because  the  interest  of  the  nation  requires,  that  the  current  coin  of  the  nation 
should  be  uniform,  both  as  to  its  species  and  value.  If  this  is  the  true  reason 
why  the  right,  of  coining  money,  and  fixing  its  value,  was  given  to  Congress, 
does  not  the  right  to  i»ue  that  which  is  to  be  the  representative  of  this  coin: 
which  in  fact  is  to  usurp  its  place:  which  is  to  be  the  real  currency  of  the 
nation,  necessarily  belong  to  Congress?  Does  not  the  right  to  create  a  bank, 
which  shall  issue  this  representative  of  money,  come  within  the  same  reason? 
I  think  it  does. 

My  friend  from  Kentucky  (Mr.  CLAY)  contends  that  the  right  to  create 
a  bank  will  prove  destructive  to  the  rights  of  the  States,  because,  if  Congress 
can  incorporate  a  bank,  it  may,  under  some  pretext  or  other,  create  other  cor- 
porations, and  authorize  them  to  hold  real  and  personal  estate,  which  shall 
be  exempt  from  the  right  of  taxation  by  the  States.  That,  if  this  is  admitted, 
and  he  believes  it  generally  is  admitted,  that  the  States  cannot  tax  bank 
stock,  in  this  way  the  States  may  be  deprived  of  the  power  of  taxation.  Sir, 
I  am  one  of  those  who  do  not  admit  the  fact.  [Mr.  CLAY  said  that  he  did  riot 
admit  it  neither,  though  he  had  understood  the  bank  held  that  doctrine.  J  I 
am  extremely  glad  we  think  alike,  at  least,  upon  this  collateral  point.  The 
right  of  the  States  to  impose  taxes  is  unlimited  by  the  constitution  of  the 
United  States;  they,  therefore,  can  tax  every  species  of  property,  which  is 
within  their  legislative  jurisdiction.  The  unlimited  power  of  the  States  to 
impose  taxes  is,  in  all  probability,  the  true  cause  of  giving  to  Congress  the 
power  of  exclusive  legislation  over  all  places  which  should  be  selected  for  the 
erection  of  forts,  magazines,  arsenals,  and  dock  yards,  because  public  property, 
to  a  great  amount,  would  necessarily  be  collected  in  these  places,  and  but  for 
vesting  the  right  of  legislation  in  Congress  to  the  exclusion  of  the  States,  all 
this  property  would  have  been  subject  to  taxation,  which  would  have  produced 
great  embarrassment.  It  has  been  said,  not  indeed  upon  this  floor,  but  by 
men  for  whose  opinions  I  entertain  a  very  high  respect,  that  the  right  of  the 
States  to  tax  bank  stock  is  inconsistent  with  the  right  of  Congress  to  create 
a  bank.  That  the  right  of  taxation  destroys  the  right  to  create,  because  the 
States,  by  immoderate  taxation,  could  drive  the  bank  out  of  their  limits.  All 
arguments  drawn  from  the  abuse  of  a  right  ought  to  be  received  with  great 
caution;  but  if  it  is  entitled  to  any  weight  in  this  case,  it  equally  proves  the 
unconstitutionally  of  the  State  banks,  because  the  right  of  Congress  to  lay 
and  collect  taxes  is  subject  to  but  two  restrictions:  that  they  shall  be  uniform, 


444  BANK  OF  THE  UNITED  STATES, 

and  that  direct  taxes  shall  be  according  to  representation.  Suppose  Congress 
was  under  a  necessity  of  raising  $10,000,000  by  direct  tax,  the  whole  or  nearly 
the  whole  of  this  sum  might  be  imposed  upon  bank  stock?  and  by  that  means 
the  State  banks  totally  destroyed.  The  advocates  of  this  doctrine  are  also 
advocates  for  State  banks.  If  the  right  of  taxation  by  the  States]  proves  the 
unconstitutionality  of  the  Bank  of  me  United  States,  the  right  of  Congress 
to  tax,  equally  proves  the  unconstitutionality  of  the  State  banks. 

To  the  fervid  imagination  of  my  friend  from  Kentucky,  (Mr.  CLAY)  this 
power  to  create  a  bank  appears  to  be  more  terrific  than  was  the  lever  of 
Archimedes  to  the  frightened  imaginations  of  the  Romans,  when  they  beheld 
their  galleys  suddenly  lifted  up,  and  whirled  about  in  the  air,  arid  in  a  moment 
plunged  into  the  bosom  of  the  ocean.  Are  these  apprehensions  founded  in 
reason?  or  are  thev  the  chinieras  of  a  fervid  and  perturbed  imagination?  What 
limitation  does  the  constitution  contain  upon  the  power  to  lay  and  collect 
taxes,  imposts,  duties,  and  excises?  None  but  that  they  shall  be  uniform; 
which  is  no  limitation  of  the  amount  which  they  can  lay  and  collect.  What 
limitation  does  it  contain  upon  the  power  to  raise  and  support  armies?  None 
other  than  that  appropriations  shall  not  be  made  for  a  longer  term  than  two- 
years.  What  restriction  is  to  be  found  in  it,  upon  the  right  to  provide  and 
maintain  a  navy?  None.  What  upon  the  right  to  declare  war,  and  make 
peace?  None;  none.  Thus  the  constitution  gives  to  the  Government  of  the 
United  States  unlimited  power  over  your  purse?;  unlimited  power  to  raise 
armies  and  provide  navies;  unlimited  power  to  make  war  and  peace;  and  you 
are  alarmed,  you  are  terrified  at  the  power  to  create  a  bank  to  aid  it  in  the 
management  of  its  fiscal  operations.  Sir,  nothing  short  of  my  most  profound 
respect  for  honorable  gentlemen,  who  have  frightened  themselves  with  this 
bugbear,  could  induce  me  to  treat  the  subject  seriously.  Gentlemen  have 
said,  that  they  are  alarmed  at  the  exercise  of  this  power,  and  I  am  bound  to 
believe  them.  Sir,  after  giving  Congress  the  right  to  make  war  and  peace; 
the  right  to  impose  taxes,  impost,  duties,  arid  excises,  ad  libitum;  the  right  to 
raise  and  support  armies,  without  restriction  as  to  number  or  term  of  service; 
the  right  to  provide  and  maintain  a  navy  without  limitation;  I  cannot  bring 
myself  to  tremble  at  the  exercise  of  a  power  incidental  to  only  one  of  these 
tremendous  grants  of  power.  The  gentleman  from  Kentucky  (Mr.  CLAY) 
contends,  that  we  have  attempted  to  give  a  degree  of  weight  and  force  to 
what  we  are  pleased  to  call  precedents,  to  which  they  would  not  be  entitled 
in  those  tribunals  from  which  we  derive  all  of  our  ideas  of  precedents.  I  am 
happy  to  find  that  my  friend  from  Virginia  (Mr.  G.)  agrees  with  me  in  opinion 
upon  this  subject.  Indeed,  the  principal  difference  between  that  gentleman 
and  myself  is  confined  to  the  question  of  expedience.  He  thinks  that  the 
construction  which  has  been  given  to  the  constitution  ought  to  be  considered 
as  conclusive;  and  that  great  incovenience  will  be  produced  by  unsettling 
what  ought  to  be  considered  as  finally  settled  and  adjudged. 

I  agree,  also,  with  the  gentleman  from  Kentucky,  that  a  precedent,  to  have 
weight,  must  be  in  point;  that  the  issue  upon  which  the  decision  is  made  must 
be  the  same  as  that  in  which  it  is  adduced  as  authority.  To  this,  I  most 
heartily  agree,  and  will  rely  upon  it  to  show  that  the  cases  which  we  urged 
as  precedents  are  entitled  to  the  greatest  weight.  In  all  cases  between  indi- 
viduals, they  are  supposed  to  understand  their  own  interests,  and  their  own 
cases.  The  plaintiff  is  supposed  to  understand  the  point  upon  which  the  de- 
cision of  his  case  must  depend.  The  defendant  is  supposed  to  understand 
the  ground  of  his  defence.  They  make  up  an  issue,  either  of  fact  or  of  law. 
It  is  this  issue  which  is  to  be  tried.  Any  declaration  or  expression  of  the 
judge,  which  is  not  confined  to  the  issue,  is  of  course  entitled  to  no  weight. 
Well,  sir,  what  is  the  nature  of  the  precedents  upon  which  we  rely?  First, 
that  a  republican  Congress,  in  the  year  1804,  passed  a  law  extending  the 
operations  of  this  unconstitutional  institution,  as  they  contend,  into  territo- 
ries, to  which  they  had  no  right  to  extend  them  by  their  charter.  In  the  year 
1807,  they  pass  a  law  punishing  the  forging  of  their  bills.  Now,  sir,  my 
friend  from  Tennessee  (Mr.  ANDERSON)  says  that  those  who  passed  the  bank 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     445 

bill  were  afraid  to  venture  that  far — they  were  afraid  to  pass  a  law  to  punish 
the  conterfeiting  of  their  bills;  but,  in  the  year  1798,  in  the  plenitude  of  fede- 
ral domination,  they  passed  a  law  to  punish  counterfeiting  the  bills  of  the 
bank.  It  is  certainly  true,  that  the  federal  party  did  pass  this  bill  in  that  year; 
but  it  is  equally  true,  that  the  republican  party,  in  the  plenitude  of  their  power, 
did  pass  a  bill  of  the  same  kind  in  the  year  1807.  Well,  sir,  what  is  the  is- 
sue which  is  tendered  in  the  passage  of  every  bill  by  the  Congress  of  the 
United  States?  First,  That  the  constitution  gives  them  the  right  to  pass  the 
bill;  and  second,  That  it  is  expedient.  The  first,  sir,  is  the  most  important 
issue,  made  up  between  the  National  Legislature  and  the  People  of  the  United 
States,  in  passing  bills  by  which  their  rights  are  to  be  protected  or  violated. 
How,  then,  are  we  told  that  these  laws  passed  sub  sikntio?  That  the  consti- 
tutional right  of  Congress  to  pass  such  a  law  never  was  discussed,  or  even 
thought  ofF  Sir,  suppose  the  gentleman  from  Kentucky  had  constituted  me 
his  attorney  to  do  a  particular  act  for  him,  and  I  had  performed  an  act,  under 
that  power,  which  had  no  connexion  with  the  one  which  he  had  authorized  me 
to  perform,  and  when  charged  with  this  violation  of  my  trust,  I  should  gravely 

say,  really  I  never  examined  the  power,  but  took  it  for  granted  that  I  had  the 

right — that  in  fact  I  had  done  it  sub  sikntio — what  would  my  friend  from 
Kentucky  say  to  such  a  reply?  But,  suppose  I  had  taken  an  oath  to  discharge 
the  trust  with  fidelity  and  skill,  and  that  I  would,  in  all  things  touching  |the 
trust,  confine  myselt  to  the  power  delegated  to  me.  Suppose,  I  say,  under 
these  circumstances,  I  should  violate  this  trust — should  transcend  the  autho- 
rity given,  and  perform  an  act  clearly  not  delegated?  What  would  the  gen- 
tleman say  to  me,  when  I  gravely  told  him  that  I  had  not  particularly  exam- 
ined the  authority  under  which  1  had  acted—that  I  had  done  it  sub  sikntioP 
Sir,  this  way  of  disposing  of  these  formal  voluntary  acts  of  the  Government, 
sanctioning  the  legality  and  constitutionality  of  the  bank  charter,  will  not  be 
accepted.  Some  more  happy  expedient  must  be  devised.  But,  sir,  we  are 
told  that,  because  the  constitution  contains  within  itself  the  principles  of 
amendment,  that  if  any  doubts  existed  on  this  subject,  it  ought  to  have  been 
amended.  Whenever  the  States  have  conceived  their  rights  to  have  been 
affected  by  any  construction  which  has  been  given  to  the  constitution,  they 
have  shown  that  they  know  how  to  obtain  relief.  When  the  Supreme  Court 
of  the  United  States  undertook  to  support  the  doctrine  that  an  individual 
could  sue  a  State,  they  did  not  hesitate  to  interfere,  and  the  constitution  was 
amended.  When  an  embargo  was  laid,  in  the  year  1807,  those  States  who 
•were  most  inimical  to  that  measure  did  not  hesitate  to  offer  an  amendment  to 
the  constitution.  Whenever  a  construction  is  given  to  the  constitution  by  a 
legitimate  and  competent  authority,  those  who  are  opposed  to  that  construc- 
tion ought  to  propose  amendments,  and  not  those  who  are  satisfied  with  it.  If 
the  construction  given  to  the  constitution,  by  the  creation  of  the  bank,  was 
thought  by  the  republican  party  to  be  vicious,  then,  indeed,  have  they  been 
guilty  of  the  grossest  act  of  negligence.  It  was  in  their  power,  and  most  as- 
suredly it  was  their  duty,  to  have  amended  the  constitution,  either  by  express- 
ly giving  or  taking  away  the  power.  It  was  their  duty  to  have  settled  the 
question  forever.  Suppose,  sir,  you  now  decide  that  it  is  unconstitutional  for 
Congress  to  incorporate  a  bank;  this  will  not  settle  the  constitutional  ques- 
tion. It  will  unsettle  and  render  uncertain  what  has  been  settled  for  twenty 
years.  You  say  you  have  not  the  right  to  incorporate  a  bank.  Ten  years 
hence  other  men  come  into  power,  ana  say  they  have  the  right,  and  exercise 
that  right  for  twenty  years.  The  bank,  then,  will  have  been  constitutional  for 
twenty  years,  unconstitutional  for  ten  years,  and  constitutional  for  twenty 
more.  Are  we  to  go  on  in  this  unsettled,  miserable,  halting  manner?  God 
iorbid. 

Sir,  I  have  closed  the  observations  which  I  thought  it  my  duty  to 
make,  in  reply  to  the  comments  which  have  been  made  upon  trie  remarks 
which  I  had  previously  submitted  to  the  consideration  of  this  honorable  body. 
If,  sir,  I  preferred  my  political  standing  in  the  State  which  I  have  the  honor  to 
represent  (and,  sir,  I  do  not  profess  to  have  any  out  of  it)  to  the  public  vvel- 


446  BANK  OF  THE  UNITED  STATES. 

fare,  I  should  rejoice  at  the  success  of  the  motion  which  has  been  made  by  the 
honorable  gentleman  from  Tennessee,  (Mr.  ANDERSON.)  But,  sir,  as  1  be- 
lieve the  public  welfare  infinitely  more  important  than  any  fleeting  popularity 
which  an  individual  like  myself  can  expect  to  enjoy,  I  shall  most  sincerely 
regret  the  success  of  that  motion.  Sir,  I  have  said  but  little  about  the  degree 
of  distress  which  will  flow  from  the  dissolution  of  the  bank,  because  I  have 
not  that  kind  of  evidence  which  would  enable  me  to  judge  of  it  with  any  de- 
gree  of  accuracy.  The  convulsed  state,  of  the  European  nations — the  im- 
mense losses  which  our  commerce,  has  sustained  by  the  operation  of  the  de- 
crees and  orders  of  the  tyrants  of  the  land  and  the  ocean,  imperiously  admo- 
nish us  to  beware  of  making  untried  and  dangerous  experiments.  By  sup- 
porting this  institution,  the  tottering  credit  of  the  commercial  class  of  your 
citizens  may  be  upheld,  until  the  storm  shall  have  passed  over.  By  overturn- 
ing this  great  moneyed  institution,  at  the  present  crisis,  you  may  draw  down 
to  undistinguished  ruin  thousands  of  your  unfortunate  and  unoffending  fellow- 
citizens. 

The  question  was  then  taken  on  the  motion  to  strike  out,  and  was  decided 
as  follows:  Yeas  17,  Nays  17. 

Those  who  voted  in  the  affirmative,  were, 

Messrs.  Anderson,  Campbell,  Clay,  Cutts,  Franklin,  Gaillard,  German,  Giles, 
Gregg,  Lambert,  Leib,  Mathewson,  Reed,  Robinson,  Smith,  of  Maryland,  Whiteside, 
and  Worthington. 

Those  who  voted  in  the  negative,  are, 

Messrs.  Bayard,  Bradley,  Brent,  Champlin,  Condict,  Crawford,  Dana,  Gilman, 
Goodrich,  Horsey,  Lloyd,  "Pickering-,  Pope.  Smith,  of  New  York,  Tait,  Taylor,  and 
Turner. 

The  Senate  being  equally  divided,  the  President  (GEORGE  CLINTON)  de- 
termined the  question  in  the  affirmative,  first  submitting  to  the  Senate  the 
following  prefatory  remarks: 

GENTLEMEN:  As  the  subject  on  which  I  am  called  upon  to  decide,  has  ex- 
cited great  sensibility,  I  must  solicit  the  indulgence  of  the  Senate  whilst  I 
briefly  state  the  reasons  which  influence  my  judgment. 

Permit  me  to  observe,  that  the  question  to  be  decided  does  not  depend  sim- 
ply upon  the  right  of  Congress  to  establish,  under  any  modification,  a  bank,  but 
upon  their  power  to  establish  a  national  bank,  as  contemplated  by  this  bill.  In 
other  words,  can  they  create  a  body  politic  and  corporate,  not  constituting  a 
part  of  the  Government,  nor  otherwise  responsible  to  it  but  by  forfeiture  of 
charter,  and  bestow  on  its  members  privileges,  immunities,  and  exemptions, 
not  recognised  by  the  laws  of  the  States  nor  enjoyed  by  the  citizens  gene- 
rally? 

It  cannot  be  doubted  that  Congress  may  pass  all  necessary  and  proper  laws 
for  carrying  into  execution  the  powers  specifically  granted  to  the  Government 
or  to  any  department  or  officer  thereof;  but,  in  doing  so,  the  means  must  be 
suited  and  subordinate  to  the  end.  The  power  to  create  corporations  is  not 
expressly  granted;  it  is  a  high  attribute  ot  sovereignty,  and  in  its  nature  not 
accessorial  or  derivative  by  implication,  but  primary  and  independent. 

I  cannot  believe  that  this  interpretation  of  the  constitution  will,  in  any  de- 
gree, defeat  the  purposes  for  which  it  was  formed;  on  the  contrary,  it  does  ap- 
pear to  me  that  the  opposite  exposition  has  an  inevitable  tendency  to  conso- 
lidation, and  affords  just  and  serious  cause  of  alarm. 

In  the  course  of  a  long  life,  I  have  found  that  Government  is  not  to  be 
strengthened  by  an  assumption  of  doubtful  powers;  but  by  a  wise  and  ener- 
getic execution  of  those  which  are  incontestible;  the  former  never  fails  to 
produce  suspicion  and  distrust,  whilst  the  latter  inspires  respect  and  con 
fidence. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF    1791.  447 

If,  however,  after  a  fair  experiment,  the  powers  vested  in  the  Government 
shall  be  found  incompetent  to  the  attainment  of  the  objects  for  which  it  was 
instituted,  the  constitution  happily  furnishes  the  mean  for  remedying  the  evil 
by  amendment,  and  I  have  no  doubt  that,  in  such  event,  on  an  appeal  to  the 
patriotism  and  good  sense  of  the  community,  it  will  be  wisely  applied. 

I  will  not  trespass  upon  the  patience  of  the  Senate  any  longer  than  to  say, 
from  the  best  examination  I  have  been  able  to  give  the  subject,  I  am  constrain- 
ed, by  a  sense  of  duty,  to  decide  in  the  affirmative;  that  is,  that  the  first  section 
of  the  bill  be  stricken  out. 

FEBRUARY  21,  1811. 

On  motion  of  Mr.  LEIB, 

Ordered,  That  the  further  consideration  of  this  bill  be  postponed  to  the 
1st  Monday  in  December  next. 

FEBRUARY  22,  1811. 

Mr.  SMITH,  of  Maryland,  asked  and  obtained  leave  to  bring  in  a  bill  to 
repeal  the  10th  section  of  the  act,  entitled  "  An  act  to  incorporate  the  sub- 
scribers to  the  Bank  of  the  United  States;"  which  bill,  on  the  3d  of  March, 
on  motion  of  Mr.  SMITH,  was  postponed  to  the  1st  Monday  in  December 
next. 

The  said  10th  section  is  as  follows: 

"SEC.  10.  The  said  corporation  may  sell  any  part  of  the  public  debt, 
whereof  its  stock  shall  be  composed,  but  shall  not  be  at  liberty  to  purchase 
any  public  debt  whatsoever:  nor  shall,  directly  or  indirectly,  deal  or  trade  in 
any  thing,  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of 
goods  really  and  truly  pledged  tor  money  lent,  and  not  redeemed  in  due 
time;  or  of  goods  which  shall  be  the  produce  of  its  lands.  Neither  shall  the 
said  corporation  take  more  than  at  tne  rate  of  six  per  centum  per  annum  for 
or  upon  its  loans  or  discounts." 

This  bill  eventually  became  a  law,  and  was  approved  by  the  President  on 
the  19th  March, 


PROCEEDINGS  AFTER  THE   REJECTION   OF  THE  BILL. 

After  the  final  rejection  of  the  bill  to  renevy  the  charter,  the  bank  applied 
for  a  temporary  continuation  of  their  powers,  for  the  purpose  of  enabling  them 
to  close  up  their  affairs.  It  is  believed  that  two  years  was  the  time  solicited. 
The  memorial  of  the  bank  was  presented  simultaneously  in  the  House  and  in 
the  Senate,  but  appears  not  to  have  been  favorably  received  in  either.  The 
following  are  the  proceedings  which  took  place,  and  the  reports  that  were 
made  on  this  subject,  in  the  two  Houses. 

IN  SENATE. 

FEBRUARY  25,  1811. 

Mr.  LEIB  presented  the  memorial  of  the  Stockholders  of  the  Bank  of  the 
United  States,  praying  an  extension  of  their  charter  so  far  as  to  enable  them 
to  settle  the  accounts  of  the  bank,  for  reasons  therein  stated.  The  memorial 
was  read,  and,  on  motion  of  Mr.  LEIB, 

Resolved,  That  it  be  referred  to  a  select  committee,  to  consist  of  five  mem- 
bers, to  consider  and  report  thereon. 

Ordered^  That  Messrs.  Clay,  Franklin,  Leib,  Anderson,  and  Bayard,  be 
the  committee. 


4 

I 


448  BANK  OF  THE  UNITED  STATES. 

MARCH  2,  1811. 
Mr.  CLAY,  from  the  said  committee,  made  the  following  report: 

That  your  committee  have  duly  weighed  the  contents  of  the  memorial,  and 
deliberately  attended  to  such  explanations  of  the  views  of  the  memorialists  as 
they  have  thought  proper  to  present,  through  their  agents:  That,  holding  the 
opinion,  (as  a  majority  of  the  committee  do,)  that  the  constitution  did  not  autho- 
rize Congress,  originally,  to  grant  the  charter,  it  follows,  as  a  necessary  conse- 
quence ot  that  opinion,  that  an  extension  of  it,  even  under  the  restrictions 
contemplated  by  the  stockholders,  is  equally  repugnant  to  the  constitution. 
But,  if  it  were  possible  to  surmount  this  fundamental  objection,  and  if  that 
rule  which  forbids,  during  the  same  session  of  the  Senate,  the  re-agitation  of 
a  proposition  once  decided,  were  disregarded,  your  committee  would  still  be 
at  a  loss  to  find  any  sufficient  reasons  tor  prolonging  the  political  existence  of 
the  corporation,  for  the  purpose  of  winding  up  its  affairs:  for, 

As  it  respects  the  body  itself,  it  is  believed  that  the  existing  laws,  through 
the  instrumentality  of  a  trust,  properly  constituted,  afford  as  ample  means  as 
a  qualified  continuance  of  the  charter  would,  for  the  liquidation  of  its  accounts, 
and  the  collection  and  final  distribution  of  its  funds.  But,  should  any  incon- 
venience be  experienced  on  this  subject,  the  committee  are  persuaded  it  will 
be  very  partial,  and  such  as  the  State  authorities,  upon  proper  application, 
would  not  fail  to  provide  a  competent  remedy  for.  And, 

In  relation  to  me  community,  if  the  corporation,  stripped  of  its  banking 
powers,  were  to  fulfil,  bona  fide,  the  duty  of  closing  its  affairs,  your  commit- 
tee cannot  see  that  any  material  advantage  would  be  derived.  Whilst,  on 
the  contrary,  if  it  should  not  so  act,  but  snould  avail  itself  of  the  temporary 
prolongation,  in  order  to  effect  a  more  durable  extension  of  its  charter,  it 
might,  in  its  operations,  become  a  serious  scourge. 

Your  committee  are  happy  to  say,  that  they  learn,  from  a  satisfactory 
source,  that  the  apprehensions  which  were  indulged,  as  to  the  distress  result- 
ing from  anon -renewal  of  the  charter,  are  far  from  being  realised  in  Philadel- 
phia, to  which  their  information  has  been  confined.  It  was,  tong  since,  ob- 
vious, that  the  vacuum  in  the  circulation  of  the  country,  which  was  to  be 
produced  by  the  withdrawal  of  the  paper  of  the  Bank  of  the  United  States, 
would  be  filled  by  paper  issuing  from  other  banks.  This  operation  is  now 
actually  going  on 5  the  paper  of  the  Bank  of  the  United  States  is  rapidly  re- 
turning, and  that  of  other  banks  is  taking  its  place.  The  ability  to  enlarge 
their  accommodations  is  proportionately  enhanced;  and  when  it  shall  be  fur- 
ther increased  by  a  removal  into  their  vaults  of  those  deposites  which  are  in  the 
possession  of  the  Bank  of  the  United  States,  the  injurious  effects  of  a  dissolu- 
tion of  the  corporation  will  be  found  to  consist  in  an  accelerated  disclosure  of 
the  actual  condition  of  those  who  have  been  supported  by  the  credit  of  others, 
but  whose  insolvent  or  tottering  situation,  known  to  the  bank,  has  been  con- 
cealed from  the  public  at  large. 

Your  committee  beg  leave  to  present  the  following  resolution: 

Resolved,  That  the  prayer  of  the  memorialists  ought  not  to  be  granted. 


ON  THE  BILL  TO  RENEW  THE  CHAUTER  OK  1791.     449 


HOUSE  OF  REPRESENTATIVES. 

A  like  memorial  was,  also,  on  the  same  day,  presented  to  the  House,  and 
ordered  to  be  referred  to  a  select  committee,  to  consist  of  Mr.  P.  B.  Porter, 
Mr.  Eppes,  Mr.  Macon,  Mr.  Davenport,  Mr.  Wilson,  Mr.  Shaw,  Mr. 
Whitehill,  Mr.  Desha,  and  Mr.  Ringgold.  /• 

MARCUS,  1811. 
Mr.  P.  B.  PORTER,  IVojji  the  said  comm^tee,  made  the  following  report: 

The  committee,  to  whom  was  referred  the  memorial  of  the  Stockholders  of 
the  Bank  of  the  United  States,  report:" 

That  they  have  carefully  examined  the  various  matters  set  forth  in  the  said 
memorial,  and  attentively  listened  to  the  representations  of  the  gentlemen 
•who  have  appeared  in  behalf  of  the  said  petitioners.  The  object  of  the  memo- 
rialists is  to  obtain  an  extension  ot  their  corporate  powers,  beyond  the  period 
limited  for  the  expiration  of  their  charter,  so  as  to  enable  them  to  prosecute 
for  their  debts,  and  to  arrange,  liquidate,  and  close,  the  various  concerns  of 
the  company. 

The  committee  are  of  opinion  that  a  law  of  Congress,  granting  the  powers 
prayed  for,  would  facilitate  the  final  adjustment  of  the  affairs  of  the  bank, 
although  they  do  not  think  such  a  law  indispensable  to  that  object.  But,  be- 
lieving, as  your  committee  do,  that,  in  granting  the  original  charter  to  the 
stockholders,  Congress  transcended  the  legitimate  powers  of  the  constitu- 
tion, the  same  objection  now  presents  itself  to  the  extension  of  any  of  their 
corporate  capacities. 

If  the  committee  had  time  to  go  into  the  investigation]  and  to  present  to 
the  House  the  various  reasons  which  have  conduced  to  this  opinion,  it  would 
be  more  than  useless  to  divert  its  attention  from  the  important  concerns  of 
the  nation,  at  this  late  period  of  the  session/to  a  subject,  which,  but  a  few 
Hays  since,  was  so  fully  and  elaborately  discussed. 

They,  therefore,  beg  leave  to  recommend  the  following  resolution: 

Resolved,  That  the  prayer  of  the  memorialists  ought  not  to  be  granted. 


DEBATE  IN   THE  HOUSE  OF  REPRESENTATIVES,   IN    1810, 

On  the  reference  of  the  Memorial  of  the   Stockholders,   and  on  the  Sill 
reported  by  Mr.  Taylor,  of  South  Carolina.* 

HOUSE  OF  REPRESENTATIVES,  March  29,  1810. 

Mr.  TAYLOR  said  it  would  be  recollected  that  several  projects  on  the  subject 
of  the  Bank  of  the  United  States  had  been  offered  during  the  present  session; 
some  to  this  House  and  one  to  the  Senate,  in  the  form  of  a  bdl  now  laid  on 
the  tables  of  members.  Some  days  ago,  said  Mr.  T.  one  of  the  plans  for  con- 
stituting or  raising  a  Bank  of  the  United  States,  which  had  been  committed 
to  a  committee  of  the  whole  House,  was,  by  the  original  proposer,  removed 
from  the  committee  of  the  whole  House,  and  referred  to  a  select  committee. 

*  The  reader  is  requested  to  excuse  the  omission  of  this  debate  in  its  proper 
place:  it  should  have  appeared  at  pages  122  and  134  ante.  By  reference  to  those 
pages,  it  will  be  seen  that,  on  the  13th  of  April,  1810,  the  House  went  into  a  Com- 
mittee of  the  Whole  on  the  bill,  and,  on  rising,  were  refused  permission  to  sit  again. 
This  debate  took  place  in  Committee  of  the  Whole. 
57 


450  BANK  OF  THE  UNITED  STATES. 

He  said  lie  believed  it  all  important  to  the  nation,  that  the  project  which 
should  be  most  advantageous  should  be  presented  to  the  decision  of  the  House, 
Other  projects  were  now,  perhaps,  in  a  train  for  being  offered  in  detail;  and 
it  would  probably  be  found  that  the  renewal  of  the  charter  of  the  Bank  of  the 
United  States  would  be  the  most  advantageous  course.  He  would  not  now 
express  an  opinion  one  way  or  the  other,  but  rose  for  the  purpose  of  advocating 
fair  play,  by  giving  the  House  a  choice  of  plans.  With  that  view,  and  to  give 
all  the  proposed  plans  an  equal  chance,  he  moved  that  the  committee  of  the 
whole  should  be  discharged  from  the  further  consideration  of  the  report  of 
the  committee  on  the  memorial  of  the  stockholders  of  the  Bank  of  the  united 
States,  and  refer  it  to  a  select  committee,  with  a  view  to  report  a  bill. 

The  question  on  discharging  the  committee  of  the  whole  from  the  report, 
was  carried  without  a  division. 

On  the  question  of  referring  the  report  to  a  select  committee, 

Mr.  LOVE  said  he  should  support  the  motion,  because  he  felt  convinced 
the  House  would,  with  difficulty ,£f  ever,  come  to  a  decision  on  apian,  if  the 
discussion  commenced  on  a  resolution,  and  was  afterwards  to  be  repeated  on 
a  bill. 

Mr.  BASSETT  was  opposed  to  the  reference.  He  thought  the  House  ought 
to  try  the  question  on  principle,  before  they  entered  into  any  details. 

Mr.  TAYLOR  said,  his  only  object  was  fair  play.  The  Senate  would,  with 
their  bill,  anticipate  the  House;  and  though  their  plan  might  not  be  deemed 
the  best,  the  regular  troops  had,  before  now,  defeated  the  militia,  and  might 
again.  He  only  asked  the  same  indulgence  as  had  been  accorded  to  the  pro- 
position of  the  gentleman  from  Virginia  (Mr.  LOVE)  a  few  days  ago. 

Mr.  GHOLSON  thought  this  reference  would  operate  as  a  delay:  for,  if  a  dis- 
cussion on  any  bill  on  the  subject  of  a  bank  was  pressed,  the  House  would  be 
told,  the  subject  was  yet  before  a  committee,  and  that  they  ought  to  wait  for 
its  report. 

Mr.  QUINCY  spoke  in  favor  of  a  commitment. 

Mr.  LOVE  said  he  had  moved  the  reference  of  his  proposition  to  a  select 
committee,  because  he  believed  it  would  be  practicable  to  report  a  bill  which 
would  not  conflict  with  any  constitutional  provision.  He  did  not  agree,  how- 
ever, that  the  proposition  to  commit  thisr  was  precisely  of  a  similar  nature 
with  that  which  was  agreed  to  in  relation  to  his.  The  difference  was  in  this, 
that,  in  the  present  case,  a  constitutional  difficulty  occurred  on  the  face  of  the 
proposition,  and  which  would  be  decided  without  seeing  the  details  of  a  bill, 
while  the  same  objection  could  not  apply  to  a  general  proposition  for  a  national 
bank:  for,  till  its  features  were  presented  in  detail,  the  objections  to  it  could 
not  be  known. 

Mr.  PITKIN  was  for  commitment.  He  wished  to  see  the  conditions  on 
which  the  charter  was  to  be  continued.  He  did  not  say  what  all  the  eondi- 
tions  should  be,  but  one  must  be,  in  his  opinion,  that  the  individuals  should 
pay  a  handsome  sum  into  the  public  treasury;  that  the  United  States  should 
have  the  benefit  of  the  renewal,  and  that  it  should  not  be  put  into  the  pockets 
of  individuals.  His  vote  might  be  governed  by  the  sum  to  be  given,  and 
therefore  he  wished  to  see  the  plan  in  detail. 

«.  Mr.  DANA  said,  lie  had  rather  that  the  whole  question,  as  respected  both 
propositions,  should  have  been  agitated  in  committee  ot  the  Whole.  It  those 
whose  business  it  was  to  administer  the  affairs  of  the  Government,  said  that 
the  business  of  the  Government  could  be  conducted  without  a  bank,  and  that 
they  would  undertake  to  do  without  it,  Mr.  D.  said,  he  was  willing  to  let  the 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF  1791. 

whole  go.  He  thought  there  was  an  incongruity  in  having  the  subject  of 
banks  referred  to  two  distinct  committees,  as  they  would  probably  be  con- 
tinually carrying  on  war  on  the  frontiers  of  each  other's  territories. 

Mr.  GOLD  expatiated  on  the  inconveniences  that  would  result  from  a  double 
discussion,  first  on  a  resolution  and  then  on  a  bill.  He  did  not  conceive,  with 
Mr.  LOVE,  that  the  question  would  be  on  a  simple  renewal  of  the  present 
charter  of  the  Bank  of  the  United  States,  but  that  an  extensive  revision  and 
modification  of  the  former  system  was  contemplated.  It  was  indispensable 
that  the  subject  should  be  presented  as  much  in  detail  as  possible.  The  House 
would  not  at  all  commit  itself  by  voting  for  this  motion. 

Mr.  MACON  said  it  was  but  fair  to  give  both  projects  the  same  course.  He 
had  no  fear  of  collision  between  the  two  committees.  He  recollected,  indeed, 
once  a  contest  between  the  military  and  naval  committees,  to  which  of  the  two 
the  gun  boats  belonged;  but  the  same  subject  was  often  before  two  different 
committees,  without  producing  difficulties;  as,  for  instance,  the  two  convoy 
bills  were  reported,  during  this  session,  by  different  committees.  It  was  pre- 
fectly  fair,  he  thought,  to  refer  to  one  committee,  the  question  whether  the 
charter  of  the  Bank  of  the  United  States  should  be  renewed,  and  to  another, 
the  question  whether  a  bank  should  be  established  on  a  plan  altogether  new. 

The  motion  for  reference  to  a  select  committee  was  carried. 

\)>KIL  13,  1810. 

In  committee  of  the  whole  House,  Mr.  LOVE,  of  Virginia,  moved  to  strike 
out  the  first  section  of  the  bill. 

^  On  this  motion  a  debate  arose,  in  which  Mr.  LOVE,  Mr.  TAYLOR,  and  Mr. 
FINDLEY,  participated.     Their  speeches  are  given  as  follows: 

Mr.  LOVE.— He  lamented  that  he  was  compelled  to  come  to  a  decision  on 
the  question  without  having  obtained  the  information  he  had  solicited  a  few 
days  before;  and  assured  the  committee  he  had  not  called  for  information,  as 
to  the  names  of  the  stockholders,  from  any  view  to  weaken  the  support  the  mea- 
sure proposed  would  have,  from  a  disclosure  of  the  names  of  tnose  members 
who  were  stockholders  in  the  Bank  of  the  United  Statesmen  the  contrary,  he 
would  not  for  a  moment  doubt,  that  all  such  would  voluntarily  and  from  choice 
decline  voting  on  the  question,  not  only  from  their  sense  of  propriety,  but 
trom  a  knowledge  of  the  imperative  rule  of  the  House,  which  forbids  a  mem- 
ber from  voting  where  his  interest  is  concerned.  He  could  not  fear  that  any 
gentleman  of  that  House  would  do  an  act  to  which  might  be  attributed  so  im- 
proper a  motive  as  that  of  advancing  his  particular  property  fifty  per  cent, 
in  value,  and  making  his  share  of  bank  stock,  now  worth  400  dollars,  by  his  own 
vote,  worth  600,  or  perhaps  much  more.  But  his  principal  ground  for  the  gene- 
ral call  of  the  names  of  the  stockholders  was  to  check  the  statement  of  foreign, 
by  exhibiting  the  domestic  stockholders.  Mr.  L.  next  adverted  to  the  infor- 
mation which  had  been  given  to  the  Senate  by  the  Secretary  of  the  Treasury, 
in  reply  to  an  inquiry  made  relative  to  the  capital  distributed  to  the  branches, 
and  the  dividends  stated  to  be  yielded  by  them;  he  said  there  was  certainly  a 
most  gross  misrepresentation  in  the  statements  of  that  report,  relative  to  the 
profits  divided  at  the  principal  bank  in  Philadelphia. 

The  portion  of  the  capital  assigned  to  the  branches  was  stated  in  the  report 
at  5.300,000  dollars;  and  those  branches  had  discounted,  by  the  last  returns, 
to  the  amount  of  11,964,000  dollars,  yielding  a  gross  profit  of  more  than  thir- 
teen per  cent.  The  capital  retained  in  Philadelphia  was  to  the.  amount  of 
4,700,000  dollars,  granting,  by  the  report,  discounts  to  the  amount  of  $4,572,000 
only.  He  'remarked  on  the  improbability  of  the  correctness  of  the  latter 
part  of  the  report,  because  he  said  it  was  well  known  that  bank  capital  had 
been  used  as  profitably  in  Philadelphia  as  in  any  other  town,  and  the  State 
banks,  unaided  by  the  depesites  ofthe  Government  ol  the  United  States,  had 


4f)'-J  TtAXK  OF  TIIK  UNITED  STATES. 

yielded  so  great  a  dividend  as  to  make  the  stock  of  those  banks  worth  from 
35  to  50  per  cent,  which  he  adverted  to  in  detail:  and  deduced  from  that  circum- 
stance the  impossibility  of  the  truth  of  the  information  on  which  the  report  was 
grounded.  He  therefore  thought  it  at  least  fair  to  state  the  profits  of  the  princi- 
pal bank  at  the  same  which  he  believed  the  branch  banks  had  honestly  reported 
of  themselves:  and  it  will  be  found  that,  after  the  deduction  for  losses  (that 
probably  never  happened)  and  contingencies  never  expected  to  take  place,  it 
would  yield  a  nett  dividend  on  the  institution  of  more  than  11  per  cent,  pel- 
annum,  instead  of  8§ths,  as  had  been  reported  by  the  Secretary  of  the  Treasury, 
on  the  statements  of  the  officers  of  the  bank. 

Mr.  L.  said  he  would  advert  to  other  instances  of  attempts  to  deceive  the 
Legislature  of  the  United  States,  discovered  in  the  memorial  of  the  stockhold- 
ers of  the  bank  or  their  agents.  They  had  stated  themselves  entitled  to  an 
honorable  claim  on  the  patronage  of  the  Government,  for  several  reasons: 
first,  in  having  enriched  the  treasury,  by  the  share  the  Government  subscrib- 
ed to  the  stock.  In  answer  to  this  Mr.  L.  said,  the  Government  composed 
originally  a  part  of  the  company;  that  it  had  the  right,  like  other  stockholders, 
to  sell  out;  it  would  have  been  hard  to  deprive  it  of  that  right,  as  it  had  no 
voice  in  the  direction,  as  other  stockholders  had:  but,  as  it  was  a  part  of  the 
original  plan,  no  party  to  it  had  a  ridit  to  complain.  As  well  might  the  Unit- 
ed States  claim  from  individual  stockholders  a  part  of  their  profits  when  they 
may  have  sold  their  stock;  but  admitting  Government  made  650,000  dollars, 
as  we  are  told,  by  its  stock,  and  that  the  other  stockholders  may  charge  this 
item  fairly,  the  Government  can  certainly  oft-set  it,  by  showing  that  the  in- 
dividual stockholders  who  held  the  six  per  cent,  debt,  as  a  part  of  the  bank 
capital, have  also  sold  at  an  advance,  and  out  of  the  public  made  their  sales  at 
least  to  this  amount. 

Another  honorable  claim  is  said  to  be  in  having  loaned  Government  great 
sums  of  money.  Mr.  L.  said  it  might  be  true,  and  it  was  also  true  that  they 
had  received  G  per  cent,  for  the  loan,  although  a  great  part  of  the  money  loan- 
ed was  actually  borrowed  by  the  bank,  in  Holland,  at  a  rate  of  interest  pro- 
bably less  than  4  per  cent.  This  item  of  honorable  claim,  then,  consisted  of 
making  about  2  per  cent,  clear  money  out  of  the  Government:  if  this  loan 
formed  an  honorable  claim  to  the  management  of  our  money  matters,  France 
and  Holland,  it  was  certain,  had  much  more  honorable  claims,  as  they  loaned 
us  money  when  our  distresses  were  much  greater,  without  a  pledge  of  antici- 
pated revenue  for  reimbursement,  as  this  bank  has  had.  But  the  truth  was, 
that  any  bank  could,  if  it  chose,  loan  to  Government  for  much  less  than  to 
individuals,  because,  in  case  of  a  press  for  money,  the  debt  due  from  the  Go- 
vernment would  always  command  specie  in  the  market,  either  by  pledges  or 
otherwise;  a  bank  could,  therefore,  discount  to  individuals  on  the  credit  of 
the  very  debt  which  was  due  them  by  Government,  at  all  times,  to  the  a- 
mount  of  one  half  of  it,  and  would,  therefore,  lose  nothing  by  loaning  to  the 
United  States  at  three  per  cent. 

Next,  it  was  said,  the  bank  had  enabled  the  Government  to  collect  its  re- 
venue/ Mr.  L.  ridiculed  this  idea,  and  said,  that  the  State  banks  would,  very 
thankfully,  take  this  trouble,  as  well  as  many  others  the  United  States  com- 
plained of  as  very  onerous.  But,  last  of  all,  the  idea  of  the  branch  banks 
having  been  a  charge  to  the  institution,  is  least  capable  of  being  supported, 
after  the  report  to  the  Senate  of  the  3d  instant,  by  which,  it  seems  those  banks 
have  averaged  a  dividend  of  more  than  thirteen  per  cent.,  while  the  principal 
bank  had  not  given  six  per  cent,  according  to  their  own  account.  He  said. 
he  had  mentioned  those  things  only  because  they  looked  like  an  attempt  to 
impose  on  a  Legislature  they  might  presume  to  be  ignorant  of  its  rights. 

Mr.  L.  then  said,  he  would  consider  the  question  of  continuing  the  United 
States'  Bank  company's  charter  on  two  grounds,  principally. 

First*  As  to  the  neceasity  which  existed  for  such  a  measure. 

Secondly,  As   to  the  policy,  if  no  real  necessity  existed. 

And,  as  to  the  first,  he  said,  it  was  easy  to  prove  that,  as  it  respected  the 
interests  of  the  community  at  large,  there  was  no  necessity  for  it;  but.  that  a 


ON  THE  BILL  TO  RENEW  THK  CHARTER  OF   1791.  453 

benefit  would  result  from  its  immediate  dissolution.  From  the  report  of  the 
Secretary  of  the  Treasury  it  appeared  they  had  $5,000,000  of  specie  in  their 
vaults  dead  and  taken  out  of  circulation;  for  which,  they  had,  according  to 
the  report  given  us,  a  circulation  in  bank  notes  to  the  amount  of  4,500,000  dol- 
The  public,  then,  lost  a  circulation  of  500.000  dollars,  besides  exchange 
of  specie  for  paper — 500,000  dollars  lay  dead  and  buried  in  the  vaults  of  this 
bank ! 

The  public,  it  is  said,  are  under  the  necessity  to  renew  this  charter,  be- 
cause the  amount  of  stock  held  by  foreigners  would  immediately  be  sent  to 
them  in  specie.  Mr.  L.  controverted  the  correctness  of  this  position,  and 
said  it  was  contrary  to  the  known  Mite  of  facts)  that  foreigners  would  not 
withdraw  a  capital  from  this  country  when  they  could  get  six  percent,  in  our 
public  debt  for  it,  in  order  to  carry  it  home  and  get  three  or  four  per  cent, 
which  was  the  most  to  be  got  in  Europe;  they  would  not,  because  tnev  could 
no  longer  get  double  as  much  as  in  Europe,  refuse  to  take  half  as  much  more; 
and  this  they  might  do  bv  buying  the  public  debt,  which  was  to  be  had  at  two 
per  cent,  above  par;  and  their  holding  that  would  produce  no  danger  of  their 
exercising  an  influence  in  our  commercial  towns,  but,  on  the  contrary,  asafe- 
-  they  would  have  a  stake  in  the  stability  of  our  Government,  without  the 
power  of  managing  our  revenues. 

But,  for  argument  sake,  he  would  admit,  that  foreigners  might  be  guilty 
of  the  folly  of  losing  so  much,  becau.se  they  could  .  a  great  deal  more, 

and  endeavor  to  .show   that,  if  they  did,  contrary   to  a  sense  of  their  own  in- 
interests,  withdraw   this   capital,    it   would    produce  infinitely   less   evil   to 
•  mntry  than  t<,  continue  their  charter,   even   with   its  present  capital. 
$7,300,000  of  the  whole  capital   belo-  :  $2,300,000  ot  the 

whole  capital  consisted  of  the  public  debt  of  6  per  cent.  Deduct  this  sum. 
say  only  one  fifth,  would  Iea\<  'led  for,  in  specie,  to  the  whole  number 

of  stockholders,  eight  millions  of  dollars.  Three-fourths  ftf  this,  or  $6,000,000, 
belongs  to  foreigners;  five  millions  of  the  whole  capital  they  already  have; 
it  lies  in  their  vaults,  dead.  They  could  only  wind  up  with  an  additional 
three  millions  of  specie.  Three  fourths  ofihU  three  millions  foreigners  might 
withdraw,  which  is  now  in  use  in  this  country,  to  wit:  the  sum  of  82.250,000; 
it  was  all  the  community  could  feel  the  lo-"s  «.f.  But  continue  the  bank, 
and.  according  to  the  principles  shown,  relative  to  actual  nett  dividends, 
foreigners  now  get  from  us  about  $1,000,000  per  annum,  and  according  to  the 
rate  of  dividend  admitted  by  the  Secretary  of  the  T  foreigners  get 

from  us  eight  and  three-eighths  percent,  on  three-fourths,  or  nearly,  of  ten 
millions,  equal,  at  least,  to  the  sum  of  about  $630,000  per  annum;  by 
which,  in  less  than  four  years,  a  larger  amount  in  specie  would  be  remitted  in 
interest,  than  the  specie  capital  now  to  be  lost:  for  the  stockholders  in  Europe 
live  upon  the  interest.  As  soon  as  the  dividend  is  declared,  it  draw-  no  more, 
and  is  remitted. 

Mr.  L.   said  there  never  was  a   time  when  this   country   could   spare; in- 
specie,  if  it  was  to  be  taken  away,  better  than  the  present,  and  he  hoped  there- 
would  be  a  time:  for  it  was  a  known  fact,  that  the  orders  of  the  belliger- 
-  >  narrowed  commercial  pursuits,  that  a  very  small  sum  was  employ- 
ed in  that  way.  and  immen-e  quantities  of  specie  were  now  in  the  country;  as 
a  proof  of  it  he  referred  the  gentleman  from  South  Carolina  to  his  own  Sta 
which  a  bank  had  lately  been  established,  and  in  a  lew  hours  greatly  over  sub- 
scribed.    .So.  tM>.  in   Baltimore,  where  several   had  been  established,  and  in 
other   mercantile  towns  of  the   United  In  addition  to  these  f< 

the  report  from  the  mint  informed  us  that,  in  the  last  year,  near  a  million  had 
been  coined,  and  bullion  remained  on  hand,  more  than  they  could  work  up. 
Another  circumstance,  worthy  of  notice,  to  prove  that  our  situation  was 
and  that  the  little  trade  we  had  did  yield  a  balance  in  our  favor,  our   mer' 
chants  are  not  in  want  of  remittances;  bills  of  exchange  on  London  ai 
eral  per  cent,  below  par. 

Mr.  L.  next  adverted  to  the  evils  which  were  said  to  be  likely  to  arise  to  in- 
dividuals from  the  dissolution  of  the  charter,  and  contended  that  the}  w»-re 


454  BANK  OF  THE  UNITED  STATES. 

not  real;  that  much  had  been  said,  in  and  out  of  doors,  to  excite  alarm  on  this 
subject.  To  prove  them  not  real,  take,  said  Mr.  L.  the  discounts  at  any  one 
of  the  branches,  or  the  mother  bank.  At  Boston,  for  instance,  the  loans  were 
to  the  amount  of  about  1,000,000  on  a  capital  of  about  700,000  dollars.  The 
agent  of  the  bank  has  voluntarily  stated  (being  admitted  at  his  own  request 
before  a'committee)  that  the  discounts  of  the  bank  were  to  the  amount  of  three 
fourths  on  real  paper.  Then,  in  Boston,  750,000  dollars  is  discounted  on  bills 
ol§  notes,  given  for  value  between  merchant  and  merchant,  for  sales  and  pur- 
chases, which  are  always  paid  at  maturity,  but  for  which  the  holders  want 
the  money  sixty  days  before  hand;  this  business  could  as  well  be.  done,  every 
body  knew,  by  private  bankers,  who  would  be  very  glad  of  it,  or  other  banks 
will  always  give  the  preference  to  this  sort  of  paper.  It  is  no  inconvenience  to 
the  monyed  interest  to  discount  this,  as  they  are  sure  of  their  capital  again  in 
sixty  days,  and  they  can,  in  the  mean  time,  turn  it  over,  if  occasion  requires. 

There  is  left,  then,  250,000  dollars  due  from  what  is  called  the  standing 
customers.  It  is  a  well  known  fact  that  the  United  States'  Bank  has,  from  the 
advantages  the  deposites  of  revenue  has  given  them,  had  their  choice  of  cus- 
tomers; and  give  to  any  other  bank  in  their  vicinity  their  deposites,  they  will 
be  very  glad  to  take  those  customers  off  their  hands,  and  to  four  times  the 
amount  of  them  if  necessary. 

New  York  has  loaned  on  its  capital  the  greatest  proportion  in  amount  of 
any  of  the  branches.  On  $1,800,000  it  has  loaned  $4,175,000.  This  has  been 
done,  the  report  of  the  bank,  sanctioned  by  the  Secretary  of  the  Treasury,  to 
the  contrary  notwithstanding,  on  the  amount  of  deposites  there;  the  immense 
deposites  of  revenue  collected  there.  Give  them  to  the  State  banks,  they  will 
accommodate  the  constant  customers,  very  gladly,  to  the  amount  of  one- 
fourth,  as  has  been  stated;  or,  if  necessary,  no  doubt  can  be  entertained  to  the 
whole  amount  of  the  $4,000,000. 

So,  said  Mr.  L. ,  of  the  other  branches  in  the  other  towns;  but,  taking  the 
whole  together,  the  debt  to  be  continued  to  individuals  would  still  be  reduced; 
something  was  due  by  mortgage  and  bond;  how  much  no  one  but  the  branch 
owners  know,  supposing  one-fourth  of  the  standing  debt,  which  may  be  sup- 
posed, after  twenty  years  operation,  and  the  whole  sum  with  which  individu- 
als would  require  to  be  accommodated,  would  be  less  than  three  millions  in 
all  the  banks. 

Having  showed  that  there  was  no  necessity,  either  of  a  public  or  private  na- 
ture, which  imposed  the  continuance  of  the  charter  of  the  United  States'  Bank, 
Mr.  L.  said  he  would  endeavor  to  prove  that  it  would  be  highly  impolitic, 
and,  he  believed,  dangerous  to  the  safety  of  the  country  to  dp  so.  It  was  a 
principle  which  the  old  charter  claimed,  and  which  was  again  to  be  recog- 
nised by  the  bill  before  the  House,  that  the  Government  of  the  United  States 
should  have  no  control  or  even  superintendence  over  the  institution.  Hewasone 
of  those  who  thought  this  power  ought,  in  some  degree,  to  be  reserved  by  Go- 
vernment, as  their  share  in  the  contract,  where  it  was  of  much  magnitude,  and 
to  operate  so  materially  on  the  general  interest,  as  well  private  as  political,  of 
the  community.  It  was  true,  the  Secretary  of  the  Treasury  had,  in  his  re- 
port, seemed  to  suppose  that  the  United  States  had  a  control  over  this  institu- 
tion, because  it  derived  its  charter  from  the  National  Legislature.  He  could 
not  see  the  force  of  the  observation,  inasmuch  as,  after  the  grant  was  made, 
it  was  held  independently,  and  he  believed  that  the  weekly  returns  of  gene- 
ral accounts  to  me  office  of  the  Secretary,  which  was  the  only  thing  required 
to  be  done  by  the  bank  officers,  could  aftbrd  but  a  feeble  check  upon  their 
transactions;  it  might  amuse  a  gentleman  fond  of  looking  over  statements  of  that 
kind,  but  what  use  could  be  made  of  them?  Or  how  was  it  ascertained  they 
were  correct?  It  had  been  proved  in  the  report  made  on  them,  of  the  third  in- 
stant, that  they  were  utterly  fallacious,  and  could  only  lead  to  deception; 
and  where  was  the  remedy?  You  cannot  penetrate  into  the  arcana*  the  hid- 
den springs  of  the  money  engine.  It  would  not,  perhaps,  be  correct  that  Go- 
vernment should  have  such  an  influence  in  the  conduct  of  a  bank  as  to 
control  its  operations,  but  he  believed  it  to  be  correct  that  Government 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      455 

should  have  a  few  directors,  who  would  operate  at  least  as  a  chock,  and 
through  the  medium  of  whom,  some  correct  iLfprmation  might  bo  got,  when 
necessary,  of  the  secret  operations  of  a  secret  tribunal. 

His  next  objection,  on  the  ground  of  policy,  was,  to  foreigners  holding  stock 
at  all  in  a  bank  which  is  used  for  national  purposes,  and  which  particularly  is 
contemplated  to  have  the  sale  keeping  of  the  revenues  of  the  country.  Ac- 
cording to  this  charter  and  the  proposed  bill,  there  was  nothing  to  prevent  fo- 
reigners from  holding  the  whole  of  the  stock 5  and,  indeed,  it  was  most  cer- 
tain (Mr.  L.  said)  that  foreigners  would  very  soon  become  the  sole  stock- 
holders. In  March,  1809,  they  had  nearly  three -fourths.  Since  that  time 
the  United  States'  bank  stock  in  London  had  been  several  per  cent,  above 
the  American  market  price  for  the  article.  It  was,  therefore,  a  profitable  re- 
mittance, which  he  did  not  doubt  had  taken  place  at  the  time  bills  were  high, 
and  our  produce  subject  to  seizure  in  every  European  sea.  The  bill  proposed 
the  creation  of  twenty-five  thousand  shares,  nearly  equal  to  $10,000,000, 
which  could  only  be  sold  to  a  great  profit  in  Europe,  and  there  he  supposed  it 
would  be  sent  for  a  market.  Foreigners  will  then  possess  in  our  country  a 
capital  of  nearly  20,000,000  of  dollars,  affording  a  circulation  to  three  times 
the  amount,  if  they  choose,  which  must  influence  every  part  of  society;  nor 
would  the  United  States  be  at  all  exempt  from  the  injurious  effects  of  this  in- 
fluence, from  a  false  reliance  on  the  discretion  of  her  citizens.  Those  citi- 
zen directors  would  be  elected  by  foreigners.  King  George  the  3d  or  the 
Emperor  Bonaparte,  may  send  their  men,  the  ostensible  owners  of  the  stock, 
who  may  easily  find,  among  the  citizens  of  the  republic,  the  friends  and  ad- 
vocates of  crowned  heads.  The  former,  it  is  said,  already  owns  a  consider- 
able' portion  of  this  bank,  and  the  latter,  should  he  ever  design  a  vital  injury 
to  this  country,  could  in  n:>  way  so  successfully  effect  it,  as  by  taking  the 
management  of  our  money  matters.  To  buy  this  engine  would  cost  him  but 
the  sum  of  twenty  or  thirty  millions  of  dollars — nothing  to  the  man  who  has 
in  his  hands  the  resources  of  the  continent  of  Europe.  If  gentlemen's  fears, 
so  often  expressed  on  this  floor,  have  not  all  been  mere  affectation,  and  in- 
tended to  mislead  us  into  dangerous  alliances  with  England,  let  them  reflect 
on  this  subject. 

Besides  the  political  point  of  ruin,  there  was  yet  another  in  which  the  im- 
policy of  permitting  foreigners  to  control  such  an  engine  among  us  was  most 
glaring.  Having  the  efficient  power,  and  it  being  not  improbable  that  foreign- 
ers might  of  necessity  be  compelled  to  exercise  it,  when  all  the  stock  shall 
have  gone  into  foreign  hands,  they  would  easily  manage  to  choose  such  a  direc- 
tion as  would  give  the  accommodations  from  the  bank  in  such  a  way,  as  to 
favor  and  prevent  any  particular  course  of  trade,  most  beneficial  to  themselves, 
and  injurious  to  the  United  States;  and  this,  independently  of  the  political 
favoritism  which  it  is  said  has  already  been  pretty  generally  exercised.  In 
order  to  make  himself  better  understood,  Mr.  L.  said  he  would  suppose  a 
case,  and  put  it  in  such  form  as  would  not  be  repugnant  to  the  feelings  of  any 
one  in  the  House.  Suppose  Bonaparte  was  to  make  the  French  a  great  com- 
mercial nation;  that  they  were  to  form  connexions  with  very  many  of  our 
American  merchants  in  our  own  country;  that  the  profits  on  their  trade  were 
to  become  identified,  and  their  course  of  trade  the  same.  That  other  great 
French  merchants,  who  had  not  partners  among  us,  should  have  their  agents, 
not  only  to  do  their  mercantile  business,  but  also  a  sort  of  spies  on  our  mer- 
chants, as  well  as  our  Government.  Could  any  man  doubt  what  would  be  the 
consequence  of  giving  these  foreign  nations  and  foreign  agents  the  encourage- 
ment of  a  specie  fund  of  twenty  millions?  That  it  would  have  the  direct 
effect  of  engrossing  among  them  the  principal  means  of  carrying  on  our  trade, 
and  enabling  them  to  cramp  and  destroy  the  American  merchant,  if  such  a 
character,  under  such  circumstances,  should  be  found  among  us. 

In  another  and  still  more  alarming  point  of  view,  the  renewal  of  the  char- 
ter, particularly  with  an  increased  capital,  was  objectionable.  It  repeated  the 
indecency  committed  on  the  States,  of  authorizing  twenty -five  persons,  under 
foreign  influence,  to  send  into  them  any  portion  01  capital,  under  managers  of 


456  BANK  OF  THE  UNITED  STATES. 

their  own  delegation,  without  consulting  the  State  authorities.  This  was  bad 
enough,  when  the  stock  was  held  by  the  United  States,  and  citizens  of  it, 
and  when  the  capital  was  only  ten  millions;  but,  increase  it  to  twenty  or  thir- 
ty millions,  as  may  be  contemplated,  it  will  not  be  borne  by  the  States.  They 
ought,  and  will  refuse  admittance  to  these  foreign  agents.  Let  it  be  remem- 
bered, that,  when  the  branches  were  admitted  under  the  present  charter,  it 
was  not  only  under  the  recommending  circumstances  before  mentioned,  but  it 
was  at  a  time  when  the  States  had  no  banks  of  their  own.  They  have  all  now 
institutions  of  this  kind,  and  they  will  not  suffer  an  intrusion  so  unreasonable, 
unless  they  participate  in  the  advantages,  and  are  made  safe  by  some  share  in 
the  control.  Virginia,  in  1795.  permitted  the  introduction  of  a  branch;  she 
has  since  banks  of  her  own,  some  of  which  have  smarted  under  the  lash  of 
this  bank.  Increase  the  power  of  this  foreign  engine  an  hundred  per  cent., 
and  Virginia  would  not  consent  to  entertain  it — he  hoped  she  would  not.  Mr. 
L.  declared  that  he  did  not  believe  that  the  stockholders  in  the  United  States 
had  any  right  to  nvike  a  contract  for  a  renewal;  a  general  meeting  could  only 
exercise  powers  within  the  grant  of  the  charter.  It  required  all,  or  at  least  a 
majority,  to  make  a  new  contract. 

Mr.  L.  next  adverted  to  the  particular  section  he  had  moved  to  strike  out 
of  the  bill.  He  remarked  on  the  first  provision,  which  proposed  a  sale  of  this 
privilege  to  the  United  States'  Bank  Company  for  twenty  years,  for  the  price 
of  $1,250,000;  that,  although  the  establishment  of  a  national  bank,  on  proper 
principles,  was  presumed  to  be  necessary  to  the  proper  management  of  the 
finances,  to  grant  an  exclusive  privilege  of  such  an  institution,  was  unconsti- 
tutional; that  the  constitution  had  only  authorized  this  kind  of  high  preroga- 
tive grant  to  the  authors  of  useful  inventions,  thereby  intending  to  foster  ge- 
nius, and  not  rivet  on  the  community  the  powers  of  a  political  or  corporate 
body.  No  one  would  pretend  that  a  bank  was  a  new  invention.  The  Bank 
of  North  America  was  older  than  the  United  States'  Bank.  For  the  pur- 
poses of  finance,  it  was  not  necessary  the  right  should  be  exclusive,  but  the 
contrary;  and  very  great  safety,  as  well  as  utility,  might  be  found  in  competi- 
tion. It  was  possible  it  might  have  been  deemed  necessary,  on  the  first  es- 
tablishment of  the  bank,  when  its  success  might  have  been  supposed  doubtful. 
It  could  not  now  be  advocated  for  that  reason,  or  any  other  reconcileable  with 
the  principles  of  justice  or  common  sense. 

But,  Mr.  L.  saidj  he  could  not  account  for  the  monstrous  proposition  con- 
tained in  this  provision.  The  bank  company  were  to  be  authorized  to  sell 
25,000  snares,  equal  to  $10,000,000  more  of  capital  for  their  own  emolument. 
This  would  probably  be  worth  to  them,  twice  or  thrice  as  much  as  they  were 
to  give  for  the  renewal  of  the  charter.  They  would,  he  presumed,  be  sold 
also  to  foreigners,  and  thus  there  would  be  introduced  an  additional  foreign 
bank  capital,  which  would  overwhelm  all  the  little  American  institutions  of 
the  kind.  Mr.  L.  said  he  was  afraid  he  could  not  speak  with  temper  on  this 
subject;  and  asked  if  gentlemen  thought  it  expedient  to  make  this  sale  of  their 
interests  to  foreigners.  He  could  not  deign  to  look  at  the  paltry  and  inade- 
quate.consideration;  but  he  believed  it  would  be  better  for  the  United  States, 
this  moment,  to  be  compelled  to  engage  in  a  seven  years'  foreign  war,  than  to 
consent  to  be  subjugated  in  the  manner  this  monstrous  proposition  would  effect. 

By  the  next  provision  they  were  not  to  be  compelled  to  loan  to  the  United 
States  more  than  $5,000,000,  and  a  rate  of  interest  seemed  to  be  fixed  for  that 
at  six  per  cent.:  for,  if  the  bank  were  unwilling  to  lend  a  cent,  (and  foreigners 
are  not  likely  to  aid  our  Government,  particularly  in  times  of  difficulty)  they 
need  not  do  it,  unless  we  give  them  six  percent,  and  then  not  exceeding  five 
millions,  when  it  is  known,  to  any  man  who  is  capable  of  a  moment's  reflec- 
tion, that  a  bank  can  always  loan  to  Government  for  half  the  rate  it  can  loan 
to  an  individual.  At  all  events,  a  bank  can  loan  to  Government  the  amount 
of  its  capital,  by  partial  calls,  as  the  section  provided,  at  a  lo\v  rate  of  inter- 
est, as  they  have  the  greatest  facility  in  their  power  of  securing  extra  funds, 
but  most  particularly  a  bank  whose  paper  is  receivable  in  all  payments  to  Go- 
vernment. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF   1791.  457 

Mr.  L.  said  he  had,  but  the  moment  the  subject  was  called  up,  had  an  op- 
portunity  of  glancing  at  the  bill,  as  he  had  been  necessarily  and  involun- 
tarily absent  tor  several  days,  and  had  rode  a  considerable  distance  that 
morning  to  the  House.  He  hoped  he  might  have  misapprehended  the  mis- 
chief ot  the  proviso.  He  proceeded  to  the  next  paragraph,  and  said  he  found 
some  difficulty  in  understanding  it,  from  reading  it  in  his  place.  It  contem- 
plated a  contract  with  this  institution,  to  have  the  deposites  of  our  reve- 
nues, by  agreeing  to  an  interest  of  three  per  cent,  when  they  exceeded  a  cer 
tain  sum,  and,  it  he  understood  the  bill,  there  must  be  a  sum  of  three  millions 
in  the  bank  for  fourteen  months  before  the  United  States  would  be  entitled  to 
draw  any  interest;  and,  after  they  notify  their  intention  to  draw  interest, 
they  must  permit  the  whole  of  this  sum  to  remain  at  least  twelvemonths  lon- 
ger. These  were  hard  terms,  and  nothing  but  an  exclusive  privilege  could 
compel  a  submission  to  them:  for  the  State  banks  would  be  glad  to  nave  our 
deposites  on  better  terms,  could  we  be  left  at  liberty  to  offer  them.  It  is 
said  (said  Mr.  L.)  that  they  should  be  ensured  the  use  of  our  money  for  at  least 
two  years  and  two  months;  should  get  at  least  eight,  he  believed  eleven,  per 
cent,  for  it,  and  only  give  three  !  But,  on  more  important  grounds  of  con- 
sideration, can  we  submit  that  this  institution  shall,  whether  we  will  it  or  not, 
keep  possession  of  our  revenues  for  at  least  twelve  months  ?  Suppose,  in  times 
of  peace,  our  revenues  should  accumulate  to  $50,000,000  of  deposites;  Great 
Britain  or  France  takes  occasion  suddenly  to  declare  war  against  us;  their 
subjects,  then,  have  this  sum  at  their  command,  for  twelve  months,  while  we 
may  sue  for  five  millions,  on  a  loan  of  six  per  cent,  and  they  have  fifty  millions 
of  our  money  at  three  per  cent,  and,  before  the  twelve  months  expire,  may 
pay  us  with  the  cannon  it  has  bought  for  them. 

nut  the  United  States  are,  also,  if  a  future  law  can  be  obtained  in  this 
House  for  the  purpose,  to  have  a  right  to  subscribe  for  blank  shares  !  How 
complete  is  the  delusion  here  intended  by  the  agents  of  this  bank.  They  go 
first  into  market  with  their  ten  millions  of  stock;  if  a  law  afterwards  can  be 
got  (and  we  know  how  difficult  it  is  to  get  a  law  passed  through  both  Houses 
on  any  subject}  the  United  States  may  then  go  into  market  with  their  stock, 
provided  they  do  not  sell  below  a  certain  price,  which,  at  least,  may  be  presum- 
ed twenty-five  per  cent.  The  bank  company  are  also  in  market,  and  they  can 
make  the  $1,250,000  they  give  for  the  extension  of  their  charter,  if  they  sell 
their  $10,000,000  at  twelve  and  a  half  per  cent.;  if  they  sell  at  twenty-five  per 
cent,  they  get  $2,500,000,  and  gain,  in  numero,  by  the  bill  before  us,  the 
clear  sum  of  $1,250,000,  instead  of  paying  that  sum  for  it. 

Mr.  L.  said  nothing  could  be  more  partial  than  the  provision  with  respect 
to  the  District  of  Columbia;  reciprocity  in  contracts  was  a  maxim  of  justice 
not  to  be  dispensed  with;  but,  this  United  States'  Bank,  as  it  is  falsely  called, 
might  introduce  its  branches  into  the  District,  and  establish  such  a  capital 
here  as  to  destroy  the  banks  already  here,  and  carry  its  foreign  influence  into 
the  very  heart  ot  our  country.  Can  it  be  the  design  of  gentlemen  to  destroy 
the  growing  prosperity  of  this  place  ?  Mr.  L.  called  on  the  western  repre- 
sentation, and  the  Potomac  interests,  to  oppose  the  bill.  He  enlarged  on  the 
propriety  of  fostering  the  interests  of  the  District,  as  a  great  means  of  preserv- 
ing the  Union,  and  promoting  the  convenience  of  the  Government. 

Mr.  L.  further  remarked,  that  the  observations  he  had  made  were  under 
the  pressure  of  extreme  fatigue,  and  hoped  the  committee  would  pardon  him 
tor  detaining  them,  as  he  had  done  it  only  from  a  sense  of  duty  to  his  coun- 
try's interests;  that,  on  another  day,  he  should  be  better  able,  he  hoped, 
to  face  the  threatening  danger:  for,  he  was  told— but  he  could  not  believe  it—- 
that a  majority  of  the  House  had  thought  favorably  of  the  bill.  He  declared 
it  to  be  impossible  !  and  said  that,  of  all  the  unwise  acts  of  the  most  unwise 
administrations  of  this  country,  none  had  ever  equalled,  in  madness  and  folly, 
the  present  project. 

Mr.  TAYLOR  said  it  almost  always  happened,  when  gentlemen  rose  and 
prefaced  their  remarks  with  a  declaration  that  it  was  the  first  time  they 
58 


458  BANK  OF  THE   UNITED  STATES. 

had  read  the  bill  under  discussion,  that  they  made  mistakes;  and  the  allusion 
just  now,  of  the  gentleman  from  Virginia,  to  his  (Mr.  T's)  listlessness  to  hi& 
arguments,  proceeded  from  the  gentleman's  having  argued  for  half  an  hour  on 
a  blank  in  the  bill.  Does  the  gentleman  suppose,  (said  Mr.  TAYLOR)  that  he. 
is  now  addressing  a  county  court,  and  that  the  advantages  of  special  plead- 
ing are  to  be  allowed  to  him?  All  the  debate  which  can  take  place  cannot 
change  the  vote  of  any  members  of  this  House.  They  have  not  been  absent, 
like  him,  from  the  House;  nor,  like  him,  for  the  first  time,  seen  the  bill  to-day. 

Sir,  I  am  no  stockholder.  1  neither  hold  a  share  in  the  Bank  of  the  United 
States  nor  any  bank  in  (he  United  States.  I  am  of  that  class  of  the  commu- 
nity, by  some  called  clod -hoppers.  For  their  interests,  I  stand  up.  I  wish 
that  the  charter  may  be  extended,  and  am  desirous,  in  that  way,  to  paralyze 
the  speculation,  now  standing,  like  the  pike,  ready  to  snap  at  the  bait.  I  am 
an  advocate  for  the  interests  of  the  honest  yeomanry  of  tnis  country.  It  is 
due  to  them,  and  to  this  House,  that  I  should  explain  the  motives  on  which  I 
act;  the  grounds  on  which  I  proceed  in  relation  to  one  topic  which  the  gentle- 
man forgot,  but  which  he  might  find  a  fair  excuse  for,  in  his  own  oil  I — I 
mean  the  constitutionality  of  the  proposition  for  erecting  or  continuing  a  bank 
at  all. 

The  constitution  of  the  United  States  has  given  to  the  Legislature  of  the 
United  States  certain  powers,  amongst  which  is  the  power  to  lay  and  collect 
taxes,  duties,  imposts,  and  excises,  and  the  power  to  borrow  money  on  the  cre- 
dit of  the  United  States;  and  the  concluding  clause  of  power,  applicable  to  all 
the  powers  granted,  gives  power  to  make  all  laws  necessary  and  proper  for 
carrying  into  execution  the  foregoing  powers.  As  the  gentleman  himself 
admitted,  and  as  we  have  been  told  by  the  Secretary  of  the  Treasury, 
the  highest  authority  in  the  nation,  on  financial  affairs,  that  a  banking  insti- 
tution is  absolutely  necessary  for  collecting  and  transferring  the  revenue 
of  the  United  States,  I  am  saved  the  trouble  of  establishing  the  constitu- 
tionality of  the  Bank  of  the  United  States.  He  admits  that  one  bank  is 
necessary,  and,  because  one  is,  two  might  be  established.  I  take  the  other 
end  of  the  argument,  that  a  general  bank  is  necessary  for  carrying  on  the 
fiscal  concerns  of  the  Government,  and  that  Government  is  bound  to  incor- 
porate an  institution  of  that  sort,  under  the  words  "necessary  and  proper." 
If  one  bank  of  the  United  States  is,  for  that  purpose,  necessary  and  proper, 
and  sufficient,  all  the  power  to  be  derived  from  that  article  of  the  constitution 
is  exhausted,  and  we  cannot  exercise  it  any  further.  Having  obtained  such 
an  institution  as  is  necessary  for  the  collection  of  the  revenue,  you  cannot, 
by  any  power  in  the  constitution,  multiply  institutions  for  the  same  purpose, 
as  you  will  have  one  coming  up  to  the  definition  of  necessary  and  proper. 
Therefore,  when  Congress  shall  have  granted  a  charter  to  any  one  bank,  I 
believe  it  would  be  incompetent,  in  the  Legislature,  to  grant  a  charter  to  any 
other  bank  in  the  United  States,  under  the  excuse  of  its  being  necessary  and 
proper  for  the  collection  of  the  revenue  of  the  United  States;  because,  they 
will  have  exercised  their  power  to  the  full  extent.  When  they  transcend  it, 
I  will  join  gentlemen,  and  say  we  are  treading  on  unconstitutional  ground. 
It  is  from  the  necesity  of  the  case  that  the  monopoly  arises- 

The  impolicy  of  employing  foreign  capital  has  been  very  much  inveighed 
against.  Does  the  gentleman  recollect  the  case  of  a  majority  of  planters  in  the 
Southern  States;  that  they,  from  year  to  year,  are  in  the  constant  habit  of  borrow- 
ing foreign  capital?  They  open  accounts  with  the  merchants  on  the  first  ot 
January,  and,  if  they  pay  punctually,  they  pay  them  at  the  end  of  the  year. 
The  merchant,  if  he  acts  wisely,  adds  to  his  profit  the  interest  of  the  sum  he- 
owes  over  the  water,  for  his  goods,  and  the  planters  pay  this  "  foreign  tribute." 
Has  the  country  grown  the  poorer  for  it?  Look  back,  sir?  to  the  first  settle  • 
mentof  the  country,  and  the  value  of  every  acre  of  land  which  has  been  opened 
and  cultivated  by  the  aid  of  this  very  foreign  capital.  It  is  a  new  idea  to  me,  that 
we  should  thus  start  at  the  bugbear  of  foreign  capital.  I  thought  the  country 
was  more  flourishing,  in  proportion  as  you  hold  forth  to  foreigners  an  induce- 
ment to  employ  their  capital  here.  If  we  pay  five  per  cent,  for  a  capital 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.    459 

on  which  we  gain  ten,  iii'teen,  or  twenty  per  cent.,  it  is  again  to  the  country. 
The  argument  of  the  gentleman  is  fallacious.  Practice,  which  is  a  better 
guide  than  any  theoretical  speculations,  will  show,  that  the  wealth  of  the 
country  has  been  increased  from  this  foreign  capital  j  from  this  bugbear,  which 
the  gentleman  is  so  much  alarmed  at! 

But,  says  the  gentleman,  there  will  be  a  foreign  influence.  George  the 
Third  may  come  over  to  reside  here,  1  suppose:  for,  unless  he  were  here,  he 
could  not  vote.  Sir,  if  the  sky  were  to  fall,  we  should  catch  larks;  and  that 
is  nof  a  more  extreme  case  than  the  gentleman's  hypothesis.  [Mr.  LOVE  said 
he  had  supposed  that  the  King  of  Great  Britain  would  send  his  agents  to  re- 
side here,  who,  being  ostensible  owners  of  the  stock,  might  have  the  whole 
direction  of  the  bank.]  Then,  it  seems,  said  Mr.  T.,  that  we  are  re- 
lieved, at  least  from  one  bugbear.  All  Europe  would  be  much  obliged  to  us, 
too,  I  fancy,  if  Bonaparte,  either  by  himself  or  proxies,  were  to  come  here 
to  speculate  in  bank  stock,  instead  of  busying  himself  about  the  affair*  of 
Europe.  All  Europe  would  be  glad  to  see  him  employed  as  a  stockjobber  in 
the  streets  of  Boston  or  elsewhere.  How  are  these  monarchs,  by  their  agents, 
to  rule  the  bank,  and  work  these  wonders  by  it,  when,  by  the  original  charter 
of  the  institution  it  is  required,  that  stockholders  who  are  citizens  of  the 
United  States,  shall  alone  be  eligible  as  bank  directors?  Suppose,  however, 
that  foreign  stockholders  had  all  this  influence,  and  exerted  it  to  gain  the  di- 
rection of  the  bank;  if  they  continued  the  bank,  pursuant  to  the  ordinary 
rules,  which  every  shop-keeper  knows  it  ought  to  pursue — if  the  bank  should 
pursue  its  own  interest,  it  would,  at  the  same  time,  pursue  ours.  The  mo- 
ment it  was  attempted  to  be  made  a  political  engine,  that  moment,  the  jealousy 
which  the  gentleman  now  feels — the  jealousy  which  a  free  People  feels — would, 
at  once,  withdraw  custom  from  it. 

It  would  sink!  It  is  only  by  piusuing  its  own  interest  that  this  bank  can 
flourish;  1  wish  it  in  such 'hands  that  it  will  pursue,  its  own  interest;  lean 
no  more  suppose  that  it  will  be  made  use  of  by  foreign  influence,  to  our  inju- 
ry, than  that  the  credit  given,  of  a  year,  and  sometimes  longer,  to  our  plant- 
ers, for  stutts,  hoes,  and  working  utensils,  &c.,  operates  to  the  injury  of  the 
country.  Neither  would  I  give  to  the  Government  of  the  United  States  any 
control  over  this  institution.  I  would  not  put  into  the  hands  of  one  party  or 
another,  as  it  became  rotten  by  its  own  sins,  the  power  of  wielding  such  a 
moneyed  engine  aa  this.  The  jealously  of  a  freeman,  which  would,  in  the 
gentleman  from  Virginia,  be  allayed  by  such  a  course,  would  make  me  abhor 
giving  the  Government  the  control  over  it.  1  then  should  stand  up,  a  stickler  for 
State  rights,  and  against  measures  tending  to  bring  about  a  consolidation  of  the 
Government  of  the  Tinted  Siatrs.  For  that  reason,  as  a  republican,  I  am  op- 
posed to  vesting  the  Government  with  any  indirect  surreptitious  power  of  con- 
trolling the  feelings  of  the  People  of  the  United  States,  for  party  purposes.  I 
do  not  know  but  what  I  may  wish  to  see  the  present  majority,  if  they  degene- 
rate, as  they  may,  entirely  changed.  I  do  not  say  such  will  be  the  case,  but 
it  might.  If  it  were,  1  wish  not  to  have  this  engine  operating  against  me. 

With  respect  to  State  rights,  I  believe  it  is  more  easily  to  be  demonstrated, 
but  of  which  I  shall  not  attempt  the  demonstration,  that  the  States  are  consti- 
tutionally prohibited  from  erecting  banks  in  their  own  States,  than  this 
Government  from  erecting  the  bank  we  are  now  discussing.  [  fancy  these 
bank  bills  are  but  bills  of  credit,  after  all,  which  the  constitution  expressly 
prohibits  the  State  Governments  from  issuing;  but  as  the  States  have,  with- 
out even  saying  by  your  leave,  sir,  exerted  this  power,  and  I  am  contented  that 
they  should  have  it,  1  would  let  the  usage  or  custom  establish  the  law  on  the 
subject.  In  the  same  manner,  I  am  willing  that  the  Government  of  the 
United  States,  from  the  same  usage,  the  same  custom,  the  same  acquiescence, 
in  this  bank  of  the  United  States,  should  have  the  advantage  of  the  same  sort 
of  usage.  I  recollect  well  to  have  heard,  in  the  first  administration  of  the 
illustrious  Washington,  that,  under  the  treaty-making  clause,  the  President 
construing  the  word  "  advice"  to  mean  something  more  than  mere  consent, 
did  actually  go  into  the  Senate  for  the  purpose  ot  making  a  treaty  with  Mr, 


460  BANK   OF  THE   UNITED   STATES. 

McGillivray  and  the  Indians;  and  finding  the  thing  so  utterly  impracticable., 
had  to  retire  and  do  it  by  his  deputy;  and,  from  the  inconvenience  of  the 
thing,  the  word  advice  is  practically  erased  from  the  constitution,  I  do  not 
nnd,  even  under  the  republican  administration  of  Jefferson,  that  it  was  at- 
tempted to  reduce  the  clause  to  practice.  When  the  Senate  give  their  con- 
sent now,  they  give  their  advice  also;  but  their  advice  is  never  called  before 
the  treaty  is  finished.  Sir,  I  could  turn  to  cases,  too,  in  which  the  republican 
administration  have  actually  covenanted  and  agreed  with  this  company  for 
loans—with  this  company,  which,if  the  dpctrine  now  urged  be  correct,  received 
a  stolen  charter,  and  with  whom  it  would,  in  such  case,  be  as  disgraceful  to  trade, 
as  for  a  man  to  trade  with  a  notorious  receiver  of  stolen  goods.  Precedent  is 
strong  on  this  point.  The  State  which  the  gentleman,  (Mr.  LOVE)  represents, 
has  given  strong  proofs  that  usage  has  weight  with  them.  What  have  they 
done  which  evinced  it?  In  the  year  1795,  when  the  interest  on  debts,  due  to 
the  State  of  Virginia,  amounted  to  but  two  per  cent. ,  a  special  law  was  passed, 
by  the  State  Legislature,  authorizing  this  institution  to  receive  six  per  cent.t 
when  others  received  but  five.  If  that  was  not  an  acquiescence  in  it,  I  know 
not  what  is.  The  State  which  I  have  the  honor  to  represent,  (South  Caro- 
lina) have  not,  to  be  sure,  traded  with  the  institution;  but  every  year,  for  the 
last  six  or  seven,  in  the  annual  tax  bill,  the  collectors  have  been  directed  ta 
receive  the  tax  in  silver  or  gold,  or  in  paper  of  the  branch  bank  at  Charleston, 
or  their  own  banks.  If  this  be  not  trading  with  them,  it  is  an  acquiescence  in 
the  value  of  the  bill  issued  by  that  institution,  and  is,  so  far,  a  manifestations 
of  the  public  sentiment.  I  dare  say,  if  I  had  the  statute  laws  of  other 
States  in  the  Union,  the  same  sort  of  acquiescence  might  be  produced  on 
record.  It  is  the  case  in  the  State  of  New  York. 

On  the  subject  of  loans,  sir,  it  was  the  policy  of  that  very  republican  ad- 
ministration, which  that  gentleman  applauded— it  will  be  the  policy,  I  hope, 
of  this  administration — not  to  obtain  money  on  extensive  loans.  The  idea  of  a 
public  debt,  being  a  public  blessing,  seems  to  have  been  exploded,  and  tem- 
porary loans  are  to  be  obtained  only  from  moneyed  institutions.  Individuals 
loaning  for  a  short  time,  and  vvho  are  obliged  to  go  into  market  to  reinvest 
their  stock,  ask  a  greater  premium  for  their  money.  Practice  has  provsd  that 
banks  can  do  otherwise. 

The  argument  of  the  gentleman,  that  Government  will  be  obliged  to  give  six 
per  cent,  for  money,  would  tax  him  with  a  want  of  candor,  if  he  had  not  said 
that  he  had  but  just  read  the  bill.  The  bank  will  have  no  advantage  over  other 
individuals,  in  this  respect,  unless  they  make  a  loan  for  a  shorter  time,  and  on 
lower  terms.  The  bill  fixes  the  maximum,  but  not  the  minimum.  It  does 
not  prevent  the  United  States  from  borrowing  money  at  five  per  cent.,  or 
three  per  cent.,  or  at  the  lowest  rate  at  which  money  could  be  obtained,  across 
the  Atlantic,  from  a  Dutch  broker.  The  maximum  was  inserted  to  prevent 
foreigners  from  screwing  the  Government,  and  obtaining  an  extravagant  inte- 
rest. We  can  only  look  to  the  bank  for  temporary  loans.  If  the  Govern- 
ment should  ever  be  so  sorely  pressed  as  to  require  larger  loans  than  five, 
millions,  it  would  be  policy  to  make  extended  terms,  to  reduce  the  interest. 
What  will  be  the  consequence  of  putting  down  this,  and  refusing  to  establish 
any  other  similar  institution?  When  we  want  to  borrow,  we  must  apply  to 
the  States,  for  acts  of  their  Legislatures,  to  authorize  their  banks  to  lend  mo- 
ney, and  be  thrown  back  into  the  state  of  the  Congress  under  the  old  con- 
federation, when  they  called,  am1  called  again,  but  could  not  obtain  a  com- 
pliance with  their  requisitions.  Loans  for  temporary  accommodation,  only, 
ought  to  be  asked  for. 

The  language  and  feelings  of  the  State  Legislatures  are  brought  into  view, 
and  an  attempt  is  made  to  frighten  this  House  with  this  sort  of  thunder  clouds. 
They  pass  by  like  the  idle  wind:  they  have  no  effect  on  me.  I  will  tell  you 
where  you  would  meet  with  the  scowl  of  the  State  Legislatures:  for  they  are 
not  composed  of  moneyed  capitalists,  but  of  the  honest  yeomanry  of  the  coun- 
try. It  would  be  to  issue  exchequer  bills^  to  send  afloat  another  Yazoo  bub- 
ble; to  blow,  with  a  mighty  wind,  the  shocking  flame  of  depravity  which  has  al- 


ON  THE  BILL  TO  RENEW  THE  CHARTER   OF    1791. 

ready  caught  in  some  parts  of  our  country — I  mean  the  spirit  of  speculation — 
which  will  diffuse  itself  from  one  end  of  the  continent  to  the  other,  in  these 
exchequer  bills,  or  these  bank  bills,  to  pass  after  we  put  to  death  the  present 
bank.  This  phoenix,  which  the  gentleman  is  to  raise  from  the  ashes  of  the 
defunct  institution,  is  to  go  forth— cm  bono?  That  so  much  only  shall  be 
given  for  them,  by  the  moneyed  capitalist,  as  shall  enable  him  to^ speculate  on 
the  unwary.  The  six  millions  of  profit  will  not  accrue  to  the  United  States, 
but  the  cormorants  will  gorge  with  it;  the  speculators,  from  one  end  of  the 
continent  to  the  other,  will  reap  the  benefit.  On  the  contrary,  sir,  the  money 
to  be  received  under  this  bill,  would  go  into  the  hands  of  the  honest  yeomanry 
of  the  country:  for.  when  it  is  in  the  treasury,  it  is  so  much  deducted  from 
what  they  would  otherwise  have  had  to  pay.  When  exchequer  bills  are  circu- 
ated,  where,  at  last,  do  they  go?  After  the  cormorants  and  rooks  have  made 
the  most  of  them,  they  travel  across  the  Atlantic,  and  the  People  of  the  United 
States  are  not  benefitted,  but  injured  by  them.  The  end  of  both  schemes  is, 
according  to  the  gentleman's  own  showing,  that  the  stock  and  interest  will  go 
into  the  pockets  of  foreigners.  Where,  then,  is  the  objection  to  the  present 
plan,  which  would  not  equally  apply  to  his  own?  I  cannot  see  it. 

Not  only,  sir,  will  the  Government  of  the  United  States,  according  to  the 
usage  of  commercial  nations,  make  this  company,  fairly  and  honestly,  pay  the 
value  of  their  charter,  with  the  conditions  annexed;  but  there  is  a  benefit  given 
to  the  United  States,  of  drawing  interest  upon  deposites,  to  a  certain  amount, 
which  they  had  not  under  the  old  charter.  There  is  also  an  advantage  given 
to  the  United  States,  of  subscribing  nine  millions  of  dollars,  not  more  than 
once  in  any  one  year;  and  from  the  manner  in  which  it  is  conducted,  and 
according  to  the  report  of  the  Secretary  of  the  Treasury,  which  must  be 
correct,  or  he  is  wanting  in  his  duty,  which  no  man  in  the  House  suspects — 
from  each  of  those  millions  you  subscribe,  you  will  receive,  perhaps,  as 
high  a  profit  as  upon  those  bank  shares  which  were  sold  to  Sir  Francis  Baring 
and  Company,  at  forty-five  percent,  advance;  say,  however,  only  twenty-five 
per  cent,  which  will  make  the  profit  on  each  million,  twenty-five  thou- 
sand dollars.  But  this  is  too  low  a  calculation.  I  believe  shares  will  rise 
much  higher,  not  from  their  real  value— but  I  will  state  candidly,  that  I  be- 
lieve they  will  be  sold  to  foreigners,  and  that  we  shall  get  fifty  per  cent, 
on  each  share,  and  for  each  million,  500,000  dollars  advance;  which  will 
be  a  total  profit  to  the  United  States  of  4,500,000  dollars,  which,  with 
1,250,000  dollars,  to  be  paid  down,  will  be  5,750,000  dollars;  equal  to  the 
promised  bonus^  from  the  gentleman's  exchequer  bills,  without  the  bubble 
they  would  raise.  If  the  plan  which  I  propose  be  adopted,  there  will  be  no 
uproar  and  speculation  throughout  the  continent;  the  mercantile  gentlemen 
will  manage  it  among  themselves,  and  we  clodhoppers  shall  not  suffer  from  it. 
On  the  contrary,  we  shall  feel  the  benefit  of  it,  in  having  saved  us  a  contribu- 
tion of  six  millions  of  dollars  to  the  public  treasury.  It  will  put  down  the 
spirit  of  speculation,  and,  for  that  paramount  reason,  if  there  were  no  other, 
I  would  adopt  it  in  preference  to  any  other  system. 

I  will  state,  and  it  is  fair  that  I  should  do  so,  that  the  committee  have  had 
a  conference  with  the  agents  of  the  bank,  and  with  the  Secretary  of  the  Trea- 
sury. You  have  got,  said  the  latter,  the  utmost  extent  of  the  bonus  you  ought 
to  expect;  and,  at  the  same  time,  I  believe,  sir,  I  may  say,  that  there  is  the 
utmost  probability  that,  if  this  bill  passes,  with  the  provision  contained  in  it, 
or  with  such  reasonable  modification  as  may  be  made,  it  will  be  accepted. 
The  establishment  or  renewal  of  the  bank  will  save  you  the  necessity  of 
borrowing  the  sum  necessary  to  supply  the  present  deficit  in  the  treasury,  on 
disadvantageous  terms,  because  you  will  be  able  to  borrow  it,  to  be  repaid  in 
as  short  a  time  as  you  please  to  ask.  If  we  wish  not  to  create  a  national  debt, 
it  is  all  important  that  we  should  have  it  in  our  power  to  borrow  money  for 
short  periods,  arid  on  the  lowest  terms;  both  of  which  advantages  will  be  af- 
forded by  this  institution.  Allowing  that  other  banks  had  sufficient  capital 
to  answer  the  same  purpose,  they  could  not  do  it  without  applying  to  the  States 


462  BANK   OF  THE  UNITED  STATES. 

for  authority.     In  some  of  the  charters,  1  have  seen  an  express  provision 
against  it. 

Sir,  I  do  not  expect  the  present  cloudy  night  is  to  last  long.  I  look  for  a 
bright  morning,  when  commercial  nations  shall  cease  to  worry  each  other; 
when  commerce  shall  resume  her  wonted  activity;  when  the  treasury  shall 
again  boast  its  millions.  When  that  time  comes,  how  degrading  will  it  be  to 
the  Government,  which  shall  not  have  anticipated  such  an  event,  and  shall 
have  borrowed  money  at  high  interest,  for  a  term  of  eight,  ten,  or  twenty 
years,  when  her  coffers  shall  be  full,  and  she  shall  not  be  able  to  pay  the  pub- 
lic debts.  It  is  all  important  that  the  Government  should  have  the  power  of 
making  short  loans;  and  it  can  only  be  had  by  passing  a  bill  to  continue  this 
institution  in  operation.  All  this  talk  about  the  immense  quantity  of  bullion 
in  the  United  States,  is,  it  appears  to  me,  erroneous;  I  believe  it  exists  only 
in  the  gentleman's  head  With  all  my  respect  for  the  embargo,  I  will  observe  , 
that  it  was  calculated,  as  we  could  not  send  produce  by  land,  and  our  mer- 
chants owe.d  money  over  the  water,  to  drain  the  country  of  specie.  It  did  so; 
and  the  stories  we  heard,  of  barrels  of  guineas  going  over  the  lines  to  Canada, 
are  proofs  of  it.  W^ill  gentlemen  recollect  that,  in  Great  Britain,  gold  sells 
twelve  and  a  half  per  cent,  above  par?  That,  alone,  is  an  inducement  to  carry 
it  there.  Money  will  go  to  the  place  where  it  can  be  most  conveniently  used. 
I  consider  it  a  good  domestic  guest,  if  it  could  be  kept  here;  I  would  not  drive 
it  out  of  the  country.  In  the  days  of  our  forefathers  it  has  done  so  much  good, 
that,  out  of  gratitude  for  former  favors,  I  would  not  be  lor  d living  it  out  of 
the  country.  I  would  not,  by  a  refusal  to  renew  the  charter,  weigh  anchor  to 
near  seven  millions,  or,  according  to  the  gentleman's  suspicions,  nearer  ten 
millions  of  dollars.  We  want  it  here;  and  the  anticipation  of  war  is  the 
greatest  argument  in  favor  of  keeping  it  here.  It  is  all  idle,  sir,  to  talk  of  the 
deleterious  effects  of  borrowing  money  from  foreign  countries,  when  we  recol- 
lect that  every  planter  in  the  country  where  I  live,  has  grown  rich  by  foreign 
capital;  has  grown  rich  on  land,  which,  without  foreign  capital,  he  could  not 
have  cultivated;  and  which,  instead  of  five,  has,  by  that  means,  become  worth 
fifty  dollars  an  acre.  This  foreign  capital  is  the  greatest  stimulant  the  coun- 
try has  ever  experienced.  I  believe  the  utility  of  employing  foreign  capital, 
in  the  United  States,  is  the  strongest  ground  on  whicn  the  institution  can 
stand. 

I  have  done,  sir.  I  have  but  incidentally  touched  the  details  of  the  bill. 
From  being  utterly  unacquainted  with  banking  affairs,  and  never  having  own- 
ed a  share  in  any  bank,  the  insinuation  of  the  gentleman  from  Virginia  did  not 
touch  me.  Sir,  the  gentleman  does  not  think  it  could  affect  me — he  did  not 
think  so  when  he  uttered  it.  I  never  received  accommodation  of  any  bank 
for  a  cent.  For  my  country  I  act,  not  for  myself 

Mr.  FIND  LEY  said  he  wished  to  offer  a  few  observations,  that  would  ap- 
ply both  to  the  bill  and  to  the  amendment,  but  was  pi-evented  by  the  mo- 
tion for  the  bill  laying  on  the  table,  made  by  the  gentleman  from  Virginia, 
(Mr.  LOVE)  which  precluded  a  reply  to  his  arguments.  [Mr.  LOVE  withdrew 
his  motion,  and  Mr.  F.  proceeded.] 

When  the  Bank  of  the  United  States  was  incorporated,  there  were  but  few 
banks  in  the  United  States,  and  very  little  experience  of  the  banking  system 
was  possessed,  and  such  as  had  been  acquired  had  given  an  unfavorable  im- 
pression. Towards  the  close  of  the  war,  in  a  time  ol  great  pecuniary  distress, 
Congress  passed  an  ordinance  incorporating  the  Bank  of  North  America,  but, 
knowing  that  this  ordinance  could  not  give  it  effect,  they  recommended  the 
incorporation  thereof  to  the  respective  State  Legislatures.  Pennsylvania  and 
Delaware,  only,  obeyed  that  recommendation.  It  was  organized  in  Philadel- 
phia, and  though  the  capital  was  small,  it  yielded  essential  relief  to  the  Go- 
vernment. 

The  charter  was  a  complete  monopoly;  it  was  not  limited  in  duration,  and 
was  vested  with  the  exclusive  right  of  banking  by  the  ordinance  by  which 
it  was  incorporated,  in  the  whole  United  States,  as  far  as  that  ordinance 


ON    THE    BILL   TO   RENEW    THE  CHARTER    OF    1791. 

was  obligatory.  When  the  war  was  concluded,  a  new  company  was  formed 
in  Philadelphia  for  the  purpose  of  banking;  but  when  they  applied  to  the  Le- 
gislature for  a  charter  of  incorporation,  the  Bank  of  North  America  claimed 
the  exclusive  right,  and  after  being  heard  by  counsel,  the  application  of  the 
newly  formed  company  was  rejected,  in  consequence  of  which  the  next  Le- 
gislature repealed  the  charter  of  the  Bank  of  North  America.  Many  thought 
it  would  have  been  better  to  have  revised  than  to  have  repealed  this  charter, 
but  the  People  had  been  more  powerfully  impressed  with  some  incidental 
hardships  that  had  resulted  from  the  operations  of  the  banking  system,  than 
with  its  advantages,  not  yet  fully  developed.  That  bank  was  still  kept  alive  by 
the  charter  from  the  State  of  Delaware.  The  impression  on  the  minds  of  the 
People  of  Pennsylvania,  at  that  time,  and  in  several  other  States,  was,  that 
banks  were,  if  not  a  nuisance,  at  least  dangerous,  and  of  no  use  to  govern- 
mental operations.  After  two  years,  however,  the  bank  obtained  a  limited 
charter. 

In  about  four  years  after  this,  the  Bank  of  the  United  States  was  incorporat- 
ed, and  the  act  of  incorporation  \v-is  powerfully  opposed  on  the  ground  that  it 
was  contrary  to  the  constitution  of  the  United  States;  and  it  was  supported  on 
the  opinion  that  it  was  necessary  for  conducting  the  moneyed  transactions  of 
the  Government  in  the  best  manner.  It  was  admitted  that,  if  it  was  necessa- 
ry, it  was  contained  in  the  powers  vested  in  Congress  to  levy  and  collect 
taxes,  duties,  imposts,  and  excises,  and  pay  the  debts  of  the  United  States,  to 
support  armies,  and,  in  general,  to  provide  for  the  common  defence;  because, 
when  a  special  power  is  given,  it  contains  in  it  all  powers  necessary  to  carry 
it  into  effect,  and  because  the  constitution  expressly  vests  Congress  with  all 
powers  necessary  and  proper  to  carry  the  given  powers  into  eftect.  There- 
lore  the  question  of  the  constitutionality  of  the  bank  solely  depends  upon  the 
question,  whether  it  is  necessary  and  proper  for  conducting  the  moneyed  ope- 
rations of  Government.  So  great  a  change  has  taken  place  on  that  subject, 
within  twenty  years  past,  that  it  is  supposed  that  question  is  now  settled. 
Not  only  the  moneyed  transactions  of  the  United  Slates,  but,  it  is  believed,  of 
all  the  State  Governments,  are  carried  on  through  the  respective  banks,  as  well 
as  commercial  transactions  and  other  moneyed  negotiations.  Pennsylvania,  for- 
merly so  much  opposed  to  banks,  has,  ^ince  that  period,  incorporated  many,  and 
for  about  seventeen  years  past  has  connected  banks  with  the  Government,  and 
conducts  her  moneyed  transactions  by  their  assistance.  This  much  is  ottered 
with  respect  to  the  constitutional  authority  of  Congress  to  incorporate  a  bank, 
because  it  is  known  that  some  members  and  many  citizens  still  doubt  of  it. 

Mr.  F.  said,  that,  from  the  ground  on  which  the  gentleman,  just  sat  down, 
(Mr.  LOVE)  had  placed  the  question,  it  was  rather  indelicate  to  oppose  his 
arguments.  He  had  stated  it  to  be  a  question  between  those  who  were  friends 
of  the  country  and  those  who  were  not  so.  However,  as  he  had  also  said,  be- 
fore he  sat  down,  that  he  did  not  himself  understand  it,  and  also  that  he  be- 
lieved that  many  other  members  did  not  understand  it;  to  the  truth  of  this, 
Mr.  F.  .said,  he  did  not  object,  but,  however  little  he  might  understand  the 
subject  of  banking,  he  presumed  that  he  knew  so  much  of  it  as  to  convince 
the  gentleman  that  he  was  not  supported  in  all  he  had  asserted,  and  that  some 
of  his  arguments  were  not  fairly  deduced. 

The  honorable  gentleman,  both  on  a  former  day  and  the  present,  has  charg- 
ed the  directors  of  the  Bank  of  the  United  States  with  having  acted  unfairly, 
nay,  even  with  fraud;  that  the  records  of  their  transactions  are  evidently  fal- 
lacious; that  they  cannot  be  understood;  that  the  bank  has  produced  much 
more  than  is  accounted  for  by  the  dividends,  &c. ;  that  the  Secretary's  report 
is  inconsistent,  and  throws  no  sufficient  light  on  the  subject. 

One  proof  he  gives  for  the  truth  of  this  charge  is,  that  the  branches  at  Bos- 
ton, New  York,  &c.  account  for  having  gained  ten  or  eleven  per  cent,  on  the 
capital  of  their  vaults,  and  that  the  mother  bank  had  in  her  vaults  a  capital 
nearly  equal  to  that  in  all  the  branches,  about  $4,500,000,  and  yet  does  not 
account  for  more  than  six  per  cent,  or  not  so  much;  and  he  considers  this  cir- 
cumstance as  a  demonstration  that  the  mother  bank,  at  least,  has  acted  afrau- 


464  BANK  OF  THE  UNITED  STATES. 

dulent  part,  by  concealing  her  profits;  whereas,  if  the  gentleman  had  under- 
stood the  subject,  he  would  have  taken  it  at  least  as  a  strong  presumption 
that  the  directors  have  acted  honestly  and  correctly:  for  this  is  just  the  way 
it  must  have  been,  if  it  was  honestly  and  wisely  conducted.  He  has  consider- 
ed the  bank  and  its  branches  as  so  many  distinct  banks,  haying  their  capital 
independent  of  each  other.  This  seems  to  be  the  source  of  his  mistake.  The 
capital  is  one.  It  is  the  capital  of  the  Bank  of  the  United  States.  When  a 
branch  is  established  in  any  State,  the  Bank  of  the  United  States  appoint  the 
directors  for  the  branch,  and  vests  so  much  capital  in  it  as  will  probably  be 
thought  necessary  for  the  demand,  aided  by  the  credit  of  the  great  firm.  The 
bank  itself  is  the  great  denosite  or  reservoir  which  contains  Sie  capital,  and 
possesses  the  credit  by  which  the  whole  is  supported.  If  the  negotiations  of 
some  branches,  whether  on  the  east  or  south,  necessarily  extend  to  discounts, 
the  mother  bank  must  extend  her  credit,  viz:  must  authorize  the  branches  to 
draw  on  the  mother  bank,  as,  if  a  run  is  made  on  them  unexpectedly,  she  must 
do  the  same.  Consequently,  she  must  always  have  sufficient  capital  in  reserve 
ready  to  meet  all  such  exigencies,  and  must  not  extend  her  discounts.  If  she 
did  otherwise,  she  would  have  justly  merited  such  censure.  If  the  honorable 
gentleman  had  understood  this,  he  would  not  have  censured  the  institution  for 
what  she  would  have  been  justly  censurable  for  not  doing. 

The  buildings  and  conducting  of  the  bank  and  its  branches  requires  consi- 
derable expense.  A  branch  that  produces  no  profit,  but  sometimes  loss,  may 
be  as  expensive  in  keeping  it  up  as  those  that  are  productive.  The  gentleman 
has  produced  none  but  such  as  are  most  productive.  Others  may  be  kept  up 
at  considerable  loss.  If  such  unfounded  objections  as  those  had  been  antici- 
pated, they  might  have  been  rebutted  by  facts,  with  which  he  was  not  now 
prepared.  One  fact,  however,  Mr.  F.  said,  he  would  offer  in  illustration, 
taken  from  a  similar  institution.  The  Bank  of  Pennsylvania,  in  which  that 
State  was  largely  interested,  had  established  a  branch  at  Pittsburg,  which  did 
much  business.  She  received  in  deposite  the  money  of  the  United  States, 
received  for  public  land,  and  money  of  the  merchants  and  dealers  of  the 
States  on  the  Ohio,  and,  in  return,  gives  drafts  on  the  mother  bank,  on  such 
terms  as  are  agreed  on;  (to  the  United  States  she  makes  no  charge. )  She  ac- 
cepts of  the  drafts  of  the  treasury  from  this  city,  and  discounts  notes  to  a 
large  amount,  and  yet  has  never  received  any  capital  sum  from  the  mother 
bank,  but  draws  upon  her  credit.  This  answers  every  purpose,  in  the  situa- 
tion of  that  country;  but  the  mother  bank  must  always  reserve  sufficient  sur- 
plus capital  to  answer  the  demand.  These  drafts  are  more  valuable  in  that 
country  than  specie. 

In  order  to  give  credit  to  the  gentleman's  assumed  charges  of  fraud,  against 
the  directors  of  the  Bank  of  the  United  States,  we  must  first  believe  other 
very  extraordinary  things.  We  must  believe  not  only  that  all  the  directors 
of  the  bank,  elected  by  me  stockholders  on  the  account  of  their  known  talents 
and  integrity,  six  of  wnom  have  been  changed  annually  for  near  twenty  years, 
to  have  been  dishonest,  and  chargeable  with  a  breach  of  sacred  trust,  but  that 
all  the  directors  of  the  branch  banks  have  been  so  also,  as  \yell  as  all  the 
cashiers  and  tellers,  who  are  changeable  at  pleasure,  and  have  frequently  been 
changed,  have  united  in  the  fraud,  and  while  they  robbed  their  employers, 
were  so  honest  to  each  other  that,  even  after  they  have  been  removed  from 
their  trust,  or  turned  out  of  employ,  they  have  never  to  this  day  made  the  dis- 
covery. Nay,  we  must  believe  what  is  still  more  extraordinary:  we  must 
believe  that  the  stockholders,  frequently  also  changing,  were  fools.  Each  of 
them  had  a  right  to  inquire  into  the  affairs  of  the  bank,  and  the  conduct  of  the 
directors,  and  it  is  to  be  presumed  they  have  done  it,  and  were  satisfied.  The 
Secretary  of  the  Treasury  has,  for  the  time  being,  had  authority  by  law  to 
inspect  the  directors  of  the  bank,  and  did  do  it,  and  obtained  weekly  returns 
of  its  situation.  These,  though  of  different  political  parties,  were  all  men  of 
character  and  talents,  whose  moral  character  has  not  been  impeached.  The 
present  Secretary  of  the  Treasury  is  supposed  to  be  honest,  ana  his  talents  on 
this  subject  are  admitted  by  all.  Indeed,  the  gentleman  from  Virginia  has 


u\     rill.    HILL   TO    RENLW   THE   CHARTKIJ    <H     1791. 

not  directly  questioned  his  integrity,  but  has  charged  him,  at  Jeast,  with  in- 
<  oinpetency.  It  is  certain  that  lie,  and  all  the  former  Secretaries  must  have 
been  either  incompetent,  or  dishonest,  or  both,  if  the  honorable  gentleman's 
assertions  are  correct. 

Mr.  F.  assured  the  House  that  he  was  not,  nor  ever  had  been,  a  stockholder 
of  that  bank,  nor  received  any  accommodations  from  it,  and  believed  he  never 
would:  and,  judging  from  his  .situation  and  time  of  life,  he  thought  he  was 
disinterested,  and  could  have  no  view  but  the  public  good,  as  far  as  he  under- 
stood it.  He  had  been  acquainted  with  many  of  the  directors  of  that  bank, 
from  its  commencement,  and  knew  their  moral  characters  to  have  been  unim- 
peachable, but,  by  the  law  of  its  corporation,  ail  the  directors  had  been  chang- 
ed; one  had  been  President  of  the  Bank  of  North  America  since  its  com- 
mencement (which  was  the  first  bank  in  the  United  States)  until  he  was 
elected  director,  and  afterwards  president,  of  the  Bank  of  the  United  States, 
and  continued  to  preside  over  that  institution  until  he  declined  the  honor  and 
the  labor,  not  long  since.  If  the  gentleman's  charges  against  the  directors  of 
that  bank  are  well  founded,  this  venerable  character,  (Thomas  Willing) 
never  heretofore  charged  with  dishonesty,  must  have  been  dishonest  in  a 
higher  degree  than  all  the  rest,  because  he  had  the  superintendence  of  the 
Bank  of  the  United  States  and  all  its  branches  for  the  longest  period. 

If  we  are  to  discredit  these  records,  and  give  credit  to  these  charges  of  in- 
tentional fraud,  so  long  continued,  and  so  successfully  carried  on,  we  must 
give  up  all  confidence  in  moral  integrity  and  artificial  clu-c  k>.  None  can 
have  ft  greater  interest  in  seeking  for  moral  integrity  and  talents,  than  the 
stockholders  have.  It  is  their  property  that  is  at  risk;  none  can  have  greater 
checks  on  their  conduct  Six  directors,  bi'ing  stockholders,  a 


,  ,  and  going  out 

every  year,  are  very  capable  of  understanding  the  subject  and  making  a  scru- 
tiny, which  every  stockholder  has  a  right  to  do.  If  they  conceal  the  profits  of 
the  bank,  they  do  it  at  their  own  loss  —  a  circumstance  very  hard  to  believe  of 
moneyed  institutions,  whose  sole  object  is  gain:  for  it  must  be  admitted  that 
the  price  of  stock  is  regulated  by  its  productiveness  in  dividends.  In  short, 
if  the  gentleman's  charges  against  the  bank  directors  £c.  are  well  founded, 
we  can  have  no  confidence  in  our  revenue  officers,  nor  in  any  department  to 
whom  the  receiving  or  paying  money  is  entrusted. 

The  honorable  gentleman  is  alarmed  with  the  dangers  of  foreign  capital  in 
the  vaults  of  the  bank,  and  amount  of  the  dividends  annually  drawn  to  Eu- 
rope; he  concluded  with  the  impressive  apprehension  that  the  day  was  not 
far  distant  when  France  and  the  United  States  would  be  in  friendship:  that,  in 
that  case,  Napoleon,  by  his  agents,  might  purchase  half  the  bank  stock,  and, 
through  that  medium,  govern  the  United  States. 

Mr.  F.  said  that  the  use  of  foreign  capital  had,  heretofore,  been  of  great 
advantage  to  the  United  States:  that,  from  the  use  and  improvement  of  this, 
our  own  commercial  capital  had  been  created,  and  our  country  improved. 
The  gentleman  had  introduced  the  opinion  ol  Mr.  Baring,  and  given,  he 
believed,  a  just  statement  of  his  wealth  and  credibility.  That  same  Mr.  Bar- 
ing had,  if  he  recollected  well,  stated  that  the  merchants  of  the  United  States 
were  always  indebted  to  the  British  merchants  and  manufacturers  upwards 
of  £2,000,000  sterling,  for  which  they  had  a  credit  of  eighteen  months,  and  on 
which,  they  sometimes  acquired  double  the  amount  in  trade,  before  the  capi- 
tal was  paid.  Why  did  riot  gentlemen  consider  this  foreign  capital  as  dan- 
gerous to  the  United  States,  which,  if  the  maxim  is  true,  that  the  borrower  is 
servant  to  the  loaner,it  certainly  is?  For  this  capital,  our  own  citizens  are  under 
obligations  to  foreigners;  for  the  stock  subscribed  for,  by  foreigners,  in  the 
bank,  they  are  under  obligations  to  us.  How  has  it  happened,  that  this,  much 
more  extensive  amount,  and  much  more  influential  use  of  foreign  capital,  has 
wholly  escaped  the  honorable  gentleman's  observations?  For  his  own  part,  Mr. 
F.  said,  he  believed  that  forefgn  capital  had  been  of  use  to  the  improvement 
of  this  country,  and  much  more  safely  in  the  form  of  bank  stock  than  other- 
wise. In  the  present  state  of  the  world,  however,  circumstances  had,  in  a 
tew  years,  greatly  changed.  He  would  not  be  alarmed  to  see  Napoleon  being 


466  BANK  OF  THE  UNITED  STATES. 

the  ^ purchaser  of  the  half,  or  even  of  the  whole  of  the  stock  of  the  Bunk  of  the' 
United  States,  as  he  could  have  no  vote  in  the  direction  of  it.  This  would  be 
the  best  security  we  could  possibly  have  for  reimbursement  of  the  spoliations 
committed  by  his  orders.  Foreigners  having  no  vote  in  the  choice  of  directors,, 
the  stock  is  wholly  in  our  power.  They  can,  even  now,  purchase  up  all  the 
stock  of  any  State  bank,  if  they  please.  It  is  for  sale  in  the  market.  Seques- 
tration of  enemy's  property  is  a  just  retaliation  for  depredations  on  the  ocean, 
bu  t  ought  to  be  the  last  resort.  Commercial  debts  are  hard  to  discover;  commercial 
honor  conceals  them;  but  bank  stock  cannot  be  concealed:  thereforey  the  se- 
questration of  bank  stock  is  the  best  security  we  could  have  in  our  power  to 
operate  against  our  greatest  enemy,  even  if  that  should  be  Bonaparte, 

There  is  also  a  mistake  about  the  value  of  the  deposites  in  the  bank;  their 
value  arises  more  from  their  certainty  than  their  amount.  No  bank  will  venture 
to  discount  on  deposites  that  may  be  withdrawn  the  next  day.  The  bank  di- 
rectors know  the  course  of  business  in  which  their  customers  are  engaged; 
they  know  when  the  deposites  will  be  withdrawn,  and  when  others  will  be 
made  to  replace  them.  On  these  they  can  calculate  with  certainty,  and  dis- 
count accordingly.  But,  this  is  not  the  case,  at  least  in  as  high  a  degree, 
with  revenue  deposites.  The  quarterly  payments  of  the  public  debt  may,  in- 
deed, be  calculated  on,  with  tolerable  certainty;  but  this  is  not  the  case  with 
numerous  other  demands  on  the  public  revenue,  to  meet  .which,  there  must  be 
always  a  sufficient  amount  ready,  on  demand.  The  deposites  of  the  public 
revenue,  no  doubt,  enable  the  bank  to  extend  its  discounts  to  a  certain  decree; 
but  by  no  means  to  the  degree  that  is  alleged;  besides,  even  permanent  depo- 
sites are  of  no  further  use  to  a  bank  than  discounts  are  in  demand.  At  pre- 
sent, banks  are  so  numerous  as  to  be  able  to  grant  discounts  on  all  good  paper; 
and  a  bank  with  a  small  capital  is  more  productive,  in  proportion  to  that  capi- 
tal, than  a  large  one;  but  not  so  safe  a  depository  for  the  public  revenue,  nor 
can  it  assist  the  Government  in  case  of  a  sudden  emergency.  The  honora- 
ble gentleman  considers  the  dangers  anticipated  from  the  sudden  stopping  of 
the  United  States'  Bank  as  mere  bugbears,  artfully  promoted  to  influence  the 
question;  and  says  he  has  heard  much  of  them  out  of  doors.  He  assures  us 
that  the  State  banks,  and  abundant  private  capital  in  the  country,  are  fully 
equal  to  the  crisis,  so  much  so,  that  no  such  effects  will  be  felt,  as  is  pre- 
tended, 

Mr.  F.  said  he  was  of  a  very  different  opinion.  Even  in  countries  where  pri- 
vate capital  and  bank  stock  was  much  more  abundant  than  in  this  country,  where 
the  great  difficulty  was  to  find  profitable  employment  for  money,  the  drawing 
of  a  much  less  sum  out  of  circulation  than  the  stock  of  the  Bank  of  the  Unit- 
ed States,  was  the  cause  of  incalculable  distress.  From  England,  from  which  we 
had  learned,  and  might  still  learn,  much,  respecting  money  negotiations,  many 
examples  to  this  purpose  might  be  produced.  He  would  only  mention  one.  In 
1793,  while  the  national  bank  of  England  was  in  full  credit,  and  issued  specie 
on  demand,  some  of  the  usual  channels  of  trade  being  stopped  by  the  war, 
several  private  banks  and  commercial  houses  stopped  payment.  So  much  be- 
ing withdrawn  from  the  usual  channels  of  circulation,  spread  distress  over  the 
whole  nation,  and  its  effects  were  felt  in  this  country  and  throughout  the  com- 
mercial world.  The  pressure  was  too  great  for  even  the  Bank  of  England  to 
relieve  it.  A  general  bankruptcy  was  so  much  apprehended,  that  the  govern- 
ment was  under  the  necessity  of  interposing,  and  issued  five  millions,  to  be 
lent  on  the  credit  of  deposites  of  merchantable  goods,  and  on  moderate  inter- 
est. Half  this  sum,  however,  supplied  the  vacuum  of  the  circulating  medium, 
and  retrieved  credit  and  confidence;  the  other  half  never  was  called  for. 
This  instance  is  selected,  because  it  is  believed  to  be  within  the  knowledge  and 
recollection  of  every  one  who  even  read  the  newspapers  but  seventeen  year  ago. 

He  said  that,  if  the  paper  in  circulation,  on  the  credit  of  the  ten  millions 
of  dollars  of  bank  stock,  were  suddenly  drawn  out  of  circulation,  the  distress 
occasioned  thereby  would  be  incalculable.  All  the  aid  that  State  or  private 
banks  could  give,  Avould  not  prevent  it;  they  would  be  distressed  themselves, 
and  many  of  them  stop.  The  d^nvMul  for  discounts,  in  specie,  would  be 


ON  THE  BILL  TO  RENEW  THE  CHARTER 


stop  business.  The  whole  ten  millions  must  be  raised  in  specie;  the  paper  of 
other  banks,  as  negotiable  paper,  will  not  do, at  least  for  the  $7,500,000  that 
is  to  return  to  Europe.  Tt  is  presumed  this  is  too  great  a  demand  of  specie 
to  be  suddenly  supplied.  Besides  these  evils,  it  would  lower  the  price  of 
produce  from  Georgia  to  New  Hampshire,  and  occasion  numerous  bankrupt- 
cies, and  would  even  affect  our  public  credit,  by  disabling  the  merchants  to 
pay  their  landed  debt,  and  obliging  such  as  possess  funded  stock  to  send  it  to  the 
market,  when  there  would  be  few  to  purchase.  Mr.  F.  said  he  was  as  con- 
fident that  such  would  be  the  consequences  of  suddenly  withdrawing  the 
stock  of  the  Bank  of  the  United  States,  as  he  could  be  of  any  causes  pro- 
ducing their  natural  effects.  These  consequences  could  only  be  lessened  by 
the  assistance  or  moderation  of  the  stockholders.  He  mentioned  an  instance 
within  his  own  knowledge,  which,  though  comparatively  small,  applied  to  the 
case,  A  number  of  French  royalists,  who  took  refuge  in  Philadelphia,  being  in 
expectation  of  a  counter  revolution^  would  not  vest  their  money  in  bank  or 
public  stock,  but  had  it  lent  on  broker  interest,  atone  per  cent  a  month;  it  had 
before  been  two  per  cent.  In  the  mean  time,  Congress  brought  forward  the 
alien  law,  and  the  emigrants  not  knowing  who  would  be  sent  out  of  the  coun- 
try, suddenly,  under  that  law,  called  in  their  money,  which,  notwithstanding 
the  assistance  of  the  banks,  soon  raised  the  broker's  interest  from  one  to  four  per 
cent,  a  month. 

For  these  reasons,  and  others  that  might  be  mentioned,  he  was  in  favor  of 
the  general  principles  of  the  bill,  and  against  the  amendment.  He  had  in- 
tended not  to  detain  the  House  long,  therefore,  he  would  not  discuss  the  de- 
tails of  the  bill.  He  supposed  they  might  be  much  improved,  in  the  passage  of 
the  bill,  by  improving  the  details. 

The  committee  then  rose,  reported  progress,  and  were  refused  leave  to  sit 
again;  consequently,  no  decision  was  had  on  Mr.  LGVK*S  motion  to  strike  out 
the  first  section. 

APRIL  21,  1810. 

The  proviso  moved  by  Mr.  TROUP,  to  be  stricken  out  of  the  bill,  (see  page 
135  ante)  was  that  which  required  the  bank  to  pay,  as  a  bonus,  for  the  re- 
newal of  its  charter,  into  the  treasury  of  the  United  States,  $1,250,000.  On 
this  motion  the  following  debate  took  place,  between  Mr.  Tnorp,  Mr.  TAY- 
LOR, Mr.  SMILIE,  and  Mr.  KEY: 

After  some  discussion  of  the  details  of  the  bill, 

Mr.  TROUP  said  gentlemen  might  pass  the  bill,  but  for  the  constitutional 
question.  If  they  did  pass  it,  he  hoped  they  would  not  permit  themselves  to 
become  the  retailing  hucksters  of  the  community,  for  the  sale  of  bank 
charters.  In  the  name  of  common  honesty,  said  he,  I  beseech  you,  what 
power  have  you  to  sell  a  charter?  There  is  a  power  in  the  constitution  to  sell 
the  public  property;  but  there  is  certainly  no  power  to  sell  privileges  of  any 
kind.  I  therefore  move  you  to  strike  out  the  bribe,  the  douceur,  aad  the  bo- 
nus, as  gentlemen  call  it,  of  1,250,000  dollars. 

Mr.  TAYLOR  said  that,  with  respect  to  the  principle  of  the  Government's 
receiving  a  bonus  for  this  monopoly,  (for  he  said  it  unquestionably  was  a  mo- 
nopoly) those  who  were  disposed  to  continue  this  charter  justified  their  con- 
clusion from  the  instrument  under  which  they  acted— under  that  clause  which 
says  that  Congress  shall  have  power  to  pass  all  laws  necessary  and  proper  to 
carry  into  effect  the  powers  granted.  If  (said  Mr.  T.)  one  banking  institu- 
tion be  necessary  and  proper,  and  answers  the  purpose  of  aiding  us  in  the 
temporary  loans  it  may  be  found  advantageous  to  indulge  in,  and  we  act  un- 
der these  terms,  when  we  have  fufilled  those  terms,  and  created  an  institu- 
tion coming  up  to  the  definition  of  necessary  and  proper,  the  power  then 
ceaspfi.  1  his  being  a  monopolizing  institution,  being  so  although  a  handmaid 


468  BANK  OF  THE  UNITED  STATES. 

to  the  Government,  it  was  deemed  fair,  acc9rding  to  the  principles  of  national 
justice,  that  they  should  pay  to  the  community,  and  to  the  People  of  the  Unit- 
ed States,  an  equivalent  for  that  advantage,  and  this  decision  of  the  commit- 
tee was  justified  not  only  by  the  example  of  other  governments,  (for  gentle- 
men have  quoted  instances  in  which  the  bank  of  England  has  given  a  bonus  for 
the  extension  of  its  charter)  but  by  the  practice  of  the  different  States:  for 
it  has  been  uniformly  the  practice  of  some  States  to  receive  a  bonus  from 
these  monopolizing  institutions.  Unquestionably,  if  benefit  conferred  requires 
a  return  in  value,  it  is  right  and  proper  that  the  Government  should  exact 
from  that  monopolizing  institution  a  bonus.  But,  sir,  this  course  is  not  only 
justified  by  the  practice  of  the  State  Governments,  but  by  the  practice  of  the 
republican  administration  of  Mr.  Jefferson.  The  Government  of  the  United 
States  possessed  a  number  of  shares  in  the  Bank  of  the  United  States,  each 
representing,  as  each  of  these  does,  four  hundred  dollars;  yet,  that  adminis- 
tration transferred  this  paper  at  an  advanced  price.  If  the  principle  of  dis- 
posing of  these  shares  be  correct,  it  will  equally  apply  to  all  the  shares  in  the 
institution.  What  right  had  the  Secretary  of  the  Treasury,  or  person  acting 
for  him,  to  demand  forty-five  per  cent,  above  the  real  specie  capital  for  the 
bank  stock?  In  transferring  the  stock,  did  not  the  Government,  on  that  oc- 
casion, receive  a  bonus?  Unquestionably  they  did.  If  they  receive  a  bonus, 
as  to  some  shares,  can  they  not,  with  equal  honesty,  receive  it  as  to  the  whole 
number  of  sharesr 

But,  it  does  not  require  refinement  to  justify  the  course  which  it  is  propos- 
ed to  pursue.  The  thing  is  worth  something.  You  are  offered  something 
for  it.  There  is  no  oppression  in  it.  If  you  could, at  once,  put  in  requisition, 
so  much  money  of  the  stockholders,  and  put  it  in  the  pockets  of  the  United 
States,  it  would  be  oppression.  But,  here  is  au  fair  choice  offered  to  them, 
whether  they  will  take  the  charter,  giving  a  bonus  for  it,  or  reject  it.  It  is 
perfectly  a  matter  of  choice;  and,  from  the  arguments  of  some  gentlemen  op- 
posed to  the  bill,  so  far  from  being  unwilling  to  give  so  much,  it  would  seem 
that  the  stockholders  ought  to  give  much  more  for  the  renewal  of  the  charter. 
I  am  desirous  to  receive  a  quid  pro  quo.  The  arguments  about  foreign  stock- 
holders have  had  so  much  effect  on  me,  that  I  would  not  continue  this  institu- 
tion, unless  Government  received  a  benefit  from  it.  It  is  unquestionably 
true,  that  the  habits,  customs,  manners,  and  decisions  of  nations  have  esta- 
blished a  common  course  of  proceeding  on  this  subject,  and  we  must  act  ac- 
cording to  custom.  We  now  value  a  dollar  at  so  much,  and  a  piece  of  iron 
at  so  much.  The  custom  of  nations  has  given  a  sort  of  common  law  control 
over  these  institutions,  and  we  must  act  with  them  as  other  nations  do.  I  do 
not  consider  it  a  "  bribe"  that  I  or  the  Government  are  about  to  receive.  On 
the  contrary,  I  think  it  a  fair  bargain.  There  seems  to  be  no  disposition  to 
abate  a  farthing,  but  to  have  the  value  arid  nothing  less.  I  do  not  wish  to 
have  more.  The  provisions  of  this  bill,  with  some  amendments,  will  give  the 
transaction  a  character  of  perfect  fairness. 

Mr.  SMILIE  said,  that,  on  this  question  he  differed  materially  from  his 
friend  on  his  left.  The  word  "bribe"  was  not  applicable  to  the  bargain  now 
about  to  be  made.  1  take  it  for  granted  (said  he)  there  is  but  one  ground  on 
which  the  Legislature  is  justified  in  granting  a  monopoly;  and  that  is,  that  it 
is  necessary  in  the  operations  of  the  Government.  If  that  be  the  case,  we 
certainly  have  a  right,  in  granting  that  monopoly,  to  make  the  best  bargain  for 
our  own  interest  which  we  can,  always  remembering  that  we  consider  the 
thing  necessary  and  proper  in  itself.  As  that  is  my  opinion,  I  think  it  a  fair 
transaction,  in  making  the  bargain  with  the  company,  to  obtain  as  great  ad- 
vantage to  the  Government  as  the  justice  of  the  case  will  admit;  and  this  is 
a  thing  we  have  done  before.  It  will  be  recollected,  when  the  State  of  Ohio, 
then  a  territory,  was  made  a  State,  we  found  it  very  inconvenient  to  the  Go- 
vernment that  they  should  possess  the  power  of  taxing  our  lands.  We  made 
a  proposition  to  them,  that,  if  they  would  not  tax  our  lands  for  a  certain  num- 
ber of  years,  we  would  do  certain  other  things.  The  bargain  took  place. 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.     459 

We  have  derived  an  advantage  from  it,  at  the  same  time  that  we  paM  them  a 
price  for  it.  The  consequence  fairly  follows,  that  we  ought  to  grant  this  ne- 
cessary charter  on  such  terms  as  are  just,  both  with  respect  to  the  country 
and  the  Government,  and  derive  as  much  advantage  as  we  can  from  it. 

Mr.  THOUP  said  he  forebore,  at  present,  going  into  the  question  of  consti- 
tutionality. He  had  no  idea  that  he  could,  with  any  efficacy  whatever,  stand 
up  on  this  floor,  with  such  a  weapon  as  an  argument,  to  contend  with  a  mo- 
neyed institution  of  ten  millions.  If  I  am  not  disposed  to  go  into  the  general 
question  of  constitutionality,  said  he,  lamas  certainly  indisposed  to  derive 
this  power  from  the  power  to  pass  all  laws  necessary  and  proper.  I  am  the 
more  reluctant  to  do  so,  because  it  is  a  dangerous  power,  and  ought  not  to  be 
derived  by  implication.  I  say  that  the  power  is  dangerous:  for,  if  it  be  con- 
ceded that  the  Congress  of  the  United  States  have  a  n^ht  to  erect  a  moneyed 
institution,  with  a  capital  of  ten  or  twenty  millions,  it  is  competent  to  erect 
one  with  a  capital  of  a  hundred  millions.  It  may  be  competent,  therefore,  to 
the  United  States  to  raise  a  corporation  more  powerful  than  itself—a  moneyed 
institution  which  may  absorb  all  the  powers  of  the  State-  And  this  principle, 
as  a  precedent,  will  be  the  more  dangerous,  in  this  case,  because  the  tempta- 
tion is  so  much  greater,  in  proportion  to  the  amount  of  capital.  I  do  contend, 
that,  if  the  constitution  did  intend  to  grant  the  power  of  chartering  moneyed 
institutions,  it  did  not  intend  to  grant  it  for  the  purposes  of  speculation,  and 
of  speculation  merely.  Sell  privileges!  Sell  for  1,250,000  dollars  the  exclu- 
sive privilege  of  taking  usurious  interest  on  money!  I  thought,  sir,  that  the 
power  of  selling  privileges  and  indulgences  was  exclusively  the  right  and 
power  of  the  Pops*.  I  ask  gentlemen  on  what  authority  they  act?  On  none 
of  morality,  certainly— but  on  what  authority?  On  that  of  the  corrupt  go- 
vernment of  England.  Servile  imitators  of  England,  we  must  have  a  national 
bank!  And  why  not  an  East  India  company?  We  could  sell  a  charter  to- 
morrow for  millions.  We  could  sell  chartered  privileges  for  almost  as  much 
as  we  should  choose  to  ask.  If  wo.  become  the  retailers  of  privileges,  we 
shall  go  on  to  sell  them  till  we  overdo  the  business;  and  when  this  great  na- 
tional source  of  revenue,  after  becoming  our  chief  and  only  resource,  had 
failed,  to  what  resources  for  reveuue  should  we  be  driven?  Is  it  not  a  very  ra- 
tional inference,  that  it  will  be  to  the  sale  of  all  privileges  we  can  derive  from 
the  constitution  a  power  to  dispose  of?  If,  sir,  on  any  occasion,  you  would 
set  up  in  the  market  privileges  for  sale  to  the  highest  bidder,  even  do  so  with 
respect  to  privileges  of  every  description.  You  would  no  more  hesitate  to  set 
up  for  sale  privileges  of  nobility  than  this  privilege;  but.  (I  thank  my  God!) 
the  constitution  has  prohibited  you.  But  for  that,  you  should  sell  them  now 
as  we  do  bank  privileges;  we  should  go  on  to  make  it  our  chief  resource,  till, 
by  the  cheapness  of  the  title,  we  should  destroy  the  value  of  the  trade.  If 
we  can  draw  money  into  the  treasury  by  bargain  and  sale  of  privileges,  let 
it  be  understood  that  we  will  continue  to  foster  it  as  our  chief  national  re- 
source. Having  done  with  internal  and  direct  taxes  of  all  descriptions,  be- 
cause we  considered  them  oppressive,  this  sale  of  privileges  will  be  made  the 
chief  national  resource. 

1  will  add  but  one  thing.  The  moment  you  accept  this  1,250,000  dollars, 
you  are  bribed  in  the  same  manner  as  the  British  Parliament  have  suffered 
themselves  to  be  corrupted.  Like  them  we  not  only  shamefully  partake  of 
the  crime,  but  on  our  statute  book  acknowledge  the  lact. 

Mr.  KEY  said  that  to  him  it  clearly  appeared  within  the  power  and  limit 
of  the  constitution  to  establish  a  bank,  if  necessary,  for  the  collection  of  the 
revenue.  Whether  necessary  or  not,  (said  he)  is  a  question  on  which  gen- 
tlemen must  make  up  their  minds;  it  would  be  only  an  unnecessary  waste 
of  time  to  argue  it  at  length.  My  ideas  on  this  subject,  which  I  have  never 
before  delivered  to  the  House,  are  plain  and  simple.  I  know  not  how 
far  they  may  appear  so  to  others;  but  1  will  explain  them  as  they  occur  to  me. 

We  need  not  look  to  the  constitution  always  for  precise  terms  to  justify  an 


470  BANK   OF  THE   UNITED   STATES. 

exercise  <»f  power,  because  it  is  but  an  enumeration  of  first  principles.  All 
we  have  to  do  is  to  examine  whether,  in  what  we  do,  we  fall  within  the  plain 
meaning  of  (he  constitution.  In  the  enumeration  of  specific  powers  given  to 
Congress  by  this  instrument,  the  first  is  to  lay  and  collect  taxes.  Here  is  a 
clear,  unequivocal  grant  of  power  to  lay  taxes,  imposts,  and  excises.  In 
construing  the  general  power,  afterwards  given,  to  make  all  laws  necessary 
and  proper,  &c.  the  sound  construction  is  to  refer  to  the  powers  previously 
given;  one  of  which  is,  as  I  have  stated,  to  lay  and  collect  taxes.  The  mode 
by  which  they  are  collected  is  not  designated  in  the  instrument.  We  have 
authority  given  us  to  make  all  laws  necessary  and  proper  to  carry  these 
powers  into  effect.  The  power  of  laying  and  collecting  taxes  is  specifically 
given;  but  the  mode  is  not  stated.  To  collect  is  not  merely  the  individual 
receipt,  but  the  substantial  collection  into  the  treasury.  It  does  not  simply 
give  power  to  the  collector  of  a  port  to  receive  the  revenue,  but  a  power  to 
collate  the  revenue  into  a  general  deposite  or  focus.  Is,  then,  a  bank  institu- 
tion necessary,  in  the  judgment  of  gentlemen,  to  draw  together,  with  greater 
facility  and  less  cost,  these  taxes?  If  there  are  those  who  think  so,  we  can 
be  at  no  loss  to  find  express  authority  for  it.  We  have  a  right  to  lay  the 
taxes — the  manner  of  levying  or  collecting  them  is  not  prescribed;  and  when 
lodged  in  the  hands  of  the  different  collectors,  ho w  they  are  to  come  into  the 
common  exchequer  is  no  where  described.  Is  the  instrumentality  of  a  bank 
necessary  for  the  more  speedy  and  less  expensive  collection  of  the  revenue? 
If  it  be,  all  who  think  so  are,  in  my  opinion,  constitutionally  justified  in 
voting  for  a  bank. 

In  all  this,  I  say  nothing  of  the  opinion  of  learned  men  on  the  subject.  The 
act  for  establishing  a  bank  was  suspended  some  time  for  consideration, 
before  it  received  the  signature  of  Washington.  It  has  been  considered  con- 
stitutional by  all  the  States:  for  I  believe  I  may  say  that  the  States,  without 
exception,  have  given  legitimacy  to  the  paper  issued  by  the  institution.  If  it 
was  originally  unconstitutional,  and  the  paper  was  not  capable  of  going 
abroad,  every  man  punished  for  counterfeiting  United  States'  bank  notes, 
has  suffered  unjustly;  because,  in  that  case,  Congress  having  no  right  to  create 
the  charter  of  a  bank,  had  no  right  to  punish  the  forgery  of  its  paper. 

I  say  nothing  of  the  stability  of  this  institution,  and  of  its  utility  in  collecting 
the  revenue.  If,  after  the  lapse  of  twenty  years,  various  acts  have  been  done, 
proceeding  on  the  constitutionality  of  the  law  establishing  the  bank,  I  consider 
the  subject  one  which  has  been  so  acted  on,  that,  whatever  obstacles  are 
opposed  on  the  ground  of  constitutionality,  should  now  be  done  away.  But, 
laying  this  consideration  aside,  all  those  who  believe  that  a  bank  is  a  speedy, 
safe,  and  economical  mode  of  collecting  money  into  the  treasury,  must  find 
authority  for  it  in  the  constitution.  To  have  given  the  power  to  collect  taxes, 
and  not  the  best  means  of  getting  them  into  the  treasury  in  the  most  correct 
manner,  would,  indeed, have  been  an  extraordinary  feature  in  the  constitution; 
it  would  have  been  giving  the  end  without  the  means  to  attain  it.  It  would 
be  giving  a  forced  construction  to  the  constitution  to  say  that  it  had  done  so. 

1  know  that  gentlemen  think  the  collection  of  the  revenue  would  be  as  well 
accomplished  through  the  State  banks.  Those  who  think  so  justify  their 
opinion  only  on  reasons  which,  to  my  mind,  show  the  constitutionality  of  the 
United  States'  Bank,  and  prove  that  we  have  authority  to  use  that  instrument, 
if  we  think  proper,  and  deem  it  the  most  eligible.  We  are  the  grantors  of 
power.  By  whom  is  it  executed?  Through  the  instrumentality  of  individuals 
and  their  funds.  In  using  the  instrument,  we  do  create  a  benefit  to  the  indi- 
viduals, who,  together  with  their  friends,  must  be  employed.  For  this  benefit 
I  can  see  nothing  improper  in  receiving  adequate  compensation.  And  if  it  be 
a  grant  of  a  benefit,  why  not  grant  it  to  those  who  will  give  an  equivalent 
for  it? 

Sir.  the  constitution  grants  to  Congress  the  power  to  secure  to  inventors  of 
useful  arts  the  exclusive  right  to  their  discoveries.  We  must  not  be  misled 
by  language  or  words.  We  sell  privileges  every  day.  Does  not  our  treasury 
receive  benefits  from  the  sale  of  these  patents?  And  yet,  according  to  the 


ON  THE  BILL  TO  RENEW  THE  CHARTER  OF  1791.      47  J 

ideas  of  the  gentleman  from  Georgia,  we  thus  become  the  hucksters  of  privi- 
leges. But  lest  the  gentleman  should  not  think  that  this  case  applies  very 
strongly,  I  will  call  to  mind  a  remarkable  case— I  know  not  how  the  gentle- 
man voted  on  the  law.  AVe  have  incorporated  a  number  of  gentlemen  to 
build  a  bridge  across  the  Potomac,  reserving  as»a  bonus  for  this  privilege,  the 
free  passage  of  all  armies,  military  munitions,  &c.  of  the  United  States; 
which  was  exactly  the  same  thing  as  receiving  so  much  money.  The  Govern- 
ment is  a  body  politic;  its  operations  must  be  carried  on  by  individuals;  and 
when  individuals,  incorporated  for  the  purpose  of  receiving  revenue,  who 
use  their  hands  and  eyes  in  the  business,  receive  too  much  emolument,  I  see 
nothing  improper  in  requiring  from  them  an  equivalent  in  lieu  of  it.  I  hope, 
therefore,  this  part  of  the  bill  will  not  be  struck  out. 

Mr.  TROUP  observed,  that  the  gentleman  has  said,  that  the  power  to  incor- 
porate a  bank  was  derived  from  the  power  to  lay  and  collect  revenue;  and 
that  the  power  ought  to  be  exercised,  because  banks  give  a  facility  to  the 
collection  of  the  revenue.  If  the  power  be  exercised,  it  must  be  necessary 
and  proper.  If  it  be  necessary  to  the  collection  of  the  revenue,  the  revenue 
cannot  be  collected  without  it.  The  gentleman  from  Maryland  might  say  a 
bank  institution  was  useful.  He  migHt  say  it  would  give  facility  to  the  col- 
lection of  the  revenue;  but  facility  and  necessity  are  wholly  different;  and 
the  constitution  says,  that  a  power,  to  be  incidental,  must  be  necessary  and 
proper.  If  facility  be  a  ground  of  action,  we  are  greatly  wide  of  the  true 
policy.  AVe  ought  to  adopt  that  measure  which  shall  give  the  greatest  facility. 
The  ingenious  gentleman  himself  could  sit  down,  and  in  fifteen  minutes 
devise  half  a  dozen  modes  which  would  give  infinitely  more  facility  than  a 
bank,  to  the  collection  of  the  revenue.  He  might  farm  out  the  revenue; 
establish  farming  districts;  put  a  farmer  general  at  the  head  of  them,  with  a 
corps  of  janissaries.  The  Secretary  of  the  Treasury  would  have  nothing  to 
dp  but  draw  on  him  for  a  sum  of  money,  and  require  it,  or  his  head.  This, 
sir,  is  a  plan  which  would  give  the  greatest  possible/aa/t/i/.  You  could  com- 
mand money  of  the  farmer  general,  or  you  could  require  his  head.  Himself 
and  his  janissaries  could  always  send  the  money;  or,  if  he  did  not,  the  People 
and  the  janissaries  could  send  his  head. 

The  motion  of  Mr.  TROTP  was  rejected,  by  a  vote  of  35  for  striking  out, 
and  75  against  it. 


CHAPTER    IV. 

ON    THE    VARIOUS    PROJECTS    FOR    A   NATIONAL    BANK,    IN    THE    YEARS    1814    ANP 
1815,    DURING    THE    THIRTEENTH    CONGRESS. 


&&£***}     HOUSE    OF   REPRESENTATIVES. 

JANUARY  4,  i«14. 

Mr.  LEFFERTS  presented  a  petition,  signed  by  one  hundred  and  fifty  in- 
habitants of  the  city  of  New  York,  praying  that  an  act  may  be  passed  to  in- 
corporate a  National  Bank,  with  a  capital  of  thirty  millions  of  dollars. 

Read,  and  referred  to  the  Committee  of  Ways  and  Means.* 


JANUARY  10,  1814. 

Mr.  EPPES,  from  the  said  committee,  made  the  following  report;  which  was 
referred  to  a  committee  of  the  whole  House  on  the  state  of  the  Union: 

The  Committee  of  Ways  and  Means,  to  whom  was  referred  the  memorial 
af  sundry  inhabitants  of  the  State  of  New  York,  praying  for  the  establish- 
ment of  a  National  Bank,  report: 

That  the  power  to  create  corporations  within  the  territorial  limits  of  the 
States,  without  the  consent  of  the  States,  is  neither  one  of  the  powers  dele- 
gated by  the  constitution  of  the  United  States,  or  essentially  necessary  for 
carrying  into  effect  any  delegated  power. 

FEBRUARY  4,  1814. 

Mr.  CALHOUN,  of  S.  C.  moved  that  the  committee  of  the  Whole  be  dis- 
charged from  the  further  consideration  of  the  report  of  the  Committee  of  Ways 
and  Means,  on  the  petition  from  New  York  for  the  establishment  of  a  Na- 
tional Bank,  and  that  the  same  be  recommitted  to  the  same  committee,  with 
a  view  of  making  a  further  motion  on  that  subject.  Agreed  to. 

Mr.  CALHOUN  then  said  that  it  would  be  found  that  the  Committee  of 
Ways  and  Means  had  decided  against  that  report,  on  the  ground  of  uncon- 
stitutional ity  of  establishing  such  a  bank  as  that  asked  for  in  the  petition. 
Mr.  C.  vyished  to  instruct  the  committee  to  inquire  into  the  expediency  of 
establishing  a  National  Bank,  within  the  District  of  Columbia,  the  power  to 
do  which,  it  could  not  be  doubted,  came  within  the  constitutional  powers  of 
Congress.  For  all  practical  purposes,  he  believed,  such  a  bank  would  be  as 
useful  as  that  which  was  proposed.  To  come  at  his  object.  Mr.  C.  proposed 
the  following  motion: 

Resolved.  That  the  Committee  of  Ways  and  Means  be  instructed  to  in- 
quire into  the  expediency  of  establishing  a  National  Bank,  to  be  located  in  the 
District  of  Columbia. 

The  resolution  was  agreed  to  without  opposition. 

*  The  said  committee  consisted  of  Messrs.  Eppes,  of  Virginia,  Taylor,  of  N.  Y. 
Roberts,  of  Pennsylvania,  Creig-hton,  of  Ohio,  Alston,  of  North  Carolina,  McKim,  of 
Maryland,  and  Cox,  of  N.  J. 


PROCEEDINGS  OF   1814,  473 

FEBRUARY  19,  1814. 

Mr.  TAYLOR,  of  New  York,'from  the  Committee  of  Ways  and  Means,  re- 
ported a  bill  to  incorporate  the  stockholders  of  the  National  Bank.  It  pro- 
posed the  establishment  of  a  bank,  with  a  capital  of  thirty  millions  ot  dollars, 
in  the  city  of  Washington,  and  named  a  number  of  persons,  some  ot  whom 
are  of  that  city  and  Georgetown,  to  act  as  Directors  until  others  were  ap- 
pointed. 

The  bill  was  twice  read  and  committed 

MARCH  10,  1814. 

Mr.  FISK,  of  New  York,  rose  to  make  a  motion,  which  he  said  he  had  in 
contemplation  ever  since  he  examined  the  provisions  of  the  bill  reported  by 
the  Committee  of  Ways  and  Means  for  the  establishment  of  a  National  Bank. 
Whatever  might  be  his  opinion  as  to  the  expediency  of  a  bank  for  national 
purposes,  he  did  not  know  that  this  was  the  proper  moment  for  erecting  sue 
an  institution,  because,  when  Congress  had  just  authorized  the  sale  ot  stock 
to  the  amount  of  twenty-five  millions,  it  would  certainly  be  inexpedient  to 
create  a  demand  for  so  large  an  amount  of  other  stock.  But,  if  it  was  expe- 
dient, or  whenever  it  shall  be,  every  one  who  had  read  the  bill  must  perc 
that  a  bill  containing  such  provisions  would  not,  could  not  pass.  He,  there- 
fore, moved  "  that  the  committee  of  the  whole  to  whom  is  referred  the  bill 
to  incorporate  the  stockholders  of  the  National  Bank  be  discharged  from  the 
consideration  thereof,  and  that  it  be  referred  to  a  select  committee,  with  in- 
structions to  report  a  bill  to  establish  a  National  Bank,  with  provisions  tor 
branches." 

Mr.  SEYBERT.  of  Pennsylvania,  said  he  was  opposed  to  this  motion.  He 
thought  it  would  be  highly  improper,  if  it  was  referred  to  a  committee  at  all, 
to  refer  this  subject  to  a  select  committee,  when  it  properly  belonged  to  the 
standing  committee,  to  which  was  referred  all  subjects  relating  to  the  Ways 
and  Moans,  and  to  the  credit  of  the  Government.  Mr,  S.  related  the  course 
this  subject  had  taken  during  this  session.  In  the  first  instance,  it  had  been 
introduced  into  the  House  by  a  petition  from  the  citizens  of  New  York,  which 
was  referred  to  the  Committee  of  Ways  and  Means;  that  committee  had  re- 
ported that,  in  their  opinion,  it  was  not  constitutional  to  establish  branches 
in  the  States.  It  was  now  proposed  again  to  refer  this  question  to  a  commit- 
tee—for what?  To  inquire  into  the  expediency  of  establishing  a  bank,  with 
branches,  against  which  so  pointed  a  report  had  already  been  made.  What 
could  the  gentleman  promise  himself  from  this  course?  Nothing  but  defeat. 
The  question  was  one  of  considerable  magnitude,  which  there  was,  during  this 
session,  no  time  to  investigate.  Mr.  S.  said  he  had  been,  and  should  be,  op- 
posed to  the  bill;  and,  on  a  former  occasion,  several  of  the  States  had  de- 
clared their  opposition  to  such  a  proposition.  To  keep  the  question  before 
the  House  would  do  an  injury  to  the  nation,  in  regard  to  its  public  stock. 
There  were  men  here  who  were  highly  interested  in  the  fate  of  this  question, 
and  who,  during  its  agitation,  would  doubtless  dissuade  their  friends  from 
embarking  in  the  loan.  He  hoped  this  motion  would  not  prevail,  but  that  the 
bill  now  before  the  House  would  be  taken  up  at  a  proper  time,  and  heard  on 
its  merits. 

^  Mr.  EPPES,  of  Virginia,  stated  the  course  this  question  had  taken  in  the 
Committee  of  Ways  and  Means.  When  the  question  was  referred  to  them, 
they  had  decided  against  the  constitutionality  of  the  measure  as  then  pro- 
posed; and,  as  so  much  argument  had  heretofore  taken  place  on  the  subject, 
they  thought  it  would  be  better  now  to  place  the  naked  question  before  the 
House,  to  enable  them  to  decide,  in  the  first  instance,  whether  the  constitu- 
tion did  vest  m  Congress  the  power  to  establish  a  National  Bank.  This  re- 
port of  the  Committee  of  Ways  and  Means  was  referred  to  a  committee  of 
the  whole;  but,  by  discharging  that  committee  from  the  further  considera- 
60 


474  BANK  OF  THE  UNITED  STATES. 

tion  of  the  report,  and  referring  it  back  to  the  Committee  of  Ways  and  Means? 
with  particular  instructions,  the  House  had  waived  the  constitutional  ques- 
tion, and  directed  an  inquiry  into  the  expediency  of  establishing  a  bank  with- 
in the  District  of  Columbia.  A  majority  of  the  committee  believed  it  would 
be  expedient,  though  he  himself  did  not  think  so,  and  did  not  agree  to  the 
report.  If  the  gentleman  was  disposed  to  try  the  question  of  establishing 
branches  to  the  bank,  it  would  be  easier  to  do  so  by  engrafting  a  proposition 
to  that  effect  on  the  present  bill.  It  would  be  better,  if  recommitted,  how- 
ever, that  the  bill  should  be  referred  to  a  select  committee,  and  not  to  the 
Committee  of  Ways  and  Means,  who  had  already  expressed  their  opinion  on 
the  subject. 

Mr.  FISK  said  he  did  not  know  that  the  question  could  be  acted  on  at  the 
present  session,  but  that  was  one  of  the  points  he  wished  to  be  inquired  into.. 
The  question  was  of  so  much  importance,  that  he  wished  it  to  be  examined 
in  all  its  bearings;  and,  if  it  could  not  be  acted  on  at  the  present  session,  that 
the  public  opinion  on  it  might  be  concentrated  before  the  next.  The  agita- 
tion of  this  question,  he  presumed,  would  not  create  any  difficulty  in  pro- 
curing the  loan,  when  it  was  recollected  that  every  Legislature  in  the  Union 
almost  was  principally  engaged  during  its  sessions  in  establishing  new  banks. 
He  thought  the  establishment  of  a  great  bank  would  rather  have  a  tendency 
to  check  the  extravagant  issue  of  paper,  and,  if  he  might  be  allowed  the  ex- 
pression, to  bring  the  community  to  its  senses.  It  had  been  said  that,  though 
the  incorporation  of  a  National  Bank  was  unconstitutional,  yet  it  might  be 
established  in  this  District,  where  Congress  possess  exclusive  jurisdiction. 
He  said  he  should  be  alarmed  by  such  a  construction,  if  it  were  to  prevail, 
that  Congress  might,  within  this  District,  do  the  most  unconstitutional  acts. 
Such  a  bank  was  certainly  not  necessary  for  the  use  of  the  people  within  this 
District.  To  establish  such  a  bank,  with  this  view,  would  be  as  preposterous 
as  it  would  be  to  build  fifty  sail  of  the  line,  under  a  pretence  of  protectingthe 
city  by  sailing  along  the  canal  which  runs  through  it.  There  was  in  the  Dis- 
trict as  much  natural  capacity  to  employ  the  one  as  the  other.  In  regard  to 
the  principle  of  exclusive  legislation  in  the  District,  Congress  had  decided  it 
not  to  exist  in  the  extent  now  contended  for,  when  they  acquiesced  in  the 
views  of  the  President  in  puting  his  veto  to  the  bill  for  incorporating  a  church 
in  the  town  of  Alexandria,  because  of  the  unconstitutional  connexion  of  reli- 
gion with  the  powers  of  the  Government.  A  very  cursory  view  of  the  bill 
now  before  the  House  would  show  that  it  was  not  intended  for  the  use  of  the 
good  people  within  the  District,  because  so  few  of  the  directors  were  located 
within  it.  Mr.  F,  adverted  to  other  objectionable  features  of  the  bill,  by  way 
of  proving  that,  if  a  National  Bank  was  necessary,  this  bill  was  not  calculated 
to  answer  the  object,  &c. 

Mr.  TAYLOR,  of  New  York,  made  a  few  observations  on  the  propriety  of 
acting  on  this  subject  speedily.  Though  he  had  reported  this  bill,  it  was  not 
a  favorite  project,-  he  was  in  favor  of  reporting  a  bill  with  very  different  pro- 
visions, but  a  majority  had  overruled  him,  and  decided  that  it  was  not  con- 
stitutional to  establish  a  bank  with  branches,  &c. 

Mr.  ALSTON,  of  North  Carolina,  observed,  that  gentlemen  might  obtain 
their  object  without  recommitting  the  bill,  by  moving  a  resolution,  and  ob- 
taining a  vote  thereon,  that  it  was,  or  was  not,  expedient  to  establish  a  bank 
with  branches. 

The  question  was  taken  on  Mr.  FISK'S  motion,  and  decided  in  the  ne- 
gative. Ayes  36. 

And  the  House  adjourned. 

[It  does  not  appear  that  any  farther  action  took  place  on  the  bill  reported 
by  Mr.  TAYLOR.  This  was  the  first  of  the  abortive  attempts  that  were  made, 
during  the  thirteenth  Congress,  to  establish  a  National  Bank.  ] 


PROCEEDINGS    OF    1814  475 

APRIL  2,  1814. 

Mr.  GRUNDY,  of  Tennessee,  submitted  the  following  resolution  for  consider- 
ation : 

Resolved,  That  a  committee  be  appointed  to  inquire  into  the  expediency  of 
establishing  a  National  Bank;  and  that  they  have  leave  to  report  by  bill  or 
otherwise. 


nitely.  He  said  that,  by  this  motion,  he  meant  not  the  slightest  disrespect  to 
the  mover  of  the  resolution;  but  feeling,  as  he  did,  a  firm  conviction  that  the 
constitution  had  not  given  to  Congress  the  power  to  establish  such  an  institu- 
tion, the  correctness  of  which  opinion  had  been  tried  and  settled  by  a  former 
Congress,  he  could  not  consent  to  the  adoption  of  the  resolution.  Besides, 
said  Mr.  N.,  the  session  is  now  drawing  to  a  close;  the  day  of  adjournment 
has  been  fixed  by  a  vote  of  this  House;  and  the  mind  of  every  member  is 
anxiously  directed  to  the  moment  which  is  to  restore  him  to  his  family  and 
home.  The  time  is  now  too  short  for  the  consideration  of  so  important  a  sub- 
ject; and  for  this,  as  well  as  the  intrinsic  objections  he  had  to  the  object  of 
the  resolution,  he  hoped  his  motion  to  postpone  it  indefinitely  would  prevail. 

Mr.  GRUNDY  said  he  trusted  the  motion  to  postpone  would  not  succeed. 
He  believed  there  was  time  enough  left  for  the  consideration  of  the  subject; 
and  if  the  House  would  bring  itself  to  discuss  it,  all  constitutional  difficulties, 
he  was  persuaded,  would  be  removed.  The  gentleman  from  Virginia,  by  his 
motion  to  postpone,  would  bring  the  subject  at  once  before  the  Housej  but  it 
would  be  much  better  to  refer  the  inquiry  to  a  committee,  let  them  investi- 
gate the  question  thoroughly,  and  report  the  result  to  the  House,  and  they 
would  then  be  enabled  to  act  understandingly.  Besides,  said  Mr.  G.,  the 
gentleman  has  opposed  the  resolution,  without  knowing  what  kind  of  a  bank 
is  contemplated,  or  upon  what  principles,  or  in  what  manner,  it  is  to  be  esta- 
blished. Let  the  matter  be  referred  to  a  committee;  it  will  then  come  regu- 
larly before  the  House,  and  every  member  will  know  how  to  act. 

Mr.  GROSVEXOR,  of  New  York,  said  he  had  always  believed  it  improper  for 
the  General  Government  to  legislate  in  erecting  banks,  except  so  far  as  to  ac- 
complish national  objects,  facilitating  the  collection  of  the  revenue,  &c.  As 
to  these  objects,  however,  it  was  the  constitutional  duty  of  the  Secretary  of 
the  Treasury  to  devise  the  ways  and  means,  and  if  sucn  an  institution  were 
necessary  for  the  purposes  of  Government,  it  was  the  duty  of  that  officer  to 
recommend  it.  He  wished  the  Secretary  to  say  whether  such  a  bank  was 
necessary,  and  not  that  the  subject  should  be  referred  to  a  committee  of  this 
House,  and  they  to  inquire  privately  of  the  Secretary  as  to  the  expediency  of 
the  measure.  When  the  proposition  came  in  at  the  proper  constitutional  door, 
and  appeared  to  be  necessary  for  the  financial  purposes  of  the  Government, 
he  should  not  object  to  it.  If  such  a  necessity  exists,  he  wished  the  Govern- 
ment to  come  forward  and  declare  it,  and  not  shrink  from  the  responsibility 
of  recommending  the  measure. 

Mr.  FINDLEY,  of  Pennsylvania,  made  a  few  remarks,  not  distinctly  heard. 
He  was  understood  to  say,  the  erection  of  a  bank  was  not  so  desirable  on  ac- 
count of  the  Government,  as  for  the  general  convenience  of  the  country. 

Mr.  OAKLEY,  of  New  York,  made  a  number  of  forcible  remarks  against  the 
indefinite  postponement.  He  said  he  did  not  believe  it  was  so  exclusively 
the  duty  of  the  Executive  department  to  recommend  the  establishment  of  a 
National  Bank,  even  if  required  by  the  finances  of  the  Government,  as  his  col- 
league (Mr.  GROSVENOR)  seemed  to  think.  He  had  no  doubt  that  a  National 
Bank  was  indispensable  to  the  proper  management  of  the  fiscal  affairs  of  Go- 
vernment; but,  independent  of  this  consideration,  he  believed  it  was  necessary 
to  the  general  convenience  of  the  community;  and  should  a  plan  for  such  an 


476  BANK   OF  THE    UNITED    STATES. 

institution  be  brought  forward  in  a  shape  that  he  approved,  he  should  certain- 
ly give  it  his  support.  Supposing,  however,  that  it  was  the  duty  of  the  Secre- 
tary of  the  Treasury  to  recommend  a  National  BankT and  that  he  should  be 
unwilling  to  assume  the  responsibility,  such  conduct  would  doubtless  be  re- 
prehensible, but  would  that  be  a  good  reason  why  Congress  should  decline  to 
establish  an  institution  that  would  alike  benefit  the  Government  and  promote 
the  general  good?  Mr.  O.  said  that,  although  the  proposition  did  not "  come 
in  at  the  proper  door,"  still  it  was  no  reason  the  House  should  refuse  to  act 
on  it.  Whether  this  be  a  proper  mode  of  establishing  a  National  Bank,  is 
properly  to  be  decided  when  the  question  comes  before  us  in  a  regular  form. 
The  question  now  turns  only  on  our  belief  as  to  the  expediency  of  such  a 
bank,  and,  if  expedient,  of  the  fitness  of  the  time,  &c.  of  incorporating  such  an 
institution.  He  was  therefore  clearly  of  opinion,  on  general  principles,  that 
the  motion?  for  an  indefinite  postponement  ought  not  to  prevail.  The  ques- 
tion of  a  national  bank,  he  added,  must  be  connected,  from  the  very  nature  of 
the  institution,  with  the  finances  of  the  Government.  But  though  he  should 
be  as  loath  as  any  one  to  volunteer  his  aid  to  the  administration,  in  support  of 
the  war,  yet  he  was  not  to  be  deterred  by  the  fear  of  incidentally  doing  so  from 
doing  what  he  believed  to  be  of  itself  right  and  proper.  It  is  our  duty,  said  hey 
to  legislate  for  a  settled  state  of  things.  A  National  Bank  is  necessary  in  my 
judgment,  to  the  permanent  interest  of  the  country,  and  therefore  I  am  and 
shall  be  in  favor  of  it,  if  the  details  of  the  bill  establishing  it  shall  be  such  as  to 
meet  my  approbation. 

Mr.  WRIGHT,  of  Maryland,  said  he  had  heretofore  voted  a  National  Bank 
unconstitutional |  he  was  then  satisfied  it  was  so,  and  he  believed  that  to  be  the 
opinion  of  a  great  portion,  if  not  a  majority  of  the  People.  If  so,  why  take 
up  the  time  ot  the  House,  and  consume  two  or  three  weeks  in  discussing  a 
question  which  may  be  determined  at  this  moment?  He  could  not  consent  to 
spend  the  precious  time  of  the  House  to  no  purpose,  and  being  satisfied  that 
no  National  Bank  could  be  passed  through  this  House,  he  should  vote  for  the 
indefinite  postponement  of  the  motion. 

Mr.  WEBSTER,  of  New  Hampshire,  said  this  was  a  subject  of  great  impor- 
tance, and  required  mature  consideration.  The  hour  of  adjournment  having 
arrived,  he  moved  that  the  House  do  now  adjourn.  Negatived,  69  to  67. 

Mr.  NEWTON  repeated,  he  had  moved  the  indefinite  postponement,  assur- 
edly not  from  any  disrespect  to  the  mover  of  the  resolution,  but  on  this 
ground.  The  time  rapidly  approached,  at  which  this  House  had  resolved  to 
adjourn;  but  nine  days  remained  of  the  session  if  the  determination  of  this 
House,  in  that  respect,  received  the  sanction  of  the  Senate,  and  after  so  long  a 
sitting,  every  member  must  turn  his  eyes  with  pleasure  to  that  moment.  The 
subject  of  a  National  Bank  was  one  which  had  been  discussed  in  the  House 
before,  and  in  private  circles,  over  and  often;  and  he  had  not  the  least  doubt 
but  every  gentleman  who  heard  him  had  made  up  his  mind  on  the  subject, 
and  that  a  year's  discussion  would  not  change  it.  He  therefore  thought  it 
would  be  best,  in  the  first  instance,  to  ascertain  whether  a  majority  was  or  was 
not  prepared  to  vote  for  such  a  measure. 

Mr.  GRUNDY  then  said,  that  he  certainly  should  never  have  brought  forward 
this  proposition,  without  having  reflected  much  on  it.  He  knew  that  it  had 
been  agitated  in  this  House,  and  in  the  nation,  heretofore,  and  had  been  much 
opposed  by  many  of  those  politicians  with  whom  he  usually  acted  in  this 
House;  but  he  did  not  believe  that  each  Congress  was  so  bound  by  the  deci- 
sions of  that  which  preceded  it,  that  it  was  a  good  argument  against  a  measure 
for  members  of  a  former  Congress  to  come  in  and  say,  "we  have  decided  it 
heretofore."  Asa  representative,  Mr.  G.  said  he  claimed  the  right  to  give  at 
least  one  vote  on  this  subject,  as  well  as  the  gentleman  from  Virginia.  The 
spirit  of  our  constitution  had  wisely  ordained  the  frequency  of  elections  for  the 
very  purpose  of  undoing  what  had  been  wrongly  done  by  their  predecessors, 
and  of  doing  that  which  had  been  lett  undone-  If  the  gentleman  from  Virgi- 
nia would  reflect  on  this  subject  as  much  as  others,  who  had  been  instrumen- 


PROCEEDINGS    OF    1814  477 

tal  in  bringing  forward  the  proposition,  he  was  sure  he  would  not  be  so  con- 
fident that  he  acted  correctly  in  refusing  a  deliberate  consideration  to  it.  I 
(said  Mr.  G.)  have  no  secret  on  this  subject:  I  wish  to  see  a  bank  established 
as  a  national  object,  let  who  will  be  in  power:  as  a  general  measure  I  wish  to 
see  it  adopted.  Look  at  the  situation  of  our  country — and  I  say  the  gentle- 
man should  forget  his  home,  and  not  leave  his  country  in  peril.  You  have 
authorized  a  loan  for  twenty-five  millions,  and  have  provided  for  the  expen- 
diture of  so  much  money.  Where  is  the  money?  Some  well  informed  men 
say  there  will  be  no  difficulty  in  obtaining  it;  others,  as  well  informed,  say, 
that  the  attempt  to  obtain  it  may  not  be  successful.  I  hope  that  gentlemen  of 
the  former  description  are  correct.  I  know  not  what  the  prospect  is;  but  one 
thing  I  do  know — I  would  run  no  hazard  on  this  point;  and  for  one,  though  I 
have  as  much  anxiety  to  be  at  home  as  anyone,  I  am  willing  to  sit  a  few  days 
longer,  to  see  how  it  will  be.  The  gentleman  from  Virginia  no  doubt  felt  the 
same  anxiety  for  the  public  service;  and  Mr.  G.  said,  if  his  constitutional 
scruples  were  so  great  that  he  could  not  vote  for  this  measure,  in  case  the 
money  should  not  be  conveniently  obtained,  it  might  be  necessary  to  resort  to 
some  other.  For  general  consideration,  Mr.  G.  said,  he  had  always  been  in 
favor  of  a  measure  of  this  sort;  and  he  entertained  no  constitutional  scruples, 
about  it.  In  point  of  time,  he  thought  the  present  situation  of  the  country 
afforded  a  cogent  argument  in  favor  of  the  measure. 

Mr.  GASTON,  of  North  Carolina,  expressed  his  entire  disapprobation  of  the 
indirect  introduction  of  Executive  recommendations  into  the  House,  as  pro- 
ducing legislation  without  intelligence,  and  action  without  responsibility,  &c. 
If,  therefore,  the  vote  on  this  question  were  to  test  his  approbation  of  this  in- 
direct mode  of  attaining  a  measure  supposed  to  be  in  favor  of  the  Executive, 
he  should  certainly  be  inclined  to  vote  against  it.  But,  when  a  proposition 
was  made  by  any  member  of  this  House,  which  recommended  itself  to  his  best 
judgment,  on  which  he  felt  no  constitutional  scruples,  and  which  he  believed 
to  be  at  all  times  expedient,  he  could  not  give  a  direct  vote  against  it,  merely 
because  the  Executive,  if  wishing  its  adoption,  had  not  recommended  it  as 
openly  as  could  have  been  wished.  That  it  is  expedient  to  establish  a  Na- 
tional Bank,  he  had  no  doubt,  and  he  congratulated  the  House  that,  at  the  mo- 
ment when  gentlemen  on  his  side  of  the  House  found  some  of  their  wishes 
about  to  be  gratified  by  the  abolition  of  the  restrictive  system,  the  consti- 
tutional scruples  which  had  cramped  the  operations  of  the  Government,  were 
vanishing  also;  that,  at  the  moment  when  they  were  about  to  liberate  com- 
merce, the  fetters  would  also  be  loosed  with  which  a  narrow  constitutional 
exposition  had  heretofore  bound  the  Government.  He  should  have  been  much 
more  pleased,  he  said,  if  the  measure  had  been  directly  recommended  by  the 
Executive,  by  an  intimation  that  its  adoption  would  conduce  to  a  successful 
management  of  our  finances;  but  merely  for  the  reasons  that  it  had  not  come 
before  the  House  in  that  manner,  he  could  not  vote  against  a  proposition,  which 
on  general  grounds,  met  his  approbation. 

Mr.  NEWTON  spoke  in  explanation.  He  was  as  ready  as  the  gentleman 
from  Tennessee  to  yield,  not  only  his  time,  but  his  personal  service  to  his 
country;  and,  had  he  but  a  dollar  in  the  world,  would  freely  lend  it  to  con- 
tribute to  the  support  of  the  Government  in  a  righteous  war.  But  this  ques- 
tion could  be  decided  as  intelligently  in  a  day  as  in  a  month;  and,  if  a  majori- 
ty was  opposed  to  it,  it  was  not  advisable  to  consume  time  unnecessarily  upon 
it.  Under  this  impression  he  had  made  the  motion  for  indefinite  postpone- 
ment, to  ascertain  the  sense  of  the  House  on  this  point. 

A  motion  was  now  made  to  adjourn,  and  carried  by  three  or  four  votes. 

APRIL  4. 

The  House  resumed  the  consideration  of  the  unfinished  business  of  Satur- 
day last,  being  Mr.  GRUNDY'S  motion  to  appoint  a  committee  to  inquire  into 


478  BANK  OF  THE  UNITED  STATES. 

the  expediency  of  establishing  a  National  Bank,  with  leave  to  report  by  bill 
or  otherwise. 

Mr.  NEWTON'S  motion  for  indefinite  postponement  of  this  subject  being 
still  under  consideration — 

Mr.  FARROW,  of  South  Carolina,  spoke  against  the  postponement.  He  was 
inclined  to  believe  the  establishment  of  a  National  *BanK  to  be  both  consti- 
tutional and  expedient;  and  should  therefore  vote  against  the  postponement, 
without  saying  how  he  should  vote  on  the  bill;  because  he  did  not  know  in 
what  form  it  would  be  reported.  The  want  of  time  was  no  argument  against 
the  discussion  of  this  subject.  None  could  be  of  more  importance,  or  more 
peremptorily  requiring  members  to  sacrifice  personal  convenience  to  the 
public  interest,  &c. 

Mr.  HAWKINS,  of  Kentucky,  supported  the  indefinite  postponement.  He 
was  against  the  proposition  proposed  to  be  postponed,  if  it  was  only  because 
the  difficulties  said  to  exist  in  procuring  funds  for  the  prosecution  of  the  war, 
were  seized  on  to  produce  a  change  of  principle.  As  to  the  difficulties  which 
were  said  to  exist,  he  considered  them  in  a  ^reat  degree  imaginary,  and  their 
reiteration  as  calculated  to  produce  no  beneficial  consequences  to  the  nation. 
He  did  not  believe  the  difficulties  in  question,  if  they  existed  at  all,  were  such 
as  to  require  this  House  to  sacrifice  principle  at  the  shrine  of  necessity.  He 
should,  therefore,  vote  for  the  indefinite  postponement,  however,  under  other 
circumstances,  he  might  object  to  such  a  course  of  legislation  because  present 
necessity  was  made  the  plea  for  obtaining  that  decision  from  the  House,  which, 
under  other  circumstances,  could  not  be  obtained. 

Mr.  ROBERTSON,  of  Louisiana,  opposed  the  postponement.  He  had  heard 
no  one,  in  the  course  of  this  debate,  advocate,  a  sacrifice  of  principle  to  the  exi- 
gency of  the  times.  He  did  not  know  but  the  establishment  ot  a  bank  could 
be  amply  supported  on  general  grounds,  distinct  from  the  situation  of  the  Go- 
vernment, or  from  considerations  of  finance.  He  was  happy  that  this  was  a 
question  trammelled  by  no  party  considerations;  it  was  a  question  which  con- 
cerned commerce  and  commercial  operations.  Representing  a  distant  but 
highly  commercial  section  of  the  country,  which  bid  fair  to  equal,  if  not  out- 
strip any  other  part  of  the  United  States,  in  commercial  importance,  he  felt 
disposed,  whenever  in  his  power,  to  do  any  act,  not  contravening  the  consti- 
tution, which  would  be  beneficial  to  commerce.  Those  gentlemen  who  enter- 
tained constitutional  objections,  would  do  well  to  vote  against  postponement, 
because  they  could  not  be  expected  to  yield  them.  Having  himself  no  such 
objection,  and  looking  to  the  expediency  of  the  measure  only,  he  wished  for 
an  opportunity  of  fair  consideration  to  be  offered  to  this  subject 

Mr.  HAWKINS  spoke  in  explanation.  He  said  he  should  be  always  ready 
to  give  a  candid  consideration  to  any  proposition  made  in  this  House  under  or- 
dinary circumstances.  But  this  subject,  he  said,  presented  itself  in  an  atti- 
tude which  did  not  entitle  it  to  discussion  by  the  House,  because  predicated 
on  a  supposed  difficulty  which  might  be  found  in  obtaining  the  loan  already 
authorised  by  law.  Temporary  expedients  were  not  proper  for  such  cases, 
but  measures  of  a  more  durable  character-  Therefore  it  was  that  he  was  in 
favor  of  the  indefinite  postponement.  Whenever  the  question  should  pre- 
sent itself  on  principles  unconnected  with  others  of  moment,  and  present  im- 
portance, he  should  not  be  found  opposed  to  the  investigation  of  it. 

Mr.  ROBERTSON  added,  that  he  considered  this  as  an  abstract  proposition, 
and  so  might  the  gentleman  from  Kentucky  if  he  chose.  Some  gentlemen 
supposed  it  had  relerence  to  the  immediate  convenience  of  the  Government, 
and  some  might  vote  for  it,  and  others  against  it,  in  that  view;  but  they  who'so 
voted  would  vote  from  motives  which  Mr.  R.  said  had  no  operation  on  him. 
He  did  consider  it  as  an  abstract  proposition,  whether  or  not  it  was  expedient 
at  this  time  to  establish  a  national  bank. 

Mr.  PITKIN.  of  Connecticut,  said  he  should  vote  to  postpone  this  proposi- 
tion, because  mere  was  already  before  the  House  a  bill  on  the  subject  of  a  na- 


PROCEEDINGS  OF  1814,  479 

tional  bank;  and  because  he  was  opp9sed  to  taking  up,  at  this  late  period  of 
the  session,  a  subject  which  required,  in  acting  on  it,  the  greatest  care  and  de- 
liberation. 

Mr.. POTTER,  of  Rhode  Island,  said  he  should  vote  for  the  postponement, 
because  no  bill  could  be  reported,  on  the  subject  of  a  national  bank,  that  he 
could  vote  for.  The  establishment  of  such  a  bank  would  answer  no  valuable 
purpose  to  the  community,  and,  by  withdrawing  from  circulation,  for  six  or 
nine  months,  a  vast  amount  of  specie,  would  add  to  the  distresses  already  ex- 
perienced in  the  nation  from  the  want  of  it,  &c. 

The  question  on  indefinite  postponement  was  then  decided  as  follows: 
Those  who  voted  in  the  affirmative,  are, 


Messrs. 

Alexander, 

Messrs.  Hanson, 

Messrs.  Newton, 

Anderson, 

Hawes, 

Pickering, 

Bard, 

Hawkins, 

Pitkin, 

Baylies,  of  Mass. 

Howell, 

Pleasants, 

Bigelow, 

Hungerford, 

Post, 

Boyd, 
Bradbury, 

Ingersoll, 
Irving, 

Potter, 
John  Reed, 

Breckenridge, 
Brigham, 

Johnson,  of  Va. 
Johnson,  ot  Ky. 

William  Reed, 
Rhea,  of  Ten. 

Caperton, 

Kennedy, 

Ring^old, 

Champion, 

Kent,  of  N.  Y. 

Ruggles, 

Ciller, 

Kershaw, 

Sharp, 

Clark, 

King,  of  Mass. 

Sheffey, 

—~ 

Crawford, 

T 
Law? 

Stanford, 

Davenport, 

Lewis, 

Stuart, 

Desha, 

Lovett, 

Sturges, 

Ely, 

Lyle, 

Troup,     

-..- 

Eppes, 

Macon,      — 

Vose, 

Evans, 

McKim, 

Webster,      _ 

Geddes, 

Miller, 

Wheaton, 

Gholson, 

Moffitt, 

Wilcox, 

Goodwin, 

Moseley, 

Wilson,  Mass. 

Hale, 

Markell, 

Wright—  71. 

Hall, 

Nelson, 

Those  who  voted  in 

the  negative,  are, 

Messrs. 

Alston, 

Messrs.  Farrow, 

Messrs.  Lowndes, 

Archer, 

Findley, 

McLean, 

Barnett, 

Fisk,  ofVt. 

Montgomery, 

Bowen, 

Fisk,ofN.  Y. 

Murfree, 

Bradley, 

Forney, 

Oakley, 

Brown, 

Forsyth, 

Ormsby, 

Butler, 

Franklin, 

Parker, 

Caldwell, 

Gaston, 

Pearson, 

—  -V 

Calhoun, 

Gourdin, 

Pickens, 

Chappell, 
Comstock, 

Griffin, 
Grundy, 

Piper, 
Rea,  of  Pa. 

Condict, 

Harris, 

Rich, 

Conard, 

Hasbrouck, 

Ridgely, 

Cox, 

Humphreys, 

Robertson, 

Creighton, 
Crouch, 

Ingham, 
Jackson,  of  R.  I. 

Sevier, 
Sherwood, 

Culpeper, 
Cuthbert, 

Jackson,  of  Va. 
Kent,  ot  Md. 

Shipherd, 
Skinner, 

Davis  of  Pa. 

Kerr, 

Smith,  of  N.  Y 

Denovelles, 

Kilbourn, 

Smith,  of  Pa. 

Duval, 
Earle. 

King,  of  N.  C. 
Lefferts, 

Smith,  of  Va. 
Strong, 

480  BANK  OF  THE  UNITED  STATES. 

Messrs.  Taggart,  Messrs.  Thompson,         Messrs.  Whitehill, 

Talimadge,  Uclree,  Wilson,  of  Pa. 

Tannehill,  Ward,  of  Mass.  Winter, 

Taylor,  Ward,  of  N.  J.  Yancey—80. 

Telfair,  White, 

So  the  House  determined  that  Mr.  GRUNDY'S  motion  should  not  be  indefi- 
nitely postponed. 

Mr.  HALL,  of  Georgia,  then  moved  to  amend  the  motion  by  adding,  after 
the  word  ""bank,"  the  words  "within  the  District  of  Columbia." 

After  a  few  words  of  objection  by  Mr.  GRUNDY,  who  wished  the  motion 
general ?  to  afford  the  committee  a  latitude  of  discretion  as  to  the  details  of  the 
institution,  and  some  observations  from  Mr.  WRIGHT,  in  reply — 

Mr.  HALL'S  motion  was  negatived,  ayes  32. 

The  question  was  then  put  on  the  adoption  of  the  resolution,  and  decided 
as  follows:  For  the  motion,  76.  Against  it,  69. 

So  the  resolution  was  passed,  and  a  committee  of  nine  members  directed  to 
be  appointed,  to  carry  it  into  effect. 

Whereupon,  Mr.  Grundy,  Mr.  Oakley,  Mr.  Calhoun,  Mr.  Gaston,  Mr. 
Jackson,  of  Va.  Mr.  Lowndes,  Mr.  Ward,  of  Mass.  Mr.  Ingham,  and  Mr. 
Fisk,  of  N.  Y.  were  appointed  the  said  committee. 

APRIL  8,  1814. 
On  motion  of  Mr.  GRUNDY, 

Ordered,  That  the  committee  appointed  to  inquire  into  the  expediency  of 
establishing  a  national  bank  be  discharged  from  the  further  consideration  of 
that  subject. 

NOTE. — No  further  proceedings  on  the  subject  took  place  during  this  ses- 
sion of  Congress. 


HOUSE  OF  REPRESENTATIVES. 

SEPTEMBER  21, 1814. 

A  Committee  of  Ways  and  Means  was  appointed,  consisting  of  Mr.  Eppes, 
Mr.  Fisk,  of  N.  York,  Mr.  Archer,  Mr.  Oakley,  Mr.  Gaston,  Mr.  Creighton, 
and  Mr.  Ingham. 

SEPTEMBER  23,  1814. 

Mr.  FISK,  of  N.  Y.  presented  a  petition  of  sundry  inhabitants  of  New  York, 
praying  that  an  act  may  be  passed  to  incorporate  a  National  Bank. 

Ordered,  That  the  said  petition  be  referred  to  the  Committee  of  Ways  and 
Means. 

OCTOBER  10,  1814. 

The  Committee  of  Ways  and  Means  made  a  report  on  the  subject  of  the 
Finances  of  the  Government,  embracing  five  resolutions,  neither  of  which, 
however,  contained  any  proposition  respecting  a  National  Bank. 

The  report  was  referred  to  a  committee  of  the  whole  House. 

OCTOBER  18,  1814. 

Mr.  EPPES,  from  said  committee,  laid  before  the  House  the  copy  of  a  letter 
from  the  chairman  to  the  Secretary  of  the  Treasury,  on  the  subject  of  main- 
taining, unimpaired,  the  public  credit,  together  with  the  answer  of  the  Secre- 
tary thereto;  which  were  referred  to  the  same  committee  of  the  whole  House. 


PROCEEDINGS  OF   1814. 
The  Commit  tee  of  Ways  and  Means  to  the  Secretary  of  the  Treasury. 

WASHINGTON,  October  11,  1814. 

8iR:^  ^ 

The  Committee  of  Ways  and  Means  have  had  under  consideration  the 
support  of  public  credit,  by  a  system  of  taxation  more  extended  than  the  one 
heretofore  adopted.  They  have  determined  to  suspend  proceeding  on  their 
report,  at  present  before  the  House  of  Representatives,  vyith  a  view  to  afford 
you  an  opportunity  of  suggesting  any  other,  or  such  additional  provisions  as 
may  be  necessary  to  revive  and  maintain,  unimpaired,  the  public  credit. 

JOHN  W.  KPPES,   Chairman. 

The  reply  of  the  Secretary  is  dated  the  17th  of  October,  1814;  it  contains 
the  following  suggestions  in  relation  to  the  state  of  the  currency,  and  a  dis- 
tinct proposition  for  the  establishment  of  a  national  bank: 

"The  condition  of  the  circulating  medium  of  the  country  presents  another 
copious  source  of  mischief  and  embarrassment.  The  recent  exportations  of 
specie  have  considerably  diminished  the  fund  of  gold  and  silver  coin;  and 
another  considerable  portion  of  that  fund  has  been  drawn,  by  the  timid  and 
the  wary,  from  the  use  of  the  community,  into  the  private  cottiers  of  individu- 
als. On  the  other  hand,  the  multiplication  of  banks  in  the  several  States  has 
so  increased  the  quantity  of  paper  currency,  that  it  would  be  difficult  to  cal- 
culate its  amount,  and  still  more  difficult  to  ascertain  its  value,  with  refer- 
ence to  the  capital  on  which  it  has  been  issued.  But  the  benefit  of  even  this 
paper  currency,  is,  in  a  great  measure  lost,  as  the  suspension  of  payments  in 
specie,  at  most  of  the  banks,  has  suddenly  broken  the  chain  of  accommoda- 
tion that  previously  extended  the  credit  and  the  circulation  of  the  notes  which 
were  emitted  in  one  State,  into  every  State  of  the  Union.  It  may,  in  gene- 
ra!, be  affirmed,  therefore,  that  there  exists,  at  this  time,  no  adequate  circu- 
lating medium  common  to  the  citizens  of  the  United  States.  The  moneyed 
transactions  of  private  life  are  at  a  stand,  and  the  fiscal  operations  of  the  Go- 
vernment labor  with  extreme  inconvenience.  It  is  impossible  that  such  a 
state  of  things  should  be  long  endured;  but,  let  it  be  fairly  added,  that,  with 
legislative  aid,  it  is  not  necessary  that  the  endurance  should  be  long.  Under 
favorable  circumstances,  and  to  a  limited  extent,  an  emission  of  treasury 
notes  would,  probably,  afford  relief;  but  treasury  notes  are  an  expensive  and 
precarious  substitute,  either  for  coin  or  for  bank  notes,  charged  as  they  are 
with  a  growing  interest,  productive  of  no  countervailing  profit  or  emolument, 
and  exposed  to  every  breath  of  popular  prejudice  or  alarm.  The  establish- 
ment of  a  national  institution,  operating  upon  credit,  combined  with  capital, 
and  regulated  by  prudence  and  good  faith,  is,  after  all,  the  only  efficient 
remedy  for  the  disordered  condition  of  our  circulating  medium.  While  ac- 
compli shing*that  object,  too,  there  will  be  found,  under  the  auspices  of  such 
an  institution,  a  safe  depository  for  the  public  treasure,  and  a  constant  aux- 
iliary to  the  public  credit.  But,  whether  the  issues  of  a  paper  currency  pro- 
ceed from  the  national  treasury,  or  from  a  national  bank,  the  acceptance  of 
the  paper  in  a  course  of  payments  and  receipts,  must  be  forever  optional  with 
the  citizens.  The  extremity  of  that  day  cannot  be  anticipated,  when  any 
honest  and  enlightened  statesman  will  again  venture  upon  the  desperate  expe- 
dient of  a  tender  law." 

"  It  is  proposed  that  a  national  bank  shall  be  incorporated  for  a  term  of 
twenty  years,  to  be  established  at  Philadelphia,  with  a  power  to  erect  offices 
of  discount  and  deposite  elsewhere,  upon  the  following  principles: 

1.  That  the  capital  of  the  bank  shall  be  fifty  millions  of  dollars,  to  be  di- 
vided into  100.000  shares,  of  500  dollars  each.  Three-fifths  of  the  capi- 
tal, being  60,000  shares,  amounting  to  30,000,000  of  dollars,  to  be  sub- 
scribed by  corporations,  companies,  or  individuals;  and  two-fifths  of  the 


482  BANK  OF  THE  UNITED  STATES. 

capital,  being  40,000  shares,  amounting  to  20,000,000  of  dollars,  to  be 
biibscribed  by  the  United  States. 

2.  That  the  subscriptions  of  corporations,  companies,  and  individuals,  shall 
be  paid  for  in  the  following  manner: 

One-fifth  part,  or  $6,000,000,  in  gold  or  silver  coin. 

Four-fifth  parts,  or  $24,000,000,  in  gold  or  silver  coin,  or  in  six  per 
cent,  stock,  issued  since  the  declaration  of  war,  and  treasury  notes, 
in  the  proportion  of  one-fifth  in  treasury  notes,  and  three-fifths  in  six 
per  cent,  stock. 

3.  That  the  subscriptions  of  corporations,  companies,  and  individuals,  shall 
be  paid  at  the  following  periods: 

20  dollars  on  each  share,  to  be  paid  at  the  time  of  subscrib- 
ing, in  gold  or  silver  coin,  ....  $1,200,000 

40  dollars  on  each  share,  1o  be  paid  in  gold  or  silver  coin, 

one  month  after  the  subscription,  .  .  .  2,400,000 

40  dollars  on  each  share,  in  two  months  after  the  subscrip- 
tion, in  gold  or  silver  coin,  ....  2,400,000 

100  dollars,  specie,  $6,000,000 

100  dollars  on  each  share,  in  gold  or  silver  coin,  or  in  six 
per  cent,  stock,  or  in  treasury  notes,  according  to  the 
preceding  apportionment,  to  be  paid  at  the  time  of  sub- 
scribing, .  .  .  .  .  6,000,000 

150  dollars  on  each  share,  to  be  paid  in  like  manner,  in  two 

months  after  subscribing,  ....  9,000,000 

150  dollars  o/i  each  share,  to  be  paid  in  like  manner,  in 

three  months  after  subscribing,  .  .  .  9,000,000 

500  dollars,  $30,000,000 

4.  That  the  subscription  of  the  United  States  shall  be  paid  in  six  per  cent, 
stock,  at  the  same  periods,  and  in  the  same  proportions,  as  the  payments 
of  private  subscriptions,  in  stock  and  treasury  notes. 

5.  That  the  United  States  may  substitute  six  per  cent,  stock  for  the  amount 
of  the  treasury  notes  subscribed  by  corporations,   companies,   and  indi- 
viduals, as  the  notes  respectively  become  due  and  payable. 

6.  That  the  bank  shall  loan  to  the  United  States  $30,000,000,   at  an  inter- 
est of  six  per  cent,  at  such  periods,  and  in  such  sums,  as  shall  be  found 
mutually  convenient. 

7.  That  no  part  of  the  public  stock,  constituting  a  portion  of  the  capital  of 
the  bank,  shall  be  sold  during  the  war;  nor  at  any  subsequent  time,  for 
less  than  par,  nor  at  any  time  to  an  amount  exceeding  one  moiety,  with- 
out the  consent  of  Congress. 

8.  That  provision  shall  be  made  for  protecting  the  banknotes  from  forgery; 
for  limiting  the  issue  of  bank  notes;  and  for  receiving  them  in  all  pay 
ments  to  the  United  States. 

9.  That  the  capital  of  the  bank,  its  notes,  deposites,  dividends,   or  profits, 
(its  real  estate  only  excepted)  shall  not  be  subject  to  taxation  by  the 
United  States  or  by  any  individual  State. 

10.  That  no  other  bank  shall  be  established  by  Congress,   during  the  term 
for  which  the  national  bank  is  incorporated. 

11.  That  the  national  bank  shall  be  governed  by  fifteen  directors,  being  resi- 
dent citizens  of  the  United  States  and  stockholders.    The  President  of 
the  United  States  shall,  annually,  name  five  directors,  and  designate  one 
of  the  five  to  be  the  president  of  the  bank.    The  other  directors  shall  be 
annually  chosen  by  the  qualified  stockholders,  in  person  or  by  proxy,  it 
resident  within  the  United  States,  voting  upon  a  scale  graduated  accord- 
ing to  the  number  of  shares  which  they  respectively  hold.     The  cashier, 


PROCEEDINGS   OF    1814, 

and  other  officers  of  the  bank,  to  be  appointed  as  is  usual  in  similar  in- 
stitutions. 

12.  That  the  directors  of  the  national  bank  shall  appoint  seven  persons,  one 
of  whom  to  preside,  as  the  managers  of  each  office  of  discount  and  de- 
posite,  arid  one  person  to  be  the  cashier. 

13.  That  the  general  powers,  privileges,  and  regulations  of  the  bank,  shall 
be  the  same  as  are  usual  in  similar  institutions;  but  with  this  special 
provision,  that  the  general  accounts  shall  be  subject  to  the  inspection  ot 
the  Secretary  of  the  Treasury," 

ik  In  making  a  proposition  for  the  establishment  of  a  national  bank,  1  can- 
not be  insensible  to  the  high  authority  of  the  names  which  have  appeared  in 
opposition  to  that  measure,  upon  constitutional  grounds.  It  would  be  pre- 
sumptuous to  conjecture  that  the  sentiments  which  actuated  the  opposition 
have  passed  away;  and  yet  it  would  be  denying  to  experience  a  great  practical 
advantage,  were  we  to  suppose  that  a  difference  of  times  and  circumstances 
would  not  produce  a  corresponding  difference  in  the  opinions  of  the  wisest,  as 
well  as  of  the  purest  men.  But,  in  the  present  case,  a  change  of  private  opinion 
is  not  material  to  the  success  of  the  proposition  for  establishing  a  national  bank. 
In  the  administration  of  human  aftiurs,  there  must  be  a  period  when  discussion 
shall  cease,  and  decision  shall  become  absolute,  A  diversity  of  opinion  may 
honorably  survive  the  contest;  but,  upon  the  genuine  principles  ot  a  represen- 
tative government,  the  opinion  of  the  majority  can  alone  be  carried  into  action. 
The  judge,  who  dissents  from  the  majority  of  the  bench,  changes  not  his 
opinion,  but  performs  his  duty,  when  he  enforces  the  judgment  otthe  court, 
although  it  is  contrary  to  his  own  convictions.  An  oath  to  support  the  con- 
stitution and  the  laws,  is  not,  therefore,  an  oath  to  support  them  under  all  cir- 
cumstances, according  to  the  opinion  of  the  individual  who  takes  it,  but  it  is, 
emphatically,  an  oath  to  support  them  according  to  the  interpretation  of  the 
legitimate  authorities.  For  the  erroneous  decisions  of  a  court  of  law,  there  is 
the  redress  of  a  censorial,  as  well  as  of  an  appellate  jurisdiction.  Over  an 
act,  founded  upon  an  exposition  of  the  constitution,  made  by  the  legislative 
department  of  the  government,  but  alleged  to  be  incorrect,  we  have  seen  the 
judicial  department  exercise  a  remedial  power.  And,  even  if  all  the  depart- 
ments, legislative,  executive,  and  judicial,  should  concur  in  the  exercise  of  a 
power,  which  is  either  thought  to  transcend  the  constitutional  trust,  or  to 
operate  injuriously  upon  the  community,  the  case  is  still  within  the  reach  of 
a  competent  control,  through  the  medium  of  an  amendment  to  the  constitu- 
tion, upon  the  proposition,  not  only  of  C'ongros.  but  of  the  several  States. 
When,  therefore,  we  have  marked  the  existence  of  a  national  bank  for  a  period 
of  twenty  years,  with  all  the  sanctions  of  the  legislative,  executive,  and  judi- 
cial authorities;  when  we  have  seen  the  dissolution  of  one  institution,  and 
heard  a  loud  and  continued  call  for  the  establishment  of  another;  when,  under 
these  circumstances,  neither  Congress  nor  the  several  States,  have  resorted 
to  the  power  of  amendment;  can  it  be  deemed  a  violation  of  the  right  of  pri- 
vate opinion,  to  consider  the  constitutionality  of  a  national  bank  as  a  ques- 
tion forever  settled  and  at  rest? 

But,  after  all,  1  ,-hould  not  merit  the  con{idence?  which  it  will  be  my  am- 
bition to  acquire,  if  I  were  to  suppress  the  declaration  of  an  opinion,  that,  in 
these  times,  the  establishment  of  a  national  bank  will  not  only  be  useful  in 
promoting  the  general  welfare,  but,  that  it  is  necessary  and  proper  for  carry- 
ing into  execution  some  of  the  most  important  powers  constitutionally  vested 
in  the  Government. 

Upon  the  principles  and  regulations  of  the  national  bank,  ji  may  be  sufli- 
cient  to  remark,  that  they  will  be  best  unfolded  in  the  form  of  a  bill,  which 
shall  be  immediately  prepared.  A  compound  capital  is  suggested,  with  a  de 
sign  equally  to  accommodate  the  subscribers,  and  to  aid  the  general  measures 
for  the  revival  of  public  credit;  but  the  proportions  of  specie  and  stock  may  be 
varied,  if  the  scarcity  of  coin  should  render  it  expedient;  yet,  not  in  so  great 
a  degree  as  to  prevent  an  early  commencement  of  the  money  operations  of  the 
institution." 


484  BANK  OF  THE  UNITED   STATES. 

OCTOBER  81,  1814, 

The  House  resolved  itself  into  a  committee  of  the  whole,  on  the  foregoing 
report  and  letters,  and  made  some  progress  therein.  And,  on  the  22d,  Mr. 
NELSON,  from  the  said  committee,  reported  that  the  committee  had  again  had 
the  said  report  and  letters  under  consideration,  and  had  made  certain  amend- 
ments to  the  first  and  second  resolutions  contained  in  the  report,  which  they 
had  directed  him  to  report  to  the  House,  ami  ask  leave  to  sit  again  upon  the 
residue  thereof. 

OCTOBER  24,  1814. 

The  House  proceeded  to  consider  the  above  report  of  the  committee  of  the 
whole  House,  and  the  question  was  stated,  to  concur  with  the  said  committee 
in  their  amendments  to  the  said  first  and  second  resolutions: 
When,  on  motion  of  Mr.  EPPES, 

Ordered,  That  the  said  first  and  second  resolutions  do  lie  on  the  table,  and 
that  the  committee  of  the  whole  House  have  leave  to  sit  again  to-day,  on  the 
residue  of  said  report  and  letters. 

The  House,  afterwards,  resolved  itself  into  a  committee,  and  Mr.  PITKIN 
reported  that  the  committee  had  again  had  the  said  report  and  letters  under 
consideration,  and  made  amendments  to  the  fourth  ancl  fifth  resolutions;  also, 
that  they  had  further  amended  the  said  report,  by  adding"  thereto  three  new 
resolutions,  to  come  in  as  the  6th,  7th,  and  8th. 
On  motion  of  Mr.  EPPES, 

Ordered,  That  the  said  report  do  lie  on  the  table. 

OCTOBER  28,  1814. 

The  House  resumed  the  consideration  of  the  remaining  part  of  the  report  of 
the  committee  of  the  whole,  it  being  the  8th  resolution,  "that  it  istexpedi- 
ent  to  establish  a  national  bank,  with  branches,  in  the  several  States." 

Mr.  POST,  of  N.  Y. ,  hoped  the  chairman  or  some  other  member  of  the  Com- 
mittee of  Ways  and  Means  would  explain  the  reasons  on  which  the  proposi 
tion  was  founded. 

Mr.  CLOPTON,  of  Va-,  called  upon  gentlemen  in  favor  of  the  proposition  to 
show  in  what  part  of  the  constitution  was  contained  the  power  to  establish  a 
national  bank.  Having  always,  himself,  denied  the  constitutional  power,  and 
the  House  having  so  decided,  six  years  ago,  he  could  not  see  what  had  occur- 
red to  change  the  nature  of  the  constitutional  question.  Unless  his  objections 
on  this  head  were  removed,  he  must  certainly  vote  against  this  proposition. 

Mr.  EPPES,  of  Va. ,  said  his  sentiments  in  relation  to  this  question  were  well 
known,  and  were  not  changed.  However  necessary  he  might  believe  the 
agency  of  such  an  institution  at  the  present  moment,  he  could  not  give  his  con- 
sent to  a  measure  which  he  believed  contrary  to  the  constitution.  For  the 
reasons  in  favor  of  the  resolve  which  he  had  reported,  in  obedience  to  the  in- 
structions of  the  committee,  he  referred  to  Mr.  DALLAS'S  report,  and  to  the 
gentlemen  of  the  committee  who  favored  it. 

Mr.  WRIGHT,  of  Md.,  expressed  himself  decidedly  in  favor  of  the  esta- 
blishment of  a  bank,  but,  in  order  to  obviate  objections  some  might  conscien- 
tiously entertain  on  constitutional  grounds,  he  was  of  opinion  that  the  bank 
ought  to  be  located  within  this  district-  He  therefore  moved  to  amend  the 
resolve,  by  inserting  therein  the  words  "  within  the  District  of  Columbia." 

Mr.  BURWELL,  of  Virginia,  said  he  had  no  doubt  of  the  power  of  Congress 
to  establish  a  bank  of  the  kind  proposed,  in  the  District  of  Columbia:  but  he 
should  vote  against  the  amendment,  because  he  believed  such  a  bunk  would 
not  at  all  assist  the  finances  of  the  Government.  He  was,  also,  entirely  hos- 
tile to  the  establishment  of  a  bank  on  the  principles  recommended  in  the  Se- 
cretary's report  as  its  basis,  for  reasons  growing  out  of  their  general  impracti- 
cability and  inexpediency. 


PROCEEDINGS  OF    1814.  435 

Mr.  DUVAL,  of  Kentucky,  said  he  was  opposed  to  the  proposed  amendment, 
because  it  would  destroy  the  utility  of  the  bank,  so  far  as  regards  its  issuing 
a  medium  which  should  possess  the  general  confidence;  and  he  was  opposed 
to  it,  also,  because  the  adoption  of  it  would  virtually  sanction  the  construc- 
tion, which  he  denied,  that  it  was  not  constitutional  to  establish  a  bank  with 
branches  in  the  several  States.  Mr.  D.  was  proceeding  to  argue  in  support  of 
the  constitutionality  of  a  bank,  when 

Mr.  WRIGHT  withdrew  the  amendment  which  he  had  proposed. 

Mr.  STANFORD,  of  North  Carolina,  moved  to  strike  out  of  the  resolve  the 
following  words:  *%  with  branches  in  the  several  States."  Some  gentlemen, 
he  said,  were  of  opinion  a  bank  might  be  established  adequate  to  all  necessary 
purposes,  having  no  branches,  but  arrangements  with  some  one  or  more  banks 
now  existing  in  each  State.  He  was  in  favor  of  leaving  the  question  as  broad 
as  possible. 

Mr.  DUVAL  resumed  his  argument  on  the  constitutional  question,  which  he 
examined  with  no  little  ability  and  ingenuity.  He  chiefly  rested  his  opinion 
of  the  power  to  incorporate  a  bank,  on  that  section  of  the  constitution  which 
prohibits  the  States  to  coin  money,  or  issue  "  bills  of  credit;"  which  negation 
of  power,  he  apprehended,  implied  the  existence  of  the  power  in  Congress. 
If  Congress  had  not  power,  under  the  constitution  of  the  United  States,  to 
establish  a  bank  or  banks,  nearly  all  the  States  had  violated  their  own  State 
constitutions,  as  well  as  the  constitution  of  the  United  States,  in  authorizing 
the  circulation  of  bank  notes,  which,  call  them  what  you  will,  are  "  bills  of 
credit."  Mr.  I),  went  deeper  still  into  this  question,  and  concluded  with  ex- 
pressing his  decided  hostility  to  the  proposed  amendment. 

Mr.  GROSVKNOII.  of  New  York,  having  no  doubt  of  the  constitutionality  of 
a  national  bank,  entreated  gentlemen  to  vote  down  the  proposed  amendment; 
because,  if  adopted,  it  would  hold  out  fallacious  ideas  of  the  adequacy  of  a 
bank  without  branches,  to  be  established  within  this  district,  which  would  no 
more  relieve  the  embarrassment  of  our  finances  than  will  the  five  and  ten 
cents  bills  issued  by  the  corporations  of  this  city  and  Georgetown,  &c.  He 
should  vote  for  the  general  proposition.  As  for  the  Secretary's  proposition, 
it  was  afelo  de  se;  and  many  of  its  features  could  not  be  sanctioned  in  this 
House. 

Mr.  H.vwKiXb,  of  Kentucky,  said  that  one  of  his  earliest  convictions  on 
political  topio  was,  that  this  Government  had  no  p  nver  to  establish  a  na- 
tional bank;  but,  if  it  is  to  be  established,  he  was  clearly  of  opinion  it  ought 
to  be  on  general  principles.  In  order  to  give  the  question  full  and  ample  con- 
sideration on  the  widest  national,  just,  and  general  objects,  he  should  vote 
against  the  amendment,  without  intending  in  any  way  to  sanction  the  idea  that 
Congress  has  the  power  "  to  establish  a  national  bank  with  branches  in  the 
several  States.'" 

Mr.  CLOPTON  made  a  number  of  observations  in  reply  to  the  argument  of 
Mr.  DUVAL.  The  true  principle  of  construction  of  the  constitution  being  that 
all  powers  not  expressly  delegated  are  reserved,  he  contended  that  Congress 
could  by  no  forced  construction  derive  the  power  to  establish  a  national  bank. 

Mr.  WILSON,  of  Pennsylvania,  predicated  his  views  in  favor  of  the  resolu- 
tion, and  against  the  amendment,  on  the  statement  of  facts,  and  reasoning  ot 
the  Secretary  of  the  Treasury  on  this  subject,  which,  combined,  he  believed 
to  be  conclusive. 

Mr.  M'KEE,  of  Kentucky,  expressed  surprise  that  the  opposition  to  this 
measure,  declared  by  the  Secretary  of  the  Treasury  to  be  necessary  not  only 
to  the  maintenance  but  to  the  restoration  of  the  public  credit,  proceeded  from 
those  who  had,  in  every  other  respect,  been  the  most  zealous  and  inflexible  in 
their  pursuit  of  measures  to  sustain  the  operations  of  the  Government.  He  had 
no  doubt  of  the  power  of  the  Government  to  establish  a  national  bank  as  an  in- 
strument of  finance,  and  entered  into  a  train  of  reasoning,  with  his  usual  acu- 
men, as  well  to  prove  this,  as  to  prove  the  injury  which  had  resulted  from  the 


DANK    OF    THE    UNITED    STATES. 

refusal  to  re-charter  the  late  Bank  of  the  United  States.  As  to  the  establish- 
ing the  bank  within  this  district,  for  all  present  practical  purposes,  it  might  as 
well  be  established  in  Abyssinia.  He  was  decidedly  opposed  to  the  motion 
now  under  consideration. 

The  question  on  Mr.  STANFORD'S  motion  to  strike  out  the  words  "  with 
branches  in  the  several  States,"  was  decided,  by  yeas  and  nays,  in  the  nega- 
tive, as  follows:     For  the  motion,  14.     Against  it,  138. 
The  question  being  stated  on  the  passage  of  the  resolution  — 
Mr.  POST,  of  New  York,  said,  under  present  impressions,  he  should  vote 
against  it.  because  the  idea  it  embraced  was  illusive,  and  its  object  impracti- 
cable at  me  present  moment;  to  show  which,  he  made  a  number  of  remarks 
going  to  establish  the  insufficiency  of  such  a  measure  to  remedy  the  general 
want  of  confidence  among  individuals  as  well  as  in  the  banks,  which  at  pre- 
sent prevailed. 

The  question  on  the  adoption  of  the  resolution  was  decided  by  the  following 
vote: 

Those  who  voted  in  the  affirmative,  are, 
Messrs.  Alexander,  Messrs.  Forney, 

Alston,  Forsyth, 

Anderson,  Gaston, 

Archer,  Geddes, 

Avery,  Gourdin, 

Barnett,  Griffin, 

Bayly,  of  Virginia,  Grosvenor, 

Bradley,  Hanson, 

Brown,  Harris, 

Butler,  Hasbrouck, 

Caperton,  Hawes, 

Caldwell,  Hopkins,  of  Ken, 

Calhoun,  Hubbard, 

Cannon,  Hurlbert, 

Chappell,  Ingersoll, 

Clark,  Ingham, 

Comstock,  Irving', 

Condict,  Kent,  of  New  York, 

Conard,  Kent,  of  Maryland, 

Creighton,  Kerr, 

Crouch,  Kershaw, 

Culpeper,  Kilbourn, 

Cuthbert,  King,  of  N.  Carolina, 

Dana,  Lefferts, 

Davis,  of  Penu.  Lewis, 

Denoyelles,  Lovett, 

Duval,  Lowndes, 

Earle,  Lyle, 
Farrow, 
Findley, 


Fisk,  of  New  York, 


M'Kee, 
M'Kim, 
M'Lean, 


Messrs.  Montgomery, 
Moore, 
Markell, 
Oakley, 
Ormsby, 
Parker, 
Pearson, 
Pickens, 
Piper, 

Rea,  of  Penn. 
Rich, 

Robertson, 
Sage, 
Sevier, 
Sherwood, 
Shipherd, 
Skinner, 
Smith,  ofN.  H. 
Strong, 
Sturges, 
Tannehill, 
Taylor, 
Telfair, 
Thompson, 
Udree, 

Ward,  of  N.  Jersey, 
Webster, 
Wilson,  of  Pcnn. 
Winter, 
Wright, 
Yancey. — 93. 


Those  who  voted  in  the  negative,  are, 

Messrs.  Barbour.  Messrs.  "Clopton, 

Bard,  Crawford, 

Baylies,  of  Mass  .  Davenport, 

Bowen,  Desha, 

Boyd,  Ely, 

Bradbury,  Eppes, 

Burwell,"  Evans, 

Champion,  Franklin, 

Cilley,  Gholson, 


Messrs.  Glasgow, 
Goodwyn, 
Hale, 
Hall, 
Hawkins, 
Humphreys, 
Hungerford, 
Jackson,  of  R.  I. 
Jackson,  of  Vir. 


PROCEEDINGS  OF    1814.  437 

Messrs,  Johnson,  of  Vir.         Messrs.  Pleasants,  Messrs.  Seybert, 

Kennedy,  Post,  Sharp, 

King-,  of  Mass.  Potter,  Smith,  of  Virginia. 

Law,  John  Reed,  Stanford, 

Macon,  William  Reed,  Taggart, 

Moseley,  Rhea,  of  Tennessee.  Vose, 

Nelson,  Ring-gold,  Wheaton, 

Newton,  Ruggles,  Wilcox, 

Pitkin,  Schureman,  Wilson,  of  Mass. — 54 

So  the  resolution  was  agreed  to,  and  this,  together  with  the  other  resolu- 
tions, were  referred  to  the  Committee  of  Ways  and  Means,  to  bring  in  bills 
acccordingly. 

NOVEMBER  7,  1814. 

Mr.  FISK,  of  New  York,  from  the  Committee  of  Ways  and  Means,  asked 
and  obtained  leave  to  report  a  bill  to  incorporate  the  subscribers  to  the  Bank 
of  the  United  States  of  America;  which  was  twice  read  by  its  title,  and  re- 
ferred to  a  committee  of  the  whole. 

And  the  House  adjourned. 

NOVEMBER  13,  1814. 

The  House  went  into  committee  of  the  whole  on  the  said  bill;  which  hav- 
ing been  read  through,  the  committee  rose,  and  obtained  leave  to  sit  again. 

NOVEMBER  14,  1814. 

The  House  resolved  itself  into  a  committee  of  the  whole,  Mr.  NELSON,  of 
Virginia,  in  the  chair,  on  the  bill  to  incorporate  the  subscribers  to  the  Bank 
of  the  United  States  of  America. 

The  first  section  of  the  bill  having  been  read,  in  the  following  words: 
"Be  it  enacted,  $-c.  That  a  bank  of  the  United  States  of  America  shall  be  es- 
tablished, the  capital  stock  of  which  shall  be  fifty  millions  of  dollars,  and  no 
more,  divided  into  one  hundred  thousand  shares,  of  five  hundred  dollars  each 
share,  and  that  subscriptions  towards  constituting  the  said  capital  stock,  shall 

be  opened  on  the  first  Monday  of next,  at  the  following  places,  viz: 

Boston,  New  York,  Philadelphia,  Baltimore,  Richmond,  Charleston,  and 
Pittsburg,  under  the  superintendence  of  the  following  persons,  as  commis- 
sioners to  receive  the  same:  At  Boston,  James  Lloyd,  Thomas  Perkins,  and 
Wrilliam  Gray;  at  New  York,  General  John  Smith,  Isaac  Bronson,  Theron 
Rudd;  at  Philadelphia,  Thomas  M.  Willing,  Stephen  Girard,  Chandler  Price; 
at  Baltimore,  Henry  Pason,  William  Cooke,  \Villiam  Wilson;  at  Richmond, 
Benjamin  Hatcher,  John  Brokenborough,  William  Preston;  at  Charleston, 
John  C.  Faber,  John  Potter,  James  Carson;  at  Pittsburg,  George  Robinson, 
Samuel  Robert,  and  Henry  Baldwin;  which  subscriptions  shall  continue  open 
every  day,  from  the  time  of  opening  the  same,  from  ten  o'clock,  in  the  fore- 
noon, until  four  o'clock,  in  the  afternoon,  until  the  Saturday  following,  at  four 
o'clock,  in  the  afternoon,  when  the  same  shall  be  closed;  and,  immediately 
thereafter,  the  commissioners,  or  any  two  of  them,  at  the  respective  places 
aforesaid,  shall  cause  two  transcripts  or  fair  copies  of  such  subscriptions  to  be 
made;  one  of  which  they  shall  send  to  the  Secretary  of  the  Treasury,  one  they 
shall  retain,  and  the  original  subscriptions  shall,  within  three  days  from  the 
closing  of  the  same,  be,  by  the  said  commissioners,  transmitted  to  the  said 
commissioners  at  Philadelphia,  or  to  one  of  them;  and,  on  the  receipt  thereof, 
the  said  commissioners  at  Philadelphia,  or  any  two  of  them,  shall  immediate- 
ly thereafter  convene,  and  proceed  to  take  an  account  of  the  said  subscrip- 
tions: and  if  more  than  the  amount  of  the  said  capital  stock  of  thirty  millions 
of  dollars  shall  have  been  subscribed,  then  the  said  last  mentioned  commis- 
sioners shall  apportion  the  same,  among  the  several  subscribers,  in  a  just  and 
equal  ratio,  according  to  their  several  and  respective  subscriptions:  Provided, 
however,  That  such  commissioners  shall,  by  such  apportionment,  allow  and 


488  BANK  OF  THR  UNITED  STATES. 

apportion  to  each  subscriber  at  least  one  share;  arid,  in  case  the  aggregate 
amount  of  the  said  subscriptions  shall  exceed  fhirty  millions  of  dollars,  the 
said  commissioners,  after  having  apportioned  the  same,  as  foresaid,  shall  cause 
lists  of  the  apportioned  subscriptions  to  be  made  out,  including  in  each  list  the 
apportioned  subscription  for  me  place  where  the  original  subscription  was 
made;  one  of  which  lists  shall  be  transmitted  to  the  commissioners,  or  to  one 
of  the  commissioners,  under  whose  superintendence  such  subscriptions  were 
originally  made,  that  the  subscribers  may  ascertain  from  them  the  number  of 
shares  apportioned  to  such  subscribers,  respectively." 

Mr.  FISK,  of  New  York,  stated  the  reasons  which  had  influenced  the  Com- 
mittee of  Ways  and  Means  in  confining  to  a  few  cities  and  towns  the  books 
of  subscription,  which  were,  generally,  that  the  Atlantic  cities  were  the  prin- 
cipal repositories  of  specie  and  superfluous  wealth,  arid  that  the  exigencies  of 
the  times  required  greater  expedition  than  was  consistent  with  a  more  diffused 
subscription.  It  had  been  deemed  proper,  however,  to  add  more  commission- 
ers in  two  or  three  of  the  cities;  and  he  was  instructed  to  move  accordingly. 

And,  on  motion  of  Mr.  FISK,  the  following  gentlemen  were  added:  To  the 
commission  at  Boston,  William  Eustis  and  Samuel  Brown;  to  the  commission 
at  New  York,  Isaac  Lawrence  and  John  Hone;  to  the  commission  at  Phila- 
delphia, Jared  Ingersoll  and  Anthony  Taylor. 

Mr.  SHARP,  of  Kentucky,  then  said.he  was  not  satisfied,  by  the  reasons  of 
the  gentleman,  for  limiting  to  so  few  the  places  of  subscription,  and  moved, 
for  the  convenience  of  the  Western  country,  to  insert  Lexington,  in  Ken- 
tucky. 

Mr.  ROBERTSON,  of  Louisiana,  proposed  also  New  Orleans,  and  argued, 
with  much  force,  in  support  of  his  suggestion;  and  other  gentlemen  proposed 
other  places. 

The  motion  of  Mr.  SHARP,  being  the  one  immediately  before  the  House,  gave 
rise  to  a  considerable  debate.  The  motion  was  supported  by  Messrs.  Sharp, 
Robertson,  Lewis,  Macon,  Wright,  Pearson,  Harris,  Hopkins,  of  Kentucky, 
Burwell,  and  Barnett,  and  opposed  by  Messrs.  Fisk,  of  New  York,  Oakley, 
Creighton,  and  Ingham. 

On  the  one  hand,  various  arguments  were  urged  in  favor  of  extending  the 
subscription,  founded  on  the  equal  rights  of  all  sections  of  the  country  to  par- 
ticipate in  any  general  benefit;  the  expediency  of  collecting  specie  from  every 
part  of  the  country;  the  advantages  of  uniting  in  the  subscription  People  of 
every  quarter  of  the  country;  and  thus  uniting  the  People  of  all  sections  to  the 
Union,  by  the  ties  of  interest,  which  are  frequently  stronger  than  those  of 
legal  or  moral  force. 

On  the  other  hand  it  was  said,  besides  the  delay  inseparable  from  such  a 
course,  that  it  was  important  that  the  bank  should  be  put  into  operation  speedi- 
ly, if  at  all,  and  that  its  commencement  would  be  greatly  delayed  by  multiply- 
ing places  of  subscription.  It  was  also  said,  that,  if  this  motion  were  with- 
drawn, an  amendment  might  be  devised  by  the  Committee  of  Ways  and  Means, 
which  would  meet  the  views  of  all  parties. 

Mr.  SHARP'S  motion  at  length  prevailed.  Lexington,  Kentucky,  was  in- 
serted as  one  of  the  places  at  which  subscriptions  should  be  opened,  and 
Messrs.  Charles  Wilkins,  Lewis  Sanders,  and  John  H.  Morton,  designated 
as  the  commissioners. 

On  motion  of  Mr.  ROBERTSON,  New  Orleans  was  then  added,  and  com- 
missioners named  for  that  place. 

On  motion  of  Mr.  HARRIS,  Nashville  was  added,  and  Robert  Weakley, 
Felix  Grundy,  and  JohnR.  Bedford,  named  as  the  commissioners. 

On  motion  of  Mr.  LEWIS,  Washington  City  was  added,  and  Robert  Brent, 
Walter  Smith,  and  Thomas  Swann,  named  as  commissioners.  Mr.  FISK,  of 
New  York,  named  John  Mason,  Daniel  Carroll,  and  John  P.  Van  Ness;  but 
Mr.  LEWIS'S  motion  bein;;  the  first  made,  was  agreed  to. 


PROCEEDINGS  OF  1814.  439 

On  motion  of  Mr.  MACON,  Raleigh,  in  .North  Carolina,  was  inserted,  arid 
Sherwood  Hay  wood,  Beverly  Daniel,  and  William  Pierce,  named  as  commis- 
sioners. 

On  motion  of  Mr.  FORSYTH,  Savannah,  in  Georgia,  was  added,  and  John 
Bolton,  Charles  Harris,  and  James  Johnson,  named  as  commissioners. 

On  motion  of  Mr.  CONDICT,  New  Brunswick,  in  New  Jersey,  was  added, 
and  James  Vanderpuol,  John  Gray,  and  Peter  Gordon,  named  as  commission- 
ers. 

Mr.  GROSVENOR  moved  to  add  Utica,  in  New  York,  and  John  C.  Devereaux, 
Benjamin  Walker,  and  Jeremiah  Van  Rensselaer  as  commissioners;  but  the 
motion  was  negatived,  after  some  objections  by  Mr.  INGHAM,  and  replication 
by  Mr.  GROSVENOR. 

On  motion  of  Mr.  WEBSTER,  Portsmouth,  in  New  Hampshire,  was  added, 
and  John  Goddard,  Nathaniel  A.  Haven,  and  Nathaniel  Gilman,  named  ai 
commissioners. 

On  motion  of  Mr.  KILBOLRN,  Pittsbarg  was  stricken  out,  Chilicothe,  in  Ohio, 
added,  and  Samuel  Find  ley,  Thomas  James,  and  William  M'Farland,  named 
as  commisioners. 

Mr.  LEWIS  then  made  a  motion,  the  object  of  which  was  to  establish  the 
principal  bank  at  the  city  of  Washington,  in  this  District. 

This  motion  was  opposed  by  Mr.  FISK,  of  New  York,  who  said  that  the 
Committee  of  Ways  and  Means  had  fixed  on  Philadelphia,  ill  preference  to 
New  York  and  other  places,  to  be  the  seat  of  the  principal  bank,  as  being  a 
place  of  greater  security  and  greater  wealth,  and  as  being  more  central  to  the 
commercial  transaction's  and  wealth  of  the  country,  &c. 

Mr.  LKWIS  said  he  had  no  doubt  that  the  gentleman  from  New  York  pre- 
ferred Philadelphia  to  this  place,  as  he  had  already  given  sufficient  evidence 
of  his  candor  in  thai  respect.  Th->  Military  School,  the  National  Bank,  and 
every  institution  of  a  national  character,  had  been  contemplated  to  be  fixed  at 
this  place,  by  those  wh  >  located  the  seat  of  Government  here,  &c.  and  so  they 
ought  to  be,  &c.  Besides,  there  might  be  many  gentlemen  who  would  vote  for  a 
bank  to  be  established  at  this  place,  who  would,  on  constitutional  grounds,  be 
opposed  to  its  establishment  elsewhere.  He  therefore  hoped  his  motion  would 
be  agreed  to. 

Mr.  LEWIS'S  motion  was  negatived,  about  thirty  members  only  rising  in 
favor  of  it. 

On  motion  of  Mr.  FISK,  of  New  York,  an  amendment  was  adopted,  author- 
izing the  Philadelphia  commissioners,  in  case  Thirty  millions  should  not  be 
subscribed  and  returned  to  them  within  the  time  allowed,  to  open  the  books 
at  Philadelphia  until  the  whole  should  be  subscribed. 

Mr.  G  ASTON,  of  North  Carolina,  then  said,  before  the  committee  proceeded 
further  in  the  bill,  he  wished  to  propose  a  material  amendment  to  it,  and,  with 
a  view  to  ascertain  whether  the  House  were  disposed  to  hear  him  in  support  ot 
his  motion  at  this  late  hour  of  the  day,  he  moved  that  the  committee  now  rise. 

This  motion  was  negatived;  and 

Mr.  GASTOX  proceeded  to  lay  before  the  committee  his  views  in  relation  to 
this  bill.  He  professed  himself  anxious  for  the  establishment  of  a  National 
Bank,  which  he  had  always  fovored  when  opportunity  ottered.  But  it  was  his 
decided  conviction,  he  said,  that  a  bill  like  that  on  the  table  would  not  answer 
the  purposes  of  the  nation  or  ot  the  Government.  This  view  of  the  subject  he 
supported  by  various  objections  to  different  features  of  the  bill,  and  particularly 
to  the  mode  of  subscription  in  stock  of  the  United  States;  the  operation  of  all 
which  he  contended  would  be  to  throw  into  circulation  a  quantity  of  paper, 
founded  not  on  a  specie  capital,  but  on  the  credit  of  the  United  States'  stock, 
&c.  which  would  therefore  be  of  no  greater  value  than  any  other  paper  which 
the  United  States  should  make  receivable  in  I  axes,  though  much  more  expen- 
sive to  the  United  State.-;  than  treasury  notes  or  bills  of  credit  would  be,  &c. 
&c.  In  support  of  this  idea.  Mr.  G.  adduced  many  illustrations,  from  writers 
62 


490  BANK  OF  THE  UNITED  STATES. 

on  this  subject,  from  our  own  history,  and  from  analogy.  He  objected 
also  to  the  proposed  appointment  of  a  part  of  the  directors  oy  the  President, 
to  the  large  portion  of  the  stock  to  be  held  by  the  United  States,  &c.  He 
wound  up  his  argument  on  these  and  other  points  by  observing,  that,  as  he  was 
friendly  in  principle  to  the  establishment  of  a  National  Bank,  he  should  not 
consider  himself  as  doing  his  duty,  if,  while  he  disapproved  of  this  plan,  he 
did  not  otter  another  as  a  substitute  to  it.  Instead  of  a  bank  of  a  nominal 
capital  of  fifty  millions,  he  would  establish  a  bank  whose  capital  should  not, 
•ct  farthest,  exceed  twenty  millions.  He  considered  it  as  by  no  means  im  - 
portantto  its  success  that  the  Government  should  subscribe  a  cent  to  its  capi- 
tal stock;  but,  as  that  was  a  fashionable  idea,  he  would  say  a  portion  of  the 
capital,  five  millions,  should  be  subscribed  by  the  Government;  that  the  re- 
maining fifteen  millons  should  be  subscribed  by  individuals,  five  millions  of  it 
at  least,  in  specie,  the  remainder  either  in  treasury  notes,  at  par,  or  in  six  per 
cent,  stock  of  future  loans,  at  par,  or  six  per  cent,  stock  of  former  loans,  at  the 
price  at  which  it  was  contracted  for  with  the  Government.  So  far  from  such 
stock  being  inalienable,  as  now  proposed,  he  would  permit  the  directors  to 
manage  and  dispose  ot  it  as  they  pleased.  They  might  lend  money  to  the 
Government  if  they  found  it  to  their  interest  and  convenience  to  do  so.  He 
would  abolish  from  such  a  charter  the  idea  that  the  fiat  of  the  President  should 
at  any  time  suspend  the  payment  of  specie  by  the  bank,  &c.  If  any  plan  of  a 
National  Bank  could  succeed,  it  must  be  on  something  like  the  plan  of  which 
this  was  the  outline.  To  try  the  principle  of  this  bill,  arid  whether  the  House 
were  disposed  to  accept  any  amendment  whatever  to  it,  Mr.  GASTON  concluded 
his  speech  by  moving  to  strike  out  fifty  millions  (the  proposed  capital  stock 
of  the  bank)  and  insert  in  lieu  thereof  twenty  millions. 

On  motion  of  Mr.  HOPKINS,  of  Kentucky,  the  committee  then  rose,  and 
obtained  leave  to  sit  again. 

NOVEMBER  15,  1814. 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NELSON, 
of  Va.  in  the  chair. 

The  motion  of  Mr.  GASTON  to  make  the  capital  of  the  bank  twenty  instead 
®f fifty  millions  of  dollars,  being  still  under  consideration — 

Mr.  FISK,  of  New  York,  spoke  in  reply  to  Mr.  GASTON'S  speech, and  in  ex- 
planation of  the  views  of  the  committee.  He  declined  replying  to  Mr.  GAS- 
TON'S  objections  to  various  details  of  the  bill,  until  those  details  should  come 
immediately  under  consideration  of  the  House;  but  applied  his  observations 
particularly  to  Mr.  G's  objections  to  the  amount  and  character  of  the  propos- 
ed capital  of  the  bank.  The  objects  of  the  Committee  of  Ways  and  Means 
in  proposing  such  an  institution,  ought  ever  to  be  kept  in  view  in  this  discus- 
sion. They  were,  generally,  the  revival  and  support  of  the  public  credit. 
These  objects  could  be  best  accomplished,  1st.  By  raising  the  value  ot  the 
public  stocks;  and,  2d.  by  the  establishment  of  a  competent  circulating  me- 
dium. Mr.  F.  then  entered  into  an  argument  to  show  that  the  plan  now  be- 
fore the  House  was  that  which  would  best  accomplish  these  objects.  He  referred 
to  the  history  of  the  former  Bank  of  the  United  States,  established  with  similar 
objects  and  under  like  circumstances,  and  from  its  efficiency  argued  what 
might  be  expected  from  this  bank.  The  committee,  in  inquiring  as  to  the  amount 
of  circulating  medium  which  could  be  now  advantageously  employed,  had  fix- 
ed on  fifty  millions,  which  amount  had  also  received  the  sanction  of  the  opi- 
nion of  the  Secretary  of  the  Treasury.  The  present  banking  capital  of  the 
nation  being  estimated  at  a  hundred  millions,  it  was  believed  by  the  com- 
mittee that  the  addition  of  fifty  millions  would  not  be  dangerous  either  to 
those  institutions  or  to  the  community.  Having  thus  determined  on  an  in- 
crease of  the  circulating  medium  of  the  country,  the  next  object  was  the  ap- 
preciation of  the  value  of  the  public  stock.  That  stock  had  depreciated  in 
value,  not  from  any  doubt  of  the  ability  or  disposition  of  the  Government  to 


PROCEEDINGS  OF    1814. 

ecmply  with  its  engagements  to  tlie  public  creditors,  but  from  the  quantity  of  tiie 
stock  which  it  had  been  necessary  to  throw  into  market  exceeding  the  means  for 
purchasing  it.  A  relief  of  the  stock  from  its  present  depreciation  was  promis- 
ed by  the  withdrawal  of  a  part  of  it  from  the  market;  and  \yith  this  view,  it 
had  been  contemplated  that  twenty- four  millions  of  the  capital  stock  of  the 
bank  should  be  subscribed  in  Government  securities.  This,  by  taking  so  much 
.stock  out  of  the  market,  would  raise  the  price  of  the  stock,  and  make  room 
for  more,  which  it  might  be  necessary  to  create.  It  had  been  thought  proper, 
too,  that  the  United  States  should  hold  a  part  of  the  stock  of  the  bank — to 
what  amount,  there  had  been  some  difference  of  opinion;  and  if  the  House 
thought  too  great  a  proportion  was  by  this  bill  allowed  to  the  United  States, 
they  would  so  decide,  Mr.  F.  was  willing,  for  himself,  that  the  bank  should 
be  connected  with  the  Government,  and  the  Government  with  the  bank,  and 
that  they  should  mutually  support  each  other,  &c.  As  to  the  share  of  the 
Government  in  the  appointment  of  directors,  whilst  it  could  be  no  injury  to 
the  institution,  it  was  necessary  as  well  to  guard  the  interest  of  the  United 
States,  as  to  take  care  of  their  interest  in  1he  security  of  the  revenue  in  the 
various  branches  of  the  bank.  Mr.  F.  took  a  comparative  view  of  the  situa- 
tion of  the  nation  now  and  in  1791,  when  the  Bank  of  the  United  States  was 
established,  dwelling  on  the  diminution  of  the  public  debt  and  increase  of  the 
means  of  payment,  since  that  day  the  increase  of  circulating  medium, 
wealth,  population,  £c,  from  which  lie  concluded  there  was  as  ample  employ- 
ment for  a  bank  of  fifty  millions  now,  as  lor  a  bank  of  ten  millions  then. 
Of  the  ten  millions  capital  of  that  bank,  three-fourths  of  it  was  composed  of 
public  stock,  as  much  depreciated  at  that  day,  as  public  stock  now  is.  The 
operation  of  that  bank,  he  said,  had  been  not  only  beneficial,  but  wonderful, 
giving  a  spring  to  public  credit,  and  raising  the  price  of  all  public  stock — as 
he  believed  tins  bank  would,  when  once  established.  As  to  the  specie  capital, 
it  was  difficult,  he  remarked,  to  say  how  much  specie  would  give  confidence 
to  the  operations  of  the  bank.  The  old  bank  of  the  United  States  had  com- 
menced its  operations  on  a  specie  capital  of  400,000  dollars.  He  had  no 
doubt,  therefore,  but  this  bank  might  safely  commence  its  operations  on  a 
specie  depositeoi'  1,200,000  dollars,  which  he  believed  there  would  be  no  diffi- 
culty in  procuring.  As  to  the  confinement  ot  the  subscription  to  the  stock 
created  since  the  war,  the  committee  had  deemed  it  proper  to  confine  their 
object  of  raising  the  price  of  the  public  stock  to  such  as  was  depreciated,  viz. 
to  that  which  had  been  created  since  the  declaration  of  war,  and  which  had 
depreciated,  perhaps,  because  not  so  well  supported  by  specific  pledges  of 
revenue  as  the  old  six  per  cent,  stock.  These  various  features  were,  how- 
ever, in  the  hands  of  the  committee  of  the  whole,  and  entirely  at  their  dispo- 
sal, &c. 

Mr.  GASTON,  in  a  speech  of  some  length,  advocated  the  superiority  of  the 
plan  he  had  yesterday  indicated  over  that  embraced  in  this  bill,  and  replied 
to  the  remarks  of  Mr.  FISK.  He  expressed  his  regret  that  Mr.  FISK  had  de- 
clined replying  to  the  objections  he  had  urged  to  the  bill,  and  had  not  given  a 
general  statesman-like  exposition  of  the  whole  bill,  instead  of  resting  its  de- 
ience  on  the  magic  words  revival,  and  support  of  the  public  credit,  &c.  He 
repeated,  and  enforced  at  some  length,  his  objections  to  this  system,  which 
he  contended  would  neither  revive  the  public  credit  nor  afford  a  circulating 
medium  of  general  credit.  As  to  the  momentary  appreciation  of  the  public 
stocks,  it  would  benefit  only  the  particular  individuals  who  held  them;  and, 
as  to  an  increase  of  mere  paper,  it  was  not  even  desirable:  for  it  was  the  su- 
perabundance of  that  which  had  already  caused  the  specie  of  the  country  to 
disappear,  &c.  He  compared  this  proposition  to  relieve  the  evil  arising  from 
too  much  paper,  by  throwing  more  into  circulation,  to  the  remedy  which 
Burke  had  described  the  French  Convention  as  prescribing  for  every  evil, 
viz.  issuing  more  assignats.  As  to  the  necessary  specie  capital,  and  the  faci- 
lity of  obtaining  it  in  the  course  of  banking  operations,  Mr.  G.  said,  a  bank 
must  have  specie  before  it  has  credit;  when  it  has  credit,  it  may  obtain  specie, 


492  BANK  OP  THE  UNITED  STATES. 

but  not  till  then,  &c.  Upon  the  whole,  he  had  no  confidence  in  this  system, 
In  times  of  public  difficulty — in  times  like  this — people  were  too  apt  to  look 
for  relief  from  some  splendid  project.  It  was  a  period  like  this  in  the  finan- 
ces of  France,  that  Mr.  Law  came  forward  with  his  Mississippi  bank  project. 
The  old  fashioned  notion  of  redeeming  credit  by  economy,  punctuality  in  ful- 
filling engagements,  &c.  was  at  that  time  abandoned;  and  tne  result  was,  that 
thousands  of  individuals  were  ruined,  and  the  finances  of  the  French  nation 
reduced  to  a  lower  state  of  degradation  than  when  the  attempt  was  made  to 
resuscitate  them.  He  cautioned  gentlemen  against  falling  into  the  same  error, 
and  to  examine  well  the  practicability  of  the  system  proposed  for  their  con- 
sideration, &c. 

Mr.  FISK  made  some  remarks  by  way  of  resisting  the  attack  which  he  said 
the  gentleman  had  to-day  made  from  the  same  battery  as  he  yesterday  opened 
on  the  bill.  He  denied  the  applicability  of  some  of  his  remarks,  particularly 
of  that  in  relation  to  Law's  scheme,  \yhich  arose  from  that  bank's  having  issu- 
ed a  vast  amount  of  paper  on  its  capital,  founded  on  the  fictitious  value  of 
certain  land  certificates,  &c. — an  excess  of  folly  into  which  no  properly  regu- 
lated bank  was  in  any  danger  of  falling,  &c. 

The  question  on  Mr.  GASTON'S  motion  to  strike  out  $fty  and  insert  twenty 
millions,  was  then  decided  as  follows:  For  the  motion,  47.  Against  it,  79. 

So  the  motion  was  negatived. 

On  motion  of  Mr.  PARKER,  of  Massachusetts,  among  the  places  at  which 
subscription  books  should  be  opened,  Hallo  well,  in  M-aine  was  inserted,  and 
three  persons  named  as  commissioners. 

Mr,  CONDICT,  of  New  Jersey,  said  he  thought  it  would  be  good  policy  to 
permit  as  large  a  portion  of  the  agricultural  community  to  contribute  to  the 
stock  as  possible.  With  this  view  he  moved  to  increase  the  number  of  shares 
from  one  to  Jive  hundred  thousand,  and  reduce  the  amount  of  each  share  to 
one  instead  of  Jive  hundred  dollars. 

Mr.  FISK,  of  New  York,  opposed  this  motion.  The  shares,  he  conceived, 
were  made  sufficiently  small,  to  enable  every  one  so  disposed  to  participate 
in  the  bank;  whilst  a  still  further  subdivision  of  the  stock  would  produce  great 
embarrassment,  and  a  total  derangement  of  the  details  of  the  bill,  and  much 
difficulty  in  apportioning  the  proportions  of  stock,  treasury  notes,  and  specie 
to  be  paid  on  each  share. 

The  motion  was  rejected,  ayes  32. 

Mr.  WRIGHT,  of  Maryland,  proposed  to  substitute,  for  the  provision  re- 
specting the  manner  of  taking  subscriptions  for  this  stock,  a  provision  for  divid  - 
ing  its  capital  stock,  among  the  several  States  in  proportion  to  their  repre- 
sentation, so  that  all  the  members  of  the  Union  might  equally  participate  in  the 
benefits  of  such  subscription.  He  had  no  doubt  the  subscriptions  would  be 
advantageous  to  the  individuals,  inasmuch  as  he  believed  the  stock  would  be 
greatly  above  par  as  soon  as  the  bank  went  into  operation.  Not  having,  how- 
ever, had  time  to  prepare  an  amendment  to  meet  his  wishes,  he  should  waive 
his  motion  for  the  present,  until  the  bill  was  gone  through. 

After  making  further  verbal  amendments  to  the  1st  section — 

The  second  section  of  the  bill  was  read: 

Mr.  HALL,  of  Georgia,  moved  to  amend  this  section  by  adding  thereto  a  pro- 
viso, in  the  following  words: 

" Provided,  That  no  interest  shall  accrue  on  the  public  stock  or  treasury 
notes  paid  by  the  subscribers  as  a  part  of  the  capital  of  the  bank  during  the 
continuance  of  the  charter." 

The  reason  assigned  by  Mr.  HALL  was,  that  the  bank  would  draw  a  double 
interest  on  the  stock  part  of  the  capital,  viz.  6  per  cent,  on  the  stock,  and  a 
per  centage  from  the  operations  of  the  bank  upon  that  stock. 


PROCEEDINGS  OF   1814.  495 

Mr.  FISK opposed  this  motion,  and  expressed  much  surprise  at  it.  He  thought 
the  moral  sense  of  the  Government  must  revolt  at  its  injustice?  besides,  that 
it  would  destroy  all  possibility  of  organizing  a  bank  on  the  principles  propo- 
sed by  the  bill. 

The  motion  of  Mr.  HALL  was  negatived,  very  lew  voices  only  appearing  in 
favor  of  it. 

Mr.  OAKLEY,  of  New  York,  moved  so  to  amend  the  bill  as  to  make  it  op- 
tional to  subscribers  to  pay  in  the  whole  of  their  shares  (except  the  specie 
part)  in  six  per  cent,  stock,  instead  of  compelling  them  to  pay  in  a  part  of 
the  subscription  in  treasury  notes. 

This  motion  was  opposed  by  Mr.  FISK,  of  New  York,  and  negatived,  ayes 
only  43. 

Mr.  BRADBURY,  of  Massachusetts,  made  a  motion,  the  object  of  which  was,  in 
the  provision  respecting  the  subscription  of  a  certain  proportion  of  the  capital 
in  stock  of  the  loans  created  since  the  war,  to  substitute,  in  lieu  thereof,  the 
stock  "in  loans  hereafter  to  be  contracted  by  authority  of  any  act  of  Congress, 
passed,  or  to  be  passed,  during  the  present  session." 

Mr.  B.  said  that  the  bill,  as  it  now  stood,  would  afford  no  real  advantage 
to  the  Government,  unless  it  were  in  the  privilege  of  borrowing  thirty  millions 
of  dollars  from  the  bank.  The  intention  of  the  charter  proposed  to  be  granted 
by  the  bill,  was  to  authorize  the  individuals  associating  to  issue  paper  money — 
notes  which  would  promise  to  pay  nothing  but  paper:  for,  he  contended, 
whether  the  provision  authorizing  the  President,  on  certain  occasions,  to 
suspend  payment  of  specie,  waere  adopted  or  not,  the  institution  would  be 
nothing  but  a  bank  of  paper  money;  and  he  could  see  no  advantage  the  Go- 
vernment could  derive  from  borrowing  thirty  millions  of  paper  money.  If, 
however,  this  bank  should  be  advantageous  or  profitable  to  the  stockholders, 
he  could  see  no  reason  why  those  who  had  lent  the  Government  money,  since 
the  declaration  of  war,  should  have  any  advantage  over  any  present  or  future 
stockholders.  They  had  obtained,  he  conceived,  sufficient  discount  beyond 
the  six  per  cent,  interest  for  the  loans  they  had  made;  and  yet,  it  appeared  to 
him,  from  an  examination  of  this  bill,  that  its  whole  object  was  to  benefit  this 
description  of  persons.  If  this  bank  should  go  into  operation,  which  he  doubt- 
ed, even  should  the  bill  pass,  what,  he  asked,  would  be  the  consequence? 
Ignorant  and  unwary  men  would  purchase  the  public  stock,  at  par,  from  these 
who  contracted  for  it,  and  now  hold  it,  and  presently  the  bubble  would  burst, 
and  these  purchasers  become  the  losers  by  the  scheme.  If  the  individuals 
who  took  the  last  loans,  had  been  permitted  to  devise  a  bill  for  their  particu- 
lar advantage,  they  could  not  have  drawn  one  to  suit  them  better,  &c. 

Mr.  WRIGHT,  of  Maryland,  proposed  to  submit,  in  lieu  of  Mr.  BRADBURY'S 
motion,  an  amendment  which  he  had  prepared.  'If  the  House  meant  to  do 
perfect  justice  to  themselves,  and  to  the  United  States,  he  said  they  would  be 
indisposed  to  put  the  public  stock,  redeemable  at  the  will  and  pleasure  ot  the 
Government,  on  the  same  footing  as  specie:  and,  if  that  stock  were  permit- 
ted to  be  subscribed,  at  the  contract  p/nce^  it  would  be  a  sufficient  bonus  to  the. 
stockholders  that  their  stock  was  converted  into  bank  capital  which  would 
immediately  rise  to  fifty  or  sixty  per  cent,  above  par.  In  such  a  provision  as 
he  proposed,  there  would  be  nothing  coercive;  the  stockholder  might  or  might 
not  subscribe  his  stock;  if  he  did,  he  would  be  placed  on  the  same  footing 
as  the  rest  oi  the  community.  Mr.  W.  wished,  therefore,  to  admit  any  stock 
to  be  subscribed,  of  the  past  or  future  loans,  at  the  contract  price. 

Mr.  BRADBURY  declined  assenting  to  this  substitute  to  his  motion,  which, 
however,  he  modified,  by  adding  to  the  end  of  it  the  words,  "at  its  par  value  " 
thus  proposing  to  allow  subscriptions  to  the  bank  in  the  stock  of  any  future 
loan,  at  its  par  value. 

Mr.  FISK  opposed  Mr.  B's  motion  with  considerable  warmth.  If  they  could 


494  BANK    OF   THE    UNITED   STATES. 

not  aid  the  public  credit,  he  said,  he  hoped  Congress  would  refrain  from  doing 
any  thing  which  should  injure  it.  The  public  creditor  had  generally  gone  to 
the  extent  of  his  means  in  purchasing  the  public  stock  now  lying  on  his  liands. 
But  it  never  could  have  entered  into  his  calculation  that  the  Government 
would  adopt  any  measure  calculated  directly  to  bear  on  him,  as  the  creation 
of  a  new  stock,  on  a  different  footing,  certainly  would,  by  giving  it  the  advan- 
tage in  the  market  over  him.  Such  a  course  pursued  by  Government,  of  ex- 
ercising its  power  to  serve  its  own  purposes,  instead  of  pursuing  a  course  of 
magnanimous  policy,  must,  Mr.  F.  said,  be  repugnant  to  every  sentiment  of 
morality  as  well  as  justice,  which  ought  to  be  observed  by  nations.  It  would 
be  an  iniquitous  delusion  practised  on  the  community,  inasmuch  as  the  depre- 
ciation of  public  stock  does  not  now  arise  so  much  from  distrust  of  the  Gov- 
ernment as  from  inability  of  the  people  to  lend,  which  ability  could  not  be 
increased  by  giving  this  sort  of  privilege  to  the  stock  in  any  subsequent  loans, 
&c.  Such  a  discrimination  as  is  proposed,  would  so  weaken  the  confidence  in 
the  public  faith,  that,  he  did  not  believe,  after  adopting  it,  the  Government 
would  be  able  to  obtain  further  loans  on  any  terns. 

Mr.  HAWKINS,  of  Kentucky,  in  a  very  decided  manner  reprobated  the 
adoption  of  this  amendment.  It  was  pretty  well  understood,  he  said,  that  the 
Government  had  exhausted  almost  to  the  last  cent  the  ability  of  the  nation  to 
obtain  loans  under  the  existing  state  of  things.  It  was  true,  that,  while  this 
House  was  recently  debating  on  the  three  millions  loan  bill,  he  had  suggested, 
and  it  was  the  fact,  that  the  Executive  was  negotiating  a  part  of  the  six  mil- 
lions loan.  They  had  hopes,  also,  to  obtain,  under  the  bill  last  proposed,  a  loan 
to  enable  them  to  redeem  the  treasury  notes  becoming  due  in  this  quarter. 
But,  how  could  this  body  expect  this  Government  should,  in  the  hour  of  most 
need  and  difficulty,  obtain  those  resources  which  are  indispensable  to  the  ful- 
filment of  the  public  engagements,  if  gentlemen,  first  on  one  day,  and  then 
on  another,  should  persist  in  introducing  motions  and  speeches  in  respect  to 
the  present  creditors,  which  must  have  an  injurious  effect  on  future  loans?  No 
doubt  thegentleman,  in  this  motion,  thought  he  was  advocating  the  interests  of 
his  country;  but,  unfortunately,  by  one  and  another  proceeding,  public  credit 
was  injured,  and  the  operations  of  Government  retarded.  Remarks  had  been 
made  on  this  floor,  and  he  alluded  emphatically  to  those  unfortunately  made 
by  a  gentleman  from  Virginia,  (Mr.  JACKSON)  who,  he  regretted,  was  not 
now  in  his  seat,  which  had  a  more  deleterious  effect  on  public  credit  than  that 
gentleman  could  possibly  liave  expected  or  wished.  They  were  certainly  not 
authorized  by  sound  policy,  and  he  would  venture  to  say,  so  far  as  they  re- 
spected the  public  credit,  the  redemption  of  the  public  debt,  and  payment  of 
past  and  future  loans,  were  not  sanctioned  by  the  administration  or  any  mem- 
ber of  it.  He  would  not  support  any  men  or  administration  that  supported 
such  a  doctrine,  and,  so  far  as  the  doctrine  had  been  advocated  by  one  of  his 
political  friends,  he  declared  the  opinions  expressed  were  not  his;  that  they 
were  unworthy  of  any  party,  of  any  government,  of  any  administration,  or  any 
member  of  it.  As  to  this  bill,  he  entertained  constitutional  objections  to  the 
establishment  of  any  bank;  if  they  could  be  removed,  he  might  vote  for  this 
bill.  He  did  not  rise  to  speak  of  its  merits,  but  to  protest  against  propositions 
calculated  to  weaken,  if  not  destroy,  all  confidence  in  the  public  faith.  It 
had  been  assigned  as  a  reason  for  such  a  motion,  that  speculators  had  preyed 
on  the  public  credit.  This  he  denied.  The  Government  had  gone  on  relying 
on  the  public  credit  alone  to  support  its  loans,  until  the  terms  on  which  they 
could  be  obtained  had  fallen  from  par  to  88,  from  88  to  80,  &c.  The  Govern- 
ment had  been  compelled  to  have  money,  and  had  bought  it  as  low  as  they 
could.  As  to  the  terms  of  the  ten  millions  loan,  on  which  so  much  had  been 
suid,  Mr.  H.  said  it  was  only  an  adaptation  to  that  loan  by  Mr.  Campbell,  of 
the  terms  on  which  Mr.  Gallatin  had,  without  censure,  obtained  the  sixteen 
millions  loan,  and  m  consequence  of  which  last  engagement  the  terms  of  the 
loan  had  been  more  than  once  varied,  &c.  Nay  more,  he  said,  the  terms  al- 
lowed by  Mr.  Campbell  were  less  advantageous  to  the  contractors  than  those 


PROCEEDINGS  OF   1814.  40,5 

allowed  by  Mr.  Gallatin,  so  that  the  blame  thrown  on  him  was  imputable  not 
to  the  terms  of  the  late  loan,  but  to  the  inability  of  the  Government  to  borrow, 
&c.  Mr.  H.  protested  against  the  principle  of  this  amendment.  If  the  House 
resorted  to  invidious  discriminations  between  the  public  creditors,  he  admon- 
ished them  that  they  would  paralyze  their  own  arm,  and  arrest  the  future  op- 
erations of  the  Government. 

Mr.  GHOLSON  said  he  sincerely  regretted,  that,  the  animadversions  of  the 
honorable  gentleman  from  Kentucky  (Mr.  HAWKINS)  on  the  speech  of  the 
honorable  gentleman  from  Virginia  (Mr.  JACKSON)  on  the  loan  bill,  had  not 
been  made  while  that  gentleman  was  present,  so  that  he  might  have  had  an 
opportunity  of  vindicating  himself  before  the  committee  and  the  nation.  Mr. 
G.  observed  that  he  did  not  recollect  the  remarks  of  his  friend  (Gen.  JACK- 
SOX)  with  sufficient  distinctness  to  attempt  to  state  the  substance  of  them  to 
the  committee.  He,  however,  did  not  understand  them  to  be  such  as  could 
be  construed  into  an  indisposition  to  pay  the  public  debt.  Mr.  G.  said  he  ap- 
plauded the  zeal  which  had  been  manifested  by  the  honorable  gentleman  from 
Kentucky,  in  favor  of  the  public  credit.  With  that  gentleman  he  ardently 
hoped,  that  ample  provision  would  be  made,  at  the  present  session,  for  the 
punctual  payment  of  the  interest,  and  for  the  redemption,  within  a  reasonable 
time,  of  the  last  cent  of  the  principal  of  every  description  of  the  public  debt. 

Mr.  CALHOUN  of  S.  C.  said  they  had  arrived  at  that  part  of  the  bill  on 
which  he  presumed  there  would  be  the  greatest  diversity  of  opinion.  The 
subject  was  highly  important  and  worthy  of  mature  consideration;  he,  there- 
fore, moved  That  the  committee  now  rise,  to  allow  time  for  further  reflection 
on  it. 

The  committee  rose,  and  the  House  adjourned. 

NOVEMBER  1C,  1814. 

The  House  resumed,  in  committee  of  the  whole,  the  consideration  of  the 
bill. 

At  the  request  of  Mr.  CALHOUN,  of  South  Carolina,  who  desired  to  propose 
another  amendment,  Mr.  BKADBURY,  of  Massachusetts,  withdrew  the  amend- 
ment he  ottered  yesterday.  A  great  part  of  his  object,  he  said,  had  been  an- 
swered by  arresting  the  attention  of  the  committee  to  this  subject. 

Mr.  CALHOUN,  then,  in  a  very  ingenious  and  elaborate  speech,  laid  before  the 
House  his  views  on  this  subject,  and  the  reasons  why  he  should  propose  a  total 
change  in  the  features  of  the  bill.  The  motion  he  now  made  was  one  of  limited 
character,  but  such  a  one  as  he  proposed  to  follow  up  byother  amendments,  or, 
by  distinct  legislative  provisions,  which  should  together  embrace  a  plan,  of 
which  the  following  is  a  brief  outline:  The  capital  of  the  bank  remaining  un 
changed,  at  fifty  millions,  the  payments  of  subscriptions  to  this  capital  stock- 
to  be  made  in  the  proportion  ot  one-tenth  in  specie,  (which  he  afterwards  va- 
ried to  six-fiftieths)  and  the  remainder  in  specie,  or  in  treasury  notes,  to  be 
hereafter  issued;  subscriptions  to  be  opened  monthly,  in  the  three  last 
days  of  each  month,  beginning  with  January  next,  for  certain  proportions  of 
the  stock,  until  the  whole  is  subscribed;  payment  to  be  made  at  the  time  of 
subscribing;  the  shares  to  consist  of  one  hundred  instead  of  five  hundred  dol- 
lars, each:  the  United  States  to  hold  no  stock  in  the  bank,  have  no  agency  in 
its  disposal,  nor  control  over  its  operations,  nor  right  to  suspend  specie  pay- 
ments. The  amount  of  treasury  notes  to  be  subscribed,  viz.  forty-five  mil- 
lions, to  be  provided  for  by  future  acts  of  Congress,  and  to  be  disposed  of  in 
something  like  the  following  way,  viz:  Fifteen  millions  of  the  amount  to  be 
placed  in  the  hands  of  the  agents,  appointed  for  the  purpose,  or  in  the  hands 
of  the  present  commissioners  of  the  sinking  fund,  to  go  into  the  stock  mar- 
ket, to  convert  the  treasury  notes  into  stock;  another  sum,  say  five  millions, 
to  be  applied  to  the  redemption  of  the  treasury  notes  becoming  due  at  the 
commencement  of  the  ensuing  year;  the  remaining  twenty  millions  he  pro- 


496  BANK   OP   THE    UNITED   STATES. 

posed  to  throw  into  circulation  as  widely  as  possible-  They  might  be  issued 
in  such  proportions,  monthly,  as  to  be  absorbed  in  the  subscriptions  to  the 
bank,  at  the  end  of  each  month,  &c.  This  operation,  he  presumed,  would 
raise  the  value  of  treasury  notes,  perhaps  twenty  or  thirty  per  cent,  above  par, 
being  the  value  of  the  privilege  of  taking  the  bank  stock,  and  thus  afford,  at 
the  same  time,  a  bonus  and  an  indirect  loan  to  the  Government;  making 
unnecessary  any  loan  by  the  bank,  until  its  extended  circulation  of  paper 
shall  enable  it  "to  make  a  loan  which  shall  be  advantageous  to  the  United 
States.  The  treasury  notes  so  to  be  issued  to  be  redeemable  in  stock,  at  six  per 
cent.,  disposable  by  the  bank  at  its  pleasure,  and  without  the  sanction  of  Go- 
vernment; to  whom  neither  is  the  bank  to  be  compelled  to  loan  any  money. 
This,  it  is  believed,  is,  in  a  few  words,  a  lair  statement  of  the /wye/  of  Mr. 
Calhoun,  which  he  supported  by  a  variety  of  explanations  of  its  operations, 
&c.  the  notes  of  the  bank,  \v\\en  in  operation,  to  be  received  exclusively  in 
the  payment  of  all  taxes,  duties,  and  debts,  to  the  United  States.  The  opera- 
tion of  this  combined  plan,  Mr.  C.  conceived,  would  be  to  aftbrd,  1.  Relief 
from  the  immediate  pressure  on  the  treasury;  2.  A  permanent  elevation  of 
the  public  credit;  and  3.  A  permanent  and  safe  circulating  medium  of  gene- 
ral credit.  The  bank  should  go  into  operation,  he  proposed,  in  April  next. 
He  concluded  his  exposition  by  a  motion,  the  effect  of  which  is  to  deprive  the 
United  States  of  any  share  in  the  stock  of  the  bank,  and  to  change  the  pro- 
portions of  specie  and  paper,  in  which  it  shall  be  payable,  to  one-tenth  in  spe- 
cie, and  nine-tenths  in  treasury  notes. 

This  motion  opened  a  wide  and  interesting  scene  of  debate. 

Mr.  FISK  attacked  Mr.  CALHOUN'S  proposition  with  considerable  zeal,  prin- 
cipally on  two  points;  its  failure  to  provide  for  the  present  absorption  of 
United  States'  stock,  and  the  difficulty  which  would  occur  in  the  circulation 
and  disposal  of  so  immense  a  mass  of  treasury  notes.  He  drew  a  comparison 
between  Mr.  CALHOUN*sprq/e/and  that  of  the" Committee  of  Ways  and  Means, 
highly  favorable  to  the  latter. 

Mr.  FORSYTH,  of  Georgia,  opposed  the  adoption  of  this  proposition,  and  ex- 
amined the  features  of  the  amendment  proposed  by  Mr.  CALHOUN,  and  the  ar- 
guments advanced  in  favor  of  it.  He  was  opposed  to  it  in  nearly  all  its  fea- 
tures, and  greatly  preferred  the  plan  reported  by  the  Committee  of  Ways  and 
Means.  His  arguments  were  principally  in  reply  to  those  of  Mr.  CALHOUN, 
which  he  generally  pronounced  to  be  erroneous  and  delusive. 

Mr.  LOWNDES,  of  South  Carolina,  replied,  at  considerable  length,  to  Mr. 
FORSYTH,  and  vindicated  the  proposition  of  Mr.  CALHOUN,  in  an  able  argument 
on  the  principal  points  of  objection,  urged  by  Mr.  FORSYTH,  and  in  illustration 
of  the  principles  of  the  bill.  He  showed  what  he  believed  a  decided  superi- 
ority or  the  amendment  over  the  original  project  of  the  Committee  of  Ways 
and  Means. 

When  Mr.  L.  ended  his  speech,  the  debate  on  the  main  question  termi- 
nated, and  this  day's  sitting  ended  with  the  following  skirmishing  debate,  du- 
ring the  whole  of  which,  the  Chairman  and  the  members  of  the  House  were 
endeavoring  to  limit  the  debate  to  the  question  before  the  House. 

Mr.  OAKLEY,  of  New  York,  after  remarking  on  the  very  high  importance  of 
this  subject,  and  the  magnitude  of  the  change  which  this  amendment  proposed 
to  introduce  into  the  principles  of  the  bill,  and  the  obvious  necessity  ot  fur- 
ther time  for  the  consideration  of  so  important  an  amendment,  moved  that  the 
committee  rise,  report  progress,  arid  ask  leave  to  sit  again. 

Mr.  IXGHAM,  of  Pennsylvania,  opposed  this  motion.  He  feared,  if  the 
House  were  to  adjourn  without  deciding  on  this  motion,  coining  from  the  im- 
posing quarter  whence  it  did,  and  supported  with  so  much  ability  by  the  gen- 
tleman from  South  Carolina,  it  would  arrest  the  loan  of  three  millions,  and 


PROCEEDINGS   OF    1814.  40,7 

even  the  nine  millions  loan,  which  were  absolutely  indispensable  to  support 
the  military  establishment,  and  other  departments  of  the  Government.  What, 
then,  he  asked,  would  become  of  the  soldier  who  is  now  in  a  northern  clime, 
depending  on  the  fate  of  these  loans  for  his  pay,  clothing,  and  sustenance? 
Whoever,  in  the  face  of  such  considerations,  should  vote  to  rise  without  de- 
ciding on  this  proposition,  possessed,  he  said,  more  courage  and  philosophy  of 
temper  than  he  would  boast-  He  hoped  the  committee  would  not  rise  with- 
out deciding  on  this  motion. 

Mr.  GROSVEXOR,  of  New  York,  said  he  hoped  the  committee  would  rise. 
This  was  the  very  question,  how  money  should  be  raised,  whether  by  treasury 
bills  or  by  any  other  mode,  which  more  than  any  other  required  the  deliberate 
decision  of  Congress.  It  was  not  a  question  simply  of  paying  the  militia,  or 
Hit1  army  now  out,  but  of  establishing  a  system  which  should  enable  the  Go- 
vernment to  discharge  all  the  demands  against  it  It  was  all  important  on 
such  a  subject  as  this,  more  than  on  any  other,  to  vote  considerately,  and  after 
deliberation.  The  proposition  of  the  gentleman  from  South  Carolina,  he  con- 
sidered to  be  generally  advantageous;  but  he  had  some  objections  to  it  which 
lie  wished  an  opportunity  to  submit.  He  hoped,  before  deciding  on  a  subject 
like  this,  the  House  would  take  due  time  to  deliberate  on  a  proposition  to  throw 
into  circulation  fifty  millions  of  treasury  notes,  trusting  to  the  bank  for  their 
absorption. 

Mr.  SHARP,  of  Kentucky,  said  he  hoped  the  committee  would  not  rise.  He 
wished,  before  rising,  that  they  would  decide  upon  the  proposition  before  them; 
not,  however,  for  the  reasons  expressed  by  the  gentleman  from  Pennsylvania. 
He  did  not,  like  that  gentleman,  conceive  that  the  decision  on  this  amend- 
ment could  affect  the  loans;  for  one,  he  said,  he  protested  against  loans  made, 
or  to  be  made,  on  the  expectation  of  the  creation  of  a  bank  to  give  a  bonus  to 
the  holders  of  the  public  stock,  in  addition  to  that  which  they  have  already 
contracted  to  receive  from  the  Government.  It  was  important  that  some  de- 
cision on  this  subject  should  immediately  take  place,  which  had  been  already 
three  days  debated;  and  he  knew  of  no  plan  which  would  be  so  operative  as 
that  now  proposed  by  his  friend  from  South  Carolina,  whose  arguments,  he 
said,  together  with  those  of  his  colleague,  (Mr.  LOWNDES)  were  something 
like  mathematical-demonstration. 

Mr.  OAKLEY  denied  any  weight  to  the  remarks  of  the  gentleman  from  Penn- 
sylvania, and  allowed  almost  as  little  to  the  argument  of  Mr.  Sharp,  that  three 
days  had  been  consumed  in  the  discussion  of  this  subject  He  should,  for  his 
part,  say  that  three  weeks  might  be  well  employed  in  the  discussion  of  a  pro- 
ject for  establishing  a.  bank  with  a  capital  of  fifty  millions  of  dollars — a  capital 
sufficiently  large  to  influence  the  destinies  of  this  nation  to  future  ages.  He 
was  friendly  to  the  main  principles  of  Mr.  Calhoun's  proposition;  but  he  was 
not  certain  but  there  might  be  radical  objections  to  some  of  them.  He  hoped 
some  indulgence  would  be  afforded  to  those,  who,  like  him,  wished  to  deliver 
their  opinions  on  this  subject. 

Mr.  INGHAM  remarked  that  the  House  had  been  sitting  here  nine  weeks, 
and  not  a  single  measure  had  been  definitively  adopted  for  the  support  of  the 
public  credit.  Delay  and  procrastination  had  taken  place  day  after  day;  and. 
if  the  House  were  to  wait  until  every  gentleman  was  satisfied  as  to  every  word 
and  letter  in  a  bill,  the  House  would  never  get  through  one.  The  very  sug- 
gestion of  such  an  amendment  as  that  now  under  consideration,  would,  he 
said,  produce  ill  consequences.  It  ought  to  be  determined,  therefore,  as  early 
as  possible.  He  did  know  that  a  speech,  (Mr.  JACKSON'S)  delivered  in  this 
House,  had  depressed  the  price  of  stocks  in  Philadelphia,  full  two  and  a  half 
per  cent.  The  proposition  now  before  the  House,  he  feared,  would  depress 
them  still  further;  and,  when  the  public  stock  was  in  a  state  of  depression, 
going  down,  down,  down,  he  was  unwilling  the  House  should  take  any  course 
which  should  still  further  prostrate  it. 
63 


498  BANK  OF  THE  UNITED  STATES. 

Mr.  FISK  hoped  the  committee  would  not  be  induced  to  rise^  at  the  early 
hour  of  three  o'clock,  by  the  old  plea  of  want  of  time  for  consideration.  It 
was  important  now  to  act,  and  that  the  whole  course  of  proceedings  of  the 
House  should  be  reformed,  and  one  of  greater  energy  and  promptitude  sub- 
stituted. 

Mr.  GROSVENOR  said  this  was  no  ordinary  subject,  on  which  men  could 
make  up  their  minds  in  a  moment;  and,  although  some  gentlemen  might  be 
prepared  to  vote  on  it,  he  hoped  they  would  allow  some  time  to  those  who  de- 
sired to  reflect  before  they  voted  on  a  question  of  so  great  moment. 

The  committee  then  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

NOVEMBER  17. 

The  House  again  in  committee  of  the  whole,  Mr*  NELSON  in  the  chair;  the 
important  amendment  yesterday  proposed  by  Mr.  CALHOUX  to  the  bill,  being 
still  under  consideration — 

An  amendment  was  moved  thereto  by  Mr.  FISK,  of  New  York,  and  ac- 
cepted by  the  House,  authorising  the  receipt  of  foreign  gold  and  silver  coin, 
(as  well  as  gold  and  silver  coin  of  the  United  States)  in  payment  for  the  sub- 
scriptions to  the  stock  of  the  bank  at  certain  rates  expressed  in  the  amend  - 
ment. 

Mr.  WRIGHT,  of  Maryland,  in  the  course  of  a  few  remarks  on  the  motion 
of  Mr.  CALHOUN,  expressed  his  approbation  of  the  principle,  and  avowed  a 
decided  preference  to  the  plan  it  embraced  over  that  contained  in  the  original 
bill. 

Mr.  SHARP,,  of  Kentucky,  moved  to  amend  the  bill  so  as  to  preclude  any 
thing  but  treasury'notes  from  being  received  in  payment  of  the  forty -four  mil- 
lions, which  are  now  proposed  to  be  payable  in  specie  or  in  treasury  notes. 
His  object  was  to  prevent  the  latter  payments  into  the  bank  from  being  made 
by  the  aid  of  accommodation  from  the  bank  after  it  goes  into  operation. 

After  sonie  conversation,  Mr.  S.  withdrew  his  amendment  with  a  view  of 
offering  it  in  some  future  stage  of  the  discussion. 

MR.  INGHAM.— Mr.  Chairman:  As  the  question  on  the  amendment  proposed 
by  the  gentleman  from  South  Carolina,  (Mr.  CALHOUN)  now  recurs,  I  beg 
leave  to  submit  a  few  observations  before  it  is  decided.  No  member  of  this 
committee,  can  be  more  sensible  than  I  am,  of  the  disadvantages  I  shall  have 
to  contend  with,  in  entering  the  lists  against  either  of  the  honorable  gentlemen 
from  South  Carolina  who  have  supported  the  amendment;  and  I  am  now  fully 
conscious,  that  I  shall  fail  to  communicate  my  ideas  with  that  perspicuity, 
which  alone  can  give  them  their  proper  force  and  effect,  yet,  [  am  embolden- 
ed by  the  importance  of  the  occasion,  and  shall  rely  upon  the  intelligence  of  the 
committee  and  the  subject  itself,  to  supply  all  other  deficiencies.  The  amend- 
ment under  consideration,  taken  in  connexion  with  the  suggestions  of  the 
honorable  mover,  contemplates  a  radical  change  of  all  the  principal  features 
of  the  bill  reported  by  the  Committee  of  Ways  and  Means.  It  will,  therefore, 
be  necessary,  in  order  to  contrast  the  two  plans,  to  notice  that  which  has  been 
proposed  by  the  committee,  somewhat  at  large,  though  I  shall  endeavor  to  be 
as  brief  as  the  subject  will  possibly  admit,  ft  will  be  seen,  that  the  only  im- 
portant features  of  the  bill  are:  1st,  the  amount  of  the  capital  stock;  2<l,  the 
character  of  it;  3d,  loan  to  the  Government  of  $30,000,000;  and  4th,  a  qualified 
power  to  suspend  specie  payments.  To  all  these  points,  objections  have  been 
urged,  either  by  the  gentleman  from  South  Carolina  or  the  gentleman  from 
North  Carolina,  (Mr.  GASTON)  and  a  particular  examination  of  them,  becomes 
necessary  as  a  preliminary  to  the  examination  of  the  amendment.  First, 
with  respect  to  the  amount  of  capital.  The  bill  proposes  a  capital  of  fifty  mil- 
lions of  dollars;  it  is  sufficiently  apparent,  that  the  establishment  of  the  pro- 
pDsed  bank,  is  designed  as  an  instrument  in  aid  of  other  measures;  to  revive 
the  public  credit,  and  thereby  enable  the  Government  to  procure  the  neces- 


PROCEEDINGS  OF  1814.  49Q 

&arv  resources  to  prosecute  the  war  with  such  effect  as  to  bring  a  speedy  and 
honorable  peace.     But  we  find,  that  since  the  commencement  ot  the  war, 
the  public  stocks  have  suffered  a  gradual  depression  up  to  the  present  year, 
when  it  seems  that  loans,  on  any  terms,  are  totally  at  an  end.     1  he  reason  of 
this  is  obvious;  we  have  borrowed  and  attempted  to  borrow  too  much,  and 
have  not  resorted,  as  we  ought  to  have  done,  to  a  more  enlarged  system  of 
internal  revenue.     It  is  unnecessary  to  go  back  farther.     What  is  the  present 
state  of  things?    We  find  the  market  exhausted  of  the  money  and  overloaded 
with  the  public  debt.   In  addition  to  this  misfortune,  we  find,  literally,  no  cir- 
culating medium  in  the  nation.   What  then  is  to  be'done?    You  cannotborrow; 
you  cannot  impose  taxes  to  the  extent  of  your  demands,  and  even  those  which 
are  laid,  cannot  be  paid  in  money  that  will  answer  the  purposes  of  the  Govern- 
ment.   The  answer  is  plain;  by  withdrawing  a  portion  of  the  encumbering 
mass  of  stock  from  the  market,  you  relieve  it  from  its  pressure;  a  pressure 
which  bids  defiance  to  your  efforts  to  penetrate  it.    But  if,  by  this  process,  you 
can  convert  this  weight  of  debt  into  an  instrument  of  credit,  not  only  for  those 
interested  in  it,  but  for  a  great  portion  of  the  community,  and  also,  for  the 
Government  to  an  almost  unlimited  extent,  and,  at  the  same  time,  restore  the 
circulation  of  the  money  medium  to  its  accustomed  action,  you  have  accom- 
plished great  and  essential  purposes.     It  is  for  these  purposes,  that  this  bill 
was  reported,  and  the  amount  named  in  it,  fixed  upon  tor  the  capital  of  a  na- 
tional bank,  that  it  might  absorb  such  a  mass  of  the  encumbering  stock  as 
would  relieve  the  market;  raise  the  price  of  debt  not  taken  up:    give  facil- 
ities to  the  obtaining  of  loans  for  the  present  year,  and  for  each  succeeding 
year.    And  here,  I  would  beg  leave  to  remark,  that  an  evident  repugnance 
has  been  manifested  by  some  gentlemen,  (which  L  will  not,  however,  impute 
to  the  honorable  gentleman  from  South  Carolina)  to  doing  any  thing  to  raise 
the  price  of  public  stock,  lest  those  who  have  purchased,  at  a  low  rate,  should 
be  benefited.     Permit  me  to  inquire  of  tho.se  who  have  no  gratitude  nor  feeling 
for  public  creditors  vyho  have  loaned  you  their  money  in  the  time  of  your  ne- 
cessity, will  you  refrain  from  doing  an  act  indispensably  necessary  for  the 
credit  of  the  Government,  and  to  enable  it  to  borrow  mom  money,  for  fear 
you  do  a  benefit,  not  to  call  it  an  act  of  justice,  to  your  creditors?    I  would 
ask  such  gentlemen,  how  they  expect  to  go  into  the  market  and  sell  stock  for 
eighty-  eight,  when  that  already  sold,  is  every  day  to  be  bought  for  eighty?    It 
is  humiliating  to  dwell  upon  a  subject  so  plain  and  simple,  and,  but  for  the 
strange  declarations  which  I  have  heard,  it  would  not  have  been  noticed .     Mr. 
Chairman,  there  is  no  consideration  to  which  every  financier  who  is  obliged  to 
anticipate  his  resources  by  loans,  is  more  attentive  to,  than  that  of  supporting 
public  credit;  or,  in  other  words,  keeping  up  the  price  of  stocks;  the  faithful 
payment  of  interest,  though  indispensable,  is  not  always  sufficient.    Sinking 
funds  have,  therefore,  been  resorted  to,  but,  as  your  power  of  establishing 
sinking  funds  is  limited,  when  we  find,  by  a  repetition  of  loans,  we  have  over- 
loadeclthe  market,  you  must,  if  possible,  withdraw  that  suplusage  before  you 
can  recommence  your  loaning  operations,  and  even  then,  you  must  return  to 
the  market  with  tliat  caution  which  experience  has  indicated,  as  necessary  to 
your  success.     It  is,  therefore,  that  we  propose  to  take  out  of  the  market,  the 
eighteen  millions  of  stock  and  the  six  millions  of  treasury  notes;  and,  as  the 
stocks  are  now  selling  at  eighty,  it  was  calculated,  that  an  advance  of  twenty- 
five  per  cent,  upon  twenty  four  millions  of  dollars,  equalized,  as  it  would  be. 
upon  the  whole  amount  of  the  debt  in  which  subscriptions  to  the  bank  could 
be  made,  (about  eighty  millions)  might  be  computed  to  advance  the  whole  of 
these  depressed  stocks  to  about  eighty-eight.    The  sum  proposed  to  be  absorb- 
ed, therefore,  was  the  least  amount  that  could,  consistent  with  the  plan,  have 
been  taken.    But,  there  is  another  reason  why  a  large  capital  was  determined 
upon.     We  propose,  for  the  sake  of  mutual  benefits  to  the  bank  and  the  Go- 
vernment, to  give  it  great  facilities  in  the  circulation  of  its  notes.    In  fact, 
this  will  be  almost  the  only  medium  which  can  be  employed  for  the  payment 
of  taxes,  or  to  carry  on  the  ordinary  commercial  intercourse  between  people 
of  different  States,  those  of  most  of  the  State  banks  being  now  exclusively 


500  BANK  OF  THE  UNITED  STATES. 

confined  to  a  circumscribed  atmosphere  around  the  bank  from  which  they  issu- 
ed. With  these  facilities,  it  is  apparent,  that  the  bank  may  issue  considerable 
quantities  of  paper,  and,  it  was  much  safer  to  make  the  capital  of  the  bank 
exceed  the  amount  of  notes  which  the  demand  for  circulating  medium  would 
enable  it  to  issue,  than,  that  it  should  have  power  to  contract  debts  equal  to 
its  capital.  And  here,  it  should  be  observed,  that  a  bank  with  a  small  capital, 
possessing,  in  all  other  respects,  the  same  facilities  with  a  bank  with  a  large 
capital-— specie  payments  being  suspended — will  be  able  to  issue  nearly,  if  not 
exactly,  the  same  quantity  of  paper.  It,  therefore,  becomes  necessary  for  the 
security  of  the  creditors  of  such  a  bank,  that  it  should  have  a  large  capital. 
I  heard  the  honorable  gentleman  from  South  Carolina,  (Mr.  CALHOUN)  with 
some  degree  of  astonishment,  yesterday,  state,  that  a  bank  of  one  million  of 
dollars,  could,  with  safety,  issue  paper  to  the  amount  of  two  or  three  millions- 
I  would  ask  him,  what  would  be  the  situation  of  an  individual  whose  debts 
three  times  exceeded  his  whole  real  and  personal  estate?  He  would  be  insol- 
vent, and  so  would  the  bank.  No  bank,  conducted  with  integrity,  ever  did 
issue  notes  to  the  amount  of  its  capital ;  and  no  bank,  that  has  any  regard  to  its 
reputation,  will  ever  dare  to  do  it.  ,  The  gentleman  has,  probably,  confounded 
discounts  and  emission  together — an  error  into  which  many  others  have  been 
led  before  him.  Although  these  operations  are  intimately  connected,  yet, 
they  are  extremely  different  in  their  nature;  the  one  constitutes  the  debts  due 
to  the  bank,  while  the  other  constitutes  the  debts  due  by  the  bank.  The 
gentleman,  and  every  member  of  the  committee,  will  see  the  distinction,  and 
it  will  be  unnecessary  further  to  illustrate  it.  I  think,  it  has  been  sufficiently 
shown,  that  a  bank,  with  a  capital  much  less  than  fifty  millions,  could  not,, 
with  safety,  issue,  upon  the  customary  mode  of  bank  operation,  notes  to  meet 
the  present  demands  for  circulating  medium  and  preserve  an  adequate  security 
to  its  creditors.  It  is,  I  believe,  unusual  for  the  large  State  banks  to  issue,  in 
paper,  more  than  one-third,  qr^at  most  one-half,  the  amount  of  their  capital  t 
although  they  often  loan  or  discount  to  the  whole  amount. 

The  next  point  which  presents  itself  for  consideration,  is  the  character  of 
the  capital.  It  is  proposed  to  be  constituted  of  twenty-four  millions  of  public 
debt,  that  have  accrued  since  March,  1812,  or,  that  is  now  authorized  to  be 
created.  Eighteen  millions  of  dollars  of  this,  will  be  six  p"er  cent,  stock,  and 
six  millions  of  dollars  in  treasury  notes  now  issued  or  to  be  issued  in  pursuance 
of  existing  laws.  Twenty  millions  to  be  subscribed  by  the  Government,  and 
paid  in  six  per  cent,  stock,  and  six  millions  in  specie.  The  objections  that 
nave  been  urged  to  the  character  of  this  capital,  are  worthy  of  some  particular 
notice.  We  are  told,  "that  it  is  nothing  more  than  a  paper  bank;" 
"  that  it  is  not  entitled  to  credits"  that  "  its  paper  will  not  circulate, 
having  no  security  for  its  solvency,  but  the  obligation  of  the  Govern- 
ment to  pay  its  debts."  It  is,  perhaps,  fortunate  for  the  friends  of  this  bill,, 
that  they  have  the  light  of  experience  to  justify  their  expectations  and  calcu- 
lations on  this  subject.  Is  there  not  a  strong  resemblance  between  the  cha- 
racter of  this  capital  and  that  of  the  old  United  States'  Bank?  The  amount 
and  proportions  are  somewhat  variant,  but  the  essentials  are  precisely  the 
same,  and  when  was  the  validity  of  that  paper  questioned?  It  is  true,  specie 
payments  were  not  suspended,  but  every  body  knew,  that,  while  it  was  doing 
business  upon  a  capital  of  ten  millions  of  dollars,  issuing  notes  to  the  amount 
of  five  to  six  millions,  its  specie  capital  only  amounted  to  two  millions  live 
hundred  thousand  dollars,  and  no  difficulties  were  ever  experienced  for  want  of 
more  specie,  that  I  have  heard  of.  In  ordinary  times,  there  is  very  little  oc- 
casion for  specie  in  banking  operations;  none  is  wanted  except  for  the  payment 
of  balances  between  the  merchants  of  different  cities,  between  different  banks, 
and  the  small  change  required  by  retailers.  And  the  amount  of  specie  re- 
quired for  these  purposes,  does  not  increase  in  proportion  to  the  amount  of  bank- 
ing capital  employed  in  the  country.  As  an  evidence  of  this  fact,  we  may  refer 
to  the  operations  performed  by  the  Bank  of  England.  The  amount  of  pay- 
ments made  every  day  by  the  different  banks  of  London,  is  estimated  to  ex- 
ceed four  millions  sterling,  and  in  the  year  1810,  the  whole  amount  of  notes- 


PROCEEDINGS  OF   1814.  501 

of  the  Bank  ot  England  and  private  banks,  in  circulation,  amounted  to  se- 
venty-nine millions  sterling,  while  the  specie  only  amounted  to  four  millions. 
It  may  be  fairly  inferred,  that  the  credit  of  a  bank  does  not  depend  upon  the 
amount  of  specie  in  its  vaults,  no  more  than  the  credit  of  a  merchant  depends 
upon  the  amount  of  money  he  keeps  in  his  desk.  His  visible  estate,  his  in- 
come, and  his  integrity,  are  the  foundation  of  his  credit,  and  it  is  the  same 
with  the  bank;  the  visible  estate  of  which,  is  the  public  debt  and  specie,  its 
inc9me  is  the  interest  arising  therefrom,  and  from  loans  to  Government  and 
individuals.  And  the  caution  that  will  be  exercised  in  the  selection  of  direc- 
tors, will,  no  doubt,  as  has  almost  universally  been  the  case,  especially  in 
the  large  banks,  ensure  a  faithful  and  judicious  management  ot  its  attairs. 
But,  we  are  told  the  only  security  for  its  paper  is  the  obligation  of  the  Govern- 
ment to  pay  its  debts!  And  are  we  to  be  gravely  told,  that  this  is  no  secu- 
rity?  1  never  can,  for  a  moment,  believe  that  this  security  will  be  question- 
ed, regarding,  as  every  man  in  the  nation  does,  the  obligations  of  the  Govern- 
ment to  its  creditors,  of  so  solemn  and  unchangeable  a  character  that,  let 
whatever  may  happen,  they  must  be  fulfilled  in  good  faith.  In  addition  to 
these  considerations,  the  credit  which  the  paper  of  the  bank  will  receive  in 
payment  of  taxes  and  customs,  and  the  imperious  necessity  which  exists  for  a 
circulating  medium  that  will  be  co-extensive  with  the  States,  will  ensure  the 
circulation  of  the  paper,  and  there  cannot  exist  a  rational  doubt  of  its  credit 
being  maintained  without  depreciation,  answering  all  the  valuable  purposes 
that  are  expected  from  it  both  for  the  Government  and  the  community.  But 
here  we  are  met  by  another  objection,  viz:  that  the  enormous  loan,  as  it  has 
been  called,  of  thirty  millions  to  be  made  to  the  Government,  will  produce 
a  run  upon  the  bank  that  will  exhaust  all  its  specie  and  arrest  its  future  opera- 
tion-. In  the  first  place,  it  is  not  to  be  presumed,  that  the  Government  will 
do  any  act  that  will  embarrass  the  bank,  being,  as  it  always  must  be,  so  deeply 
interested  in  its  preservation.  The  loan  will,  therefore,  be  av.ked  for  accord- 
ing to  the  terms  of  the  bill,  in  such  sums  and  at  such  periods  as  may  be  made 
mutually  convenient  and  consistent  with  the  objects  of  the  Government. 
And  there  is  no  doubt,  but  the  Government  would  regard  this  resource  as  a 
reserve  only  to  be  used  in  time  of  particular  necessity,  when  the  depression  of 
stocks  should  forbid  them  from  going  at  large  into  the  market.  At  any  rate, 
the  amount  would  not  be  required,  as  it  could  not  be  wanted,  in  large  sums. 
And  such  of  th"se  as  would  be  drawn  out  of  the  bank,  would  mostly  find 
their  way  into  it  again  before  another  payment  would  be  demanded;  a  portion 
would  return  in  tuxes  and  other  portions  in  payment  of  debts  due  from  the 
country  to  the  city  merchants,  and  a  very  considerable  part  of  this  loan  would, 
like  ordinary  loans  or  discounts,  as  they  are  called,  to  individuals,  never  get 
from  the  drawer  of  the  bank,  but  merely  pass  from  the  credit  to  the  debtor 
side  of  its'books.  Under  this  view  ot  the  subject,  which  exhibits  the  necessay 
and  natural  operations,  it  will  be  admitted,  that  not  so  much  danger  exists 
from  this  loan,  as  some  gentlemen  seem  to  apprehend.  But  should  any  unex- 
pected difficulties  menace  the  bank,  there  will  be  a  resort  to  the  power  of 
suspending  specie  payments.  But  this  provision  has  also  been  objected  to, 
and  almost  in  the  same  breath,  we  are  told,  that  no  bank  can  exist  with  the 
usive  operations  designed  tor  this,  with  an  obligation  to  make  specie  pay- 
ments. But  the  objectors  have  not  furnished  us  with  an  alternative.  [  do 
not  apprehend  any  serious  consequence  will  result  from  the  temporary  sus- 
pension of  specie  payments.  The  experiment  was  tried  many  years  ago  in 
England,  and  has  been  continued  up  to  this  time,  without  injury  to  the  com- 
mercial interests  and  with  essential  benefit  to  the  nation  at  large.  It  has  also 
been  tried  here,  and,  although  bank  paper  is  somewhat  depreciated  thereby,  it 
is  solely  because  it  will  not  ansvyer  the  purpose  of  paying  balances  between 
people  of  different  States,  for  which  specie  had  usually  been  employed.  For 
example,  the  bank  paper  of  this  District  will  not  enable  you  to  trade  east  of 
Baltimore;  yet,  every  article  to  be  purchased  with  it  here,  is  as  cheap  as  it 
was  twelve  months  ago.  It  may,  therefore,  be  fairly  inferred,  that  a  paper 
which  was  receivable  all  over  the  United  States,  in  taxes,  and  might  be  ex- 


502  BANK  OF  THE  UNITED  STATES. 

changed  for  notes  of  smaller  or  greater  denomination,  or  treasury  notes  in 
each  of  the  States  would,  from  its  general  convenience,  continue  to  circulate 
without  depreciation,  even  though  a  temporary  suspension  of  specie  payments 
should  take  place.  It  has  already  been  shown  that,  but  a  small  quantity  of 
specie  is  actually  necessary,  when  the  People  have  faith  in  the  capital,  the 
income,  and  the  integrity  of  the  bank;  and  in  this  case,  necessity  would  be- 
come an  auxiliary  to  faith,  and  business  would  go  on  as  usual.  But  further: 
Is  it  not  probable  that  most  of  the  moneyed  capitalists  in  the  United  States 
would  vest  a  portion  of  their  disposable  funds  in  this  bank,  as  also  a  number 
of  the  State  banks?  and  will  not  all  these  be  interested  in  the  support  of  the 
credit  of  its  paper?  I  do  not  believe  it  possible,  for  any  hostile  combination 
to  resist  their  influence  in  money  transactions,  when  thus  united  and  thus  in- 
terested. And  from  every  view  that  can  be  taken  of  the  subject,  there  does 
not  appear  any  rational  doubt  of  the  success  of  the  plan  proposed  by  the  com- 
mittee in  answering  all  (he  valuable  purposes  for  which  it  was  designed.  The 
plan  has  been,  fora  considerable  time,  before  the  public,  and  although  some  have 
objected  to  the  amount  of  the  specie  called  for  by  the  bill  as  being  difficult  to  pro- 
cure and  unnecessary,  it  has  met  the  approbation  of  the  most  intelligent  men  in 
this  community,  (as  to  money  matters  I  mean)  to  say  nothing  of  the  mature  and 
deliberate  consideration  which  has  been  given  to  it  by  the  able  and  enlightened 
statesman  at  the  head  of  the  Treasury  Department,  who,  relying  upon  the  sup- 
port of  Congress,  has  assumed  the  high  responsibility  of  his  station  with  a  degree 
of  energy  and  confidence  that  does  no  less  honor  to  himself,  than  it  promised  to 
do  service  to  the  country;  to  say  nothing  of  the  discussion  and  consideration 
which  has  been  given  to  this  subject  by  the  Committee  of  Ways  and  Means, 
for  whom,  although  no  more  confidence  should  be  claimed  than  lor  any  like 
number  of  the  members  of  the  House,  yet,  their  duty,  their  great  responsi- 
bility, could  not  fail  to  produce  a  laborious  examination  of  the  plan.  But,  we 
are  not  without  experience  a,s  to  its  influence.  The  stocks  had  began  to  ad- 
vance,  of  course  public  credit  was  reviving,  and  some  loans  were  actually  ne- 
gotiating for  the  relief  of  the  present  quarter,  in  anticipation  of  the  success 
of  this  bill,  to  carry  into  effect  the  general  plan  of  finance  submitted  to  Con- 
gress by  the  Secretary  of  the  Treasury.  Such  was  the  progress  of  pur  fiscal 
operations,  and  we  were  emerging,  as  it  were,  from  a  dense  cloud  of  difficul- 
ties and  embarrassments  that  hung  over  the  nation.  A  more  extensive  and 
efficient  system  of  finance  than  any  ever  adopted  in  this  country,  was  pro- 
gressing to  maturity  as  rapidly  as  circumstances  would  admit:  and  the  bill 
under  consideration,  an  indispensable  instrument  to  carry  it  into  effect,  had 
progressed  with  a  flattering  prospect  of  success;  and  behold,  at  a  crisis  so 
eventful,  we  are  met  by  a  proposition  which  goes  (to  use  the  expression  of  the 
gentleman  from  South  Carolina)  to  effect  a  radical  change  in  the  whole  sys- 
tem of  the  bill  reported  by  the  Committee  of  Ways  and  Means.  I  shall  say 
nothing  farther  as  to  the  time  and  manner  of  this  proposition;  but  I  trust  it 
will  appear  to  have  been  suggested  without  due  consideration,  as  it  has  been 
without  concert  or  consultation;  and,  however  plausible  in  theory,  that  it  is 
impracticable  in  its  details,  and  will  be  injurious  in  its  effects.  In  attempting 
to  investigate  this  new  plan,  we  are  subjected  to  considerable  difficulties  on 
the  threshold,  because  it  has  neither  assumed  form  nor  shape.  The  plan  can 
therefore  only  be  collected  from  the  suggestion  of  the  honorable  gentleman  in 
his  speech  yesterday,  except  so  far  as  it  is  found  in  the  amendment  on  the  ta- 
ble, which  only  appears  to  be  a  small  patch  of  the  scheme.  That  the  scheme 
is  crude  and  undigested,  there  can  be  little  doubt,  when  we  recollect  the 
changes  that  have  been  proposed  or  consented  toby  the  mover,  since  it  made 
its  appearance  in  the  committee  yesterday;  but  I  will  proceed  to  examine  it. 
The  plan  proposes  to  constitute  the  bank  upon  a  basis  of  six  millions  of  spe- 
cie, and  forty -four  millions  of  treasury  notes;  these  notes  hereafter  to  be  is- 
sued, and  when  subscribed  to  the  bank,  to  be  exchanged  for  six  per  cent, 
stock  at  par;  fifteen  millions  of  the  forty-four  to  be  placed  in  the  hands  of  the 
commissioners  of  the  sinking  fund;  and  to  carry  the  plan  into  effect,  a  law 
must  be  passed  to  authorize  the  issuing  of  the  treasury  notes,  and  another  law 


PROCEEDINGS  OF  1814. 

10  dispose  of  the  fifteen  millions  in  the  hands  of  the  commissioners  of  the 
sinking  fund,  and  as  there  may  be  a  great  difference  of  opinion  as  to  these  ul- 
terior measures  between  the  branches  of  Congress,  the  possibility  of  a  failure 
to  pass  these  laws,  presents  a  strong  objection  to  the  plan.  We  already  find 
a  difference  of  opinion  between  the  two  gentlemen  from  South  Carolina  who 
have  supported  the  amendment;  one  of  them  (Mr.  LOWNDES)  altogether  dis- 
approves of  placing  fifteen  millions  of  notes  in  the  hands  of  the  commissioners 
ot  the  sinking  fund,  to  be  exchanged  for  six  per  cent,  stock,  and  subscribed 
to  the  bank,  t  shall  presently  consider  this  part  of  the  subject,  with  refer- 
ence to  both  their  schemes,  and,  in  the  mean  time,  recur  to  the  proposition  to 
issue  either  the  forty-four  or  the  twenty-nine  millions  of  treasury  notes,  for 
the  purpose  of  being  subscribed  to  the  bank;  and  it  may  here  be  observed,  that 
the  treasury  notes  are  not,  as  some  seem  to  think,  calculated  for  a  circulating 
medium,  nor  can  they  ever  be  made  to  supply  its  place;  it  is  an  evidence  of 
debt  bearing  interest  in  no  essential  particular  different  from  the  public  stocks, 
except  that  the  former  is  made  payable  monthly  at  the  end  of  a  year,  while 
the  latter  are  redeemable  at  a  longer  period;  the  interest  that  accrues  retards, 
instead  of  accelerating  the  circulation,  and  it  must  partake  of  all  the  essen- 
tial qualities  of  capital-  If,  therefore,  you  issue  a  sum  of  treasury  notes,  you 
make  virtually  a  loan  to  that  amount,  and  especially  if  they  are  not  to  be  re- 
paid, as  in  the  present  case,  at  the  end  of  the  year:  the  money  market  is  as 
much  exhausted  by  the  operation,  as  if  six  per  cent,  stock  is  sold  to  the  same 
amount;  it  is,  therefore,  fair,  to  consider  this  enormous  emission  of  treasury 
notes  as  a  loan,  which,  by  offering  extraordinary  inducements,  you  calculate 
to  effect.  Now,  in  order  to  judge  of  the  propriety  of  this  measure  at  this 
time,  we  must  consider  the  state  of  the  money  market,  and  also  what  consti- 
tutes the  capacity  of  a  people  to  loan  to  their  Government.  It  has  already 
been  observed,  that  the  market  is  overcharged  with  stocks,  and  each  succeed- 
ing loan  has  (except  in  one  instance)  been  obtained  on  more  unfavorable  terms 
than  the  former.  It  must  be  evident,  therefore,  that  we  have  attempted  to 
borrow,  and  that  we  have  borrowed  too  much  in  proportion  to  the  provisions 
that  have  been  made  to  redeem,  especially  when  we  consider  the  stagnation  of 
the  medium.  The  stock  market  is  glutted  and  overloaded,  and  you  may  buy 
stocks  in  it  at  a  much  cheaper  rate  than  the  Government  ought  to  sell  them. 
Is  it  then  prudent,  or  wise,  to  force  out  at  such  a  time,  in  one  year,  the  enor- 
mous sum  of  forty -four  millions  of  new  stock,  to  accumulate  this  new  insup- 
portable burthen  on  the  market?  It  should  be  recollected,  that  the  amount 
which  the  people  can  loan  to  their  Government,  within  a  given  time,  can  never 
exceed  the  amount  of  their  nett  profits  for  the  same  time;  and  in  a  country 
like  this,  where  there  are  so  many  avenues  to  wealth  by  the  reinvestment  of 
the  yearly  profits  in  capital,  either  by  enlarging  existing  establishments,  or  en- 
gaging in  new  employments,  it  cannot  be  expected  that  any  very  considerable 
pun  ion  of  the  annual  profits  can  be  borrowed,  without  giving  a  high  premium 
For  them.  But,  at  this  particular  time,  when,  owing  to  the  interruption  of  all 
business,  by  the  stoppage  of  specie  payments  by  the  banks,  and  the  consequent 
location  of  their  paper  to  a  very  limited  boundary,  it  cannot  be  expected  that 
the  habits  of  industry,  or  means  of  loaning,  can  be  near  as  great  as  they  will 
be  when  the  circulating  medium  of  the  country  shall  resume  its  accustomed 
activity.  If  these  premises  are  correct,  the  conclusion  is  inevitable,  that  it 
would  not  only  be  unwise  and  impolitic  to  press  so  great  a  loan,  as  it  were,  by 
force,  upon  the  market  at  this  time,  but  that  it  would  be  much  more  safe  and 
prudent  to  withdraw  a  part  of  the  stocks  from  the  market,  and  abstain,  if  pos- 
sible, from  pressing  it  again,  until  it  shall  have  become  relieved  by  the  income 
of  the  succeeding  year.  Hence  it  is,  that  we  propose  to  require  the  bank  to 
loan  money  to  the  Government,  a  part  of  which  would  perhaps  be  required  for 
the  next  year,  and  the  remainder  reserved  for  similar  exigencies.  But  the 
honorable  gentleman  from  South  Carolina  calculates  to  obviate  all  difficulties 
and  embarrassments  for  two  years,  by  the  sale  of  the  twenty-nine  or  the  forty- 
four  millions  of  treasury  notes,  which  he  calculates  will  readily  be  sold  at  par, 
nay,  even  at  a  premium.  Now,  as  the  amendment  stood  when  he  delivered 


504  BANK  OF  THE  UNITED  STATES. 

his  speech,  and  as  it  now  stands,  (although  I  am  aware  of  the  proposition  of 
the  honorable  gentleman  from  Kentucky,  to  require  payments  for  the  bank 
subscription  to  be  made  in  the  treasury  notes  only,  to  the  amount  of  forty-four 
millions,  which  he  had  thought  proper,  however,  on  reflection,  to  withdraw, 
and  which,  upon  more  mature  reflection,  I  am  sure  lie  will  not  renew)  as  the 
amendment  now  stands,  the  payments  may  be  made  in  treasury  notes,  or  gold 
and  silver.    And  how  will  treasury  notes  be  sold  for  specie  or  bank  notes  ol" 
equal  value,  at  a  premium  or  at  par,  when  the  specie  can  be  paid  directly  into 
the  bank?    The  thing  is  too  absurd  to  dwell  upon  for  a  moment.     But,  per- 
haps we  shall  be  told  that  the  subscriptions  for  the  forty-four  millions  must 
be  paid  in  treasury  notes  only.    I  can  hardly  think  it  possible  that  the  honora- 
ble gentleman,  with  all  his  courage,  would  venture  upon  such  a  measure  to 
force  his  treasury  notes  into  the  market;  it  would  be  little  better  than  a  ten- 
der law  in  principle,  and  in  its  operation  most  iniquitous  and  injurious  to  the 
success  of  his  plan.    For  instance,  an  individual  being  in  possession  of  spe- 
cie, must  be  compelled  to  buy  treasury  notes  before  he  can  subscribe  to  the 
bank;  thus  preventing  specie  from  finding  its  way  into  a  bank,  which  must 
always  continue  its  specie  payments,  and  he  must  be  subjected  to  the  risk  of 
not  being  able  to  secure  the  amount  of  his  subscription  to  the  bank;  in  which 
case  there  will  no  doubt  be  a  loss  upon  the  treasury  notes  that  are  not  absorbed, 
and  of  course  the  less  inducement  to  buy  them.    But  it  does  not  appear  to 
me,  that  the  treasury  notes  can  be  sold  to  the  amount  proposed.    How  are 
they  to  be  paid  for?    Specie  cannot  be  found:  will  you  sell  them  for  bank 
notes?    One  half  of  these,  if  the  treasury  notes  are  distributed   over  the 
States  for  sale,  as  the  gentleman  proposes,  will  answer  the  Government  no 
purpose.     It  has  now  near  three  millions  of  southern  notes,  which  must  be 
applied  to  the  payment  of  the  interest  on  the  public  debt  in  Boston;  nor  can 
the  notes  of  Baltimore  be  certainly  applied  to  the  payment  of  debts  even  in 
Philadelphia.     How  then  can  these  forty-four  millions  of  treasury  notes  be 
sold  for  a  valuable  consideration  in  any  State  where  the  taxes  exceed  the  dis- 
bursements of  the  Government,  and  in  which  the  banks  do  not  pay  specie? 
The  gentlemen  of  this  House  may,  perhaps,  take  a  few  of  their  per  diems 
home  in  treasury  notes;  but  it  will   be  impossible  to  distribute  them,  when 
the  credit  of  the  Government  exceeds  its  debts,  unless  you  give  them  away. 
But  the  gentleman  proposes  to  reduce  the  denomination;  and  what  will  this 
avail  his  plan?    A  few  of  them  may  be  picked  up  by   hucksters  and  tin- 
pedlars,  and  there  it  will  end.     You  cannot  pay   money  where   you  do  not 
owe  it,  nor  sell  treasury  notes  to  people  who  have  no  money  to  buy  them  with, 
or  whose  money  answers  you  no  purpose.  I  conclude  thus  far  that  the  scheme 
is  unwise,  impolitic,  and  impracticable.     But  suppose  it  were  possible  to  car- 
ry it  into  effect,  what  is  its  moral  character  and  its  effect  upon  public  credit? 
I  do  not  mean  to  impeach  the  motives  or  moral  principles  of  the  honorable 
gentlemen  who  have  advocated  this  plan  of  a  bank;  I  know  they  are  utterly 
incapable  of  supporting  any  measure  of  which  they  entertain  a  doubt  as  to  its 
strict  moral  propriety;  but,  thinking  differently  from  them  in  this  particular, 
I  shall  be  excused  for  explaining  my  views  of  it.     It  has  already  been  stated 
that  the  stocks  are  in  a  state  of  heavy  depression;  and  it  may  be  added,  that 
those  who  have  given  you  one  hundred  dollars  in  specie  for  one  hundred  dol- 
lars in  stock,  cannot  now  sell  the  same  for  more  than  eighty  dollars — so  of 
those  who  have  given  you  eighty- eight  for  one  hundred.     This  depression  is 
not  the  fault  of  the  creditor;  it  is  his  misfortune;  and  when  the  Government 
can,  without  injury  to  itself  either  do  a  benefit  to  its  creditors  thus  circum- 
stanced, or  avoid  doing  them  an  injury,  it  is  bound  by  every  moral  obligation 
so  to  do.    But  what  wdl  be  the  effect  of  the  measure  under  consideration? 
We  iind  the  stock  market  glutted;  the  public  creditor  sinking  under  his  bur- 
dens, and,  without  any  occasion  whatever,  we  accumulate  an  additional  mass 
upon  him,  and  consummate  his  ruin.    But,  says  the  honorable  gentleman  from 
South  Carolina,  (Mr.  CALHOUN)  fifteen  millions  of  treasury  notes  shall  be  ap- 
plied to  purchase  up  the  depressed  stocks;  that  is,  he  will  offer  seventy-five  or 
eighty  dollars  in  treasury  notes  for  a  certificate  which  purports  on  its  face  to 


PROCEEDINGS    OF   1814.  5Q5 

demand  one  hundred  dollars  in  specie.  But  this  is  not  all;  by  our  own  act, 
we  first  depress  the  price,  and  depreciate  the  value  of  our  debt,  and  then,  by 
the  aid  of  some  speculating;  scheme,  we  buy  up  that  debt  at  its  depreciated 
rates,  just  like  same  swindling  traders  in  our  cities,  who,  when  their  credit 
is  exhausted,  shut  up  shop,  and  send  out  runners  to  buy  up  their  notes  at  forty 
or  fifty  per  cent  discount.  Such  is,  to  my  mind,  the  character  of  the  trans- 
action. But  one  honorable  gentleman  from  South  Carolina  (Mr.  LOWNDES) 
is  opposed  to  this  part  of  the  plan;  he  will  not  employ  any  part  of  the  intended 
capital  of  this  bank  to  purchase  up  the  depressed  stocks.  So  much  the  worse. 
The  public  creditor  would  then  nave  no  remedy  for  even  a  part  of  his  misfor- 
tunes, and  the  Government,  in  such  a  case,  would  act  the  part  of  a  spendthrift, 
whose  land  could  not  be  sold  for  debt,  and  while  he  was  giving  usurious  ad- 
vantages to  obtain  new  credit,  he  would  doty  his  old  ones,  and  mock  at  their 
complaints.  I  am  aware  that  many  plausible  things  may  be  said  to  show  what 
are  the  obligations  of  the  Government  to  its  creditors,  and  thattliey  may  be 
fulfilled  according  to  the  terms  of  the  contract,  without  being  noticed  in  this 
bill.  Be  it  so;  but,  T  contend  that  you  are  attempting  to  effect  by  indirect 
means,  what  you  would  not  venture  to  do  by  direct  means;  that  is,  to  obtain 
from  the  public  creditor  your  obligation  for  a  less  amount  than  you  promise 
upon  the  face  of  it  to  pay  him.  He  will  not  be  satisfied  with  special  plead- 
ings and  logic;  he  will  realize  his  misfortunes,  and  execrate  his  wrong-doers. 
\\hen  his  children  cry  for  bread,  his  answer  will  be,  I  loaned  my  country;  1 
confided  in  her  justice;  but,  in  an  unlucky  hour,  her  councils  were  guided  by 
logicians,  and  1  am  ruined.  But  there  is  another  feature  in  the  new  plan, 
which  constitutes  an  insuperable  objection.  Specie  payments  are  to  be  made 
absolute.  If  we  did  not  know  that  necessity  sometimes  requires  a  suspension 
of  specie  payments  by  banks  both  at  home  and  abroad,  and  that  it  may  be 
done  without  that  terrible  danger  which  some  affect  to  apprehend,  there  would 
be  some  reason  to  refuse  making  any  provision  for  the  case;  but,  with  all  this 
light,  and  the  existing  condition  of  the  specie  medium  of  the  country  in  full 
view  before  us,  it  would  seem  to  be  a  species  of  frantic  enthusiasm,  not  to  pro- 
vide for  the  case.  If  bank  credit  can  be  restored,  and  it  has  not  been  essen- 
tially impaired,  there  will  be  a  better  opportunity  to  doit  under  the  power  to 
suspend  the  specie  payments,  guarded  as  it  is,  than  there  would  be  in  any 
other  way.  But,  suppose  the  balance  of  tiade  to  continue  strongly  against 
us,  and  a  high  premium  for  specie  to  be  given  by  our  enemy.  Your  bank  will 
become  an  instrument  by  which  it  will  be  drained  from  the  country;  and  it 
may  happen,  and  probably  wiU  happen,  that  their  specie  payments  cannot  be 
discontinued,  and  what  will  then  be  the  situation  of  the  bank?  Failing  to 
fulfil  the  purposes  designed,  its  credit  is  blighted,  its  operations  are  stopped, 
and  its  charter  violated;  and  if  this  should  take  place,  before  your  treasury 
notes  are  sold,  the  Government  will  scarce  obtain  a  moment's  relief;  but,  if 
the  treasury  notes  have  been  forced  out,  will  they  not  come  back  upon  the  Go- 
vernment for  payment,  when  it  has  no  means  to  redeem  them,  instead  of  pass- 
ing into  the  drawer  of  a  broken  bank? 

The  patience  of  (lie  committee  is  no  doubt  exhausted,  and  I  will  conclude 
by  exhibiting  the  relative  pecuniary  value  of  the  two  plans,  in  a  calculation 
that  cannot  be  misunderstood. 

By  the  scheme  of  the  honorable  gentleman  from  South  Carolina,  suppose 
that  you  succeed  in  issuing  the  forty-four  millions  of  dollars  in  treasury  notes 
at  par,  whether  to  be  vested  in  stock,  or  for  the  purpose  of  a  direct  subscrip- 
tion into  the  bank,  and  suppose,  too,  that  the  fifteen  millions  of  treasury  notes 
will  purchase  one  hundred  dollars  ot  stock  for  eighty  dollars  of  notes;  the 
advance  or  profit  obtained  in  the  operation,  will  be  the  difference  between  the 
present  price  that  is  paid  for  money,  and  the  rate  thus  obtained,  viz.  twenty- 
jive  per  cent.,  which,  upon  forty-four  millions,  will  be  eleven  millions.  This 
is  the  utmost  that  can  be  claimed  for  his  plan,  if  it  succeeds. 

Now,  by  the  plan  proposed  by  the  bill,  we  have  the  same  advance  upon 
6,000,000  treasury  notes,  viz.  -  $1,500,000 

Twenty -five  per  cent,  upon  a  loan  of  $30,000,000.  7.500.000 

64 


506  BANK  OT?  THE  UNITED  STATES. 

And,  if  we  suppose  our  bank  stock  to  advance  twenty  percent, 
above  par,  it  will  make  a  disposable  capital  of  $25,000,000,  to 
obtain  which,  we  should  be  obliged  at  the  present  rates  to  pay  a 
premium  of  $6,250,000.  G,250,000 

Which,  together  with  the  advance  on  the  stock,      •  -        5,000,000 

Will  make  a  nettgain  to  the  Government,  of  -    $20,250,000 

Making  a  difference  in  favor  of  the  Government,  by  the  bill  as  reported  by 
the  Committee  of  Ways  and  Means,  of  $9,250,000. 

This  is  a  plain  arithmetical  fact,  that  cannot  be  controverted.  The  figures 
will  speak  for  themselves,  and  every  member  of  the  committee  may  make  the 
calculations  for  himself.  But  I  can  scarcely  hope  to  convince  the  honorable 
gentleman  from  South  Carolina.  He  appears  to  be  so  enthusiastically  attach- 
ed to  his  proposition,  that  he  has  called  in  the  aid  of  his  prophetic  spirit  to  sus- 
tain him,  and  has  painted  in  glowing  colors  the  prospect  of  the  blockade  being 
raised,  and  the  speedy  restoration  of  our  foreign  commerce  and  coasting  trade 
to  their  accustomed  activity.  But  I  cannot  rely  upon  anticipations  of  this 
kind,  though  I  have  often  listened  with  pleasure  to  them.  I  have  heard  of 
his  prophecies  before,  and  recollect  listening  with  pleasure,  though  with  some 
degree  of  scepticism,  to  a  speech  of  his,  highly  colored  with  promising  pros- 
pects, on  a  bill  which  has  contributed  to  produce,  more  than  any  other  cause, 
our  present  fiscal  embarrassments.  It  does  appear  to  me,  that  the  wisest 
course  would  be,  not  to  yield  to  visionary  speculations,  nor  to  adapt  our  mea- 
sures to  a  state  of  things  not  likely  to  be  realized.  We  have  been  trying  ex- 
pedients too  long.  Solid,  substantial,  and  lasting  measures,  are  now  indis- 
pensable. Such  is  the  character  of  the  proposition  contained  in  the  bill;  while 
the  amendment  proposed  totally  changes  its  character  as  well  as  form.  That 
which  was  designed  as  an  agent  to  revive  public  credit,  to  supply  the  present 
exigence  of  the  country,  and  give  such  facility  in  obtaining  future  loans,  as 
would  enable  us  to  prosecute  this  war  with  vigor  and  effect,  is  to  be  convert- 
ed into  a  machine  to  squeeze  a  little  depreciated  money  out  of  the  People  for 
the  present;  abandoning  the  other  great  and  important  objects  so  indispensa- 
bly necessary  to  be  effected. 

I  beg  pardon  of  the  committee  for  having  trespassed  so  long  upon  their  pa- 
tience, and  the  only  apology  that  can  be  offered,  is  the  importance  of  the  sub- 
ject. 

Mr.  INGERSOLI/S  speech  against  Mr.  CALHOUN'S  amendment. 

Mr.  INGERSOLL  said,  that  he  inserted  himself  into  this  debate  with  great 
reluctance,  almost  in  despair — reluctance  to  take  part  in  a  discussion  for 
which  he  had  no  inclination,  and  which  he  thought  had  better  be  left  to  the 
members  of  the  committee  who  had  reported  the  bill 5  in  despair,  because  he 
had  no  hope  of  making  any  impression  on  an  assembly  but  too  studious  of 
change,  too  fond  of  novelty,  too  apt  to  think  that  national  wealth  was  most 
certainly  to  be  found  in  individual  impoverishment.  Ever  since  this  war  was 
declared,  and,  indeed,  since  the  session  of  Congress  preceding  it,  the  nation 
had  been  kept  alive  on  sickly  hopes  of  peace,  and  the  em pyrical  sustenance  of 
inadequate  loans;  and  it  was  not  till  just  now,  when  these  flattering  unctions 
were  no  longer  applicable,  that  we  had  made  up  our  minds  to  the  solid  food  of 
heavy  taxes,  pledges  of  them  in  sinking  funds  and  a  national  banking  institu- 
tion. For  his  part,  Mr.  I.  said,  that  he  had  uniformly  denied  and  deprecated 
the  effects  anticipated  from  the  Russian  mediation,  as  well  as  those  of  the  ne- 
gociation  subsequently  translated  from  Gottenburg  to  Ghent.  These  always 
appeared  to  him  to  be  the  beau  ideal  of  our  foreign  relations.  He  had  never 
ceased  to  remonstrate  against  abstracting  an  eminent  person  from  the  head 
of  the  Treasury  Department,  to  send  him  to  make  the  grand  tour  of  Europe 
in  pursuit  of  peace.  I  have  invariably  thought  and  said,  (said  Mr.  INGERSOLL) 
that  the  only  policy  was  that  just  indicated  by  my  friend  and  colleague  who 
preceded  me.  (Mr.  INGHAM)  to  look  the  difficulties  manfully  in  the  face,  con- 


.s  or  LSI*.  597 

cene  thrm  at  their  worst,  ami  deal  with  them  accordingly.  We  have  at  last 
route  lo  this  complexion,  and  1  congratulate  the  country  on  the  occasion.  We 
never  should  have  had  peace  till  war  was  waged  in  earnest;  and  perhaps  we 
are  now  much  nearer  to  a  termination  of  hostilities,  than  we  were  while  sub- 
sisting on  pacific  overtures. 

The  Treasuiy  Department,  in  concert,  and  after  long  consideration,  with 
the  committee  of  Ways  aud  Means,  assuming  the  responsibility  of  their  res- 
pective stations,  have  recommended  to  us  the  plan  of  a  bank,  which  is  com- 
prehended in  the  bill  under  discussion.  In  this  Congress  of  ambassadors,  as 
1  think  it  was  the  late  President  Adams,  (in  his  Treatise  on  the  Constitution) 
very  aptly  denominates  us,  rather  than  a  Congress  of  the  representatives  of 
different  portions  of  the  same  people,  it  should  always  be  the  first  preliminary 
to  entering  upon  any  subject,  the  tint:  ijua  non  (since  nine  qua  nons  are  so 
much  the  mode  at  modem  Congresses)  to  agree  by  mutual  sacrifices  of  the 
pride  of  opinion,  and  the  spirit  of  system,  to  endeavor  to  attain  some  practi 
cable  object  and  result.  It  is  well  known  to  every  member,  that  a  national 
bank,  while  nearly  all  acknowledge  the  imperious  necessity  of  such  an  esta- 
blishment, has  to  "encounter  the  various  obstacles  and  collisions  which  arise 
from  various  quarters  of  this  House.  In  the  first  place,  it  is  to  be  opposed  by 
those  gentlemen -on  the  opposite  side,  who,  deeming  this  war  unjust  in  its 
origin,  deem  it,  moreover,  a  constitutional  ami  correct  orbit  of  opposition,  to 
move  indiscriminately  against  every  measure  calculated  to  act  in  furtherance 
of  the  war.  1  will  not  take  upon  myself  to  determine,  whether  this  is  a  pro- 
per view  of  the  subject.  \\Vatall  events  know  that  it  is  one  mo>t  stead 
lastly  adherred  to.  In  the  next  place,  a  bank  is  resisted  by  certain  scruples 
respecting  the  constitutional  power  of  Congress  to  create  oue,  which  obtain 
with  several  gentlemen  on  this  side  of  the  House.  And  lastly,  it  cannot  be 
doubted  but  that  the  most  powerful,  pervading,  and  indefatigable  hostility  out 
of  doors,  will  be  organ'r/.ed  by  the  innumerable  State  banking  institutions: 
which  comprehend  within  the  sphere  of  their  influence,  almost  every  man  of 
property  in  the  country,  who  may  apprehend  that  a  Hank  of  the  V'nited  States 
would  tend  to  curtail,  to  cripple,  or  to  destroy  their  resources.  As  long,  how- 
ever, as  the  objections  urged  on  this  floor  were  confined  to  those  which  might 
have  been  expected,  and  which  may  be  urged  against  all  such  establishments, 
1  did  not  suppose  it  incumbent  on  any  member,  to  assist  those  gentlemen  of 
the  committee  who  have  the  particular  conveyance  of  this  bill  through  the 
House,  1  should  not  have  presumed,  therefore,  to  mingle  in  the  debate  in 
reply  to  such  objections.  Indeed,  the  grounds  which  were  eloquently  occu- 
pied by  the  gentleman  from  North  Carolina,  (Mr.  GASTOX)  seemed  to  me  to 
toe  sufficiently  answered  by  himself:  for  I  really  think  that  there  were  few  of 
the  difficulties  which  he  recapitulated  against  the  proposed  plan,  that  are  not 
in  equal  force  of  existence  against  the  substitute  he  su^gosted.  As  to  plans, 
indeed  I  am  not  myself  at  all  tenacious.  Any  plan  will  answer  my  purposes, 
that  promises  to  restore  public  credit  and  create  a  circulating  medium.  Nor 
can  we,  to  be  sure,  complain  of  any  deficiency  of  projects.  Almost  every 
gentleman  has  his  own;  and  if  you  happen  to  look  into  a  newspaper  ecce  7/omo, 
here  is  a  daily  column  of  most  comfortable  schemes  ready  printed  for  your 
perusal,  [in  allusion  to  a  voluminous  writer  on  these  subjects  in  the  National 
Intelligencer,  who  affixed  the  signature  of  Homo  to  his  essays.]  It  affords 
me  pleasure  to  bear  testimony  to  the  satisfaction  with  which  i  followed  the 
gentleman  from  South  Carolina,  (Mr.  CALHOUN)  in  the  developement  of  his 
substitute  for  the  system  recommended  by  the  Treasury  Department.  I  must 
do  that  gentleman  the  justice  to  say,  that  his  views  were  exhibited  in  a  clear, 
connected,  and  well  digested  discourse,  on  this  abstruse  and  complicated  sub 
ject,  in  which  he  unquestionably  showed,  at  least,  his  own  preparation  and 
capacity  for  explaining  and  supporting  any  favorite  project  he  may  choose  to 
introduce;  and  while  I  declare  my  unequivocal  opinion,  that  his  appears  to 
me  to  be  the  most  fantastic,  impracticable,  and,  I  will  add,  pernicious,  of  all 
the  plans  we  could  adopt,  calculated  inevitably  to  destroy  the  public  credit 
of  this  Government,  to  damn  it  to  alt  eternity;  yet,  so  anxious  am  I  to  pro- 


50B  BANK  OF  THE  UNITED  STATES. 

vide  for  the  crisis  which  presses  on  us,  that  i  would  rather  fall  in  even  with 
this  alternative,  at  the  expense  of  all  your  remaining  public  credit,  in  prefer- 
ence to  not  voting  for  some  immediate  means  for  meeting  present  embarrass- 
ments. If  we  must  ruin  our  existing  creditors  in  order  to  procure  fresh  sup- 
plies, and  if  that  is  the  best  manner  of  procuring  them,  I  profess  my  readiness 
to  proceed  to  so  deplorable  a  result,  rather  than  to  omit  altogether,  the  making 
01  some  provision  for  the  exigency.  But  the  gentleman  from  South  Carolina 
(Mr.  CALHOUN)  has  pointed  out  to  us  a  stream  of  finance  which  positively  is 
not  navigable.  We  may  trace  its  origin,  and  follow  its  course — seemingly  a 
line  volume  of  water— fertilizing  as  it  flows— until  we  behold  it  emptying  it- 
self into  the  ocean:  but  when  \yecome  to  try  its  usefulness,  we  find  that,  like 
the  river  Susquehanna,  its  navigation  is  doubtful,  dangerous,  and  unsafe.  It 
invites  population  to  settle  on  its  shores;  but  diseases  and  death  infest  them; 
and  we  are  amazed  to  discover,  on  experiment,  how  fatally  it  disappoints  the 
expectations  that  were  at  first  encouraged  of  its  beneficial  properties.  Nothing 
but  a  freshet  will  justify  our  venturing  on  this  current;  and  that  is  precarious,, 
uncertain,  and  alarming. 

Let  us  examine  this  unexpected  substitute.  What  do  we  find?  Why,  sir* 
m  the  outset  an  insuperable  difficulty,  in  limim,  before  we  reach  the  body  of 
the  project.  The  gentleman  from  South  Carolina  (Mr.  CALHOUN)  who,  (no- 
doubt  in  the  zeal  of  an  ardent  mind)  let  drop  some  rather  inadmissible  expres- 
sions, by  way  of  forestalling  the  objections  he  anticipated  to  his  scheme,  will 
excuse  me  for  the  similitude— but  really  it  reminds  me  of  the  French  veteri- 
nary surgeon,  who  killed  the  sick  horse,  in  order  that  he  might  prove  his  skill 
by  restoring  him  to  life.  Is  it  not  so?  Does  not  his  plan  demand,  as  its  first 
postulate,  a  total  prostration  of  the  public  means,  an  absolute  vacuum  in  the 
treasury,  to  be  afterwards  revived,  by  filling  it  \vith  forty  millions  of  treasury 
notes?  Does  it  not  require  that  the  twelve  millions  which  are  indispensable 
for  the  current  quarter  of  this  year,  should  be  sacrificed,  and  that  the  Govern- 
ment should  stop  payment  for  the  present,  relying  on  this  scheme  for  obtain- 
ing funds  hereafter?  Most  assuredly,  the  doors  to  which  you  look  for  loans, 
will  be  locked  up  and  double  bolted'against  your  advances,  if  you  enact  a  law, 
impregnated  as  this  is  now  proposed  to  be,  with  injustice  to  those  who  have 
hitherto  sustained  your  credit  by  administering  to  your  occasions.  You  are 
to  forego  the  advantages  of  an  approved  and  rational  plan — you  are  to  aban- 
don the  attempt  to  borrow  what  you  stand  most  seriously  in  need  of  at  the 
present,  moment;  you  are  to  stop  payment;  you  are  to  become  bankrupt,  in 


you  must,  perish  under  the  operation.  Of  how  nice  and  delicate  a  texture  public 
credit  is  composed,  yve  have  had  demonstrations  but  too  painful,  during  the 
present  session.  It  is  the  very  gossamer  of  political  elements.  The  perpetual 
sunshine  of  confidence,  is  necessary  to  its  existence.  Withhold  this,  and  it 
languishes.  Withdraw  it,  and  it  dies.  And  once  dead,  where  is  the  magic, 
xvhere  the  power  that  can  revive  it?  Let  me  caution  gentlemen  against  even 
handling  it  too  roughly.  It  is  but  too  easily  destroyed;  and,  whatever  may 
be  said  in  speculations  here,  depend  upon  it,  sir,  that  there  is  no  skill  in  either 
surgery,  or  quackery,  that  can  call  it  back  again  to  an  animation  once  sus- 
pended. 

Such,  however,  so  imminent,  so  full  of  dissolution  and  decay,  arc  the  very 
foundations  on  which  this  new  superstructure  is  to  be  built  up.  Let  us  now  look 
a  little  further  into  its  details.  And  here,  at  the  very  inside  of  the  threshold, 
I  am  again  struck  with  a  general  imperfection.  Why  not  come  at  once  to  the 
rejected  resolutions  of  my  honest  friend  from  Georgia  (Mr.  HALL?)  What 
use  is  there  in  such  a  mass  of  banking  machinery,  to  give  circulation  to  some 
millions  of  treasury  notes?  Why  not  issue  them  at  once  without  this  unwieldy, 
this  unnecessary  medium?  Do  you  surround  them  with  it,  in  order  to  pass 
them  off  with  less  embarrassment,  supposing  that  the  public  will  occupy  them- 
selves in  examining  the  mill,  without  scrutinizing  the  material?  If  you  do. 


PROCEEDINGS  OF   1814.  509 

disappointment  will  be  the  consequence  for  those  moneyed  men,  whom  you 
hitherto  have  looked  to  for  support,  though  now  you  seem  ready  to  discard 
them,  are  not  to  be  so  easily  prevailed  upon.  They  are  sharp  sighted  ani- 
mals, who  will  pierce  through  your  projects  at  a  glance,  however  you  may 
wrap  and  fold  them  up  from  common  observation. 

Again:  If  treasury  notes  are  to  constitute  the  universal  succedaneum,  and 
you  intend  to  deprive  the  Government  of  authority  to  prohibit  the  issue  of 
specie  even  under  peculiar  circumstances,  and  for  short  periods,  what  occa- 
sion have  you  for  any  specie  capital  at  all?  Do  you  imagine,  sir,  that .  your 
five  or  six  millions  will  be  suffered  to  remain  quietly  in  circulation,  going  in 
and  out  of  the  vaults  of  this  bank,  without  any  guard  whatever  against  its 
fraudulent  evasion?  I  am  quite  mistaken  if  the  whole  sum  would  not  migraV 
to  Halifax  within  a  fortnight  after  its  deposite.  I  cannot  pretend  to  speak 


with  precision  as  to  the  amount  of  specie,  now  in  retirement,  belonging  to 
the  different  banks  of  Philadelphia,  and  individuals  who  have  secured  portions 
of  it  in  safe  places:  but  I  should  imagine  that  it  must  be  considerable,  perhaps 


some  millions.  How  long,  is  it  supposed,  it  would  continue  in  fair  circulation 
if  the  banks  were  (o  pay  it  out  for  notes?  It  would  infallibly  and  almost. 
instantaneously  disappear.  1  confess  that  I  have  my  doubts  as  to  the  propriety 
Of  affording  Government  any  number  of  the  directors  of  the  bank,-  but  I  cannot 
conceive  a  mode  for  dispensing  with  the  inhibition  by  law  of  specie  issues  in 
certain  cases,  without  referring  this  authority  for  its  exercise  to  the.  directors 
themselves,  who  must  endanger  the  charter  by  its  enforcement.  It  is,  there- 
fore, best  in  other  hands. 

But,  after  all,  Mr.  Chairman,  it  was  in  behalf  of  the  public  creditors  that 
I  was  mainly  induced  to  address  you.  It  was  to  bespeak  your  indulgence, 
to  appeal  to  your  faith,  to  indicate  your  policy,  as  regards  the  stockholders  of 
the  late  loans,  that  I  have  ventured  to  rise  on  this  occasion.  In  order  to  under- 
stand and  appreciate  their  relation  to  the  Government,  let  us  inquire  how  it 
came  about.  It  is  not  two  years  since,  when  I  first  came  to  this  House,  I  felt 
it  my  duty  to  assert  their  pretensions  against  attack  from  the  other  side. 
And  now,  already,  much  sooner,  I  confess,  than  I  expected,  I  am  called  upon 
to  defend  them  from  attacks  on  this  side.  Blessed  encouragement  this,  to 
be  sure,  for  those  who  may  be  disposed  to  lend  their  money  to  the  public! 
And  pray,  what  are  the  circumstances  that  justify  these  aggressions."  You 
first  went  into  the  market  fora  loan  of  eleven  millions  at  six  per  cent,  of 
which  you  obtained  but  about  six.  [Here  some  explanation  took  place  between 
Mr.  EPPKS  (Chairman  of  the  Committee  ol"\Ynys  and  Means)  and  Mr.  INGER- 
SOLL,  by  which  it  appeared  that  Mr.  I.  was  mistaken  in  supposing  that  the 
residue  of  this  loan  had  been  filled  up  by  a  diversion  of  the  sinking  fund  for 
that  purpose.  Mr.  E.  pointedly  denied  that  the  sinking  fund  ever  had  been 
diverted  from  its  true  object.] 

The  explanation  afforded  by  the  gentleman  from  Virginia  (Mr.  EPPES) 
makes  no  change  (proceeded  Mr.  INGERSOLL)  in  the  aspect  of  my  argu- 
ment. 1  was  about  to  show  that  your  loan  market  was  exhausted  by  a  loan 
of  six  or  seven  millions,  at  the  hundred  for  a  hundred.  Your  next  bar- 
gain was  for  sixteen  millions  at  eighty-eight  for  the  hundred.  Afterwards, 
seven  millions  and  a  half  at  the  same  rate.  And  finally,  that  portion  of  the 
twenty-five  millions,  which  has  been  negotiated  at  eighty,  and  perhaps  less, 
for  the  hundred.  And  what  inducements  did  you  bold  forth  to  those  who 
advanced  these  sums?  Of  course  the  faith  of  Government  for  the  punctual 
payment  of  the  interest,  and  faithful  redemption  of  the  principal  at  the  expi- 
ration of  the  stipulated  term.  But  was  this  all?  ,Was  there  no  accessory, 
no  additional  inducement,  besides  the  plighted  faith  of  the  nation?  This 
House  must  well  remember  that  there  was.  It  cannot  be  forgotten  that  the 
Secretary  of  the  Treasury  was  selected  as  one  of  the  commissioners  to  repair 
to  Europe  to  treat  for  peace;  and  it  is  perfectly  well  known  that  both  he  and 
his  colleague,  at  the  time  that  some  of  these  loans  were  under  contract,  were 
sanguine  in  their  calculations  on  the  prosperous  result  of  their  mission.  Indeed, 
since  we  have  become  acquainted  with  their  instruction?,  it.  cannot  be  matter 


510  BANK  OF  THE  UNITED  STATES. 

of  surprise  (hat  they  should  have  entertained  such  a  confidence.  The  fact, 
however,  is,  that  subscribers  to  the  loan  at  eighty-eight,  were  led  to  believe, 
and  from  the  best  authority,  that  their  stock  would  enjoy  all  the  benefits  of 
peace  within  twelve  months  from  the  time  of  their  subscription,  and  that  in- 
stead of  merely  par  for  the  eighty-eight  which  they  loaned,  they  might  reasona- 
bly calculate  on  a  rise  of  ten  or  fifteen  per  cent,  above  the  hundred  which 
they  were  promised  for  their  money.  It  was,  moreover,  made  a  test  of 
patriotism  in  the  subscribers,  and  hundreds  contributed  in  part  on  this  prin- 
ciple. Gentlemen  talk  of  these  persons  as  if  they  were  the  veriest  brokers 
and  stockjobbers  in  the  world:  and  as  if,  too,  none  but  brokers  and  stock- 
jobbers had  subscribed.  But 'no  misconception  could  be  more  unfounded. 
Let  such  as  imagine  that  some  half  a  dozen  usurious  capitalists  hold  all  the 
stock  in  question,  attend  on  quarter  day;  at  the  door  of  a  bank,  in  which  divi- 
dends are  payable,  and  examine  there  into  the  characters  and  conditions  of 
the  crowd  of  anxious  expectants  for  their  income.  They  will  find  the  widow 
and  the  orphan,  the  aged  and  the  infirm,  as  well  as  the  wealthy  and  the  com- 
petent, waiting  for  their  shares;  some  of  them  for  small  sums,  payable  by 
way  of  annuity,  (which  was  authorized  by  the  loan  laws)  and  the  only  reliance 
of  the  poor  People  who  have  invested  their  funds  in  this  stock.  These  are 
the  persons  whom  you  are  proposing  to  cast  aside.  They  did  not  seek  you 
nor  press  themselves  into  your  assistance;  but,  on  the  contrary,  you  went  in 
search  of  them,  and  induced  them,  by  strong  and  seductive  promises,  to  part 
with  their  money  for  your  necessities.  They  did  so  at  your  earnest  instances. 
They  paid  it  to  you  when  they  could  have  had  gold  and  silver  for  their  checks. 
But  now  having  bound  them  to  your  destiny,  having  exhausted  their  capacity 
to  lend,  you  deny  them  (should  the  proposed  amendment  be  adopted}  any 
participation  in  your  plans  for  the  improvement  of  their  funds.  You  leave 
them  to  their  fate,  vainly  imagining,  that  after  such  crying  injustice,  you  can 
substitute  another  class  of  creditors  in  their  places.  No  moneyed  institution 
can  succeed  which  is  to  be  founded  on  principles  at  war  with  the  interests  of 
the  moneyed  men  of  a  community.  You  may  rail  at  these  persons  if  you  will; 
but,  depend  upon  it,  that  to  enlist  their  opposition  to  any  plan  for  the  resto- 
ration of  public  credit  is  not  the  way  to  accomplish  it. 

The  bank  contemplated  by  the  original  bill  on  the  table,  was  to  be  laid  on 
the  liberal,  the  politic,  and  the  natural  endowments  of  public  stock  and  spe- 
cie, in  certain  adequate  proportions.  That  which  is  to  be  attempted,  should 
the  amendment  succeed,  would,  for  the  first  time  in  the  history  of  such  insti- 
tutions, be  founded  on  a  vast  basis  of  new  paper  or  stock  to  be  created,  to 
the  prejudice  of  those  who  now  own  the  stocks  and  regulate  the  prices,  in  the 
market.  Of  these,  there  are  between  sixty  and  eighty  millions  (including 
treasury  notes)  in  existence.  Instead  of  withdrawing  a  third  of  this  amount 
and  appropiating  it  to  a  bank,  the  gentleman  from  South  Carolina  (Mr.  CAL  • 
HOUN)  would  send  in  forty  odd  millions  more,  in  the  shape  of  treasury  notes, 
more  heavily  than  ever  to  choke  up  and  overdo  the  market.  I  do  not  pretend 
to  be  very  conversant  with  these  matters,  but  I  must  confess,  that  1  cannot 
perceive  how  such  a  scheme  could  possibly  succeed  in  operation. 

Of  all  models  fora  moneyed  institution,  the  late  Bank  of  the  United  States 
affords  one.  the  most  worthy  of  imitation.  And  upon  what  was  it  founded? 
Public  stock  and  specie  capita!.  What  public  stock?  Not  new  stock  created 
for  the  purpose;  but  that  which  was  funded  at  twenty  shillings  in  the  pound, 
though  a  great  deal  of  it  was  purchased  as  low  as  one  and  six  pence.  The 
Secretary  of  the  Treasury  would  hear  of  no  discrimination  between  the  credi- 
tors. He  well  knew  that  public  credit  was  to  be  created,  not  by  looking  for- 
ward to  new  auxiliaries,  and  discarding  old  ones,  but  by;  a  punctilious  and 
faithful,  an  indiscriminate  and  universal  fulfilment  of  all  former  engagements. 
Paying  old  debts  is  the  best  mode  of  enabling  a  community  to  contract  new 
ones.  The  Bank  of  England,  the  Bank  of  Genoa,  most  of  the  celebrated  mo- 
neyed institutions  in  Europe  ,  were  established  on  similar  recognitions  and 
adoptions  of  the  public  stocks  of  their  respective  countries.  The  Bank  of  the 
United  States,  therefore,  followed  their  example.  Stockholders,  who  were 


PROCEEDINGS  OF  1814. 

known  to  have  purchased  their  stock  at  a  great  discount,  were,  nevertheless, 
allowed  to  subscribe  without  discrimination,  though  it  was  well  ascertained 
that  the  bank  stock  would  immediately  rise  after  the  subscription,  and  though 
it  did  actually  rise  to  one  hundred  and  forty.  Now,  in  all  views  of  this  sub- 
ject, the  late  Bank  of  the  United  States  affords  a  precedent  to  be  consulted 
with  the  utmost  consideration,  and  one  not  to  be  departed  from  without  very 
sufficient  causes.  Broken  up  as  that  institution  has  been,  and  subjected  to 
the  severest  tests  of  investigation,  the  wisdom,  fidelity,  and  punctuality  of  its 
transactions  have  been  manifested  in  the  strongest  light;  and  I  think  it  would 
be  hazarding  not  a  little  to  disregard  them. 

The  gentlemen  from  South  Carolina,  both  the  honorable  mover  of  this  amend- 
ment, CM r.  CALHOUN)  and  his  colleague  who  supports  him,  (Mr.  LOWNDES) 
deny  that  the  creation  of  a  new  stock  for  the  ban*  capital  would  be  either  an 
injury  or  an  injustice  to  the  present  stockholders-  I  understand  that  the 
stock  was  at  81  the  day  before  yesterday,  in  Baltimore,  and  looking  up,  in  an- 
ticipation of  its  incorporation  into  the  bank.  No  doubt  it  will  fall  again  as 
soonasthis  proposition  for  excluding  itgoesabroad.  AV hat  more  infallible  ther- 
mometer can  we  have  of  the  effect  of  such  a  measure  on  the  stock?  There  are 
between  sixty  and  eighty  millions  of  it  in  circulation.  You  propose  to  issue 
fifteen  millions  of  treasury  notes  for  purchasing  up  such  of  it  as  is  to  be  sub- 
scribed to  the  bank.  The  inevitable  consequence  must  be,  first,  a  competi 
tion,  a  most  unfair  one,  in  the  market,  and  then  a  depreciation  of  the  stock. 
He  who  subscribed  at  80  has  20  per  cent,  advantage  over  the  more  meritori- 
ous subscriber  at  100  or  at  88;  and  no  alternative  is  left  for  the  latter  but  to 
sacrifice  his  stock  at  50  or  60,  in  order  to  reimburse  himself  by  the  profits  of 
a  subscription  to  the  bank,  or  to  hold  his  stock,  depreciated  to  one  half  of 
what  he  gave  for  it.  I  am  not  disposed  to  repeat  the  epithets  that  were  be- 
stowed on  such  dealings  by  my  friend  and  colleague  (Mr.  IXGHAM,)  but  real- 
ly, I  must  say,  that  I  should  consider  them  most  reprehensible  proceedings. 
There  is,  too,  a  difference  ot  from  fifteen  to  twenty  per  cent,  in  the  prices  o 
stock  at  different  places;  at  Baltimore  and  Boston,  for  instance;  and  the  scan- 
dalous speculations  to  be  authorized,  would,  therefore,  carry  with  them  this 
additional  aggravation.  In  fact,  there  is  no  stock  market  in  this  country;  and 
whenever  the  purchases  in  question  are  to  be  made,  the  holders  of  stock  in 
different  places  must  abide  the  effects  of  the  variation  in  the  prices  accumu- 
lated on  the  other  hardships  of  their  case. 

But  why,  we  arc-  asked,  arc  these  stockholders  to  be  preferred?  Why  is 
an  individual,  holding  certificates  of  this  stock,  to  enjoy  the  advantages  of  a 
subscription  to  the  Bank  of  the  United  states,  in  preference  to  any  individual 
who  does  not  happen  to  hold  such  certificates?  The  answer  is,  that  they  are 
not  preferred  anv  more  than  the  few  possessors  of  specie.  Any  person  may 
buy  the  stock  who  chooses  it,  and  thus  become  capacitated  to  subscribe  it  to 
the  bank.  There  is  no  deficiency  of  it  for  sale  in  the  market.  We  have  taken 
care  of  that;  and  but  two  numerous,  unfortunately,  are  they  who  are  anxious 
to  get  rid  of  it. 

As  to  taking  it  at  the  rate  at  which  Government  received  their  money, 
could  any  thing  be  more  unjust?  The  public  faith  was  plighted  to  redeem 
eighty -eight  with  a  hundred.  The  stockholders  are,  consequently,  entitled,  in 
the  first  place,  to  have  one  hundred  for  their  eighty-eight;  and  then,  most  as- 
suredly, they  have  aright,  in  common  with  all  other  subscribers,  to  all  the 
profits  to  accrue,  above  par,  on  their  subscription  to  the  bank.  In  this,  they 
are  not  preferred  to  other  subscribers;  though,  perhaps,  it  might  be  shown, 
without  any  great  difficulty,  that  they  are  entitled  to  at  least  a  highly  favora- 
ble attention  from  the  Government.  We  have  got  all  their  money.  We  took 
it  when  it  was  convertible  into  gold  and  silver.  And  it  would  be  neither 
generous  nor  just  now  to  postpone  them  to  other  members  of  the  commu- 
nity. 

These  arguments,  however,  are  controverted  by  the  gentlemen  from  South 
Carolina,  both  of  whom  deny  that  Government  is  bound  to  admit  these  stock- 
holders into  the  bank,  as  well  as  that  any  injury  will  be  done  to  them  by  the 
exclusion.  But  what  facts  have  they  advanced  to  sustain  their  theory?  The 


512  BANK  OF  THE  UNITED  STATES. 

rise  and  fall  of  the  stock  is,  as  I  have  shown,  a  very  clear  criterion  of  the  state 
of  the  stockholders'  interests;  arid,  really,  I  cannot  help  saying,  that  when 
so  much  experience  and  fact  is  to  be  overthrown  by  a  speculation,  we  should 
have  something  more  than  even  the  most  respectable  opinions  in  its  favor. 
One  of  those  gentlemen  (Mr.  CALHOUN)  insists  that  no  depreciation  can  be 
the  consequence  of  his  scheme,  and  the  other  (Mr.  LOWNDES)  expresses  his 
conviction  that  the  proposed  amendment  is  preferable  to  the  original  bill. 
Those  honorable  gentlemen  know,  I  am  well  persuaded,  of  the  attention  and 
pleasure  with  which  1  always  listen  to  whatever  falls  from  either  of  them. 
But  I  must  be  pardoned  for  withholding  my  consent  to  this  conclusion  of  theirs, 
which  really  is  only  asserted,  not  proved,  by  the  one,  with,  if!  may  so  ex- 
press it,  his  most  respectable  colleague's  endorsement  on  the  draft. 

I  was  surprised,  I  confess,  at  the  latter  gentleman's  (Mr.  LOWNDES)  repe- 
tition of  a  question  which  had  been  previously  put  by  the  gentleman  from 
North  Carolina  (Mr.  GASTON).  Why,  it  is  with  seeming  triumph  demanded, 
why, if  former  and  not  new  stock  is  to  be  part  of  the  capital,  do  you  exclude 
the  old  funded  debt  of  the  United  States?  Most  obviously,  it  may  be  an- 
swered, because  that  account  has  long  ago  been  settled,  because  a  sink- 
ing fund  has  been  many  years  operating  the  absorption  of  that  debt,  be- 
cause it  is  not  liable  to  the  fluctuation  of  the  market,  as  the  late  stock 
is,  and  because  the  holders  of  it  do  not  desire  you  to  meddle  with  it. 
[Mr.  LOWNDES  here  inquired  if  Mr.  INGERSOLL  included  the  Louisiana  stock, 
to  which  he  answered  that  he  did  not.]  The  difference  is  very  great  indeed 
between  the  old  six  per  cents,  of  which  I  am  speaking,  and  the  recent  stock, 
created  during  the  present  war.  After  the  experience  public  creditors  have 
lately  had  of  congressional  kindness  and  good  will,  they  might  well  exclaim, 
like  the  French  merchants  to  the  economists,  "Laissez  nous  fare.  Let  us 
alone.  We  do  riot  stand  in  need  of  your  assistance,  nor  desire  your  interpo- 
sition. All  that  we  ask  is,  to  be  let  alone.  "  Very  different,  indeed,  is  the 
situation  of  the  new  stockholders,  with  all  their  money  gone,  their  funds  de- 
preciated, and  their  Representatives  in  Congress  inveighing  against  their  con- 
tracts as  usurious  and  iniquitous.  They  are  bound  to  the  public  car  by  ties 
they  cannot  break.  They  must  continue  to  follow  public  fate.  They  cannot 
afford  either  to  sell  or  to  hold.  After  exhausting  their  credit  at  bank  they  are 
driven  to  the  usurer  for  relief,  who  strips  them  of  half  their  stock  for  the  pre- 
servation of  the  residue;  and  that  residue  they  must  needs  hold — to  bequeath 
it  to  their  children,  with  curses  on  the  Government  which  borrowed  of  them, 
on  fair  promises,  to  their  last  cent,  and  then  left  them  to  their  ruin. 

Mr.  Chairman,  we  are  debating  this  interesting  subject  under  very  peculiar 
circumstances.  It  is  now  two  months  since  Congress  have  been  in  session, 
convened  by  the  President,  under  the  pressure  of  great  and  weighty  consider- 
ations. Since  we  assembled,  a  most  alarming  temperhas  appeared  in  very  de- 
cided indications  among  some  of  the  Eastern  States:  and  it  is  said  to  be  in- 
tended by  the  agitation  of  the  Hartford  convention,  to  proceed,  deliberately, 
to  the  disintegration  of  New  England  from  the  Union.  For  my  part,  I  can- 
not believe  it.  I  cannot  impute  such  designs  to  a  people  whose  forecast,  or  or- 
derly and  general  attachment  to  regular  government,  have  been  so  much 
vaunted,  and  perhaps  not  without  reason.  But  what  encouragement,  if  such 
be  their  object,  are  we  not  holding  out  to  them !  And  what  a  rebuke  the  Hart- 
ford convention  may,  in  all  probability,  impose  upon  Congress?  The  fifteenth 
of  December  is  advertised  as  the  day  of  their  meeting,  scarcely  more  than 
three  weeks  from  the  moment  when  I  address  you — after  having  been  two 
months  in  session  under  every  impulse  to  action  and  concert — without  having 
yet  achieved  anyone  important  act — without,  in  fact,  being  now  as  likely  to 
agree  as  we  were  six  weeks  ago — still  amusing  ourselves  with  discordant  pro- 
jects and  visionary  speculations.  The  Hartford  convention  will  find  disu- 
nion ready  made  to  their  occasions.  Instead  of  taking  steps  to  separate  them 
selves  from  the  other  States,  to  delay  or  defeat  our  measures,  they  will 
have,  I  fear,  but  too  much  opportunity  tbrjdeclaririg  that  their  convention  wsa 
rendered  indispensable  by  our  procrastination  and  idle  controversy — that  they 
met  to  save,  not  to  destroy— not  to  deny  the  authority  of  Congress  and  prevent 


PROCEEDINGS  OF  1814.  513 

its  .proceedings 5  but  to  provide  for  our  omissions;  to  raise  an  army  to  repel  in- 
vasion; to  create  a  navy;  to  establish  adequate  taxes  and  a  circulating  me- 
dium— to  uphold  the  staggering  credit  of  the  country.  We  are  disputing 
about  details  while  the  nation  is  agonized  with  the  pangs  of  dissolution.  We 
must  come  to  action,  and  that  speedily  too,  or  the  agony  will  be  over.  I  hope, 
therefore,  Mr.  Chairman,  that  the  amendment  will  be  rejected,  and  that 
\ve  shall  endeavor  to  make  some  harmonious  progress  with  the  original  bill 
on  the  table. 

Mr.  OAKLEY,  of  New  York,  in  a  speech  of  an  hour  and  a  half,  replied 
to  the  speeches  of  Messrs.  INOHAM  and  INGERSOLL,  and  advocated  the  mo- 
tion of  Mr.  CALHOUN.  He  began  by  deprecating  a  hasty  decision  on  this 
subject,  one  of  the  most  important  that  could  ever  come  before  a  legislative 
body;  being  no  less  than  the  establishment  of  a  charter  for  a  moneyed 
institution  of  fifty  millions,  the  features  of  which  could  not,  when  once  set- 
tled by  a  solemn  act  of  Congress,  be  changed,  but  must  be  as  irrevocable,  dur- 
ing the  term  of  the  charter,  as  the  constitution  itself,  &c.  The  National  Bank, 
if  necessary.  \vas  required  by  the  public  good  alone.  He  therefore  threw  out  of 
view,  as  wholly  irrelative,  the  argument  m  relation  to  the  effect  of  the  propos  • 
ed  amendment  on  the  holders  of  public  stock,  who  had  no  right  to  demand  any 
advantages  from  such  an  institution,  and  to  whom  no  injustice  would  be  done 
by  precluding  them  from  any  other  share  in  it  than  other  citizens  of  the  United 
States.  He  stated  some  things  in  relation  to  tiiis  bill,  to  show  that  the  facts 
of  its  having  been  reported  by  the  Committee  of  Ways  and  Means  was  not  an 
unanswerable  argument  against  amendment:  for,  he  stated,  that  the  principal 


nrst  tne  details  ol  me  Dill  uetore  the  House,  and  next  or  me  amendment  pro- 
posed to  be  made  to  it;  and  concluded  an  elaborate  and  able  view  of  the  sub- 
ject, by  expressing  his  decided  conviction  of  the  superior  practicability  of  Mr. 
CALHOUN'S  proposition  over  the  bill  as  reported,  &c. 

When  Mr.  OAKLEY  concluded, 

The  question  was  taken  on  Mr.  CALHOUN'S  motion  to  amend  the  bill,  and 
decided  in  the  affirmative,  by  a  majority  of  about  sixty  votes. 
The  committee  then  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

NOVEMBER  18,  1814. 

Mr.  CALHOUN,  of  South  Carolina,  remarked,  that  he  looked  upon  the  deci- 
sion of  the  House  on  yesterday,  as  indicating  a  disposition,  on  the  part  of  the 
House,  to  change  the  whole  nature  of  the  bill,  now  before  a  committee  of  the 
whole,  for  incorporating  the  subscribers  to  the  Bank  of  the  United  States  of 
America.  As  many  amendments  in  detail  would  be  required,  he  thought  the 
most  proper  way  to  act  on  the. bill  would  be  to  recommit  it  for  amendment 
to  a  select  committee. 

This  motion  was  opposed  by  Mr.  WRIGHT,  of  Maryland,  and  Mr.  LOWNDES, 
of  South  Carolina,  on  the  ground  that  there  were  parts  of  the  plan  of  the  een- 
tleman,  against  which  the  House  might  decide,  and  which  could  as  well  be 
acted  on  in  committee  of  the  whole  as  by  a  select  committee. 

Mr.  CALHOUN  then  withdrew  his  motion,  reserving  the  right  to  offer  it 
again  when  further  progress  should  have  been  made  in  the  discussion  of  the 
bill. 

On  motion  of  Mr.  FISK,  of  New  York,  the  House  then  again  resolved  itself 
into  a  committee  of  the  whole  on  the  said  bill,  Mr.  NELSON  in  the  chair. 

Mr.  FORSYTH,  of  Georgia,  moved  an  amendment  to  the  second  section  of 
the  bill,  (as  it  has  been  amended)  the  object  of  which  was,  to  admit  the  forty- 
four  millions  of  the  capital  to  be  paid  in  treasury  notes,  as  it  now  stands,  or 
in  public  stock  created  since  the  war. 
65 


514  BANK  OF  THE  UNITED  STATES. 

This  motion  was  declared  by  the  Chairman  to  be  out  of  order,  inasmuch  as 
the  committee  of  the  whole  had  yesterday  decided,  that  no  part  of  the  pay- 
ments of  the  subscriptions  to  the  bank,  snould  be  made  in  the  manner  pro- 
posed by  the  amendment. 

Mr.  FORSYTH  was,  on  this  decision,  disposed,  for  the  present,  to  waive  his 
motion;  but 

An  appeal  was  made  by  Mr.  FISK,  from  the  decision  of  the  chair  on  this 
point;  which  decision  was  affirmed  by  the  committee  of  the  whole — 75  to  39. 

The  House  then  proceeded  to  the  consideration  of  the  third  section  of  the 
bill,  which  contemplates  the  subscription  by  the  United  States  of  twenty 
millions  in  six  per  cent,  stock  to  the  capital  of  the  bank. 

This  section  Mr.  CALHOUN  moved  to  strike  out  of  the  bill. 

This  motion  produced  debate. 

Mr.  FORSYTH,  of  Georgia,  said,  he  hoped  the  section  would  not  be  struck 
out.  He  considered  it  important  that  the  United  States  should  hold  a  certain 
proportion  of  the  stock  of  the  bank,  because  he  believed  the  privilege  of  so 
doing,  would  be  valuable  to  the  Government.  In  the  stock  of  the  old  Bank 
of  the  United  States,  the  Government  had  held  a  considerable  portion  of  the 
stock,  and  the  benefit  to  be  derived  from  it  had  not  been  denied.  It  had  been 
a  matter  of  boast  on  the  other  side  of  the  House,  and  the  republican  admin- 
istration had  enjoyed  the  advantages  arising  to  the  Government  from  it.  He 
could  not  conceive  any  solid  objection  to  this  course.  It  might  be  said  the 
bank  would  be  injuriously  affected  by  the  shares  the  United  States  would 
hold  in  it,  because  they  would  subscribe  nothing  but  stock.  But  Mr.  F.  said, 
if  the  basis  of  the  bank  was  to  be  public  stock,  its  value  would  not  be  destroyed 
by  a  part  of  it  being  owned  by  the  United  States  as  well  as  by  individuals.. 
He  hoped  the  motion  would  not  prevail. 

Mr.  CALHOUN  said  the  principle  of  his  motion  had  been  decided  by  the 
amendment  which  had  been  made  to  the  second  section.  Consistency  re- 
quired that  the  House,  after  deciding  as  they  did  yesterday,  should  now 
strike  out  this  section. 

Mr.  WRIGHT  said  he  did  not  consider  the  decision  of  yesterday  as  at  all 
interfering  with  this  motion.  If  it  did,  he  felt  himself  to  be  committed  con- 
trary to  his  intention.  The  discussion  on  yesterday  had  not  turned  on  thia 
point j  and,  he  contended,  even  had  the  House  inadvertently  decided  the 
principle  yesterday,  the  decision  to  retain  this  section  would  control  the 
provision  in  the  said  second  section,  inasmuch  as,  in  law,  posterior  control 
prior  provisions.  The  Government  ought,  he  contended,  to  have  a  share  in 
the  stock,  and  in  the  direction  of  the  bank.  The  old  Bank  of  the  United 
States  would  yet  have  been  in  operation,  he  said,  if  a  portion  of  the  direction 
had  been  under  the  control  of  the  Government,  to  have  prevented  it  from 
being  a  perfect  inquisition.  He  instanced  the  advantages  which  several  of 
the  States  derive  from  holding  a  share  in  the  stock  and  direction  of  banks 
within  their  respective  limits.  Seven-eighths  of  the  capital  of  the  old  bank 
had,  he  said,  been  held  by  foreigners:  and  every  man  who  had  any  hand  in 
tlie  direction  of  its  concerns  was  adverse  to  the  politics  of  this  administration. 
Some  of  them  were  refugees  from  the  country,  who  ought  to  have  been  hung 
during  the  Revolution.  It  could  not,  therefore,  be  expected  that  Congress 
would  revive  that  institution  or  create  any  other,  the  whole  weight  of  which 
would  have  been  thrown  in  the  opposite  scale  to  that  of  the  United  States. 
Mr.  W.  was  desirous  not  only  that  the  United  States,  but  that  the  agricul- 
tural interest  of  the  country,  should  hold  a  due  proportion  in  the  stock  of  this 
bank,  to  keep  it  out  of  the  exclusive  control  of  the  commercial  class,  which, 
he  intimated,  was  generally  in  the  British  interest,  and  not  a  few  actually 
connected  in  business  with  Britisli  houses.  The  landed  and  manufacturing 
interest,  he  argued,  ought  to  be  at  least  equally  interested  in  the  bank  with 
the  commercial.  It  was"  necessary  the  Government  should  hold  both  stock 


PROCEEDINGS  OF  1814. 

and  direction  in  the  bank,  to  guard  the  United  States  against  the  operation  of 
any  foreign  influence,  &c. 

Mr.  CALHOUN  finding,  as  he  said,  from  the  course  of  the  debate,  that  the 
eyes  of  the  committee  had  been  so  entirely  directed  to  the  main  object  of  the 
amendment  adopted  yesterday,  that  they  had  overlooked  the  part  of  it  to  which 
this  section  had  reference,  rose  to  explain  the  reasons  of  his  present  motion. 
Whether  the  provision  under  consideration  should  be  struck  out  or  retained, 
he  contended,  depended  on  the  situation  of  the  nation.  He  was  clearly  of 
opinion,  that,  in  the  present  situation  of  the  nation,  it  ought  to  be  struck  out. 
One  great  object  of  this  bank  was  to  afford  the  means  of  relieving  the  nation 
from  difficulties  under  which  it  now  labored.  By  striking  out  this  section, 
the  Government  would  not,  he  said,  lose  the  advantages  it  would  derive  from 
retaining  it,  inasmuch  as  the  twenty  millions,  instead  of  being  vested  by  the 
United  States  in  stock,  would  assume  the  shape  of  treasury  notes,  and  in 
reality  produce  the  effect,  by  their  absorption  in  the  bank,  of  an  immediate 
loan  to  the  Government.  Which,  he  asked,  does  the  United  States  now 
most  want — a  capital,  or  the  use  of  a  capital?  He  said  he  should  be  glad, 
indeed,  abstractedly,  that  the  United  States  should  possess  a  share  in  the 
capital  of  the  bank;  he  should  be  glad  the  United  States  should  possess  a 
capital  in  the  bank  on  which  they  could  draw  one,  two,  or  three  per  cent, 
more  interest  than  they  had  to  pay  for  it.  But  we  want  still  more  the  use  of 
the  capital.  If  any  gentleman  could  conceive  the  situation  of  the  country  to 
be  such  that  we  could  lock  up  instead  of  using  these  twenty  millions  of 
capital,  he  would  vote  against  this  amendment.  The  capital,  he  said,  would 
not  be  lost  to  the  United  States,  but  would  assume  for  them  the  most  active 
and  most  efficient  form,  by  means  of  the  treasury  notes,  which,  being  put 
into  circulation  and  absorbed  by  the  Government,  would  effect  an  immediate 
loan  to  the  Government.  But,  it  had  been  said,  unless  the  United  States 
held  some  share  in  the  bank,  it  would  fall  into  the  hands  of  our  enemies. 
Mr.  C.  said  he  did  not  think  so  harshly  as  the  gentleman  from  Maryland  of 
the  commercial  interest;  in  the  large,  he  believed  that  great  interest  to  be 
American,  notwithstanding  some  exceptions  might  be  found  to  that  character. 
But  even  if  such  a  disposition  as  was  feared  by  the  gentleman  should  exist, 
it  would  not  be  controlled  by  retaining  the  present  provisions  of  the  bill; 
because  the  twenty  directors  could  always  vote  down  the  five  proposed  to  be 
appointed  by  the  Executive,  if  there  should  arise  a  contest  between  the 
Government  and  the  bank.  But  there  was  another  mean  of  protecting  the 
Government  against  the  bank,  more  potent  and  certain  than  any  such  provi- 
sions: let  the  United  States  retain  the  power  over  its  deposites,  and  over  the 
receipt  of  the  bank  notes  in  payment  or  duties  and  debts  to  the  Government, 
and  it  would  possess  a  sufficient  control  over  the  bank. 

Mr.  FORSYTH  admitted  an  immediate  loan  would  be  an  advantage  to  the 
Government;  but  was  such  a  loan  wanted,  to  the  proposed  amount,  in  addition 
to  the  taxes  to  be  raised  by  the  bills  now  before  the  House?  He  contended 
that  it  probably  would  not.  But,  if  it  would,  he  argued  that  part  of  the  project 
was  impracticable,  because  of  the  difficulty  of  throwing  into  market  forty -four 
millions  of  dollars  of  treasury  notes;  whereas,  if  twenty  millions  of  that 
amount  were  subscribed  in  stock  in  behalf  of  the  United  States,  the  balance  of 
twenty-four  millions  would  be  all  disposed  of,  and  would  probably  be  suffi- 
cient tor  all  the  purposes  of  the  Government.  Even  for  the  benefit  of  the 
gentleman's  plan,  therefore,  this  feature  ought  to  be  retained. 

Mr.  CALHOUN  said,  that  if  fifteen  millions  of  the  forty-four  millions  of 
treasury  notes  were  applied,  as  he  had  suggested,  to  the  purchase  of  stock, 
and  five  millions  to  the  redemption  of  treasury  notes  falling  due  at  the  com- 
mencement of  the  next  year,  there  would  be  no  difficulty  in  disposing  of  the 
remainder  of  them.  He  said,  to  vest  twenty  millions  in  the  capital  stock  of 
the  bank  would  be  acting  like  a  man,  without  d  dollar  in  his  pocket,  offering 


516  BANK  OF  THE  UNITED  STATES. 

to  lend  out  money  at  an  interest  lower  than  he  lias  to  pay  for  it  for  hi&  use* 
If  the  demands  of  the  treasury  during  the  next  year  did  not  require  the  whole 
of  these  notes,  Mr.  C.  said  a  part  could  be  retained  until  the  year  after,  and 
thus  provision  be  made  for  two  years.  If  the  subscriptions  were  received 
monthly  in  twelve  instalments,  there  would  never  be  out  at  one  time  more 
than  two  millions;  much  less  than  the  amount  of  treasury  notes  now  in  cir- 
culation-. There  would  be  no  doubt,  he  thought,  of  their  being  sought  for  with 
avidity. 

Mr.  INGHAM,  of  Pennsylvania,  said  that,,  if  the  whole  amount  of  treasury 
notes  now  proposed  to  be  issued,  should  not  be  wanted  in  the  course  of  the 
next  year,  it  would  unquestionably  be  more  to  the  interest  of  the  Government 
to  invest  twenty  millions  of  the  amount  in  stock  in  the  bank,  provided  it  would 
be  an  advantage  to  them  to  possess  that  stock.  Allowing  the  stock  of  the 
bank  to  advance  as  it  might  be  expected  to  do,  it  would  afford  a  profit  to  the 
United  States,  in  twelve  months,  of  six  millions  of  dollars;  and  the  United 
States  would  besides  dispose  of  the  capital  stock  at  its  full  value  whenever 
they  chose. 

Mr.  FORSYTH  still  questioned  the  ability  to  circulate  so  large  an  amount  of 
treasury  notes;  because  they  were  not  like  bank  paper,  which  could  at  any  time 
command  specie;  nor  would  they  circulate  even  as  well  as  the  present  treasury 
notes,  because  not  payable  at  the  end  of  the  year,  but  to  be  funded  in  six  per 
cent,  stock.  The  fact  that  money  is  not  to  be  paid  for  the  proposed  issue  of 
treasury  notes,  would  be  as  well  known  to  the  People  of  the  United  States  as 
this  House.  The  circulation  of  treasury  notes  at  present  was  principally 
among  those  who  have  money  on  hand  tor  which  they  have  not  immediate 
use,  which  they  invest  in  treasury  notes,  in  preference  to  this  public  stock; 
because,  at  the  same  time  that  they  produce  an  interest,  they  are  payable  at 
a  day  certain.  The  treasury  notes  to  be  issued  will  not  suit  such  persons,, 
and  will,  therefore,  probably  have  a  very  limited  circulation, 

Mr.  KILBOURN  said  he  had  voted  for  the  amendment  yesterday,  without 
any  idea  that  the  other  amendments  indicated  by  its  mover,  would  necessarily 
follow.  He  hoped  the  section  now  under  consideration  would  not  be  struck 
out.  For,  though  he  had  ever  believed  the  establishment  of  a  national  bank 
one  of  the  most  important  objects,  yet,  if  this  motion  prevailed,  he  should 
greatly  deprecate  it.  Was  it  true,  he  asked,  that  this  nation  was  so  embar- 
rassed in  its  finances,  was  in  such  a  critical  situation,  thaty  to  obtain  money 
for  a  year,  it  was  necessary  to  establish  a  colossal  moneyed  institution,  with 
a  charter  which  it  would  be  beyond  the  power  of  this  Governmunt  to  alter 
for  twenty  years;  that  might,  in  one  year,  if  amended  as  proposed,  fall  entirely 
under  the  direction  of  the  enemies  of  the  Government?  He  trusted  not,  lt'r 
on  the  other  hand,  this  stock  was  taken  by  the  Government  in  the  bank,  it 
might  be  sold  at  any  moment,  if  necessary,  at  twenty  per  cent,  profit,  or  at 
least  without  a  sacrifice;  and  thus  furnish  the  United  States  with  as  much 
money  as  it  would  sell  for. 

Mr.  LOWNDES  supported  the  motion  to  strike  out  this  section.  The  reser- 
vation of  twenty  millions  for  the  United  States  of  the  capital  of  the  bank* 
would,  he  said,  unquestionably  be  attended  with  some  advantages.  It  could 
not  be  denied  that  it  would,  by  the  strength  of  this  capital,  or  by  selling  it  at  an 
advance,  afford  the  means  of  obtaining  money  for  the  service  of  the  Govern- 
ment in  the  year  1816.  But  the  course  proposed  by  gentlemen  was  to  lessen 
the  security  of  the  loan  for  1815,  in  order,  with  remarkable  foresight,  to  pro- 
vide the  ways  and  means  for  the  year  1816.  Mr.  L.  said  he  differed  from  his- 
colleague  as  to  the  application  of  fifteen  millions  of  treasury  notes  to  purchase 
of  public  debt,  and  five  millions  for  the  redemption  of  treasury  notes.  The  ob- 
ject of  Mr.  L.  was  nothing  more  than  this:  to  induce  the  House  to  reduce  the 
capital  of  the  bank  from  its  present  proposed  amount.  It  almost  necessarily 
followed,  from  the  main  points  of  his  colleague's  plan,  that  the  capital  should 


PROCEEDINGS  OF  1814. 

be  reduced.  It  was  impossible  every  treasury  note  thrown  out  should  be 
absorbed  in  the  bank  at  me  times  of  subscription;  and  the  amount  to  be  issued 
must,  therefore,  of  necessity,  exceed  the  amount  to  be  paid  in  as  a  part  of  the 
capital  stock  of  the  bank.  It  was  important,  in  giving  additional  value  to  the 
treasury  notes,  that  the  bank  stock  should  be  made  as  valuable  as  it  could. 
The  success  of  the  plan  for  immediately  aiding  Government  by  the  means 
proposed,  must  depend  on  the  value  of  the  treasury  notes,  which  must  depend 
on  the  value  of  the  shares  in  the  bank.  The  less  valuable  the  shares  in  the 
bank,  as  they  would  be  by  the  retention  of  so  large  a  capital  stock,  the  less 
temptation  would  there  be  to  purchase  the  notes  or  stock  which  is  the  basis 
of  the  subscription.  Mr.  L.  said  he  hoped,  before  this  subject  was  finally 
acted  on,  the  committee  would  limit  to  thirty  or  thirty-five  millions,  to  some 
moderate,  some  reasonable  amount,  the  circulation  of  the  bank,  and  thus 
guard  against  danger  of  the  plan  from  the  amount  of  capital,  at  the  same  time 
that  it  would  increase  the  value  of  the  treasury  notes.  The  plan  of  the  gen- 
tleman before  him  (Mr.  Forsyth)  he  thought  it  obvious,  provided  for  the 
demands  of  the  public  service  in  1816,  by  rendering  utterly  hazardous,  if  not 
entirely  defeating,  the  provision  for  1815.  He  denied  that  the  treasury  notes 
to  be  issued  in  pursuance  of  this  plan  would  be  less  valuable  than  those  now 
in  circulation.  It  was  impossible,  he  said,  in  the  nature  of  things,  but,  in 
furnishing  additional  modes  of  application  of  them,  the  committee  would 
increase  instead  of  diminishing  the  value  of  treasury  notes,  &c.  £c. 

After  a  few  words  from  Mr.  RHEA,  of  Tennessee,  indicative  of  an  impa- 
tience for  the  question — 

The  committee  agreed  to  Mr.  CALHOUN'S  motion  by  the  following  vote: 
For  the  motion,  79, 

Against  it,  -  53. 

So  the  third  section  was  struck  out. 

Th  ;  committee  then  proceeded  in  further  examination  and  amendment  to 
the  details  of  the  bill,  in  the  course  of  which  considerable  debate  took  place, 
involving  generally  the  minor  principles  of  the  art  or  science  of  banking. 
Among  the  amendments  agreed  to,  were  the  following:  viz.  To  strike  out 
so  much  as  gives  the  Government  a  share  in  the  direction  of  the  bank;  so 
much  as  prohibits  the  bank  from  selling  the  United  States'  stock  which  may 
come  into  its  possession;  so  much  as  binds  the  bank  to  loan  thirty  millions  to 
the  Government,  &c. 

A  motion  was  made  by  Mr.  LEWIS,  of  Virginia,  and  supported  by  Mr. 
PEARSON,  to  amend  that  part  of  the  section  authorizing  the  bank  to  establish 
offices  of  discount,  deposite,  and  distribution,  so  as  to  require  the  bank,  when- 
ever the  Government  may  direct  it?  to  establish  an  office  of  discount  and  de- 
posite at  the  city  of  AVashington,  with  a  capital  (not  less  than  five  millions  of 
dollars.)  After  striking  out  the  latter  clause,  within  parenthesis,  the  motion 
was  negatived. 

When  the  committee  rose  for  to-day,  an  amendment  was  under  discussion 
affecting  the  manner  in  which  the  bank  shall  pay  specie  for  its  notes,  whether 
at  all  its  offices,  or  at  the  mother  bank  only. 

NOVEMBER  19,  1814. 

The  House  again  in  committee  of  the  whole,  Mr.  NELSON  in  the  chair. 

The  question  depending  on  yesterday's  adjournment  was  on  a  motion  of 
Mr.  OAKLEY,  of  New  York,  to  strike  out  the  18th  fundamental  rule  for  the 
government  of  the  bank,  which  is  in  the  following  words: 

"  18.  During-  the  continuance  of  the  present  war  between  the  United  States  and 
Great  Britain,  all  the  notes  of  the  said  corporation,  whether  payable  at  the  seat  of  the 
bank  in  Philadelphia,  or  elsewhere,  shall  be  payable  in  other  notes  of  the  said  corpora- 
tion, in  treasury  notes,  or  in  gold  and  silver  coin,  at  the  bank  in  the  city  of  Philadelphia, 


518  BANK  OF  THE  UNITED  STATES. 

at  the  option  of  the  applicant.  At  all  the  offices  of  discount,  deposite,  and  distribu- 
tion, and  of  deposite  and  distribution  only,  established,  as  aforesaid,  and  at  all  the  banks 
employed  in  lieu  of  such  offices,  as  aforesaid,  the  notes  of  the  said  corporation,  during 
the  continuance  of  the  said  war,  shall  be  payable  in  other  notes  of  the  said  corporation, 
or  in  treasury  notes  only."  And  the  said  corporation  shall,  at  all  times,  distribute 
among  the  offices  and  banks  aforesaid,  a  sufficient  sum  in  the  various  denominations  of 
the  notes  of  the  said  corporation,  and  in  treasury  notes,  to  answer  the  demand  there- 
for, and  to  establish  a  sufficient  circulating  medium  throughout  the  United  States  and 
the  territories  thereof. 

On  the  suggestion  of  Mr.  LOWNDES,  Mr.  OAKLEY  modified  his  motion  so 
as  to  strike  out  that  part  only;  of  the  rule  which  is  in  inverted  commas;  and, 
after  some  remarks,  in  opposition,  from  Mr.  FISK,  the  motion  was  agreed  to. 

Ayes  82. 

Mr.  LOWNDES  then  moved  to  amend  the  remainder  of  this  rule,  by  adding, 
after  the  words  "treasury  notes,"  the  words  "which  it  may  receive  upon  de- 
posite of  the  Government."  Agreed  to. 

The  19th  rule  having  been  read,  in  the  following  words: 
19.  "The  officer  at  the  head  of  the  Treasury  Department  of  the  United  States  shall 
be  furnished,  from  time  to  time,  as  often  as  he  may  require,  not  exceeding  once  a 
week,  with  statements  of  the  amount  of  the  capital  stock  of  the  said  corporation,  and 
of  the  debts  due  to  the  same;  of  the  moneys  deposited  therein;  of  the  notes  in  circu- 
lation, and  of  the  cash  in  hand;  and  shall  have  a  right  to  inspect  such  general  accounts 
in  the  books  of  the  bank  as  shall  relate  to  the  said  statement:  Provided,  That  this 
shall  not  be  construed  to  imply  a  right  of  inspecting  the  account  of  any  private  indivi- 
dual or  individuals  with  the  bank." 

Mr.  FORSYTH  moved  to  strike  out  this  rule.  If  the  Government  had  no 
interest  in,  or  control  over  the  institution,  he  saw  no  reason  or  propriety  in 
the  United  States  having  a  right  to  inspect  the  proceedings  or  state  of  the 
bank. 

To  this  Mr.  CALHOUN  replied,  that  there  was  an  obvious  propriety  in  the 
United  States  haying  the  right  to  inspect  the  affairs  of  the  bank,  to  ascertain 
whether  its  deposites,  &c.  would  be  safe  in  its  hands. 

The  motion  to  strike  out  the  rule  was  negatived. 

The  10th  section,  making  the  notes  of  the  bank  receivable  in  all  payments 
to  the  United  States,  having  been  read — 

Mr.  CALHOUN,  of  South  Carolina,  moved  to  strike  it  from  the  bill;  assign- 
ing, as  a  reason  for  this  motion,  that,  as  the  United  States  were  now,  by  the 
amendments  which  had  taken  place,  divested  of  all  control  over  the  opera- 
tions of  the  bank,  it  would  be  proper,  in  self-defence,  for  the  Government  to 
retain  in  its  hands  the.  power  to  make  the  notes  of  the  bank  receivable  or  not, 
to  protect  it  against  misconduct  or  attempt  at  control  by  the  bank. 

The  motion  was  agreed  to  without  a  division. 

On  motion  of  Mr.  CALHOUN,  the  section  authorizing  the  suspension,  on 
proclamation  of  the  President,  of  specie  payment  in  certain  cases  and  for  cer- 
tain periods,  was  stricken  out  without  debate  or  division. 

The  13th  section  of  the  bill,  which  pledges  the  faith  of  Congress  not  to  esta- 
blish any  other  bank  during  the  continuance  of  the  charter,  being  read, 

Mr.  LEWIS,  of  Virginia,  moved  an  amendment,  the  object  of  which  was,  to 
except  from  this  prohibition  the  banking  associations  existing  within  the  Dis- 
trict of  Columbia,  not  at  present  incorporated. 

Agreed  to. 

The  bill  having  been  gone  through, 

The  committee  recurred,  on  suggestion  of  Mr.  LOWNDES,  to  the  first  sec- 
tion of  the  bill. 

Mr.  LOWNDES  made  a  motion,  which  he  supported  by  a  train  of  reasoning, 
predicated  on  the  impracticability  and  unwieldinessof  so  large  a  moneyed  in- 


PROCEEDINGS    OF   1814. 

stitution  as  this  bank  was  proposed  to  be,  to  reduce  the  capital  of  the  bank 
fromjtfiy  to  thirty-Jive  millions  of  dollars. 

Mr.  CALHOUN  opposed  the  motion  with  much  zeal,  defending  the  proposed 
amount  of  capital  on  the  ground  of  the  proposed  appropriation  of  fifteen  mil- 
lions of  the  treasury  notes  for  the  purchase  of  existing  stock,  &c. 

Mr.  CUTHBERT  and  Mr.  FORSYTH  supported  Mr.  LOWNDES'S  motion,  and 
Mr.  CALHOUN  replied  to  them. 

The  motion  was,  in  the  end,  negatived,  as  follows: 

For  the  motion,      -  -        56, 

Against  it,  75. 

On  motion  of  Mr.  CALHOUX,  an  amendment  was  adopted  to  the  first  section 
of  the  bill,  changing  the  times  of  subscription  to  conform  it  to  the  intimations 
he  had  before  given. 

On  motion  of  the  delegate  from  Missouri,  the  town  of  St.  Louis  was  inserted 
as  one  of  those  at  which  subscriptions  should  be  received,  and  J.  B.  C.  Lucas, 
Alexander  Stuart,  and  Bernard  Pratt,  named  as  commissioners;  and,  on  mo- 
tion of  Mr.  Fisk,  of  Vermont,  Windsor,  in  that  State,  was  also  inserted,  and 
Elias  Lyman,  Wm.  Levering,  and  Eleazer  May,  named  as  commissioners. 

Various  other  amendments  were  proposed  to  the  bill,  some  of  which  were 
adopted  and  some  rejected. 

At  length  the  committee  rose  and  reported  the  bill  as  amended. 
The  bin  having  been  so  interleaved  and  interlined  with  amendments  by  the 
committee  of  the  whole,  that  the  Clerk  himself  could  scarcely  arrange  them, 
or  the  Speaker  state  them  to  the  House. 
It  was  ordered  to  lie  on  the  table,  ana  be  printed  as  amended. 

[The  amended  bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States  of 

America.  ] 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  a  Bank  of  the  United  States 
of  America  shall  be  established,  the  capital  stock  of  which  shall  be  fifty  mil- 
lions of  dollars,  and  no  more,  divided  into  five  hundred  thousand  shares,  of 
one  hundred  dollars  each  share,  and  that  subscriptions  and  payments  towards 
constituting  the  said  capital  stock  shall  be  opened  and  made  on  the  two  last 
days  of  January  next,  Sundays  excepted,  of  each  succeeding  month  of  the  year 
one  thousand  eight  hundred  and  fifteen,  till  the  whole  amount  subscribed  and 
paid  shall  equal  the  sum  of  fifty  millions  of  dollars,  aforesaid,  the  sum  sub- 
scribed to  be  paid  at  the  time  of  subscribing,  at  the  following  places,  viz:  at 
Hallo  well,  in  Maine;  Portsmouth,  in  New  Hampshire;  Windsor,  in  Vermont; 
Boston;  New  York;  New  Brunswick,  in  New  Jersey;  Philadelphia;  Balti- 
more; City  of  Washington;  Richmond;  Raleigh;  Charleston;  Savannah;  Lex- 
ington, in  the  State  of  Kentucky;  Nashville,  in  the  State  of  Tennessee;  Chil- 
licothe,  in  the  State  of  Ohio;  New  Orleans  and  St.  Louis,  in  the  Territory 
of  Missouri,  under  the  superintendence  of  the  following  persons,  as  commis- 
sioners to  receive  the  same:  at  Hallowell,  Benjamin  Dearborn,  Joshua  Gage, 
and  Peter  Grant;  at  Portsmouth,  in  New  Hampshire,  John  Gpddard,  Na- 
thaniel A.  Haven,  Nathaniel  Gilman;  at  Windsor,  in  Vermont,  Elias  Lyman, 
William  Leverett,  and  Eleazar  May;  at  Boston,  James  Lloyd,  Thomas  Handy- 
side  Perkins,  William  Gray,  William  Eustis,  and  Samuel  Brown;  at  New 
York,  Isaac  Lawrence,  John  Hone,  General  John  Smith,  Isaac  Bronson,  and 
Theron  Rudd;  at  New  Brunswick,  James  Vanderpool,  John  Bray,  and  Peter 
Gordon;  at  Philadelphia.  Jared  Ingersoll,  Anthony  Taylor,  Thomas  M.  Will- 
ing, Stephen  Girard,  Chandler  Price;  at  Baltimore,  Henry  Pason,  William 
Cooke,  William  Wilson;  at  the  City  of  Washington,  Robert  Brent,  Walter 
Smith,  and  Thomas  Swann;  at  Richmond,  Benjamin  Hatcher,  John  Broken- 
borough,  John  Preston;  at  Raleigh,  Sherwood  Haywood,  Beverly  Daniel,  and 
William  Peace;  at  Charleston,  John  C.  Faber,  John  Potter,  James  Carson; 
at  Savannah,  John  Bolton,  Charles  Harris,  and  James  Johnson;  at  Lexington; 


520  BANK   OF  THE   UNITED    STATES. 

in  Kentucky,  Charles  Wilkins,  Lewis  Sanders,  John  H.  Morton;  at  Nashville, 
Tennessee,  Robert  Weekly,  Felix  Grundy,  and  John  R.  Bedford;  at  Chilli- 
cothe,  in  Ohio,  Samuel  Finley,  Thomas  James,  William  McFarland;  at  New 
Orleans,  Dominick  A.  Hall,  Benjamin  Morgan,  Paul  Lanuse,  Thomas  L. 
Harmar,  and  William  Flood;  at  St.  Louis,  in  the  Territory  of  Missouri,  John 
B.  C.  Lucas,  Alexander  Stuart,  and  Bernard  Pratt;  which  subscriptions  shall 
continue  open  every  day,  from  the  time  of  opening  the  same,  from  ten  o'clock 
in  the  forenoon  until  four  o'clock  in  the  afternoon;  and  immediately  after 
each  subscription  and  payment,  the  commissioners,  or  a  majority  of  them,  at 
the  respective  places  aforesaid,  shall  cause  two  transcripts,  or  fair  copies  of 
such  subscriptions  to  be  made,  one  of  which  they  shall  send  to  the  Secretary 
of  the  Treasury,  one  they  shall  retain,  and  the  original  subscriptions  shall, 
within  three  days  from  the  closing  of  the  same,  be,  by  the  said  commissioners, 
transmitted  to  the  said  commissioners  at  Philadelphia,  or  to  one  of  them;  ana 
on  the  receipt  thereof,  the  said  commissioners  at  Philadelphia,  or  a  majority  of 
them,  shall  immediately  thereafter  convene,  and  proceed  to  take  an  account  of 
the  said  subscriptions:  and  if,  on  adding  the  final  subscription  and  payment 
to  the  sums  previously  subscribed  and  paid,  more  than  the  amount  of  fifty 
millions  of  dollars  shall  have  been  subscribed  and  paid,  then  the  said  last 
mentioned  commissioners  shall  apportion  the  difference  between  the  said  ca- 
pital stock  of  fifty  millions  of  dollars,  and  the  aggregate  amount  of  the  sub- 
scriptions and  payments,  preceding  the  final  subscription  and  payment,  among 
the  several  subscribers  to  the  final  subscription,  in  a  just  and  equal  ratio,  ac- 
cording to  their  several  and  respective  subscriptions:  Provided,  however,  That 
such  commissioners  shall,  by  such  apportionment,  allow  and  apportion  to  each 
subscriber  at  least  one  share;  and  the  said  commissioners,  after  having  appor- 
tioned the  same  as  aforesaid,  shall  cause  lists  of  the  said  apportioned  subscrip  - 
tions  to  be  made  out,  including  in  each  list  the  apportioned  subscription  for 
the  place  where  the  original  subscription  was  made,  one  of  which  lists  shall 
be  transmitted  to  the  commissioners,  or  to  one  of  the  commissioners,  under 
whose  superintendence  such  subscriptions  were  originally  made,  that  the  sub- 
scribers may  ascertain  from  them  the  number  of  shares 'apportioned  to  such 
subscribers,  respectively:  and  if  the  amount  of  thirty  millions  of  dollars  shall 
not  be  subscribed,  during  the  period  aforesaid,  at  all  the  places  aforesaid,  the 
subscription  to  complete  the  said  sum  shall  afterwards  be,  and  remain  open, 
at  Philadelphia,  under  the  superintendence  of  the  said  commissioners  ap- 
pointed at  that  place;  and  the  subscriptions  may  be  there  made  by  any  corpo- 
ration, copartnership,  or  person,  for  any  number  of  shares,  not  exceeding  the 
amount  required  to  complete  the  said  sum  of  thirty  millions  of  dollars. 

SEC.  2.  And  be  it  further  enacted,  That  it  shall  be  lawful  for  any  person, 
copartnership,  or  body  politic,  to  subscribe  for  so  many  shares  of  the  said  capital 
stock  of  the  said  bank,  as  he,  she,  or  they,  shall  think  fit;  and  the  sums  re- 
spectively subscribed,  shall  be  payable  in  the  manner  following,  that  is  to  say: 
six  millions  of  dollars  thereof  in  gold  or  silver  coin  of  the  United  States,  or  in 
gold  coin  of  Spain,  or  the  dominions  of  Spain,  at  the  rate  of  one  hundred  cents 
for  every  twenty-eight  grains  and  sixty-hundredths  of  a  grain  of  the  actual 
weight  thereof :  or  in  other  foreign  gold  or  silver  coin,  at  the  several  rates  pre- 
scribed by  the  first  section  of  an  act  regulating  the  currency  of  foreign  coins 
in  the  United  ^States,  passed  tenth  day  of  April,  one  thousand  eight  hundred 
and  six;  and  forty-four  millions  of  dollars  thereof  in  such  gold  or  silver  coin 
as  aforesaid,  or  in  treasury  notes,  now  authorized,  or  to  be  authorized,  to  be 
issued  in  the  year  one  thousand  eight  hundred  and  fifteen. 

SEC.  3.  find  be  it  further  enacted,  That  whenever  and  as  often  as  any  of 
the  treasury  notes  shall  be  subscribed  and  paid  in  as  aforesaid,  to  the  said 
capital  stock  of  the  said  bank,  shall  be  due  and  payable,  it  shall  be  lawful  for 
the  Secretary  of  the  Treasury  (and  he  is  hereby  authorized  and  required)  to 
pay  and  redeem  the  same,  principal  and  interest,  by  causing  certificates  of  pub- 
lic stock,  for  an  equal  amount,  bearing  an  interest  of  six  per  cent,  per  annum, 
and  redeemable  in  any  sums,  and  at  any  periods,  which  the  Government  may 
deem  fit,  to  be  prepared  and  made  in  the  usual  form,  and  the  same  to  be  de- 


PROCEEDINGS  OF   1814, 

hvered  to  the  president  and  directors  of  the  said  bank,  in  satisfaction  and  dis- 
charge of  such  treasury  notes. 

SEC,  4.  And  be  it  further  enacted,  That  the  subscribers  to  the  said  Bank  of 
the  United  States  of  America,  their  successors  and  assigns,  shall  be,  and  are 
hereby,  created  a  corporation  and  body  politic,  by  the  name  and  style  of  "The 
President,  Directors,  and  Company  of  the  Bank  of  the  United  States  of  Ameri- 
ca;" and  shall  so  continue  until  the  third  day  of  March,  in  the  year  one  thousand 
eidit  hundred  and  thirty-five:  and  by  that  name  shall  be,  and  are  hereby,  made 
able  and  capable  in  law  to  have,  purchase,  receive,  possess,  enjoy,  and  retain, 
to  them  and  their  successors,  lands,  rents,  tenements,  hereditaments,  goods, 
chattels,  and  effects,  of  whatsoever  kind,  nature,  and  quality,  to  an  amount  not 
exceeding  in  the  whole  fifty-five  millions  of  dollars,  including  the  amount  of 
the  capital  stock  aforesaid;  and  the  same  to  sell,  grant,  demise,  alien,  or  dis- 
pose of,  to  sue  and  be  sued,  plead  and  be  irnpleaded,  answer  and  be  answered, 
defend  and  be  defended,  in  all  courts  and  places  whatsoever:  and  also  to  niake, 
have,  and  use,  a  common  seal,  and  the  same  to  break,  alter,  and  renew,  at 
their  pleasure;  and  also  to  ordain,  establish,  and  put  in  execution,  such  by-laws 
and  ordinances,  and  regulations,  as  they  shall  deem  necessary  and  convenient 
for  the  government  of  the  said  corporation,  not  being  contrary  to  the  constitu- 
tion and  laws  of  the  United  States;  and  generally  to  do  and  execute  all  and 
8ingular  the  acts,  matters,  and  things,  which  to  them  it  shall  or  may  appertain 
to  do;  subject,  nevertheless,  to  the  rules,  regulations,  restrictions,  limitations, 
and  provisions,  hereinafter  prescribed  and  declared. 

SEC.  5.  Jlnd  be  it  further  enacted,  That,  lor  the  management  of  the  affairs 
of  the  said  corporation,  there  shall  be  twenty-five  directors,  who  shall  be 
elected  on  the  first  Monday  of  January,  in  each  year,  by  the  stockholders  or 
proprietors  of  the  capital  stock  of  the  said  corporation,  and  by  a  plurality  of 
votes  actually  given,  according  to  the  scale  of  voting  hereinafter  prescribed: 
and  the  directors  so  duly  chosen,  shall  be  capable  of  serving  by  virtue  of  such 
choice,  until  the  end  or  expiration  of  the  first  Monday  in  January,  next  en- 
suing the  time  of  such  election,  and  no  longer:  Provided*  always,  That  the 
first  election  of  directors  shall  be  at  the  time,  and  for  the  period',  hereinafter 
declared. 

SEC.  6.  And  be  it  further  enacted,  That,  as  soon  as  the  sum  of  thirteen  mil- 
lions two  hundred  thousand  dollars,  in  such  gold  and  silver  coin  as  aforesaid, 
and  in  such  treasury  notes  as  aforesaid,  shall  have  been  actually  received  on 
account  of  the  subscriptions  to  the  said  capital  stock,  notice  thereof  shall  be 
given  by  the  persons  under  whose  superintendence  the  subscriptions  shall  have 
been  made,  at  Philadelphia,  in  at  least  txvo  public  newspapers,  printed  in  each 
of  the  places  where  subscriptions  shall  have  been  made;  and  the  said  persons 
shall,  at  the  same  time,  and  in  like  manner,  notify  a  time  and  place  within 
the  said  city  of  Philadelphia,  at  the  distance  of  at  least  twenty  days  from  the 
time  of  such  notification,  for  proceeding  to  the  election  of  directors  aforesaid; 
and  it  shall  be  lawful  for  such  election  to  be  then  and  there  made.  And  the 
persons  who  shall  be  then  and  there  chosen,  as  aforesaid,  shall  be  the  first  di- 
rectors, and  shall  proceed  to  elect  one  of  their  number  president  of  the  said 
corporation,  and  they  shall  be  capable  of  serving  by  virtue  of  such  choice  until 
the  expiration  of  the  last  Monday  in  January,  next  ensuing  the  time  of  mak- 
ing the  same,  and  shall,  forthwith,  thereafter,  commence  the  operations  of  the 
said  bank,  at  the  said  city  of  Philadelphia:  Provided  always,  That,  in  case  it 
should  at  any  time  happen  that  an  election  of  directors  and  president  of  the 
said  corporation  should  not  be  made  upon  any  day,  when,  in  pursuance  of 
this  act,  they  ought  to  be  made,  the  said  corporation  shall  not  for  that  cause 
be  deemed  to  be  dissolved;  but  it  shall  be  lawful  on  any  other  day  to  hold  and 
make  an  election  of  directors  and  president  of  the  said  corporation  (as  the  case 
may  be)  in  such  manner  as  shall  have  been  regulated  by  the  by-laws  arid  or- 
dinances of  the  said  corporation,  and  until  such  election  be  so  made,  the  di- 
rectors and  president,  for  the  time  being,  shall  continue  in  office:  And  pro- 
vided, also,  That,  in  case  of  the  death,  resignation,  or  absence  from  the  United 
States,  or  removal  of  a  director  from  office,  the  vacancy  shall  be  supplied  by 
66 


522  BAN*  OF  THE   UNITED   STATES. 

the  stockholders  for  the  remainder  of  the  yean  And  provided,  also,  That,  in 
case  of  the  death,  resignation,  or  removal,  of  the  president  of  the  said  corpora- 
tion,  the  directors  shall  proceed  to  elect  another  president. 

SEC.  7.  Jlnd  be  it  further  enacted,  That  the  directors,  for  the  time  being, 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants,  under  themf 
as  shall  be  necessary  lor  executing  the  business  of  the  said  corporation,  and 
to  allow  them  such  compensation  for  their  services,  respectively,  as  shall  be 
reasonable;  and  shall  be  capable  of  exercising  such  other  powers  and  authori- 
ties for  the  well  governing  and  ordering  of  the  affairs  of  the  said  corporation , 
as  shall  be  described,  fixed,  and  determined,  by  the  laws,  regulations,,  and 
ordinances,  of  the  same. 

SEC.  8.  Jlnd  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form  and  be  fundamental  articles  of  the 
constitution  of  the  said  corporation,  to  wit: 

1.  The  number  of  votes  to  which  the  stockholders  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  n amber  of  shares  he,  sher  or  they, 
respectively,  shall  hold,  in  the  proportions  following,  that  is  to  say:  for  one 
share  and  not  more  than  two  shares,  one  vote;  for  every  two  shares  above  two 
and  not  exceeding  tenr  one  vote}  for  every  four  shares  above  ten  and  not  ex- 
ceeding thirty r  one  vote;  for  every  six  shares  above  thirty  and  not  exceeding 
sixty,  one  vote;  for  every  eight  shares  above  sixty  and  not  exceeding  one  hun- 
dred, one  vote;  and  for  every  ten  shares  above  one  hundred,  one  vote.     But 
no  person,  copartnership,  or  body  politic,  shall  be  entitled  to  a  greater  number 
than  thirty  votes.    And  after  the  first  election,  no  share  or  shares  shall  con- 
fer a  right  of  voting,  which  shall  not  have  been  holden  three  calendar  month* 
previous  to  the  day  of  election..    And  stockholders,  actually  resident  within 
the  United  States,,  and  none  other,  may  vote  in  elections  by  proxy. 

2.  Not  more  than  eighteen  of  the  directors  in  office  at  the  time  of  an  annual 
election 9  shall  be  re-elected  for  the  next  succeeding  year,  and  no  person  shall 
be  a  director  more  than  three  out  of  four  years;  but  the  director  who  shall  be 
the  president  at  the  time  of  an  election,  may  always  be  re-elected. 

3.  None  but  a  citizen  of  the  United  States,  and  being  a  stockholder,  shall 
be  a  director;  and  if  any  director  shall  cease  to  be  a  stockholder,  he  shall 
cease  to-  be  a  director. 

4.  No  director  shall  be  entitled  to  any  emolument,  unless  the  same  shall 
have  been  allowed  by  the  stockholders  at  a  general  meeting.    The  stock- 
holders shall  make  such  compensation  to  the  president,  for  his  extraordinary 
attendance  at  the  bank,  as  shall  appear  to  them  reasonable. 

5.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transaction- 
of  business,  of  whom  the  president  shall  always  be  one,  except  in  case  ot 
sickness  or  necessary  absence,  in  which  case  his  place  may  be  supplied  by  any 
other  director,  whom  he,  by  writing,  under  his  hand,  shall  depute  for  the  pur- 
pose.   And  the  director  so  deputed,  may  do  and  transact  all  the  necessary 
Business  belonging  to  the  office  of  the  president  of  the  said  corporation  during 
the  continuance  of  the  sickness  or  necessary  absence  of  the  president. 

6.  A  number  of  stockholders,  not  less  than  sixty,  who,  together,  shall  be  pro- 
prietors of  one  thousand  shares  or  upwards,  shall  have  power  at  any  time  to 
call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  insti- 
tution, giving  at  least  ten  weeks'  notice  in  two  public  newspapers  at  the  place 
where  the  bank  is  seated,  and  specifying  in  such  notice  the  object  or  objects 
of  such  meeting. 

7.  Every  cashier,  or  treasurer,  before  he  enters  upon  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfaction 
of  the  directors,  in  a  sum  not  less  than  fifty  thousand  dollars,  with  a  condition 
for  his  good  behavior,  and  the  faithful  performance  of  his  duties  to.  the  corpor- 
ation. 

8.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for  its  im- 
mediate accommodation  in  relation  to  the  convenient  transacting  of  its  busi- 
ness, and  such  as  shall  have  been  bona  fide  mortgaged  to  it  by  way  of  security, 


PROCEEDINGS  OF  1814.  523 

or  conveyed  to  it  in  Satisfaction  of  debts  previously  contracted  in  the  course 
of  its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall  have  been 
obtained  for  such  debts. 

9.  The  total  amount  of  the  debts  which  the  said  corporation  shall,  at  any 
time,  owe,  whether  by  bond,  bill,  note,  or  other  contract,  shall  not  exceed 
the  sum  of  fifty  millions  of  dollars,  over  and  above  the  moneys  then  actually 
deposited  in  the  bank  for  safe  keeping,  unless  the  contracting  of  any  greater 
debt  shall  have  been  previously  authorized  by  a  law  of  the  United  States.    In 
case  of  excess,  the  directors,  under  whose  administration .it  shall  happen,  shall 
be  liable  for  the  same  in  their  natural  and  private  capacities;  and  an  action  of 
debt  may,  in  such  case,  be  brought  against  them,  or  any  of  them,  their,  or  any  of 
their  heirs,  executors,  or  administrators,  in  any  court  of  record  of  the  United 
States,  or  either  of  them,  by  any  creditor  or  creditors  of  the  said  corporation, 
and  may  be  prosecuted  to  judgment  and  execution,  any  condition,  covenant,  or 
agreement,  to  the  contrary  notwithstanding.     But  this  provision  shall  not  be 
construed  to  exempt  the  said  corporation,  or  the  lands,  tenements,  goods,  or 
chattels,  of  the  same,  from  being  also  liable  for,  and  chargeable  with,  the  said 
excess.     Such  of  the  said  directors  who  may  have  been  absent  when  the  said 
excess  was  contracted  or  created,  or  who  may  have  dissented  from  the  reso- 
lution or  act  whereby  the  same  was  so  contracted  or  created,  may  respective- 
ly exonerate  themselves  from  being  so  liable,  by  forthwith  giving  notice  of  the 
met,  and  of  their  absence  or  dissent,  to  the  President  of  the  United  States, 
and  to  the  stockholders,  at  a  general  meeting,  which  they  shall  have  power  to 
call  for  that  purpose. 

10.  The  said  corporation  shall  not,  directly  or  indirectly,  deal  or  trade  in 
any  thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of 
goods  really  and  truly  pledged  for  money  lent  and  not  retleemed  in  due  time, 
or  goods  which  shall  be  the  produce  of  its  lands.     It  shall  not  be  at  liberty  to 
purchase  any  public  debt  whatsoever;  nor  shall  it  take  more  than  at  the  rate 
of  six  per  centum  per  annum  for,  or  upon,  its  loans  or  discounts;  but  the  said 
corporation  may  sell  any  part  of  the  public  debt  whereof  its  stock  shall  be 
composed. 

11.  No  loan  shall  be  made  lay  the  said  corporation  for  the  use,  or  on  account 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  three  hun- 
dred thousand  dollars,  or  of  any  particular  State,  to  an  amount  exceeding  fifty 
thousand  dollars,  or  of  any  foreign  Prince  or  State,  unless  previously  autho- 
rized by  a  law  of  the  United  States, 

12.  The  stock  of  the  said  corporation  shall  be  assignable  and  transferable 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same. 

13.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corporation, 
which  shall  be  made  to  any  person  or  persons,  shall  be  assignable  by  endorse- 
ment thereupon,  under  the  hand  or  hands  of  such  person  or  persons,  and  his, 
her,  or  their  executors  or  administrators,  and  of  his.  her,  or  their  assignee  or 
assignees,  and  the  executors  or  administrators  of  such  assignee  or  assignees, 
and  so  as  absolutely  to  transfer  and  vest  the  property  thereof  in  each  and 
every  assignee  or  assignees  successively,  and   to  enable  such  assignee  or  as- 
signees, and  his,   her,  or  their  executors  or  administrators,  to  maintain  an 
action  thereupon  in  his,  her,  or  their  own  name  or  names.    And  the  bills  or 
notes  which  may  be  issued  by  order  of  the  said  corporation,  signed  by  the  pre- 
sident, and  countersigned  by  the  principal  cashier  or  treasurer  thereof,  pro- 
mising the  payment  of  money  to  any  person  or  persons,  his,  her,  or  their  order, 
or  to  bearer,  although  not  under  the  seal  of  the  said  corporation,  shall  be 
binding  and  obligatory  upon  the  same,  in  the  like  manner,  and  with  the  like 
force  and  effect,  as  upon  any  private  person  or  persons,  if  issued  by  him  or 
them,  in  his,  her,  or  their  private  or  natural  capacity  or  capacities,  and  shall 
be  assignable  and  negotiable  in  like  manner  as  if  they  were  so  issued  by  such 
private  person  or  persons;  that  is  to  say:  those  which  shall  be  payable  to  any 
person  or  persons,  his,  her,  or  their  order,  shall  be  assignable  by  endorsement, 
in  like  manner,  and  with  the  like  eft'ect,  as  foreign  bills  of  exchange  now  are; 


524  BANK   OF  THE   UNITED   STATES. 

and  those  which  are  payable  to  bearer,  shall  be  assignable  and  negotiable  by 
delivery  only. 

14.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable;  and,  once  in  every  three 
years,  the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting, 
for  their  information,  an  exact  and  particular  statement  of  the  debts  which 
shall  have  remained  unpaid  after  the  expiration  of  the  original  credit,  for  a 
period  of  treble  the  term  of  that  credit,  and  of  the  surplus  of  profits,  if  any, 
after  deducting  losses  and  dividends.     If  there  shall  be  a  failure  in  the  pay- 
ment of  any  part  of  any  sum  subscribed  by  any  person,  copartnership,  or  body 
politic,  the  party  failing  shall  lose  the  benefit  of  any  dividend  which  may  have 
accrued  prior  to  the  time  for  making  such  payment,  and  during  the  delay  of 
the  same. 

15.  It  shall  be  lawful  for  the  directors  of  the  said  corporation  to  establish 
offices  wheresoever  they  shall  think  fit,  within  the  Unitecf  States,  or  the  terri- 
tories thereof,  for  the  purposes  of  discount,  deposite,and  distribution;  or  for  the 
purposes  of  deposite  and  distribution  only;  and  upon  the  same  terms,  and  in 
the  same  manner,  as  shall  be  practised  at  the  bank;  and  to  commit  the  ma- 
nagement of  the  said  offices,  and  the  business  thereof,  respectively,  to  such 
persons,  and  under  such  regulations,  as  they  shall  deem  proper,  not  being  con- 
trary to  law  or  to  the  constitution  of  the  bank.    Or,  instead  of  establishing 
such  offices,  it  shall  be  lawful  for  the  directors  of  the  said  corporation,  from 
time  to  time,  to  employ  any  other  bank  or  banks,  at  any  place  or   places  that 
they  may  deem  safe  and  proper,  to  manage  and  transact  tne  business  proposed 
as  aforesaid  to  be  managed  and  transacted  by  such  offices,  under  such  agree- 
ments, and  subject  to  such  regulations,  as  they  shall  deem  just  and  proper. 

16.  The  said  corporation,  all  offices  of  discount,  deposite,  and  distribution, 
and  of  deposite  ana  distribution  only,  which  shall  be  established  by  the  said 
directors  as  aforesaid,  and  all  banks  by  the  said  directors  employed  in  lieu  of 
such  offices  as  aforesaid,  shall  be  bound  to  receive  upon  deposite  the  treasury 
notes  of  the  United  States  which  have  been,  or  may  be,  hereafter  issued,  bv 
virtue  of  any  law  or  laws  of  the  United  States.     But  it  shall  be  optional  with 
the  said  corporation  to  pay  and  discharge  the  checks  or  drafts  of  the  persons 
making  such  deposite  in  treasury  notes,  for  the  amount  thereof,  either  in  gold 
or  silver  coin,  or  in  the  notes  of  the  bank,  or  in  treasury  notes.  And  all  banks 
by  the  said  directors  employed  as  aforesaid,  in  lieu  of  the  offices  aforesaid, 
shall  be  further  bound  to  receive  on  deposite,  and  to  circulate,  the  notes  of 
the  said  corporation,  on  the  same  terms,  and  in  the  same  manner,  as  the  notes 
of  the  said  banks,  respectively,  are  received  and  circulated;  and,  from  time  to 
time,  to  issue  and  exchange  for  the  said  notes  of  the  said  corporation,  other 
notes  of  the  said  corporation,  or  the  notes  of  the  said  banks,  respectively,  or 
treasury  notes,  at  the  option  of  the  persons  applying  for  such  issue  or  exchange. 

17.  The  said  corporation  shall,  at  all  times,  distribute  among  the  offices  of 
discount,  and  deposite,  and  distribution,  and  of  deposite  and  distribution  only, 
and  at  all  the  banks  employed  in  lieu  of  such  offices,  as  aforesaid,  a  sufficient 
sum,  in  the  various  denominations  of  the  notes  of  the  said  corporation,  and  in 
the  treasury  notes  which  it  may  receive  upon  deposite  from  the  Government, 
to  answer  the  demand  therefor,  and  to  establish  a  sufficient  circulating  me- 
dium throughout  the  United  States  and  the  territories  thereof. 

18.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United  States 
shall  be  furnished,  from  time  to  time,  as  often  as  he  may  require,  not  exceed- 
ing once  a  week,  with  statements  of  the  amount  of  the  capital  stock  of  the 
said  corporation,  and  of  the  debts  due  to  the  same;  of  the  moneys  deposited 
therein,  of  the  notes  in  circulation,  and  of  the  cash  in  hand;  and  shall  have  a 
tight  to  inspect  such  general  accounts  in  the  books  of  the  bank  as  shall  relate 
to  the  said  statement:  Provided,  That  this  shall  not  be  construed  to  imply  a 
right  of  inspecting  the  accounts  of  any  private  individual  or  individuals  with 
the  bank. 

SEC.  9.  ^nd  be  it  further  enacted,  That,  if  the  said  corporation,  or  any  person 
or  persons  for,  or  to  the  use  of  the  same,  shall  deal  or  trade  in  buying  or  sel- 


PROCEEDINGS  OF    1814.  525 

ling  any  goods,  wares,  merchandise,  or  commodities,  whatsoever,  contrary  to 
the  provisons  of  this  act,  all  and  every  person  and  persons  by  whom  any  order 
or  direction  for  so  dealing  or  trading  shall  have  been  given.,  and  all  and  every 
person  and  persons  who  shall  have  been  concerned  as  parties  or  agents  there- 
in, shall  forfeit  and  lose  treble  the  value  of  the  goods,  wares,  merchandises, 
and  commodities,  in  which  such  dealing  and  trade  shall  have  been;  one  half 
thereof  to  the  use  of  the  informer,  and  the  other  half  thereof  to  the  use  of  the 
United  States,  to  be  recovered  in  an  action  at  law  with  costs  of  suit. 

SEC.  10.  And  be  it  further  enacted,  That,  if  the  said  corporation  shall 
advance  or  lend  any  sum  of  money  tor  the  use  or  on  account  of  the  Govern- 
ment of  the  United  States,  to  an  amount  exceeding  three  hundred  thousand 
dollars;  or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand  dol- 
lars; or  of  any  foreign  Prince  or  State,  (unless  previously  authorized  thereto  by 
a  law  of  the  United  States)  all  and  every  person  and  persons,  by  and  with 
whose  order,  agreement,  consent,  approbation,  and  connivance,  such  unlawful 
advance  or  loan  shall  have  been  made,  upon  conviction  thereof,  shall  forfeit 
and  pay  for  every  such  offence  treble  the  value  or  amount  of  the  sum  or  sums 
whicn  shall  have  been  so  unlawfully  advanced  or  lent;  one  fifth  thereof  to  the 
use  of  the  informer,  and  the  residue  thereof  to  the  use  of  the  United  States,  to 
be  disposed  of  by  law,  and  not  otherwise. 

SEC.  11.  And  be  it  further  enacted,  That  the  capital  stock  of  the  said 
corporation,  its  dividends,  deposites,  and  profits,  its  bills  arid  notes,  and  ge- 
nerally, all  its  personal  property  and  estate,  whatsoever  and  wheresoever, 
shall  be  exempt  from  all  taxes  imposed,  as  well  by  the  authority  of  the  Unit- 
ed States,  as  by  the  authority  of  the  several  States:  Provided  always,  That  this 
exemption  shall  not  be  extended,  nor  be  deemed  to  extend,  to  the  real  estate 
of  the  said  corporation. 

SEC.  12.  And  be  it  further  enacted,  That  no  other  bank  shall  be  establish- 
ed by  any  future  law  of  the  United  States,  during  the  continuance  of  the 
corporation  hereby  created;  for  which  the  faith  of  the  United  States  is  hereby 
pledged,  provided  Congress  may  renew  existing  charters  for  banks  in  the  Dis- 
trict of  Columbia,  not  increasing  the  capital  thereof,  and  grant  charters  to 
such  banking  associations,  within  the  District  of  Columbia,  as  are  at  present 
in  operation,  and  which  have  already  applied  for  acts  of  incorporation.  And 
notwithstanding  the  expiration  of  the  term  for  which  the  said  corporation'^  cre- 
ated, it  shall  be  lawful  to  use  the  corporate  name,  style,  and  capacity,  for 
the  purpose  of  suits,  for  the  final  settlement  and  liquidation  of  the  affairs  and 
accounts  of  the  corporation,  and  for  the  sale  and  disposition  of  their  estate, 
real,  personal,  arid  mixed,  but  not  for  any  other  purpose,  or  in  any  other  man- 
ner whatsoever,  nor  for  a  period  exceeding  two  years,  after  the  expiration  of 
the  said  term  of  incorporation. 

SEC.  13.  And  be  it  further  enacted,  That  any  committee  specially  appointed 
by  Congress  for  the  purpose,  shall  have  a  right  to  examine  into  the  doings  of 
the  said  corporation,  and  shall  have  free  access  to  all  their  books  and  vaults, 
and  report  their  proceedings  to  Congress. 

SEC.  14.  And  be  it  further  enacted,  That,  during  the  continuance  of  this  act, 
and  whenever  required  by  the  Secretary  of  the  Treasury,  the  said  corporation 
shall  dp  and  perform  the  several  and  respective  duties  of  the  commissioners  of 
loans, for  the  several  States,  or  any  one  or  more  of  them,  at  the  times,  in  the 
manner,  and  upon  the  terms,  to  be  prescribed  by  the  Secretary  of  the  Treasury. 


526  BANK   OF   THE    UNITED    STATES. 

HOUSE  OF  REPRESENTATIVES. 

NOVEMBER  21,  1814. 

The  House  took  up  the  amendments  reported  by  the  committee  of  the 
whole. 

The  amendments  to  the  first  section  having  been  taken  up,  and  the  question 
being  about  to  be  put  generally;  on  motion  ot  Mr.  FORSYTH,  the  question  was 
divided,  and  first  put  on  agreeing  to  such  amendments  as  add  places  of  sub- 
scription, and  names  of  commissioners;  and,  with*  modifications,  that  class  of 
amendments  was  agreed  to. 

The  question  was  then  stated  on  agreeing  to  the  amendments  which  go  to 
change  the  times  and  mode  of  subscription,  viz:  to  make  the  number  of  shares 
500,000,  at  one  hundred  dollars,  instead  of  100,000,  at  five  hundred  dollars,* 
to  be  subscribed  and  paid  in  on  the  two  last  days  of  January  next,  and  the 
three  last  days  of  each  succeeding  month  in  the  year  1815. 

On  this  question,  Mr.  FORSYTH,  of  Georgia,  said  he  had  no  idea  of  renew- 
ing, at  this  time,  the  debate  on  this  subject,  having  already  expressed  his  sen- 
timents on  this  project.  He  wished  it  at  the  same  time  to  be  distinctly  un- 
derstood, that  he  was  not  prevented  from  so  doing  by  any  signs  of  impatience 
exhibited  in  the  House;  because,  he  should  never  be  deterred  from  doing  his 
duty  by)  any  emotion  which  might  be  thereby  excited.  But  he  thought  it 
fair  for  the  gentlemen,  who  advocated  the  amendments  made  by  the  commit- 
tee to  this  bill,  to  make  it  as  perfect  as  they  could;  and  reserved  the  right, 
when  the  bill  should  be  perfected,  to  make  such  remarks  as  the  subject  should 
appear  to  him  to  call  for.  As,  however,  the  House  had  not  expressed  their 
sense  directly  on  the  subject  of  the  change  of  the  principles  of  the  bill,  he 
should  call  for  the  yeas  and  nays  on  the  first  question  which  should  involve 
the  principle  of  the  main  amendment. 

The  amendments  to  the  first  section  were  then  agreed  to,  in  part;  and  the 
section  was  further  amended  on  suggestion  of  various  gentlemen. 

Mr.  BRIGHAM,  of  Massachusetts,  moved  to  strike  out  fifty,  (the  proposed 
amount  of  capital  stock)  and  insert  twenty-jive  in  lieu  thereof.  This  motion 
Mr.  B.  sustained  on  a  series  of  reasoning,  founded  on  the  impracticability  of 
filling  up  the  stock  of  so  large  an  institution,  by  means  of  a  species  of  paper 
already  so  greatly  depreciated  in  some  parts  of  the  country. 

Mr.  CALHOUN  replied  to  the  argument  of  Mr.  Brigham,  and  explained  the 
process  by  which  the  treasury  notes,  which  appeared  to  alarm  the  gentleman 
so  much,  would  be  absorbed. 

Mr.  LOWNDES,  of  South  Carolina,  explained  at  some  length,  and  with  much 
clearness,  the  objections  he  entertained  to  the  present  magnitude  of  the  capital 
of  the  bank,  founded  on  the  disproportion  of  the  paper  to  the  specie  to  be 
subscribed,  and  the  impracticability  of  the  circulation  and  absorption  of  so 
much  paper.  He  concluded  his  observations  by  intimating,  that,  if  the  gen- 
tleman from  Massachusetts  would  withdraw  his  motion,  he  (Mr.  L.)  would 
substitute  thirty  instead  of  tiventy-five,  as  the  amount  to  which  he  desired  the 
capital  of  the  bank  to  be  reduced. 

Mr.  BRIGHAM  declined  to  vary  his  motion;  but,  subsequently,  waived  it  un- 
til the  House  should  have  acted  on  all  the  amendments  proposed  to  the  bill. 

The  House  then  proceeded  to  the  amendments  of  the  second  section,  which 
embrace  the  principle  of  Mr.  Calhoun's  amendment. 

SEC.  2.  And  be  it  further  enacted,  That  it  shall  be  lawful  for  any  person,  co-part- 
nership, or  body  politic,  to  subscribe  for  so  many  shares  of  the  said  capital  stock  of 
the  said  bank,  as  he,  she,  or  they,  shall  think  fit,  and  the  sums  respectively  subscribed 
shall  be  payable  in  the  manner  following,  that  is  to  say:  ftix  millions  of  dollars  in  gold 
or  silver  coin  of  the  United  States,  or  in  gold  coin  of  Spain,  or  the  dominions  of  Spain, 
at  the  rate  of  one  hundred  cents  for  every  twenty-eight  grains,  and  sixty -hundredths 


PROCEEDINGS  OF    1814.  527 

of  a  grain  of  the  actual  weight  thereof,  or  in  other  foreign  gold  or  silver  coin,  at 
the  several  rates  prescribed  by  the  first  section  of  an  act  regulating  the  currency  of 
foreign  coins  in  the  United  States,  passed  tenth  day  of  April,  one  thousand  eight  hun- 
dred and  six;  and  forty -four  millions  of  dollars  thereof  in  such  gold  or  silver  coin,  as 
aforesaid,  or  in  treasury  notes,  now  authorized  or  to  be  authorized,  to  be  issued  in 
the  year  one  thousand  eight  hundred  and  fifteen . 

Mr.  FORSYTH  moved  to  amend  this  section,  by  adding;  the  following  clause 
to  the  end  thereof;  which  motion  would  restore  the  principle  embraced  by  the 
bill  as  first  reported,  viz: 

"  Or  in  the  public  debt  of  the  United  States,  contracted  by  virtue  of  the  act  of  Con- 
gress, entitled  '  An  act  authorizing  a  loan  for  a  sum  not  exceeding  eleven  millions  of 
dollars,'  passed  the  14th  day  of  March,  1812,  or  contracted  by  virtue  of  any  subse- 
quent act  or  acts  of  Congress  authorizing  a  loan  or  loans." 

This  question  was  decided,  without  debate,  by  yeas  and  nays,  as  follows: 

For  the  motion, 45, 

Against  it, 94. 

So  the  motion  was  negatived. 

A  motion  of  Mr.  GASTOX  was  more  successful,  being  agreed  to,  to  amend 
the  bill  by  striking  out  the  wsrds,  "six  millions  of  dollars,"  and,  in  lieu  there- 
of, insert  the  words,  "on  each  share  twelve  dollars;"  and  strike  out  u  forty- 
four  millions  of  dollars,''  and  insert  the  words  "eighty-eight;"  so  that  sub- 
scriptions shall  be  paid  in  the  proportion  of  twelve  dollars  in  specie,  and 
eighty-eight  in  treasury  notes,  on  each  share  of  one  hundred  dollars. 

Mr.  SHARP,  of  Kentucky,  moved  to  strike  out,  in  the  latter  part  of  this 
section,  the  words  "in  such  gold  or  silver  coin,  as  aforesaid,  or" — his  object 
being  to  require  treasury  notes,  only,  to  be  received  in  payment  of  the  eighty- 
eight  dollars  on  each  share  allowed  to  be  paid  in  that  way.  The  motion  was 
negatived — 75  to  58. 

Mr.  HAAVKINS,  of  Kentucky,  then  moved  to  add,  after  the  words  "now  au- 
thorized" in  the  latter  clause  of  the  above  section,  the  words  "to  be  issued;" 
his  object  being  to  allow  to  be  received  in  payment  on  the  bank  shares,  as 
well  those  treasury  notes  now  in  circulation,  or  already  authorized  to  be  put 
in  circulation,  as  those  hereafter  to  be  authorized,  &c.  The  motion  was  ne- 
gatived— ayes  26. 

The  question  on  the  amended  section  having  been  divided,  wras,  on  the  sug- 
gestion of  Mr.  KILBOURX,  of  Ohio,  first  taken  on  striking  out  so  much  of 
the  original  second  section  of  the  bill  as  limits  the  subscription  of  any  indi- 
vidual, or  body  politic,  (the  United  States  excepted)  to  one  thousand  shares. 

This  part  of  the  amended  section  having  been  agreed  to,  the  question  re- 
curred on  the  main  principle  of  the  section  as  amended. 

Mr.  GROSVENOR,  of  New  York,  requested  the  yeas  and  nays  on  the  ques- 
tion of  concurrence  with  the  committee  of  the  whole  in  agreeing  to  the 
amendment.  He  believed  the  plan  embraced  in  the  amendment  to  be  fanciful 
and  wholly  impracticable,  and  such  as  would,  in  its  failure,  prove  more  ruin- 
ous in  its  consequences  to  the  community,  than  could  be  well  anticipated; 
he,  therefore,  desired  to  record  his  vote  against  it. 

Mr.  FISK,  of  Vermont,  opposed  the  amendment,  and  conjured  gentlemen, 
on  the  same  side  with  himself,  to  oppose  this  amendment,  embracing  a  system 
which,  he  said,  he  was  confident  would  disappoint  the  hopes  of  its  projectors, 
and  prostrate  the  party  now  in  power.  If  the  House  should  determine  to  ex- 
clude the  holders  of  the  stock  of  the  United  States  from  any  participation  in 
the  subscription,  and  should  permit  the  bank  to  go  into  operation,  as  was  pro- 
posed, whenever  13,200,000  dollars  should  be  subscribed,  it  would  fall  wholly 
into  the  hands  of  the  opponents  of  the  present  administration,  who  would 
never  lend  the  United  States  a  cent  of  the  capital  of  the  bank,  but  employ  it, 
as  far  as  possible,  in  opposing  the  measures  of  the  Government.  The  very 
moment  the  subscription  is  opened,  Mr.  F.  said,  it  would  be  filled  by  those 


528  BANK  OF  THE  UNITED  STATES. 

who  have  modestly  told  you  that  they  alone  are  competent  to  carry  on  the 
operations  of  the  Government,  and  its  influence  be  employed  by  them  against 
the  measures  of  the  Government-  Rather  than  follow  such  an  ignis  fatuus  as 
this,  Mr.  F.  said,  he  would  take  his  hat,  make  his  bow,  and  retire  from  the 
House  at  once.  The  bill  did  not  contain  a  single  provision  to  oblige  a  man  to 
pay  in  his  subscription  in  treasury  notes.  The  bill,  he  said,  as  proposed  to 
be  amended,  would  completely  disappoint  its  projectors.  In  the  first  place, 
it  would  shut  out  our  friends,  all  the  subscribers  to  the  old  stock  who  have 
exhausted  their  funds;  and,  in  the  next  place,  the  only  subscribers  to  the  bank 
would  be  those  who  wish  us,  as  ,they  say,  to  retire  as  soon  as  possible,  and 
who  have  not  aided  us  very  much  in  the  prosecution  of  the  war.  They  are 
under  no  obligation,  by  this  bill,  to  loan  money  to  the  Government;  and  they 
would  not  do  it  until  better  times  and  better  men  being  in  the  Government 
(according  to  their  modest  opinion  of  themselves)  should  authorize  them  in 
doing  it.  Mr.  F.  said  he  was  for  taking  a  practical  course  in  whatever  he 
he  did,  and  therefore  he  would  never  agree  to  such  a  system  as  this. 

Mr.  CALHOUX  said,  in  reply  to  these  remarks,  that  it  was  a  sound  rule  in 
legislation,  not  to  act  with  a  view  to  benefit  one  or  another  party,  but  with 
a  view  to  promote  the  national  good.  If  a  bank  was  tx>  be  erected  to  prop  up 
this  or  that  party,  Mr.  C-  said,  it  should  not  receive  his  sanction.  In  moving 
the  amendment,  he  said,  he  had  not  been  governed  by  views  of  so  limited  a 
character.  He  had  regarded  the  nation  as  a  nation,  and  not  as  divided  into 
two  political  parties.  The  subscription  was  equally  open  to  both  parties;  and, 
although  the  moneyed  class  attached  to  the  ruling  party  might  be  exhaust- 
ed, the  farming  interest  was  not  in  so  miserable  a  situation.  Mr.  C.  was  not 
willing  to  recognise  the  correctness  of  the  picture  which  the  gentleman  had 
drawn  of  the  great  republican  party,  as  exhausted  and  moneyless.  Although 
there  was  great  capital  on  one  side,  so  there  was  on  the  other;  and  it  is  our 
boast  that  the  yeomanry,  the  substantial  part  of  our  population,  are  on  that 
side  of  the  question  to  which  we  belong.  The  very  amendments  proposed, 
and  now  objected  to,  present  the  opportunity  to  every  capitalist,  however  in- 
considerable, to  share  in  the  capital  of  the  bank,  &c.  and  to  disseminate  its 
benefits  all  over  the  country,  &c.  As  to  the  control  over  the  bank,  Mr.  C. 
contended  that  the  amendments,  retaining  the  power  over  deposites,  and  of 
making  the  bills  receivable  for  the  revenue,  or  otherwise,  gave  the  Government 
a  greater  control  than  it  before  possessed  over  the  operations  of  the  bank,  &c. 
Legislation,  on  party  principles,  he  said,  must  ever  react  on  the  party  pur- 
suing it;  he  would,  therefore,  not  resort  to  it.  No,  said  he,  rather  let  us  act 
on  national,  on  great  principles. 

Mr.  FISK  rejoined,  and  defended,  with  his  usual  point,  the  ground  he  had 
taken. 

Mr.  [NGHAM,  of  Pennsylvania,  took  occasion,  in  behalf  of  the  Committee 
of  Ways  and  Means,  to  disclaim  the  operation  of  any  party  feelings  in  recom- 
mending to  the  House  the  system  advocated  by  the  gentleman  from  Vermont; 
from  whom,  although  he  agreed  with  him  in  opposition  to  the  present  amend' 
ment,  he  differed  as  to  the  grounds  of  his  opposition. 

The  question  was  then  taken,  by  yeas  and  nays,  on  agreeing  to  the  second 
section  as  amended,  and  decided  in  the  affirmative,  as  follows: 

For  the  amendment, 87. 

Against  it, 52. 

NOVEMBER  22,  1814. 

The  House  resumed  the  consideration  of  the  remainder  of  the  amendments 
of  the  committee  of  the  whole. 

The  amendment  of  the  committee  of  the  whole,  to  strike  out  the  third  sec- 
tion of  the  original  bill,  (authorizing  the  Government  to  subscribe  twenty 
millions  to  the  capital  of  the  bank)  was  concurred  in. 


PROCEEDINGS  OF   1814,  529 

That  amendment  being  under  consideration  which  strikes  out  so  much  of 
the  original  bill  as  allows  to  the  Government  the  appointment  of  five  directors 
of  the  bank- 
It  was  opposed  by  Messrs.  ROBERTSON,  GHOLSON,  and  WRIGHT,  and  sup- 
ported by  Messrs.  CALHOUN,  GROSVENOR,  and  LEWIS. 

[The  advocates  of  this  amendment  contended  that  the  power  of  appoint- 
ment of  five  of  the  directors  of  ihe  bank  would  be  merely  nominal,  as  to  anv 
control  over  the  operations  of  the  institution,  which  control  would  be  much 
better  effected  by  the  power  of  the  Government  to  withhold  its  deposites,  &c. 
On  the  other  hand,  it  was  said  that  a  large  majority  of  the  directors  would 
probably  be,  in  future,  as  they  have  been  heretofore,  adverse  to  the  politics  of 
the  Government,  and,  unless  properly  guarded,  would  be  disposed  to  thwart 
its  operations,  and  favor  the  views  ot  its  opponents,  &c.  &c.  ] 

The  question  on  concurring  with  the  committee  of  the  whole  in  this  amend- 
ment to  the  bill,  was  decided  as  follows: 

For  the  amendment, 86. 

Against  it, - 64. 

The  House  proceeded  in  the  further  consideration  of  the  amendments  to 
the  bill. 

When  the  House  came  to  that  amendment  to  the  tenth  rule  for  the  go- 
vernment of  the  bank,  which  is  expressed  in  the  following  words:  "But  the 
said  corporation  may  sell  any  part  of  the  public  debt,  whereof  its  stock  shall 
be  composed:" 

A  motion  was  made,  by  Mr.  FORSYTH,  so  to  amend  this  amendment  as  to 
make  it  read  as  follows:  u  But  the  said  corporation  SHALL  NOT  sell  any  part 
of  the  public  debt,  whereof  its  stock  shall  be  composed,  DURING  THE  PRESENT 
WAR." 

After  a  debate  of  considerable  length  and  warmth,  the  question  on  the  mo- 
tion to  amend  the  amendment  was  decided  as  follows: 

For  the  motion, 64. 

Against  the  motion, 73. 

The  motion  of  Mr.  Forsyth  having  been  thus  rejected — 

The  amendment  reported  by  the  committee  of  the  whole,  as  first  above 
stated,  was  amended  by  adding  thereto  the  following,  on  motion  of  Mr.  RICH: 

"  Provided,  That,  during-  the  continuance  of  the  present  war,  the  said  corporation 
shall  not,  without  the  consent  of  Congress,  sell  or  dispose  of  their  public  debt  to  an 
amount  above  ten  millions  of  dollars." 

A  motion  was  made  by  Mr.  INGHAM,  of  Pennsylvania,  further  to  amend 
the  said  amendment,  by  adding  to  it  as  follows:  nor,  ctfter  the  ivur,  any  part 
thereof,  at  a  price  less  than  its  par  value." 

This  motion  was  negatived. 

The  amendment  of  the  committee  of  the  whole,  as  amended,  was  then 
agreed  to.  Other  amendments  were  then  considered  and  agreed  to. 

The  amendment  to  the  12th  rule  for  the.  government  of  the  bank,  is  to 
strike  out  the  following  clause: 

«'  But  the  said  corporation  shall  be  bound  to  lend  to  the  Government  of  the  United 
States  thirty  millions  of  dollars,  at  an  interest  not  exceeding-  six  per  centum  per  an- 
num, in  such  sums,  and  at  such  periods,  as.  consistently  with  the  objects  of  the  Go- 
vernment, may  be  made  mutually  convenient  to  the  Government  and  the  corporation, 
whenever  any  law  or  laws  shall  authorize  and  require  such  loan  or  loans." 

The  question  on  concurring  in  this  amendment,  was  decided  in  the  affirma- 
tive, as  follows: 
67 


530 


BANK  OF  THE  UNITED  STATES. 
Those  who  voted  in  the  affimative,  are. 


i.  Alston, 

Messrs.  Geddes, 

Messrs.  Potter, 

Avery, 

Grosvenor, 

John  Reed, 

Bard, 

Hale, 

Wm.  Reed, 

Barret, 

Hanson, 

Rea,  of  Penn. 

Baylies,  of  Mass, 

Hasbrouck, 

Rich, 

Bayly,  of  Va. 

Hurlburt, 

Robertson, 

Bigelow, 

Ingersoll, 

Ruggles, 

Boyd, 

Jackson,  of  R.  I. 

Sharp, 

Bradley, 

Kent,  of  N.  Y. 

Sheffey, 

Brigham, 

Kent,  of  Md. 

Shipherd, 

Burwell, 

Kerr, 

Smith,  of  N.  Y. 

Butler, 

King,  of  Mass. 

Smith,  of  Va. 

Caperton, 

Lawr 

Stanford, 

Caldwell, 

Lewis, 

Stockton, 

Calhoun, 

Lovett, 

Sturges, 

Champion, 

Lowndes, 

Tallmadge, 

Cilley, 

M'Kee, 

Taylor, 

Clarke,' 

M«Kim, 

Thompson, 

Crawford, 

M'Lean, 

Vose, 

Creighton, 

Miller, 

Ward,  of  Mass. 

Crouch, 

Moore, 

Ward,  of  N.  J. 

Culpeper, 

Moseley, 

Webster, 

Cuthbert, 

Markell, 

Wheaton, 

Davenport, 

Oakley, 

White, 

Davis,  of  Mass. 

Ormsby, 

Wilcox, 

Duval, 

Pearson, 

Wilson,  of  Mass. 

Ely, 

Pickering, 

Winter, 

Forney, 

Pitkin, 

Yancey  —  86. 

Gaston, 

Pleasants. 

Those  wfio  voted 

in  the  negative,  are, 

}.  Alexander, 

Messrs.  Franklin, 

Messrs.  Lyle, 

Anderson, 

Gholson, 

Mac  on, 

Barbour, 

Goodwyn, 

M'Coy, 

Bines, 

Gourdin, 

Nelson, 

Bowen, 

Griffin, 

Newton, 

Cannon, 

Hall, 

Parker, 

Chappell, 

Harris, 

Pickens, 

Clopton, 

Hawes, 

Piper, 

Comstock, 

Hopkins,  of  Ky, 

Rhea,  of  Tenn. 

Conard, 

Hubbard, 

Roane, 

Dana, 

Humphreys, 

Sage, 

Davis,  of  Penn. 

Hungerford, 

Sevier, 

Denoyelles, 

Ingham, 

Seybert, 

Desha. 

Irwin, 

Smith,  of  Penn. 

Earle, 

Johnson,  of  Va. 

Tannehill, 

Eppes, 

Kennedy, 

Telfair, 

Farrow, 

Kershaw, 

Udree, 

Findley, 

Kilbourn, 

Wilson,  of  Penn. 

Fisk,  of  N.  Y. 

Lefferts, 

Wright—  68. 

Forsyth, 

The  House  having  under  consideration  the  new  section  added  to  the  bill 
by  the  committee  of  the  whole,  giving  the  Congress  power,  at  any  time,  to 
appoint  a  special  committee  to  examine  into  the  state  of  the  bank, 

A  motion  was  made  by  Mr.  KILBOURN  to  amend  the  same  by  adding  there- 
to the  following: 

"And  if,  upon  full  investigation,  it  shall  appear  that  the  said  corporation  have  ex- 
ceeded their  powers,  or  violated  any  of  the  provisions  or  restrictions  of  this  act,  it 
shall  be  within  the  power  of  Congress  to  declare  their  charter  void." 


PROCEEDINGS   OF   1811  53J[ 

This  motion  was  negatived,  after  debate,  and  the  new  section  concurred  in. 

All  the  amendments  made  in  committee  of  the  whole  having  been  agreed 
to — 

On  motion  of  Mr,  PICKENS,  the  House  agreed  to  reconsider  the  disagreement 
to  Mi-.  SHARP'S  motion  to  amend  the  bill,  by  excluding  other  medium  but 
treasury  notes  being  received  in  payment  of  that  portion  of  the  subscription 
on  each  share,  which  is  proposed  to  be  paid  in  that  way. 

And  the  question  being  put  on  now  agreeing  to  this  amendment,  alter  de- 
bate, the  House  adjournecf. 

NOVEMBER  23, 

Mr.  IrviNG,  of  New  York,  presented  a  memorial  from  sundry  persons,  (on 
behalf  of  five  banks  in  the  city  of  New  York)  appointed  to  examine  into  the 
state  of  credit  in  that  city,  remonstrating  against  the  passage  of  the  bill  be- 
fore the  House  of  Representatives,  for  the  establishment  of  a  national  bank, 
which  they  see  with  alarm,  believing  this  to  be  the  ^yorst  possible  time  for  the 
creation  of  such  an  institution,  and  fearing  that  it  would  not  relieve,  but 
rather  augment,  the  present  embarrassment  of  public  and  private  credit. 
They  state,  also,  their  impression  that  treasury  notes,  at  their  present  inte- 
rest, fundable  at  a  higher  interest,  would  circulate  better,  and  be  less  liable  to 
depreciation,  than  the  notes  of  such  a  bank.  [These  objections  apply,  and 
are  directed  to  those  features  principally  of  the  bill  which  have  been  stricken 
out  by  the  House.]  The  memorial  was  read,  and  ordered  to  lie  on  the  table. 

The  House  resumed  the  consideration  of  the  bill  to  "  incorporate  the  sub- 
scribers to  the  Bank  of  the  United  States  of  America." 

The  question  depending  yesterday,  on  Mr.  SHARP'S  motion,  was,  after  fur- 
ther debate,  decided  in  the  anirmatiw. 

The  bill  having  been  further  amended— 

A  motion  was  made  by  Mr.  G ASTON  further  to  amend  the  bill  by  striking 
out  fifty  millions,  the  proposed  amount  of  the  capital  of  the  bank,  arid  in- 
serting twenty  in  lieu  thereof. 

This  motion  was  supported  by  Mr.  WEBSTER,  in  a  speech  of  considerable 
length;  which  he  had  not  concluded  when  the  House  anjourned. 

NOVEMBER  25,  1814. 

The  House,  on  motion  of  Mr-  CALHOUN,  resumed  the  consideration  of  the 
bill. 

The  question  being  on  Mr.  GASTON'S  motion  to  substitute  twenty  for  fifty 
millions  of  dollars,  as  the  amount  of  the  capital  of  the  bank. 

Mr.  WEBSTER  concluded  the  speech  which  he  commenced  on  Wednesday, 
in  opposition  to  the  bill  as  it  now  stands.  In  the  course  of  his  remarks,  to 
day,  lie  indicated,  generally,  his  v  iews  as  to  the  sort  ot  bank  which  ought  to 
be  established.  He  would  have  a  bank  of  a  limited  amount,  say  twenty  mil- 
lions of  capital;  he  would  make  it  indispensable  that  it  should  pay  specie,  by 
a  provision  that  all  notes  not  paid  in  specie,  when  properly  presented,  should 
thenceforth  bear  a  certain  interest;  and  by  inflicting  a  penalty  on  such  direc- 
tors as  should,  during  the  suspension  of  specie  payment,  consent  to  put  the  notes 
of  the  bank  in  circulation.  He  was  willing  the  Government  should,  if  others 
believed  it  necessary,  hold  some  stock  in  the  bank,  but,  at  the  extent,  not  to 
exceed  one  half  of  the  whole  amount;  the  remaining  half  to  be  paid  in  specie, 
or,  at  the  discretion  of  the  directors,  in  notes  of  existing  banks,  on  condition 
that  such  banks  should  agree  to  resume  their  specie  payments  within  a  given 
time;  and,  if  it  was  thought  desirable,  the  Government  might,  he  said,  retain 
the  right  to  subscribe,  hereafter,  an  additional  five  millions  to  the  capital  of 
the  bank.  This  was,  generally,  his  plan.  Upon  the  whole,  he  concluded  by 
Baying,  although  there  were  many  points  in  which  the  present  bill  was  pre- 


532  BANK  OF  THE  UNITED  STATES. 

ferable  to  the  bill  first  reported,  still,  with  its  present  amount  of  capital,  ancf 
the  great  proportion  of  stock  to  specie,  it  was  wholly  objectionable,  in  his 
mincl,  and  he  could  not  vote  for  it.  When  Mr.  W.  sat  down, 

Mr.  LOWNDES,  of  South  Carolina,  said,  if  he  conceived  any  advantage  to 
the  nation  could  result  from  permitting  this  discussion  to  progress,  he  should 
not  make  the  motion  he  was  about  to  offer.  But,  believing,  from  the  difference 
of  views  entertained  in  different  parts  of  the  House,  and  from  the  variety  of 
ulans  which  had  been  offered,  that  longer  discussion  would  merely  consume 
time  without  a  prospect  of  the  final  passage  of  the  bill;  and  believing,  also, 
that,  by  a  reference  to  a  select  committee,  a  concurrence  of  the  views  of  all 
parties  might  be  obtained  in  favor  of  one  plan,  he  moved  that  this  bill  be  re- 
ferred to  a  select  committee. 

Mr.  INGHAM,  of  Pennsylvania,  said  he  was  in  favor  of  the  recommitment 
of  the  bill,  because  he  believed  that,  in  its  present  form,  it  would  not  pass  the 
House,  but  that  a  bill  might  be  devised  that  would  meet  the  views  of  gentle- 
men on  all  sides  of  the  House.  It  was  possible,  at  least,  a  combination  of 
the  views  ot  different  gentlemen  might  be  effected,  which  might  produce  great 
good,  and  could  do  no  harm.  He  was,  therefore,  in  favor  of  the  recommit- 
ment, as  the  only  means  of  effecting  this  desirable  object. 

Mr.  FISK,  of  New  York,  said  he  merely  rose  to  add  his  wish  to  that  of  his 
friend  from  Pennsylvania.  It  was  as  certain  as  any  thing  yet  in  suspense 
could  be,  that  the  bill  would  not  pass  the  House  in  its  present  shape.  That 
it  might  be  kept  in  possession  of  the  House,  and  not  destroyed  without  an 
effort  to  preserve  it,  he  hoped  the  House  would  agree  to  refer  it  to  a  select 
committee  for  such  modification  as  might  appear  to  be  calculated  to  meet  the 
views  of  the  House.  The  opinions  of  gentlemen,  on  all  sides,  had  been  so 
fully  expressed,  that  the  committee,  being  in  possession  of  them,  would  be 
able  to  mould  the  bill  accordingly. 

Mr.  CALHOUN,  of  South  Carolina,  said  it  must  be  obvious, 'from  the  course 
of  the  debate,  if  it  were  not  from  the  nature  of  the  subject,,  that  a  great  di- 
versity of  sentiment  existed  on  this  head.  No  question  could  exhibit  a  greater 
division  of  sentiment,  confined  neither  to  party  or  locality.  As  he  was  ex- 
tremely anxious  that  the  bank  showl-d  be  established,  Mr,  C.  said  he  should 
be  averse  to  throwing  any  obstacle  in  the  way  of  the  practicability  of  the 
measure,  and  would  therefore  heartily  assent  to  the  motion  for  recommit- 
ment. 

The  question  was  then  taken  on  recommitment,  and  decided  in  the  affirma- 
tive without  a  division. 

And  Mr.  Lowndes,  Mr.  Fisk,.  of  New  York,  Miv  Calhoun,  Mr.  Ingham. 
Mr.  Forsyth,  Mr.  Oakley,  and  Mr.  Gaston,  were  appointed  the  said  com- 
mittee. 

NOVEMBER  28. 

Mr.  LOWNDES,  of  S.  C.  from  the  select  committee  to  whom  was  committed 
the  bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States  of 
America,  reported,  that  the  committee  had  had  said  bill  under  consideration, 
but  not  having  been  able  to  discover  any  means  of  uniting  the  conflicting  opin- 
ions on  the  subject,  had,  therefore,  directed  him  to  report  the  bill  without 
amendment.  Mr.  L.  also  laid  before  the  House  a  letter  obtained  from  the 
Secretary  of  the  Treasury,  by  the  committee,  on  the  subject  of  the  amend- 
ments made  to  the  bank  bill. 

[This  letter  was  read.  It  is  written  with  remarkable  frankness,  and  ex- 
presses a  decided  disapprobation  of  the  issue  of  treasury  notes,  proposed 
by  the  amendments  made  to  the  bill.  See  page  535.] 

A  motion  was  made,  by  Mr.  HANSON,  to  print  the  letter;  which  motion  being 
nbjected  to,  was  declared  not  to  be  in  order  at  this  time. 

The  House  proceeded  to  the  consideration  of  the  bilL 


PROCEEDINGS    OF    1814.  535 

The  question  depending  when  the  bill  was  referred  to  a  select  committee, 
now  recurred.  It  was  on  a  motion  of  Mr.  GASTON  to  strike  out  fifty  millions 
(the  proposed  capital  of  the  bank)  and  insert  twenty 

This  motion  was  immediately  decided,  without  debate,  by  the  following 
vote: 

For  the  motion,  54, 

Against  it,  -  85. 

Mr.  LOWNDES  then  moved  to  amend  the  bill  bv  striking  out  fifty  and  in- 
serting thirty  millions,  which  question  was  decided  without  debate  by  the  fol- 
lowing vote: 

For  the  motion,  76, 

Against  it,  -  67. 

So  the  House  determined  to  reduce  the  capital  of  the  bank  to  thirty  millions. 
Mr.  LOWNDES  then  suggested  several  amendments,  to  make  other  parts  of 
the  bill  correspond  with  the  amendment  just  made;  which  were  agreed  to. 

Mr.  EASTON  then  moved  an  amendment  to  the  bill,  and  spoke  some  time  in 
support  of  it,  the  object  of  which  was,  to  require  the  directors  of  the  bank,  at 
any  time  when  100,000  dollars  should  be  subscribed  and  paid  in,  or  held,  by 
citizens  of  Missouri  territory,  and  when  the  same  shall  be  required  by  three- 
fourths  of  such  stockholders,  to  establish  an  office  of  discount  and  dcposite  at 
St.  Louis,  in  the  Missouri  territory. 

This  motion  was  supported,  also,  in  a. cogent  manner, by  Mr.  M'KEE,  of 
Kentucky. 

It  was,  however,  negatived,  twenty-seven  only  rising  in  favor  of  it. 

Mr.  HANSON,  of  Maryland,  then  moved  to  strikeout  the  first  section  of  the 
bill;  which  he  supported  by  a  speech  of  considerable  length.  He  was  opposed 
to  the  bill  as  it  now  stood,  as  an  inefficient  and  impracticable  measure,  not 
suited  to  the  great  exigency  of  the  times. 

Mr.  CALHOUN,  of  S.  C.  followed  in  reply  to  some  points  of  Mr.  HANSON'S 
speech,  in  defence  of  the  bill. 

Mr.  GROSVENOR,  of  New  York,  next  took  the  floor,  and  made  an  animated 
speech  against  the  bill  as  it  now  stood.,  and  giving  the  preference  to  the  bill 
originally  reported  by  the  Committee  of  Ways  and  Means. 

When  Mr.  GROSVENOR  concluded — 

Mr.  JOHNSON,  of  Kentucky,  assigning  as  a  reason  therefor  his  anxiety  to 
expedite  the  public  business,  and  proceed  to  the  adoption  of  those  measures 
which  the  times  imperiously  demand,  required  the  previous  question. 

The  call  was  sanctioned  by  a  vote  of  73  to  71;  but  some  misapprehension  of 
the  question  having  taken  place,  a  second  count  took  place,  after  some  little 
confusion,  and  there  appeared  to  be  62  for  the  previous  question,  and  70 
against  it.  So  the  call  was  not  duly  sanctioned. 

After  a  few  remarks  from  Mr.  MACON  and  others,  as  to  the  effect  of  strik- 
ing out  the  first  section  of  the  bill,  which  some  appeared  to  think  would  have 
the  effect  to  destroy  the  bill, 

Mr.  HANSON,  to  save  difficulty  in  that  respect,  withdrew  his  motion  to  strike 
out  the  first  section  of  the  bill. 

Mr.  JOHNSON  then  renewed  his  demand  of  the  previous  question,  (which 
precludes  all  further  amendment  as  well  as  debate)  which  demand  was  se- 
conded by  a  vote  of  62  to  59. 

The  previous  question  was  then  put  in  the  following  form,  viz:  "  Shall  the 
main  question  be  now  put?"    And  decided  by  yeas  and  nays  as  follows  : 
For  the  previous  question,  75, 

Against  it,  67. 

The  requisite  number  having  required  the  main  question  to  be  put,  it  wa.s 
put  on  the  engrossing' the  bill  for  a  I  hint  reading-;  and  was  decided  as  tollo\\>: 


534 


BANK  OF  THE  UNITED   STATES. 


Those  who  voted 

in  the  affirmative,  are, 

Messrs.  Alexander, 

Messrs.  Earle, 

Messrs.  M'Lean, 

Alston, 

Findley, 

Montgomerv, 

Bines, 

Forney, 

Oakley, 

Bradley, 

Gaston, 

Pearson, 

Caldwell, 

Gourdin, 

Pickens, 

Calhoun, 

Griffin, 

Hea,  of  Penn. 

Cannon, 

Harris, 

Rich, 

Chappell, 

Hasbrouck, 

Robertson. 

Clark, 

Irving', 

Sevier, 

Condict, 

Kent,  of  Md. 

Sharp, 

Crawford, 

Kerr, 

Skinner, 

Creighton, 

Kershaw, 

Smith,  of  Vir. 

Crouch, 

Kilbourn, 

Taylor, 

Culpeper, 

King,  ofN.  C. 

Ward,  ofN.  J. 

Cuthbert, 

Lowndes, 

Winter, 

Duval, 

M'Kee, 

Yancey  —  49. 

Those  who  voted 

ill  the  negative,  are, 

Messrs.  Anderson, 

Messrs.  Goodwin, 

Messrs.  Pickering, 

Avery, 

Grosvenor, 

Piper, 

Barber, 

Hall, 

Pitkin, 

Bard, 

Hanson, 

Pleasants, 

Baylies,  of  Mass. 

Hawes, 

Potter, 

Bayly,  of  Va. 

Hopkins,  of  Ky. 

John  Reed, 

Bigelow, 

Hubbard, 

Wm.  Reed, 

Bowen, 

Hufty, 

Rhea,  of  Tenn. 

Boyd, 

Humphreys, 

Rhone, 

Bradbury, 

Hungerford, 

Ruggles, 

Brigham, 

Ingersoll, 

Sage, 

Brown, 

Ingham, 

Schureman, 

Burwell, 

Irwin, 

Sevbert, 

Cilley, 

Jackson,  of  R.  I. 

Sheffey,         

Clopton, 

Johnson,  of  Va. 

Shipherd, 

Comstock, 

Johnson,  of  Ky. 

Smith,  of  Penn. 

C  onnard, 

Kennedy, 

Stanford, 

Cooper, 

Kent,  ofN.  Y. 

Stockton, 

Cox, 

King,  of  Mass. 

Strong 

Dana, 

Law, 

Sturges, 

Davenport, 

Lefferts, 

Taggart, 

Davis,  of  Mass. 

Lewis, 

Tanneliill, 

Davis,  of  Penn. 

Lovett, 

Telfair, 

Denoyelles, 

Lyle, 

Thompson, 

Desha, 

Macon, 

Udree, 

Ely, 

M'Coy, 

Vose, 

Eppes, 

M'Kim, 

Ward,  oi  Mass, 

Evans, 

Miller, 

Webster, 

Farrow, 

Moore, 

Wheaton, 

Fisk,  of  Vt. 

Moseley, 

White, 

Fisk,  of  N.  Y. 

Murfree, 

Wilcox, 

Forsyth, 

Markell, 

Williams, 

Franklin, 

Nelson, 

Wilson,  of  Mass. 

Geddes, 

Newton, 

Wilson,  of  Pa.—  104. 

Gholson, 

Parker, 

So  the  House  decided  that  the  bill  should  not  be  read  a  third  time — in  other 
words,  that  it  should  be  rejected. 

Mr.  FORSYTH,  of  Geo.  then  rose,  and  said  he  had  voted  in  the  majority 
against  the  bill;  and  was,  therefore,  at  liberty  to  move  a  reconsideration  of 
the  vote  just  taken.  This  motion  he  did  make,  with  a  view  to  retain  the  bill 
still  in  possession  of  the  House,  in  order  to  recommit  it:  that  the  House  might 


PROCEEDINGS    OF    1814.  535 

not  be  deprived  of  an  opportunity  of  passing  a  bank  bill  during  the  present 
session. 

This  motion  gave  rise  to  considerable  sensation  in  the  House,  as,  indeed,  had 
all  the  proceedings  of  this  day. 

The  motion  was  opposed  by  Mr.  MILLER,  of  N.  Y.  and  Mr.  FISK,  of  Vt.  and 
advocated  by  Mr.  FISK,  of  N.  Y.  and  Mr.  FARROW,  of  S.  C.  &c.  &c. 

At  length,  Mr.  FORSYTH  withdrew  his  motion  for  the  present,  intimating 
that  he  might  renew  it  to-morrow. 

Mr.  CALHOUN  moved  to  print  the  Secretary  of  the  Treasury's  letter,  read 
this  morning;  when  the  House  adjourned. 

NOVEMBER  29,  1814. 

Ordered,  That  the  letter  of  the  Secretary  of  the  Treasury,  laid  before  the 
House  yesterday,  by  the  chairman  of  the  committee,  to  which  was  committed 
the  bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States,  be 
referred  to  the  Committee  of  Ways  and  Means. 

The  letter  of  the  Chairman,  and  the  Secretary's  reply,  are  here  inserted. 

WASHINGTON,  November  27 ,  1814. 
SIR: 

The  committee  of  the  House  of  Representatives,  to  which  the  bank  bill 
was  recommitted,  on  Friday  last,  have  directed  me  to  request  you  to  commu- 
nicate your  opinion  in  relation  to  the  effect  which  a  considerable  issue  of  trea- 
sury notes  (to  which  should  be  attached  the  quality  of  being  receivable  in  sub- 
scriptions to  the  bank)  might  have  upon  the  credit  of  the  Government,  and 
particularly  upon  the  prospects  of  a  loan  for  1815. 

As  the  bill,  as  it  was  referred  to  the  committee,  provides  for  the  subscrip- 
tion of  forty-four  millions  of  treasury  notes,  to  form,  with  six  millions  of  spe- 
cie, the  capital  of  the  bank,  any  information  which  you  may  think  proper  to 
give,  either  in  relation  to  the  practicability  of  getting  them  into  circulation 
without  depreciation,  or  in  regard  to  their  operation  on  any  part  of  our  fiscal 
system  afterwards,  vyill  be  very  acceptable. 

I  am,  sir,  very  respectfully,  your  obedient  servant, 

WM.  LOWNDES. 
To  the  Hon.  the.  Secretary  nf  the  Treasury. 


TREASURY  DEPARTMENT,  November  27 ',  1814. 
SIR: 

I  have  the  honor  to  acknowledge  the  receipt  of  your  letter,  requesting, 
for  a  committee  of  the  House  of  Representatives,  an  opinion  upon  the  follow- 
ing inquiries: 

1.  The  effect  which  a  considerable  issue  of  treasury  notes,  with  the  quality 
of  being  receivable  in  subscriptions  to  a  national  bank,  will  have  upon  the 
credit  of  the  Government;  and  particularly  upon  the  prospects  of  a  loan  for 
1815?  , 

2.  The  practicability  of  getting  forty-four  millions  of  treasury  notes  (form- 
ing, with  six  millions  of  specie,  the  capital  for  a  national  bank)  into  circula- 
tion, without  depreciation:1 

The  inquiries  of  the  committee  cannot  be  satisfactorily  answered,  in  the  ab- 
stract; but  must  be  considered  in  connexion  with  the  state  of  our  finances 
and  the  state  of  the  public  credit. 

When  I  arrived  at  Washington,  the  treasury  was  suffering  under  every 
kind  of  embarrassment.  The  demands  upon  it  were  great  in  amount,  while 
the  means  to  satisfy  them  were  comparatively  small;  precarious  in  the  collec- 
tion, and  difficult  in  the  application.  The  demands  consisted  of  dividends 
upon  old  and  new  funded  debt,  of  treasury  notes,  and  of  legislative  appropri- 
ations for  the  army,  the  navy,  and  the  current  service;  all  urgent  and  impor- 


536  BANK   OF  THE   UNITED    STATES. 

lant-  The  means  consisted,  first,  Of  the  the  fragment  of  an  authority  to  bor- 
row money,  when  nobody  was  disposed  to  lend,  and  to  issue  treasury  notes 
which  none  but  necessitous  creditors,  or  contractors  in  distress,  or  commissa- 
ries, quartermasters,  and  navy;  agents,  acting,  as  it  were,  officially,  seemed 
willing  to  accept.  Second,  Of  the  amount  of  bank  credits  scattered  through- 
out the  United  States,  and  principally  in  the  Southern  and  Western  banks, 
which  had  been  rendered  in  a  great  degree  useless,  by  the  stoppage  of  payments 
in  specie,  and  the  consequent  impracticability  of  transferring  the  public  funds 
from  one  place,  to  meet  the  public  engagements  in  another  place.  And  third. 
Of  the  current  supply  of  money  from  the  imposts,  from  internal  duties,  ana 
from  the  sales  of  public  land,  which  ceased  to  be  a  foundation  of  any  rational 
estimate,  or  reserve,  to  provide  even  for  the  dividends  on  the  funded  debt, 
when  it  was  found  that  the  treasury  notes  (only  requiring,  indeed,  a  cash  pay- 
ment at  the  distance  of  a  year)  to  whomsoever  they  were  issued  at  the  trea- 
sury, and  almost  as  soon  as  they  were  issued,  reached  the  hands  of  the  col- 
lectors, in  payments  of  debts,  duties,  and  taxes;  thus  disappointing  and  de- 
feating the  only  remaining  expectation  of  productive  revenue. 

Under  these  circumstances  (which  I  had  the  honor  to  communicate  to  the 
Committee  of  Ways  and  Means)  it  became  the  duty  of  this  department  to 
endeavor  to  remove  the  immediate  pressure  from  the  treasury  $  to  endeavor  to 
restore  the  public  credit;  and  to  endeavor  to  provide  for  the  expenses  of  the 
ensuing  year.  The  only  measures  that  occurred  to  my  mind,  for  the  accom- 
plishment of  such  important  objects,  have  been  presented  to  the  view  of  Con- 
gress. The  act  authorizing  the  receipt  of  treasury  notes,  in  payment  of  sub- 
scriptions to  a  public  loan,  was  passed,  I  fear,  too  late  to  answer  the  purpose 
for  which  it  was  designed.  It  promises,  at  this  time,  little  relief,  either  as  an 
instrument  to  raise  money,  or  to  absorb  the  claims  for  treasury  notes,  which 
are  daily  becoming  due.  From  this  cause,  and  from  other  obvious  causes,  the 
dividend  on  the  funded  debt  has  not  been  punctually  paid;  a  large  amount  of 
treasury  notes  has  already  been  dishonored;  and  the  hope  of  preventing  fur- 
ther injury  and  reproach,  in  transacting  the  business  of  the  treasury,  is  too 
visionary  to  afford  a  moment's  consolation. 

The  actual  condition  of  the  treasury,  thus  described,  will  serve  to  indicate 
the  state  of  the  public  credit.  Public  credit  depends  essentially  upon  public 
opinion.  The  usual  test  of  public  credit  is,  indeed,  the  value  of  the  public 
debt.  The  faculty  of  borrowing  money  is  not  a  test  of  public  credit:  for  a 
faithless  Government,  like  a  desperate  individual,  has  only  to  increase  the 
premium,  according  to  the  exigency,  in  order  to  secure  a  loan.  Thus  public 
opinion,  manifested  in  every  form,  and  in  every  direction,  hardly  permits  us, 
at  the  present  juncture,  to  speak  of  the  existence  of  public  credit;  and  yet,  it 
is  not  impossible  that  the  Government,  in  the  resources  of  its  patronage  and 
its  pledges,  might  find  the  means  of  tempting  the  rich  and  the  avaricious  to 
supply  its  immediate  wants.  But,  when  the  wants  of  to-day  are  supplied, 
what  is  the  new  expedient  that  shall  supply  the  wants  of  to-morrow?  If  it  is 
now  a  charter  of  incorporation,  it  may  then  be  a  grant  of  land;  but,  after  all, 
the  immeasurable  tracts  of  the  western  wild  would  be  exhausted  in  successive 
efforts  to  obtain  pecuniary  aids,  and  still  leave  the  Government  necessitous, 
unless  the  foundations  of  public  credit  were  re-established  and  maintained. 
In  the  measures,  therefore,  which  it  has  been  my  duty  to  suggest,  1  have  en- 
deavored to  introduce  a  permanent  plan  for  reviving  the  public  credit;  of 
which  the  facility  of  borrowingmoney  in  anticipation  ot  settled  and  productive 
revenues,  is  only  an  incident,  although  it  is  an  incident  as  durable  as  the  plan 
itself.  The  outline  seemed  to  embrace  whatever  was  requisite;  to  leave  no 
doubt  upon  the  power  and  the  disposition  of  the  Government,  in  relation  to 
its  pecuniary  engagements;  to  dimmish,  arid  not  to  augment,  the  amount  of 
the  public  debt  in  the  hands  of  individuals;  and  to  create  general  confidence, 
rather  by  the  manner  of  treating  the  claims  of  the  present  class  of  creditors, 
than  by  the  manner  of  conciliating  the  favor  of  a  new  class. 

With  these  explanatory  remarks,  sir,  I  proceed  to  answer,  specifically,  the 
questions  which  you  have  proposed. 


PROCEEDINGS  OF   1814.  537 

1.  I  am  of  opinion  that  a  considerable  issue  of  treasury  notes,  with  the 
quality  of  being  receivable  in  subscriptions  to  a  national  bank,  will  have  an 
injurious  effect  upon  the  credit  of  the  Government,  and  also  upon  the  prospects 
of  a  loan  for  1815. 

Because  it  will  confer,  gratuitously,  an  advantage  upon  a  class  of  nevy  cre- 
ditors, over  the  present  creditors  of  the  Government,  standing  on  a  footing  of 
at  least  equal  merit. 

Because  it  will  excite  general  dissatisfaction  among  the  present  holders  of 
the  public  debt;  and  general  distrust  among  the  capitalists,  who  are  accus- 
tomed to  advance  their  money  to  the  Government. 

Because  a  quality  of  subscribing  to  the  national  bank,  attached  to  treasury 
notes  exclusively,  will  tend  to  depreciate  the  value  of  all  public  debt,  not 
possessing  that  quality;  and  whatever  depreciates  the  value  of  the  public  debt 
in  this  way,  must  necessarily  impair  the  public  credit. 

Because  the  specie  capital  of  the  citizens  of  the  United  States,  so  far  as  it 
may  be  deemed  applicable  to  investments  in  the  public  stocks, has  already,  in 
a  great  measure,  been  so  vested;  the  holders  of  the  present  debt  will  be  una- 
ble to  become  subscribers  to  the  bank  (if  that  object  should,  eventually,prove 
desirable)  without  selling  their  stock  at  a  depreciated  rate,  in  order  to  procure 
the  whole  amount  of  their  subscriptions  in  treasury  notes;  and  a  general  de- 
pression in  the  value  of  the  public  debt  will  inevitably  ensue. 

Because  the  very  proposition  of  making  a  considerable  issue  of  treasury 
notes,  even  with  the  quality  of  being  subscribed  to  a  national  bank,  can  only 
be  regarded  as  an  experiment,  on  which  it  seems  dangerous  to  rely.  The 
treasury  notes  must  be  purchased.,  at  par,  with  money;  a  new  set  of  creditors 
are  to  be  created;  it  may,  or  it  may  not,  be  deemed  an  object  of  speculation 
by  the  money  holders  to  subscribe  to  the  bank;  the  result  of  the  experiment 
cannot  be  ascertained,  until  it  will  be  too  late  to  provide  a  remedy  in  the  case 
of  failure;  while  the  credit  of  the  Government  will  be  affected  by  every  cir- 
cumstance which  keeps  the  efficacy  of  its  fiscal  operations  in  suspense  or 
doubt. 

Because  the  prospect  of  a  loan  for  the  year  1815,  without  the  aid  of  a  bank, 
is  faint  and  unpromising;  except,  perhaps,  so  far  as  the  pledge  of  a  specific  tax 
may  succeed;  and  then,  it  must  be  recollected  that  a  considerable  supply  of 
money  will  be  required  for  the  prosecution  of  the  war,  beyond  the  whole 
amount  of  the  taxes  to  be  levied. 

Because,  if  the  loan  for  the  year  1815  be  made  to  depend  upon  the  issue  of 
treasury  notes,  subscribable  to  the  national  bank,  it  will  probably  fail,  for  the 
reasons  which  have  already  been  suggested;  and,  if  the  loan  be  independent  of 
that  operation,  a  considerable  issue  of  treasury  notes,  for  the  purpose  of  creat- 
ing a  bank  capital,  must?  it  is  believed,  deprive  the  Government  of  every 
chance  of  raising  money  in  any  other  manner. 

2.  I  am  of  opinion   that  it  will  be  extremely  difficult,  if  not  impracticable, 
to  get  forty-four  millions  of  treasury  notes  (forming,  with  six  millions  of  spe- 
cie, the  capital  of  a  national  bank)  into  circulation,  with  or  without  depre- 
ciation. 

Because,  if  the  subscription  to  the  bank  becomes  an  object  of  speculation, 
the  treasury  notes  will  probably  be  purchased  at  the  treasury  and  at  the  loan 
offices, and  never  pass  into  circulation  at  all. 

Because,  whatever  portion  of  the  treasury  notes  might  pass  into  circulation, 
would  be  speedily  withdrawn,  by  the  speculators,  in  the  subscription  to  the 
bank,  after  arts  had  been  employed  to  depreciate  their  value. 

Because  it  is  not  believed  that,  in  the  present  state  of  the  public  credit, 
forty-four  millions  of  treasury  notes  can  be  sent  into  circulation.  The  only 
difference  between  the  treasury  notes  now  issued  and  dishonored  and  those 
proposed  to  be  issued,  consists  in  the  subscribable  quality;  but  reasons  have 
been  already  assigned  for  an  opinion,  that  this  difference  does  not  afford  such 
confidence  in  the  experiment,  as  seems  requisite  to  justify  a  reliance  upon  it, 
for  accomplishing  some  of  the  most  interesting  objects  of  the.Government. 

I  must  beg  you,  sir.  (0  pardon  the  haste  with  which  I  have  written  these 
68 


538  BANK  OF  THE  UNITED  STATES'. 

general  answers  to  your  inquiries.  But,  knowing  the  importance  of  time? 
and  feeling  a  desire  to  avoid  every  appearance  of  contributing  to  the  loss  of  a 
moment,  I  have  chosen  rather  to  rest  upon  the  intelligence  and  candor  of  the 
committee,  than  to  enter  upon  a  more  labored  investigation  of  the  subject  re- 
ferred to  me. 

I  have  the  honor  to  be,  very  respectfully,  sir,  your  moat  obedient  servant, 

A.  J.  DALLAS. 

WILLIAM  LOWNDES,  Esquire. 

NOVEMBER  29,  1814. 

Mr.  KiLBouRNy  of  Ohio,  said  he  had  ever  considered  it  to  be  the  interest 
of  the  United  States  that  a  national  bank  should  be  established,  for  the  con  - 
venient  management  of  its  finances.  It  was  with  satisfaction  he  found  that  to 
be  the  opinion  of  a  great  majority  of  the  House,  by  the  vote  some  time  agor 
on  the  proposition  that  it  was  expedient  to  establish  a  national  bank.  The 
project  before  the  House  having  been  rejected,  he  held  in  his  hand  a  resolu- 
tion embracing  a  sketch  of  a  plan,  which,  if  approved,  might  be  put  into  the 
shape  of  a  bill.  Mr.  K.  then  offered  his  resolution  for  consideration. 

[The  resolution  embraced  the  same  plan,  with  a  few  variations,  as  that  con- 
tained in  the  bill  which  was  yesterday  rejected  by  the  House.] 

This  motion  the  SPEAKER  pronounced  to  be  out  of  order,  as  in  substance 
and  matter  the  same  as  that  already  rejected  by  the  House,  and  which,  there- 
fore, could  not  now  be  resumed,  unless  by  a  vote  of  reconsideration  to-day. 

Mr.  KILBOURN  remarked,  that  he  had  not  understood  that  his  motion  would 
be  considered  by  the  chair  out  of  order,  or  he  would  not  have  proposed  it, 
He  the  more  readily  withdrew  it,  because  he  understood  that  it  was  yet  in- 
tended to  move  a  reconsideration  of  the  vote  of  yesterday. 

[No  reconsideration  was  moved  to-day  of  the  national  bank  bill,  which  was, 
therefore,  finally  rejected  in  the  House,  but  revived  in  the  Senate.] 

Mr.  KILBOURN'S  motion  was  as  follows: 

Resolved,  That  the  Committee  of  Ways  and  Means  be  instructed  to  pre- 
pare, in  due  form,  and  report  to  this  House,  a  bill  to  establish  a  national  bank, 
of  which  the  following  shall  be  the  principal  or  prominent  features,  viz:  It 
shall  be  called  the  National  Bank  of  the  United  States.  It  shall  be  seated  in 
the  city  of  Philadelphia,  but  may  have  branches  throughout  the  Union.  The 
capital  stock  thereof  shall  be  fifty  millions  of  dollars,  divided  into  five  hun- 
dred thousand  shares,  of  one  hundred  dollars  each.  Thirty  millions  of  the 
capital  may  be  subscribed  bv  individuals,  companies,  and  corporations;  and 
twenty  millions  thereof  shall  be  subscribed  by  the  Secretary  of  the  Treasury, 
on  behalf  of  the  United  States-  The  thirty  millions,  subscribed  by  individu- 
als, companies,  and  corporations,  shall  be  paid  at  proper  periods,  as  follows, 
vix:  Six  millions  in  specie,  eighteen  millions  in  stock  created  since  the  year 
1811,  and  six  millions  in  treasury  notes  issued  since  the  commencement  of  the 
war;  that  is  to  say:  on  each  share  twenty  dollars  in  specie,  sixty  dollars  in 
stock,  and  twenty  dollars  in  treasury  notes.  The  twenty  millions  subscribed 
for  the  United  States,  shall  be  paid  in  treasury  notes,  hereafter  to  be  issued, 
or  in  stock  of  the  United  States,  to  be  hereafter  created.  For  the  manage- 
ment of  the  bank,  there  shall  be  fifteen  directors,  nine  of  whom  shall  be  elect- 
ed by  the  individual  stockholders,  and  six  shall  be  nominated  by  the  Secre- 
tary of  the  Treasury,  and  appointed  by  the  President  of  the  United  States. 
The  board  of  directors  shall  appoint  the  president,  and  all  other  officers  and 
servants  of  the  principal  bank,  and  of  the  branches.  The  charter  to  continue 
twenty  years;  and  no  other  bank  charters  to  be  granted  by  Congress  during 
that  time,  except  to  the  banking  associations  now  formed  within  the  District 
of  Columbia.  Subscriptions  to  be  opened  in  one  or  more  places  in  every  State 


PROCEEDINGS  OF    1814.  539 

\\u\  Territory,  and  in  the  District  of  Columbia,  under  the  care  of  proper  su- 
perintendents*. The  bank  shall  go  into  operation  so  soon  as  $1,200,000  [as 
intended  twelve  millions  of  dollars]  in  due  proportion  of  specie,  stock  and 
treasury  notes,  is  paid  in  upon  the  subscriptions.  The  bank  shall  be  autho- 
rized to  receive,  upon  .all  loans  it  shall  make,  an  interest  at  the  rate  of  five 
per  cent,  per  annum,  and  no  more.  When  the  subscriptions  shall  be  filled  to 
the  amount  of  fifty  millions,  and  the  same  be  paid  in,  the  bank  may  be  requir- 
ed to  loan  to  the  Government  $25,000,000,  and,  at  any;  time  prior  to  the  com- 
pleting of  that  amount  of  subscription,  it  may  be  required  to  loan  to  Govern 
tnent  in  that  proportion,  to  the  amount  actually  subscribed  and  paid  in.  It 
shall  be  the  right  and  duty  of  the  Secretary  of  the  Treasury  to  inspect  all  the 
books  of  business  of  the  bank,  and  Congress  may  appoint  committees  for  that 
purpose.  And  the  President  of  the  United  States  shall  be  empowered,  in  cer- 
tain cases,  and  during  certain  limited  periods,  to  authorize  or  direct  the  sus- 
pension of  specie  payments  at  the  bank,  or  to  substitute  therefor,  certain 
treasury  notes;  which  suspension,  or  substitution,  with  the  causes  thereof,  he 
shall  make  public  by  proclamation;  and  the  same  in  like  manner  to  recall  and 
revoke,  when  the  cause  or  causes  shall  cease  to  operate;  or,  in  case  of  their 
continuance,  to  lay  the  same  before  Congress  at  the  next  session  thereafter, 
that  they  may  take  such  measures  thereon  as  shall  appear  to  them  expedient. 

Had  the  foregoing  been  received  and  adopted  by  the  House,  he  intended  to 
have  added  the  following  proposition,  viz:  Congress  shall  have  power,  when 
they  shall  deem  it  expedient,  to  extend  the  capital  of  the  bank  to  $60,000,000. 
by  authorizing  a  further  subscription,  on  the  part  of  the  United  States,  of 
$10,000,000,  payable  in  six  per  cent,  stock  of  the  United  States;  and  in  such 
case,  there  shall  be  appointed,  as  above,  on  behalf  of  the  Government,  three 
additional  directors  in  the  board. 


i3TH    CoNORZSg,? 

3d  Session.       $ 


SEPTEMBER  30,  1814. 

Mr.  GERMAN  presented  the  petition  of  David  M.  Clarkson,  and  others, 
itizens  of  New  York,  praying  the  establishme 
sons  therein  stated;  and  the  petition  was  read. 


OCTOBER  31,  1814. 
On  motion  by  Mr.  SMITH, 

Resolved,  That  the  petition  of  David  M.  Clarkson,  and  others,  citizens  of 
New  York,  praying  the  establishment  of  a  national  bank,  presented  the  30th 
ultimo,  be  referred  to  a  select  committee,  to  consist  of  five  members,  to  con- 
sider and  report  thereon  by  bill  or  otherwise. 

Ordered,  That  Messrs.  King,  Smith,  Taylor,  Bibb,  and  Mason,  be  the  com- 
mittee. 

On  the  2d  December,  Mr.  King,  from  the  said  committee,  reported  a  bill  to 
incorporate  the  subscribers  to  the  Bank  of  the  United  States  of  America;  which 
then  had  its  first  reading. 

A  bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States  of  America. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  a  Bank  of  the  United  States 
of  America  shall  he  established,  the  capital  stock  of  which  shall  be  fifty  mil- 
lions of  dollars,  and  no  more,  divided  into  one  hundred  thousand  shares,  of 
five  hundred  dollars  each  share,  and  that  subscriptions  for  forty  millions  of 
dollars,  towards  constituting  the  said  capital  stock,  shall  be  opened  on  the 


540  BANK  OF  THE  UNITED  STATES. 

Monday  of next,  at  the  following  places,  viz:  Boston,  New 

York,  Philadelphia,  Baltimore,  Richmond,  Charleston,  and  Pittsburg, 
under  the  superintendence  of  the  following  persons,  as  commissioners  to  re- 
ceive the  same:  at  Boston,  James  Lloyd,  Thomas  Perkins,  and  William 

Gray;  at  New  York,  — ;  at  Philadelphia,  Jared  Ingersoll,  Thomas  M. 

Willing,  Stephen  Girard,  Chandler  Price,  Anthony  Taylor 5  at  Baltimore, 
James  A,  Buchanan,  Henry  Payson,  William  Wilson;  at  Richmond,  Benja- 
min Hatcher,  John  Brockenborough,  William  Preston,*  at  Charleston,  John 
C.  Faber*  John  Potter,  James  Carson;  at  Pittsburg,  George  Robinson,  Samuel 
Robert,  and  Henry  Baldwin:  which  subscriptions  shall  continue  open  every 
day,  from  the  time  of  opening  the  same,  from  ten  o'clock,  in  the  forenoon,  un- 
til four  o'clock,  in  the  afternoon,  until  the  Saturday  following,. at  four  o'clock, 
in  the  afternoon,  when  the  same  shall  be  closed;  and,  immediately  thereafter, 
the  commissioners,  or  any  two  of  them,  at  the  respective  places  aforesaid, 
shall  cause  two  transcripts,  or  fair  copies  of  such  subscriptions,  to  be  made* 
one  of  which  they  shall  send  to  the  Secretary  of  the  Treasury,  one  they  shall 
retain,  and  the  original  shall,  within  three  days  from  the  closing  of  the  same,, 
be,  by  the  said  commissioners,  transmitted  to  the  said  commissioners  at  Phi- 
ladelphia, or  to  one  of  them;  and,  on  the  receipt  thereof,  the  said  commis- 
sioners at  Philadelphia,  or  any  three  of  them,  shall,  immediately  thereafter, 
convene,  and  proceed  to  take  an  account  of  the  said  subscriptions;  and  if  more 
than  the  amount  of  forty  millions  of  dollars  shall  have  been  subscribed,  then 
the  said  last  mentioned  commissioners  shall  apportion  the  same  among  the 
several  subscribers,  ^according  to  their  several  and  respective  subscriptions: 
Provided^  however ',  That  such  commissioners  shall,  by  such  apportionment, 
allow  and  apportion  to  each  subscriber,  at  least,  one  share;  ami,  in  case  the 
aggregate  amount  of  the  said  subscriptions  shall  exceed  forty  millions  of  dol- 
lars, the  said  commissioners,  after  having  apportioned  the  same,  as  aforesaid, 
shall  cause  lists  of  the  said  apportioned  subscriptions  to  be  made  out,  includ- 
ing, in  each  list,  the  apportioned  subscription  for  the  place  where  the  original 
subscription  was  made,  one  of  which  lists  shall  be  transmitted  to  the  commis- 
sioners, or  to  one  of  the  commissioners,  under  whose  superintendence  such 
subscriptions  were  originally  made,  that  the  subscribers  may  ascertain  from 
them  the  number  of  shares  apportioned  to  such  subscribers,  respectively;  and 
if  the  amount  of  forty  millions  of  dollars  shall  not  be  subscribed,  during  the 
period  aforesaid,  at  all  the  places  aforesaid,  the  subscription,  to  complete  the 
said  sum,  shall  afterwards  be,  and  remain  open  at  Philadelphia,  under  the 
superintendence  of  the  said  commissioners  appointed  at  that  place,  and  the 
subscription  may  be  then  made  by  any  corporation,  copartnership,  or  person, 
for  any  number  of  shares  not  exceeding  the  amount  required  to  complete  the 
said  sum  of  forty  millions  of  dollars;  '.'and  in  case  of  the  death,  or  refusal  to 
serve,  of  any  of  the  commissioners,  aforesaid,  it  shall  be  lawful  for  the  Pre- 
sident of  the  United  States  to  supply  the  vacancy,  or  vacancies,  thus  created, 
by  appointing  some  suitable  person,  or  persons." 

SEC.  2.  And  be  it  further  enacted,  That  it  shall  be  lawful  for  any  person, 
copartnership,  or  body  politic,  to  subscribe  for  so  many  shares  of  the  said 
capital  stock  of  the  said  bank,  as  he,  she,  or  they,  shall  think  tit,  not  exceed- 
ing one  thousand  shares,  except  as  is  hereinafter  provided  for  the  subscription 
on  behalf  of  the  United  States;  and  the  sums  respectively  subscribed,  except 
on  behalf  of  the  United  States,  as  is  hereinafter  provided,  shall  be  payable  in 
the  manner  following;  that  is  to  say:  five  millions  of  dollars  thereof  in  gold 
or  silver  coin  of  the  United  States,  or  of  foreign  coin  at  the  value  heretofore 
established  by  the  act  of  Congress,  entitled  an  "  Act  regulating  the  currency  of 
foreign  coins,"  passed  the  10th  April,  1806;  twenty-seven  millions  of  dollars 
thereof  in  gold  or  silver  coin,  as  aforesaid,  or  in  the  public  debt  of  the  United 
States,  contracted  by  virtue  of  the  act  of  Congress,  entitled  "An  act  autho- 
rizing a  loan  for  a  sum  not  exceeding  eleven  millions  of  dollars,"  passed  the 
fourteenth  day  of  March,  one  thousand  eight  hundred  and  twelve,  or  contract- 
ed, or  to  be  contracted,  by  virtue  of  any  subsequent  act  and  acts  of  Con- 
gress, heretofore  passed,  authorizing  a  loan  or  loans;  and  eight  millions  of 


PROCEEDINGS  OF    1814. 

dollars  thereof  in  gold  or  silver  coin,  or  in  treasury  notes,  issued  under  the 
act  of  Congress,  entitled  "  An  act  to  authorize  the  issuing  of  treasury  notes," 
passed  the  thirtieth  day  of  June,  one  thousand  eight  hundred  and  twelve,  or 
issued,  or  to  be  issued,  under  the  authority  of  any  subsequent  act  or  acts  of 
Congress,  authorizing  or  which  shall  authorize  treasury  notes  to  be  issued, 
previously  to  the  final  closing  of  the  subscriptions  to  the  said  bank.  And  the 
said  payment  shall  be  made  and  completed  in  the  sums,  and  at  the  times 
hereinafter  declared;  that  is  to  say:  at  the  time  of  subscribing,  there  shall  be 
paid  twenty-two  dollars  and  fifty  cents  on  each  share,  in  gold  or  silver  coin, 
forty  dollars  in  the  treasury  notes,  aforesaid,  and  one  hundred  and  thirty- 
seven  dollars  and  fifty  cents  in  the  public  debt  of  the  United  States,  contract- 
ed, or  to  be  contracted,  as  aforesaid.  At  the  expiration  of  four  calendar 
months,  after  the  time  of  subscribing,  there  shall  be  paid  the  further  sum  of 
twenty  dollars,  on  each  share,  in  gold  or  silver  coin,  thirty  dollars  in  the 
treasury  notes  aforesaid,  and  one  hundred  dollars  in  the  public  debt  of  the 
United  States,  contracted,  or  to  be  contracted,  as  aforesaid.  At  the  expira- 
tion of  six  calendar  months  from  the  time  of  subscribing,  there  shall  be  paid 
the  further  sum  of  twenty  dollar*,  in  goldor  silver  coin,  thirty  dollars  in  the 
treasury  notes,  aforesaid,  and  one  hundred  dollars  in  the  public  debt  of  the 
United  States,  contracted,  or  to  be  contracted,  as  aforesaid.  And  the  sub- 
scriptions, in  public  Stock  and  treasury  notes,  as  aforesaid,  shall  be  taken  and 
credited  for  the  principal  and  so  much  of  the  interest  thereof,  respectively, 
as  shall  have  accrued  on  the  day  of  subscribing  the  same.  And,  at  the  time 
of  subscribing  to  the  capital  stock  of  the  said  bank,  as  aforesaid,  each  and 
every  subscriber  shall  deliver  to  the  commissioners,  at  the  place  of  subscrib- 
ing, as  well  the  specie  amount  of  their  subscriptions,  respectively,  as  the  cer- 
tificates of  stock  for  the  stock  proportion  of  their  subscriptions,  respectively, 
together  with  a  power  of  attorney  authorizing  the  said  commissioners,  or  a 
majority  of  them,  to  transfer  the  said  stock,  in  due  form  of  law,  to  "  The 
President,  Directors,  and  Company,  of  the  said  Bank  of  the  United  States  of 
America,"  as  soon  as  the  said  bank  shall  be  organized,  and,  also,  treasury 
notes  for  the  proportion  of  the  subscriptions,  respectively,  payable  in  treasury 
notes,  as  aforesaid:  Provided  always,  That  if,  in  consequence  of  the  appor- 
tionment of  shares,  in  the  said  bank,  among  the  subscribers,  in  the  case  and 
in  the  manner  hereinbefore  prescribed,  any  subscriber  shall  have  delivered  to 
the  commissioners,  at  the  tune  of  subscribing,  a  greater  amount  of  specie, 
stock,  and  treasury  notes,  than  shall  be  necessary  to  complete  the  payments 
for  the  share,  or  snares,  to  such  subscriber,  apportioned  as  aforesaid;  the 
commissioners  shall  only  retain  so  much  of  the  said  money,  stock,  and  trea- 
sury notes,  as  shall  be  necessary  to  complete  such  payments,  and  shall,  forth- 
with, return,  on  application  for  the  same,  the  surplus  thereof  to  the  subscri- 
ber lawfully  entitled  thereto.  And  the  commissioners,  respectively,  shall 
deposite  the  gold  and  silver,  certificates  of  stock,  and  treasury  notes,  by 
them,  respectively,  received,  as  aforesaid,  from  the  subscribers  to  the  said 
bank,  in  some  place  of  secure  and  safe  keeping,  so  that  the  same  may,  and 
shall,  be  specifically  delivered  and  transferred,  as  the  same  were,  by  them, 
respectively,  received,  to  the  said  President,  Directors,  and  Company,  of  the 
said  Bank  of  the  United  States  of  America,  or  to  their  order,  as  soon  as  shall 
be  required  after  the  organization  of  the  said  bank. 

SEC.  3.  tfnd  be  it  further  enacted*  That,  at  the  opening  of  the  subscriptions 
to  the  capital  stock  of  the  Bank  of  the  United  States  of  America,  the  Secre- 
tary of  the  Treasury  shall  subscribe,  or  cause  to  be  subscribed,  on  behalf  of 
the  United  States,  to  the  said  capital  stock  of  the  said  bank,  the  amount  of 
ten  millions  of  dollars,  to  be  paid  in  public  stock,  bearing  an  interest  of  four 
per  cent,  per  annum,  from  the  time  of  subscribing  the  same,  and  redeemable 
in  any  sums,  and  at  any  periods,  which  the  Government  may  deem  fit;  and 
the  certificates  of  such  public  stock,  the  Secretary  of  the  Treasurv  shall  cause 
to  be  prepared  and  made  in  the  usual  form,  and  shall  pay  and  deliver  the 
same  to  the  President  and  Directors  of  the  said  bank,  at  the  expiration  of 


542  BANK  OF  THE  UNITED  STATES. 

three  calendar   months  after  the  time  of  opening  the  said  subscription  to  the 
capital  stock  of  the  said  bank,  as  aforesaid. 

SEC.  4.  And  be  it  further  enacted,  That  whenever  and  as  often  as  any  of 
the  treasury  notes,  subscribed  as  aforesaid  to  the  said  capital  stock  of  the  said 
bank,  shall  be  due  and  payable,  it  shall  be  lawful  for  the  Secretary  of  the 
Treasury  (and  he  is  hereby  authorized  and  required)  to  pay  and  redeem  the 
same,  principal  and  interest,  by  causing  certificates  of  public  stock  for  an 
equal  amount,  bearing  an  interest  of  six  per  cent,  per  annum,  and  redeema- 
ble in  any  sums,  and  at  any  periods,  which  the  Government  may  deem  fit,  to 
be  prepared  and  made  in  the  usual  form,  and  the  same  to  be  delivered  to  the 
president  and  directors  of  the  said  bank,  in  satisfaction  and  discharge  of  such 
treasury  notes. 

SEC.  5.  find  be  it  further  enacted,  That  the  subscribers  to  the  said  Bank  of 
the  United  States  of  America,  their  succeesors  and  assigns,  shall  be,  and  are 
hereby  created  a  corporation  and  body  politicly  the  name  and  style  of  "  the 
President,  Directors,  and  Company,  of  the  Bank  of  the  United  States  of 
America,"  and  shall  so  continue  until  the  third  day  of  March,  in  the  year 
one  thousand  eight  hundred  and  thirty-five:  and  by  that  name  shall  be,  and 
are  hereby  made  able,  and  capable  in  law,  to  have,  purchase  receive,  possess, 
enjoy,  and  retain,  to  them  and  their  successors,  lands,  rents,  tenements,  here- 
ditaments, goods,  chattels,  and  effects,  of  whatsoever  kinc^  nature,  and  quality, 
to  an  amount  not  exceeding  in  the  whole  fifty-five  millions  of  dollars,  includ- 
ing the  amount  of  the  capital  stock  aforesaid;  and  the  same  to  sell,  grant, 
demise,  alien,  or  dispose  of,  to  sue  and  be  sued,  plead  and  be  impleaded, 
answer  and  be  answered,  defend  and  be  defended,  in  all  courts  and  places 
whatsoever;  and  also  to  make,  have,  and  use,  a  common  seal,  and  the  same 
to  break,  alter,  and  renew,  at  their  pleasure;  and  also  to  ordain,  establish,  and 
put  in  execution,  such  by-laws  and  ordinances  and  regulations,  as  they  shall 
deem  necessary  and  convenient,  for  the  government  of  the  said  corporation, 
not  being  contrary  to  the  constitution  and  laws  of  the  United  States:  and 
generally  to  do  and  execute  all  and  singular  the  acts,  matters,  and  things, 
which  to  them  it  shall  or  may  appertain  to  do;  subject,  nevertheless,  to  the 
rules,  regulations,  restrictions,  limitations,  and  provisions,  hereinafter  pre- 
scribed and  declared. 

SEC.  6.  Jind  be  it  further  enacted  That,  for  the  management  of  the  affairs  of 
the  said  corporation,  there  shall  be  twenty-five  directors,  who  shall  be  elect- 
ed at  the  banking  house  in  Philadelphia,  on  the  first  Monday  of  January,  in 
each  year,  by  the  stockholders  or  proprietors  of  the  capital  stock  of  the  said 
corporation,  and  by  a  plurality  of  votes  then  and  there  actually  given,  accord- 
ing to  the  scale  of  voting  hereinafter  prescribed.  And  the  directors,  so 
duly  chosen,  shall  be  capable  of  serving,  by  virtue  of  such  choice,  until  the 
end  or  expiration  of  the  first  Monday  in  January  next  ensuing  the  time  of  such 
election,  and  no  longer:  Provided  always,  That  the  first  election  and  ap- 
pointment of  directors  shall  be  at  the  time,  and  for  the  period  hereinafter  de- 
clared. 

SEC.  7.  Jind  be  it  further  enacted,  That,  as  soon  as  the  sum  of  thirteen 
millions  two  hundred  thousand  dollars,  in  gold  and  silver  coin  and  in  the  pub- 
lic debt  and  treasury  notes,  shall  have  been  actually  received  on  account  of 
the  subscriptions  to  the  said  capital  stock,  (exclusively  of  the  subscription 
aforesaid  on  the  part  of  the  United  States)  notice  thereof  shall  be  given  by 
the  persons  under  whose  superintendence  the  subscriptions  shall  have  been 
made  at  Philadelphia,  in  at  least  two  public  newspapers,  printed  in  each  of 
the  places  where  subscriptions  shall  have  been  made;  and  the  said  persons 
shall,  at  the  same  time,  and  in  like  manner,  notify  a  time  and  place,  within  the 
said  city  of  Philadelphia,  at  the  distance  of  at  least  twenty  days  from  the  time 
of  such  notification,  for  proceeding  to  the  election  of  directors  as  afosesaid; 
and  it  shall  be  lawful  for  such  election  to  be  then  and  there  made.  And  the 
persons  who  shall  be  then  and  there  chosen  as  aforesaid,  shall  be  the  first 
directors,  and  shall  proceed  to  elect  one  of  their  number  president  of  the  said 
corporation,  and  they  shall  be  capable  of  serving,  by  virtue  of  such  choice,  un  • 


PROCEEDINGS  OF  1814.  545 

til  the  end  and  expiration  of  the  first  Monday  of  January  next  ensuing  the 
time  of  making  the  same,  and  shall  forthwith,  thereafter,  commence  the  opera- 
tions of  the  said  bank,  at  the  said  city  of  Philadelphia:  Provided  always, 
That,  in  case  it  should,  at  any  time,  happen  that  an  election  of  directors  and 
president  of  the  said  corporation  should  not  be  made  upon  any  day  when,  in 
pursuance  of  this  act,  they  ought  to  be  made,  the  said  corporation  shall  not 
tor  that  cause  be  deemed  to  be  dissolved;  but  it  shall  be  lawful  on  any  other 
day  to  hold  and  make  an  election  of  directors  and  president  of  the  said  cor- 
poration, (as  the  case  may  be)  in  such  manner  as  shall  have  been  regulated  by 
the  by-laws  and  ordinances  of  the  said  corporation;  and  until  such  election  be 
so  made,  the  directors  and  president,  for  the  time  being,  shall  continue  in 
office:  And provided,  also,  That,  in  case  of  the  death,  resignation,  or  removal, 
of  the  president  of  the  said  corporation,  the  directors  shall  proceed  to  elect 
another  president:  And  provided,  also,  That,  in  case  of  the  death,  resignation, 
or  absence  from  the  United  States,  or  removal  of  a  director  from  office,  the 
vacancy  shall  be  supplied  by  the  stockholders. 

SEC.  8.  And  be  it  further  enacted,  That  the  directors,  for  the  time  being, 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants  under  them,  as 
shall  be  necessary  for  executing  the  business  of  the  said  corporation,  and  to  al- 
low them  such  compensation  for  their  services,  respectively,  as  shall  be  reasona- 
ble: and  shall  be  capable  of  exercising  such  other  powers  and  authorities,  for  the 
well  governing  and  ordering  of  the  aftairs  of  the  said  corporation,  as  shall 
be  prescribed,  fixed,  and  determined,  by  the  laws,  regulations,  and  ordinan- 
ces of  the  same. 

SEC.  9.  And  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form,  and  be  fundamental  articles  of  the  con- 
stitution of  said  corporation,  to  wit: 

1.  The  number  of  votes  to  which  the  stockholders  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  number  of  shares  he,  she,  or  they, 
respectively,  shall  hold,  in  the  proportions  following,  that  is  to  say:  for  one 
share  and  not  more  than  two  shares,  one  vote;  for  every  two  shares  above 
two  and  not  exceeding  ten,   one  vote;  for  every  four  shares  above  ten, 
and  not  exceeding  thirty,  one  vote;  for  every  six  shares  above  thirty,  and  not 
exceeding  sixty,  one  vote;  for  every  eight  shares  above  sixty,  and  not  exceed- 
ing one  hundred,  one  vote;  and  for  every  ten  shares  above  one  hundred,  one 
vote.     But,  no  person,  copartnership,  or  body  politic,  shall  be  entitled  to  a 
greater  number  than  thirty  votes;  and  after  the  first  election,  no  share,  or 
shares,  shall  confer  a  right  of  voting,  which  shall  not  have  been  holden  three 
calendar  months  previous  to  the  day  of  election.     And  stockholders,  actually 
resident  within  the  United  States,  and  none  other,  may  vote  in  elections  by 
proxy. 

2.  Not  more  than  three-fourths  of  the  directors  in  office,  at  the  time  of  an 
annual  election,  shall  be  elected  for  the  next  succeeding  year,  and  no  person 
shall   be  a  director  more   than  two  out  of  four  years;  but  the  director  who 
shall  be  the  president  at  the  time  of  an  election,  may  always  be  re-elected. 

3.  None  but  a  resident  citizen  of  the  United  States,  and  holding,  at  the 
time  of  his  election,  not  less  than  ten  shares,  bona  fide  in  his  own  right,  shall 
be  a  director;  and,  if  any  director  shall  cease  to  be  a  stockholder  to  that  a - 
mount,  he  shall  cease  to  be  a  director. 

4.  No  director  shall  be  entitled  to  any  emolument.     The  stockholders  may 
make  such  compensation  to  the  president,  for  his  extraordinary  attendance  at 
the  bank,  as  shall  appear  to  them  reasonable. 

i  5.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transaction 
of  business,  of  whom  the  president  shall  always  be  one,  except  in  case  of  sick- 
ness, or  neceaaary  absence,  in  which  case  his  place  may  be  supplied  by  any 
other  director  whom  he,  by  writing  under  his  hand,  shall  depute  for  the  pur- 
pose. And  the  director,  so  deputed,  may  do  and  transact  all  the  necessary 
business  betonging  to  the  office  of  the  president  of  the  said  corporation,  dur- 
ing the  contmuanceof  the  sickness,  or  necessary  absence  of  the  president. 
6.  A  number  of  stockholders,  not  less  than  sixty,  who,  together,  shall  be 


544  BANK  OF  THE  UNITED  STATES. 

proprietors  of  one  thousand  shares  or  upwards,  shall  have  power?  at  any  time, 
to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  in- 
stitution, giving  at  least  ten  weeks'  notice,  in  two  public  newspapers  of  the 
place  where  the  bank  is  seated,  and  specifying  in  such  notice  the  object  or  ob- 
jects of  such  meeting. 

7.  Every  cashier,  or  treasurer,  before  he  enters  upon  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfaction  of 
the  directors,  in  a  sum  not  less  than  fifty  thousand  dollars,  with  a  condition 
for  his  good  behavior,  and  the  faithful  performance  t>f  his  duties  to  the  corpo- 
ration.^ 

8.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for  its  im- 
mediate accommodation,  in  relation  to  the  convenient  transacting  of  its  busi- 
ness, and  such  as  shall  have  been  bona  fide  mortgaged  to  it  by  way  of  security, 
or  conveyed  to  it  in  satisfaction  of  debts  previously  contracted  in  the  course 
of  its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall  have  been 
obtained  for  such  debts. 

9.  The  total  amount  of  debts  which  the  said  corporation  shall  at  any  time 
owe,  whether  by  bond,  bill,  note,  or  other  contract,  over  and  above  the  debt, 
or  debts,  due  for  money  deposited  in  the  bank,  shall  not  exceed  the  sum  of 
fifty  millions  of  dollars,  unless  the  contracting  of  any  greater  debt    shall  have 
been  previously  authorized  by  a  law  of  the  United  States.     In  case  of  excess, 
the  directors  under  whose  administration  it  shall  happen,  shall  be  liable  for 
the  same,   in  their  natural  and  private  capacities;  and  an  action  of  debt  may 
in  such  case  be  brought  againt  them,  or  any  of  them,  their,  or  any  of  their 
heirs,  executors,   or  administrators,  in  any  court  of  record  of  the  United 
States,  or  either  of  them,  by  any  creditor,  or  creditors,  of  the  said  corporation, 
and  may  be  prosecuted  to  judgment  and  execution,  any  condition,  covenant, 
or  agreement,  to  the  contrary  notwithstanding.    But,  this  provision  shall  not 
be  construed  to  exempt  the  said  corporation,  or  the  lands,  tenements,  goods, 
or  chattels  of  the  same,  from  being  also  liable  for,  and   chargeable  with,  the 
said  excess.     Such  of  the  said  directors  who  may  have  been  absent  when  the 
said  excess  was  contracted,  or  created,  or  who  may  have  dissented  from  the 
resolution  or  act,  whereby  the  same  was  contracted,  or  created,  may  respect- 
ively exonerate  themselves  from  being  so  liable,  by  forthwith  giving  notice  of 
the  fact,  and  of  their  absence  or  dissent,  to  the  President  of  the  United  States, 
and  to  the  stockholders,  at  a  general  meeting,  which  they  shall  have  power  to 
call  for  that  jmrpose. 

10.  The  said  corporation  shall  not,  directly  nor  indirectly,  deal  or  trade  in 
any  thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of  goods, 
really  and  truly  pledged  for  money  lent,  and  not  redeemed  in  due  time,  or 
goods  which  shall  be  the  proceeds  of  its  lands.     It  shall  not  be  at  liberty  to 
purchase  any  public  debt  whatsoever;  nor  shall  it  take  more  than  at  the  rate  of 
six  per  cent,  per  annum,  for  or  upon  its  loans  or  discounts. 

11.  The  said  coporation  shall  not.  during  the  continuance  of  the  present 
war  between  the  United  States  and  Great  Britain,  sell  any  portion  of  the 
public  debt,  constituingapart  of  its  capital  stock  aforesaid;  nor,  after  the  war, 
at  a  price  less  than  its  par  value;  nor  at  any  time,  to  an  amount  exceeding  one 
moiety  of  the  public  debt  so  constituting  a  part  of  its  capital  stock,  without  the 
consent  of  Congress. 

12.  No  loan  shall  be  made  by  the  said  corporation,  for  the  use  or  on  account 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  five  hundred 
thousand  dollars,  or  of  any  particular  State,  to  an  amount  exceeding  fifty 
thousand  dollars,  or  of  any  foreign  prince,  or  state,  unless  previously  autho- 
rized by  a  law  of  the  United  States.    But  the  said  corporation  shall  be  bound 
to  lend  to  the  Government  of  the  United  States,  reimbursable  at  their  plea- 
sure, thirty  millions  of  dollars,  at  an  interest  not  exceeding  six   per  centum 
per  annum,  in  such  sums,  and  at  such  periods,  as  maybe  made  convenient  to 
the  Government  of  the  United  States,  whenever  any  law  or  laws  of  the  Unit- 
ed States  shall  authorize  and  require  such  loan  or  loans. 


PROCEEDINGS  OF   1814.  545 

13.  The  stock  of  the  said  corporation  shall  be  assignable,  and  transferable, 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same. 

14.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corpora- 
tion, which  shall  be  made  to  any  person  or  persons  shall  be  assignable  by  en- 
dorsement thereupon,  under  the  hand  or  hands  of  such  person  or  persons, 
and  his,  lier,  or  their  executors  or  administrators,  and  ot  his,  her,  or  their  as- 
signee or  assignees,  and   the  executors  or  administrators  of  such  assignee  or 
assignees,  and  so  as  absolutely  to  transfer  and  vest  the  property  thereof,  in  each 
and   every  assignee  or  assignees  successively,  and  to  enable  such  assignee  or 
assignees,  and  his,  her,  or  their  executors  or  administrator*,  to  maintain  an 
action  thereupon  in  his,  her,  or  their  own  name  or  names.     And  the  bills  or 
notes  which  may  be  issued  by  order  of  the   said  corporation,  signed  by  the 
president,  and  countersigned  by  the  principal  cashier,  or  treasurer  thereof, 
promising  the  payment  ot  money  to  any  person  or  persons,  his,  her,  or  their  or- 
der, or  to  bearer,  although  not  under  the  seal  of  the  said  corporation,  shall  be 
binding  and  obligatory  upon  the  same,  in  the  like  manner,  and  with  the  like 
force  and  effect,  as  upon  any  private  person  or  persons,  if  issued  by  him,  her. 
or  them,  in  his,  her,  or  their  private  or  natural   capacity  or  capacities,  ana 
shall  be  assignable  and  negotiable  in  like  manner  as  if  they  were  so  issued  by 
such  private  person  or  persons,  that  is  to   say:  those  which  shall  be  payable 
to  any  person  or  persons,  his,  her,  or  their  order,  shall  be  assignable  bv  en- 
dorsement, in  like  manner,  and  witli  the  like  effect,  as  foreign  bins  of  exchange 
now  are,  and  those  which  are  payable  to  bearer,  shall  be  assignable  and  nego- 
tiable by  delivery  only. 

15.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable;  and  once  in  every  three  years, 
the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting,  for  their 
information,  an  exact  and  particular  statement  of  the  debts  which  shall  have 
remained  unpaid  after  the  expiration  of  the  original  credit,  for  a  period  of 
treble  the  term  of  that  credit,  and  of  the  surplus  of  profits,  if  any,  after  de- 
ducting losses  and  dividends.     If  there  shall  be  a  failure  in  the  payment  of 
any  part  of  any  sum  subscribed  by  any  person,  copartnership,  or  body  politic, 
the  party  failing  shall  lose  the  benefit  of  any  dividend  which  may  have  ac- 
crued prior  to  the  time  for  making  such  payment,  and  during  the  delay  of  the 
same. 

16.  The  directors  of  said  corporation  shall  be  bound  to  establish  a  compe- 
tent office  of  discount  and  deposite  in  the  District  of  Columbia,  whenever  any 
law  of  the  United  States  shall  require  such  establishment,  and  it  shall  be  law- 
ful for  the  said  directors  to  establish  offices  wheresoever  they  shall  think  fit, 
\yithin  the  United  States,  for  the  purposes  of  discount,  deposite,  and  distribu- 
tion, or  for  the  purposes  of  deposite  and  distribution  only;  and  upon  the  same 
terms,  and  in  the  same  manner,  as  shall  be  practised  at  the  bank;  and  to  com- 
mit the  management  of  the  said  offices,  and  the  business  thereof,  respectively, 
to  such  persons,  and  under  such  regulations,  as  they  shall  deem  proper,  not 
being  contrary  to  law  or  the  constitution  of  the  bank.    Or,  instead  of  esta- 
blishing such  offices,  it  shall  be  lawful  for  the  directors  of  the  said  corpora- 
tion, from  time  to  time,  to  employ  any  other  bank  or  banks,  at  any  place  or 
places,  that  they  may  deem  safe  and  proper,  to  manage  and  transact  the  bu- 
siness proposed  as  aforesaid,  to  be  managed  and  transacted  by  such  offices, 
under  such  agreements,  and  subject  to  such  regulations,  as  they  shall  deem 
just  and  proper.     But  the  managers  or  directors  of  every  office  of  discount, 
deposite,  and  distribution,  established  as  aforesaid,  shall  be  annually  appoint- 
ed by  the  directors  of  the  bank,  to  serve  one  year;  each  "of  {them  shall  be  a 
citizen  of  the  United  States,  and  shall  hold,  at  the  time  of  his  appointment, 
not  less  than  five  shares  in  the  said  bank,  bona  fide  in  his  own  right;  and  if 
he  shall  cease  to  be  a  stockholder  to  that  amount,  he  shall  cease  to  be  a  man- 
ager or  director  of  such  office  of  discount,  deposite,  and  distribution;  and  not 
more  than  three-fourths  of  the  said  managers  or  directors  in  office  at  the  time 
of  an  annual  appointment,  shall  be  reappointed  for  the  next  succeeding  year; 

69 


546  BANK   OF  THE    UNITED   STATES. 

nor  shall  any  person  be  a  manager  or  director  for  more  than  two  out  of  four 
years,  ^but  the  president  may  be  always  reappointed. 

17.  The  said  corporation,  all  offices  of  discount,  deposite,  and  distribution, 
and  of  deposite  and  distribution  only,  which  shall  be  established  by  the  said 
directors  as  aforesaid,  and  all  banks  by  the  said  directors  employed,  in  lieu 
of  such  offices  as  aforesaid,  shall  be  bound  to  receive,  upon  deposite,  the  trea- 
sury notes  of  the  United  States,  which  have  been  or  may  be  hereafter  issued.. 
by  virtue  of  any  law  or  laws  of  the  United  States.     But  it  shall  be  optional 
with  the  said  corporation  to  pay  and  discharge  the  checks  or  drafts  of  the 
persons  making  such  deposite  in  treasury  notes,  for  the  amount  thereof,  either 
in  gold  or  silver  eoin,  or  in  the  notes  of  the  bank,  or  in  treasury  notes.    And 
all  banks  by  the  said  directors  employed  as  aforesaid,  in  lieu  of  the  offices 
aforesaid,  shall  be  further  bound  to  receive,  on  deposite,  and  to  circulate  the 
notes  of  the  said  corporation  on  the  same  terms,  and  in  the  same  manner,  as 
the  notes  of  the  said  banks  respectively  are  received  and  circulated;  and,  from 
time  to  time,  to  issue  and  exchange  for  the  said  notes  of  the  said  corporation, 
other  notes  of  the  said  corporation,  or  the  notes  of  the  said  banks,  respectively, 
or  treasury  notes,  at  the  option  of  the  person  applying  for  such  issue  or 
exchange, 

18.  During  the  continuance  of  the  present  war  between  the  United  States 
and  Great  Britain,  all  the  notes  of  the  said  corporation,  whether  payable  at 
the  seat  of  the  bank  in  Philadelphia,  or  elsewhere,  shall  be  payable  in  other 
notes  of  the  said  corporation,  in  treasury  notes,  or  in  gold  and  silver  coin,  at 
the  bank  in  the  city  of  Philadelphia  only,  at  the  option  of  the  applicant.    At 
all  the  offices  of  discount,  deposite,  and  distribution,  and  of  deposite  and  dis- 
tribution only,  and  at  all  the  banks  employed  in  lieu  of  such  offices, the  notes 
of  the  said  corporation,  during  the  continuance  of  the  said  war,  shall  be  pay- 
able in  other  notes  of  the  said  corporation,  or  in  treasury  notes  only.    And  the 
said  corporation  shall,  at  all  times,  distribute  among  the  offices  and  banks  afore- 
said, a  sufficient  sum  in  the  various  denominations  of  the  notes  of  the  said  cor- 
poration, and  in  treasury  notes,  to  answer  the  demand  therefor,  and  to  establish 
a  sufficient  circulating  medium  throughout  the  United  States  and  the  territories 
thereof;  and  the  treasury  notes  to  be  distributed  and  circulated,  the  Secretary 
of  the  Treasury  shall  cause  to  be  delivered,  from  time  to  time,  to  the  said  bank 
in  Philadelphia;  and  the  same  shall  be  distributed  and  circulated  by  the  said 
bank,  under  directions,  in  that  behalf, given  by  the  said  Secretary. 

19.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United 
States  shall  be  furnished,  from  time"  to  time,  as  often  as  he  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  the  capital  stock  of  the 
said  corporation,  and  of  the  debts  due  to  the  same:  of  the  moneys  deposited 
therein;  of  the  notes  in  circulation;  and  of  the  cash  in  hand;  and  shall  have  a 
right  to  inspect  such  general  accounts  in  the  books  of  the  bank  as  shall  relate 
to  the  said  statement:  Provided,  That  this  shall  not  be  construed  to  imply  a 
right  of  inspecting  the  account  of  any  private  individual  or  individuals  with 
the  bank, 

SEC.  10.  Jind  be  it  further  enaded,  That,  if  the  said  corporation,  or  any 
person  or  persons  for  or  to  the  use  of  the  same,  shall  deal  or  trade  in  buying 
or  selling  any  goods,  wares,  merchandise,  or  commodities,  whatsoever,  con- 
trary to  the  provisions  of  this  act,  all  and  every  person  and  persons  by  whom 
any  order  or  direction  for  so  dealing  or  trading  shall  have  been  given,  and  alt 
and  every  person  and  persons  who  shall  have  been  concerned  as  parties  or 
agents  therein,  shall  forfeit  and  lose  treble  the  value  of  the  goods,  wares,  mer- 
chandises, ami  commodities,  in  which  such  dealing  and  trade  shall  have  beenf 
one-half  thereof  to  the  use  of  the  informer,  and  the  other  half  thereof  to  the 
use  of  the  United  States,  to  be  recovered  in  any  action  at  law  with  costs  of 
suit. 

SEC.  11.  Jindbe  it  further  enacted,  That,  if  the  said  corporation  shall  ad- 
vance or  lend  any  sum  of  money  for  the  use,  or  on  account,  of  the  Government 
of  the  United  States,  to  an  amount  exceeding  five  hundred  thousand  dollars, 
or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand  dollars,  or  of 


PROCEEDINGS  OF   1814.  547 

any  foreign  Prince  or  State,  (unless  previously  authorized  thereto  by  a  law  of 
the  United  States)  all  and  every  person  and  persons,  by,  and  with  whose  order, 
agreement,  consent,  approbation,  and  connivance,  such  unlawful  advance  or 
loan  shall  have  been  made,  upon  conviction  thereof,  shall  forfeit,  and  pay  for 
every  such  offence  treble  the  value  or  amount  of  the  sum  or  sums  which  shall 
have  been  so  unlawfully  advanced  or  lent;  one-fifth  thereof  to  the  use  of  the 
informer,  and  the  residue  thereof  to  the  use  of  the  United  States. 

SEC.  12.  And  be  it  further  enacted,  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable,  on 
demand,  during  the  continuance  of  the  present  war  between  the  United  States 
and  Great  Britain,  in  gold  and  silver  coin,  at  the  seat  of  the  bank  in  Phila- 
delphia, and  which,  during  the  continuance  of  the  said  war,  are  made  payable 
elsewhere,  on  demand,  in  other  notes  of  the  said  corporation,  or  in  treasury 
notes  as  aforesaid,  and  which,  after  the  termination  of  the  said  war,  shall  be 
made  generally  payable  on  demand,  in  gold  or  silver  coin,  shall  be  receivable 
in  all  payments  to  the  United  States. 

SEC.  13.  And  be  it  further  enacted,  That  if,  during  the  continuance  of  the 
present  war  between  the  United  States  and^  Great  Britain,  and  a  period  of  one 
year  after  the  termination  of  the  said  war,  demands  shall,  at  any  time  or  times, 


United  States,  so  as  greatly  to  diminish  or  endanger  the  specie  capital  of  the 
Government  and  country,  as  well  as  of  the  said  corporation;  or  that  the  said 
gold  and  silver  coin  is  intended  to  be  wilfully  withdrawn  from  circulation,  so 
as  greatly  to  embarrass,  obstruct,  and  discredit  the  pecuniary  transactions  of 
the  People  and  the  Government,  as  well  as  of  the  said  corporation;  or  that  the 
said  gold  and  silver  coin  is  demanded,  in  consequence  of  a  wilful  and  sinister 
accumulation  of  the  bills  and  notes  of  the  said  corporation,  with  the  intention 
to  impair  or  destroy  the  credit  of  the  said  corporation;  then,  and  in  every  such 
case,  and  as  often  as  such  cases  shall  occur,  it  shall  be  lawful  for  the  directors 
of  the  said  corporation,  to  suspend  its  payments  in  specie,  and  their  duty  forth- 
with, to  represent  the  same  to  the  President  of  the  United  States.  And  it 
shall  be  thereupon  lawful  for  the  President  of  the  United  States  to  direct  the 
said  corporation  to  resume,  or  to  continue  to  suspend^  its  payments  in  specie, 
for  such  time  as  he  shall  deem  expedient;  and  the  said  corporation  shall  re- 
sume, or  continue  to  suspend,  its  payments  in  specie,  according  to  such  di- 
rections. And  the  President  of  the  United  States  shall  cause  a  statement  of 
the  proceedings,  in  all  such  cases,  to  be  laid  before  Congress,  if  in  session,  im- 
mediately; if  not  in  session,  then  within  ten  days  after  the  next  meeting  of 
Congress;  and  such  suspension  may  continue  until  removed  by  Congress,  ot 
by  the  President. 

SEC.  14.  And  be  it  further  enacted,  That,  during  the  continuance  of  this 
act,  and  whenever  required  by  the  Secretary  of  the  Treasury,  the  said  cor- 
poration shall  do  and  perform  the  several  and  respective  duties  of  the  com- 
missioners  of  loans  for  the  several  States,  or  of  any  one  or  more  of  them,  at  the 
times,  in  the  manner,  and  upon  the  terms,  to  be  prescribed  by  the  Secretary  of 
the  Treasury. 

SEC.  15.  And  be  it  further  enacted,  That  no  other  bunk  shall  be  established 
by  any  future  law  of  the  United  States,  during  the  continuance  of  the  cor- 
poration hereby  created;  for  which  the  faith  of  the  United  States  is  hereby 
pledged:  Provided,  Congress  may  renew  existing  charters  for  banks  in  the 
District  of  Columbia,  not  increasing  the  capital  thereof;  and  may  grant  char- 
ters, if  they  deem  it  expedient,  to  any  banking  associations  now  in  operation 
in  the  said  District,  and  renew  the  same,  not  increasing  the  capital  thereof. 
And,  notwithstanding  the  expiration  of  the  term  for  which  the  said  corpora- 
tion is  created,  it  shall  be  lawful  to  use  the  corporate  name,  style,  and  capa- 
city, for  the  purpose  of  suits,  for  the  final  settlement  and  liquidation  of  the 
affairs  and  accounts  of  the  corporation,  and  for  the  sale  and  disposition  of 
their  estate,  real,  personal,  and  mixed,  but  noffor  any  other  purpose,  or  in 


548  BANK  OF  THE  UNITED  STATES. 

any  other  manner  whatsoever;  nor  for  a  period  exceeding  two  years  after  the 
expiration  of  the  said  term  of  incorporation. 

DECEMBER  5,  1814. 

The  bill  was  read  a  second  time,  and  considered  by  the  Senate  as  in  com- 
mittee of  the  whole. 

Mr.  MASON  moved  to  strike  out,  from  the  first  section,  the  word  <fcfifty," 
and  insert  "twenty,"  in  lieu  thereof,  thereby  reducing  the  proposed  amount 
of  the  capital  stock  from  fifty  to  twenty  millions  of  dollars;  which  motion  was 
debated  on  this  and  the  two  following  days;  and,  on  the  7th, 

The  question  was  taken  on  Mr.  MASON'S  motion,  and  decided  as  follows: 
Yeas,  13;  Na,vs,  18. 

Those  who  voted  in  the  affirmative,  were, 

Messrs.  Brown,  Daggett,  Dana,  Fromentin,  German,  Goldsborough,  Gore,  Horsey, 
Hunter,  King,  Lambert,  Mason,  Thompson. 

Those  who  voted  in  the  negative,  were, 

Messrs.  Anderson,  Bibb,  Bledsoe,  Brent,  Chase,  Condit,  Gaillard,  Lacock,  Mor- 
row, Roberts,  Robinson,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker,  Wharton.  . 

So  the  motion  was  lost. 

The  bill  proposed  that  subscriptions  be  forthwith  opened  for  forty  millions 
of  the  capital  stock. 

Mr.  MASON  moved  to  strike  out  "  forty,"  and  insert  "  thirty,"  in  lieu  there- 
of; and, 

A  division  of  the  question  being  required  by  Mr.  DANA, 

The  question  on  striking  out  the  word  "  forty"  was  negatived,  by  precisely 
the  same  vote  as  that  just  recorded. 

After  making  further  progress  in  the  bill,  the  Senate  adjourned. 

DECEMBER  8,  1814. 

On  motion  by  Mr.  KING,  to  strike  out  of  section  second,  after  the  word 
"  States,"  the  following  words:  "or  in  the  public  debt  of  the  United  States, 
contracted  by  virtue  of  the  act  of  Congress,  entitled  'An  act  authorizing  a 
loan  for  a  sum  not  exceeding  eleven  millions  of  dollars,'  passed  the  14th  day 
of  March,  1812,  or  contracted,  or  to  be  contracted,  by  any  subsequent  act  and 
acts  of  Congress,  heretofore  passed,  authorizing  a  loan  or  loans,"  and  insert 
in  lieu  thereof,  "or  in  any  public  debt  of  the  United  States,  bearing,  at  the 
time  of  payment,  an  interest  of  six  per  centum  annually;" 

It  was  determined  in  the  negative:  Ayes,  11;  Noes,  19. 

On  motion  by  Mr.  FROMENTIN.  to  strike  out  of  the  second  section,  line 
twenty  seven,  after  the  word  "paid,"  the  word  "twenty," and  insert,  in  lieu 
thereof,  the  word  "  sixty,"  it  was,  by  a  vote  of  ten  to  nineteen,  determined 
in  the  negative. 

On  motion  by  Mr.  KING,  to  add  a  new  section  to  the  bill,  as  follows: 

"SEC.  16.  Jlnd  be  it  further  enacted,  That,  if  the  said  corporation  shall  do, 
or  cause  or  permit  to  be  done,  or  transacted,  on  its  behalf,  or  for  its  use,  any 
matter  or  thing  injurious  to  the  public  welfare,  and  not  authorized  by  this  act, 
or  shall  neglect  to  do  any  matter  or  thing,  which  it  shall  be  the  duty  of  the 
said  corporation  to  do,  it  shall,  in  each  anil  every  such  case,  be  competent  and 
lawful  for  Congress  to  repeal  so  much  of  this  act  as  allows  the  notes  of  this 
corporation  to  be  received  in  payment  to  the  United  States;" 

It  was  determined  in  the  negative:  Yeas  13,  Nays  18. 

On  motion  by  Mr.  GERMAN,  to  add  a  new  section  to  the  bill,  as  follows: 

"And  be  it  further  enacted.  That  Congress  may  repeal  so  much  of  this  act 
as  relates  to  the  payment  of  the  public  revenue  in  the  bills  of  the  said  bank;" 


PROCEEDINGS  OF  1814.  549 

It  was  determined  in  the  negative:  Yeas  10,  Nays  21. 

And  the  bill  was  reported  to  the  House  amended. 

On  the  question,  "  Shall  the  bill  be  engrossed  and  read  a  third  time,  as 

It  was  determined  in  the  affirmative,  as  follows:  Yeas  18;  Nays  13. 

Those  who  voted  in  the  affirmative,  were, 

Messrs.  Anderson,  Bibb,  Bledsoe,  Brent,  Chase,  Condit,  Gaillard,  Lacock,  Morrow, 
Roberts,  Robinson,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker,  Wharton. 

Those  who  voted  in  the  negative,  were, 

Messrs.  Brown,  Daggett,  Dana,  Fromentin,  German,  Goldsborough,  Gore,  Horsey, 
Hunter,  King-,  Lambert,  Mason,  Thompson. 

DECEMBER  9,  1814. 

The  question,  "  Shall  the  bill  pass?"  was  decided  by  the  following  vote: 
Yeas  17;  Nays  14. 

Those  who  voted  in  the  affirmative,  were, 

Messrs.  Anderson,  Bibb,  Bledsoe,  Brent,  Chase,  Condit,  Lacock,  Morrow,  Roberts, 
Robinson,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker,  Wharton. 

Those  who  voted  in  the  negative,  were, 

Messrs.  Brown,  Dag-gett,  Dana,  Fromentin,  Gaillard,  German,  Goldsborough,  Gore, 
Horsey,  Hunter,  King,  Lambert,  Mason,  Thompson. 

So  the  bill  was  passed,  and  sent  to  the  House  of  Representatives  for  con- 
currence. 

HOUSE  OF  REPRESENTATIVES. 

DECEMBER  9,  1814. 

The  bill  from  the  Senate  was  received,  and  on  the  following  day  referred  to 
the  Committee  of  Ways  and  Means. 

DECEMBER  14,  1814. 

Mr.  FISK,  of  New  York,  from  the  Committee  of  Ways  and  Means,  reported 
a  number  of  amendments  to  the  bill  from  the  Senate,  "to  incorporate  the  sub- 
scribers to  the  Bank  of  the  United  States  of  America:"  which  were  read,  and, 
with  the  bill,  referred  to  a  committee  of  the  whole. 

DECEMBER  23,  1814. 

On  motion  of  Mr.  FISK,  of  New  York,  the  House  resolved  itself  into  a  com- 
mittee of  the  whole,  Mr.  MACOX  in  the  chair,  on  the  bill. 

The  first  section  contains  the  leading  principles  of  the  bill,  substantially  as 
follows:  The  capital  to  consist  of  fifty  millions  of  dollars,  to  be  divided  into 
an  hundred  thousand  shares,  of  five  hundred  dollars  each;  subscriptions  for 
forty  millions  whereof  to  be  opened  on  the  third  Monday  of  January  next,  at 
Boston,  New  York,  Philadelphia,  Richmond,  Charleston,  and  Pittsburg. 
[The  amendments  proposed  to  this  section,  by  the  Committee  of  Ways  and 
Means,  contemplate  an  extension  of  the  number  of  places  of  subscription,  &c.] 
Betore  the  question  was  stated  on  these  amendments, 

Mr.  CLOPTOX,  of  Virginia,  moved  to  strike  out  the  first  section  of  the  bill, 
and  said:  I  have  made  this  motion,  Mr.  Chairman,  at  this  stage  of  the  dis- 
cussion, as  being  at  the  most  proper  time  to  try  the  general  principle  of  the 
bill,  because  I  cannot,  under  my  present  convictions,  vote  for  this  or  any 
other  bill  to  establish  a  bank,  and  therefore  wish  to  state  to  this  committee 
the  ground  of  constitutional  objection  which  I  have  to  it.  The  objection  is 
not  one  which  admits  a  right  to  legislate  on  the  subject  proposed,  but  would 
prescribe  the  precise  extent  to  which  it  might  be  exercised,  and  beyond  which 


550  BANK  OF  THE  UNITED  STATES. 

it  ought  not  to  be  exercised ;  but  it  is  an  objection  grounded  on  a  thorougli  be- 
lief, the  result  of  deliberate  examination  of  the  constitution,  and  reflection 
thereon,  that  there  does  not  exist  in  this  body  any  manner  of  right  to  legislate 
on  the  subject  at  all;  that  no  sort  of  authority  to  do  so  is  vested  in  it,  either 
by  express  grant,  or  as  incidental  to  any  express  grant. 

I  should,  indeed,  have  been  glad  it  some  gentleman  who  patronizes  this 
scheme,  would  have  presented  to  us  his  views  of  the  authority  which  he  con- 
ceives the  constitution  has  given  to  pass  such  a  bill  as  this,  that  if  I  had  been 
convinced  of  having  been  heretofore  in  error,  I  might  have  been  left  free  to 
decide  upon  the  measure  accordingly  as  it  should  appear  to  be  expedient  or 
otherwise:  but  no  gentleman  having  done  so,  in  the  course  of  a  long  discus- 
sion of  the  bill  on  the  same  subject,  which  was  before  this  body  some  time 
ago,  when  I  was  in  a  very  low  state  of  health;  and  expecting  that  the  same  si- 
lence, in  that  respect,  will  be  observed  upon  this  bill,  I  am  left  to  presume  al- 
together as  to  the  ground  on  which  the  friends  of  the  scheme  rest  for  their 
authority;  and,  being  left  so  to  presume,  I  cannot  conceive  of  any  part  of  the 
constitution  on  which  they  can  rely  for  authority,  other  than  the  concluding 
clause  of  the  eighth  section  of  the  first  article  of  the  constitution,  commonly 
called  the  sweeping  clause,  in  the  following  words:  "  To  make  all  laws  which 
shall  be  necessary  and  proper  for  carrying  into  execution  the  foregoing  powers," 
&c.:  because  there  is  no  other  part  of  the  constitution,  that  I  know  of,  which 
can  afford  even  a  shadow  of  pretext  for  exercising  such  a  power  as  is  now  pro- 
posed to  be  exercised  by  the  bill  before  you:  because,  upon  every  occasion 
which  has  heretofore  occurred,  when  a  right  has  been  claimed  to  exercise  a 
distinct  power  or  powers,  not  expressly  granted,  for  the  avowed  purpose  of 
carrying  into  execution  other  powers  that  are  so  granted,  that  clause  has  been 
always  resorted  to;  and  more  especially,  because  the  Secretary  of  the  Trea- 
sury, the  original  parent  of  this  scheme,  in  his  letter  to  the  chairman  of  the 
Committee  of  Ways  and  Means,  of  the  17th  of  October  last,  after  modestly 
suggesting  the  propriety  of  a  change  of  opinion  respecting  the  constitution,  to 
suit  the  "difference  of  times  and  circumstances,"  wound  up  his  recommenda- 
tion of  the  scheme  with  a  declaration  of  his  "  opinion,  that,  in  these  times,  it 
will  not  only  be  useful  in  promoting  the  general  welfare,  but  that  it  is  neces- 
sary and  proper  for  carrying  into  execution  some  of  the  most  important  powers 
constitutionally  vested  in  the  Government;"  thus  using  the  most  operative 
words  of  that  clause,  the  words  "  necessary  and  proper  for  carrying  into  ex- 
ecution," &c.,  and  evidently  thereby  inviting  the  attention  of  the  members  of 
this  body  to  the  clause,  as  being  of  singular  importance  in  guiding  their  deli- 
berations on  this  subject. 

It  would  seem,  sir,  nevertheless,  that  even  in  the  mind  of  the  Secretary 
himself,  there  existed  at  least  some  doubt  whether  a  power  to  establish  the 
proposed  bank  is  z/se/f  constitutionally  vested  in  Congress,  for  he  does  not  say 
that  it  is,  but  only,  that,  in  his  opinion,  "the  establishment  of  a  national  bank 
is  necessary  and  proper  for  carrying  into  execution"  some  powers  that  are 
constitutionally  vested  in  the  Government,  as  if  he  intended  to  confine  the 
actual  constitutional  investiture  to  powers  expressly  granted.  If  he  did  in- 
tend so  to  confine  it,  he  was  thus  far  correct;  for  no  power  whatever  is  con- 
stitutionally vested  in  this  body  that  is  not  expressly  granted  to  it. 

Let  the  opinion  of  the  Secretary  on  this  point  be  what  it  may,  his  letter  will 
not,  cannot,  induce  me  to  participate  in  the  exercise  of  a  power  which,  I  ve- 
rily believe,  is  not.  in  any  manner  whatever,  vested  in  this  body.  Even  if  the 
measure  proposed  should  seem  ever  so  expedient,  which,  however,  is  far  from 
appearing  to  me  to  be  the  case  with  respect  to  the  proposed  institution;  but, 
on  the  contrary,  should  it  be  established,  I  fear  it  may  ultimately  turn  out  to 
be  a  dangerous,  a  very  dangerous  political  machine  to  this  country,  even  if 
some  temporary  advantages  should  be  derived  from  it;  if  some  of  the  difficul- 
ties under  which  the  Government  is  said  to  labor,  should,  for  the  present,  be 
obviated— difficulties,  I  am  constrained  to  say,  which  might  have  been  pre- 
vented by  timely  provisions,  by  other  means  not  in  any  way  conflicting  with 
the  constitution,  which  might  have  precluded  that  great  necessity,  as  it  is  re- 


PROCEEDINGS  OF   1814. 

presented  to  be,  and  now  spoken  of  by  some  gentlemen,  as,  in  their  opinion,  so 
imperiously  calling  lor  such  an  institution  as  the  one  proposed.  But,  sir,  I 
am  not  prepared,  nor  am  I  willing,  to  admit  that  the  Government  is  in  such  a 
desperate  situation  as  to  render  the  proposed  bank  necessary  for  its  relief  or 
accommodation,  even  if  the  right  to  establish  the  institution  was  unquestion- 
able. I  deny  that  such  necessity  does  exist.  On  this  occasion,  therefore,  as 
on  others,  I  take  the  liberty  to  decide  according  to  the  dictates  of  my  own 
judgment.  If,  in  this  instance,  I  judge  upon  mere  visionary  speculation,  in 
respect  to  the  constitution,  let  the  observations  I  am  about  to  offer  to  the  com- 
mittee determine. 

In  tracing  the  features  of  the  federal  constitution,  Mr.  Chairman,  I  have 
always  found  that  they  present  themselves  to  my  mind  as  being  rooted  in  one 
great  fundamental  principle,  which  is,  that  all  the  powers  at  the  command  of 
this  Government  are  those  only  which  are  delegated  to  it.  This  principle  is 
expressly  recognised  by  an  amendment  to  the  constitution,  adopted  at  a  very 
early  period  after  the  constitution  was  carried  into  operation.  The  term 
"delegated,"  as  used  in  that  amendment,  I  consider  to  be  a  peculiar  phrase 
of  special,  distinct,  definite  meaning,  and  when  applied  to  any  particular 
power,  not  fairly  susceptible  of  implication  or  involution  of  any  distinct  power, 
other  than  the  power  to  which  it  is  immediately  and  directly  applied.  In 
other  words,  sir,  I  understand  the  term  to  mean  that  the  powers  "delegated," 
are  those  only  which  are  specifically  designated  by  express  grants.  The  de- 
legation of  me  powers  of  this  Government  comprehends,  then,  no  more  than 
what  are  distinctly  expressed  in  the  delegation  or  series  of  positive  grants. 

A  sort  of  powers,  however,  has  been  much  and  often  spoken  of,  the  true 
nature  and  extent  of  which,  perhaps,  have  not  been  always  distinctly  and 
clearly  understood,  if,  indeed,  the  existence  of  any  powers  at  all,  under  that 
denomination,  ought  to  be  admitted;  I  allude  to  what  are  called  incidental 
powers.  The  broadest  latitudinarians,  in  relation  to  the  powers  of  this  body, 
have  never,  that  I  know  of,  extended  their  notions  of  its  powers  farther  than 
to  these  two  species — the  powers  strictly  denominated  **  delegated"  powers, 
or  powers  "expressly  granted,"  and  what  they  call  "incidental"  powers. 
This  notion  of  incidental  powers,  is  deduced  altogether  from  the  same  con- 
cluding clause  of  the  8th  section  of  1st  article  of  the  constitution,  as  being 
"  necessary  and  proper"  for  carrying  into  execution  the  express  powers  spe- 
cified in  the  preceding  clauses  of  that  section;  and  very  much,  if  not  the  whole, 
of  the  diversity  of  opinion,  which  has  prevailed  in  relation  to  the  powers  con- 
stitutionally vested  in  Congress,  has  proceeded,  perhaps,  from  the  difference 
between  the  construction  given  to  that  clause  by  some,  and  the  construction 
given  to  it  by  others. 

According  to  my  understanding  of  the  word  "  incidental,"  I  take  it  to  be 
an  adjective,  not  only  in  point  of  grammar  strictly,  but  that,  if  it  can  properly 
be  applied  to  any  power  at  all,  it  can  be  applied  only  to  a  power  which  is  itself 
but  the  adjective  or  adjunct  of  another  power  to  which  it  belongs,  and  has  no 
existence  separate  from  that  power.  In  my  opinion,  then,  what  is  commonly 
called  incidental  powers,  are  not  real,  distinct  powers,  but  rather  modes  of 
exercising  the  express  powers  to  which  they  belong  or  are  incident.  Whence, 
sir,  I  consider  myself  perfectly  justifiable  in  the  declaration,  that  the  clause 
in  the  constitution,  which  has  been  mentioned,  and  by  which  alone,  it  is  gene- 
rally thought,  the  exercise  of  those  supposed  incidental  powers  is  authorized, 
does  not  embrace  any  distinct  substantive  power  at  all.  The  power  now  pro- 
posed to  be  exercised,  in  passing  the  bill  before  you,  I  consider  to  be  a  distinct 
substantive  power,  as  clearly  as  any  power  can  be,  and  therefore  not  embraced 
in  that  clause.  It  is  not  expressly  granted,  as  must  be  admitted  by  every 
body;  whence  it  is  evident  to  my  mind,  that  it  is  not,  in  any  manner  what- 
ever, vested  in  this  body,  and  therefore  cannot  be  constitutionally  exercised 
by  this  body. 

Firmly,  then,  as  the  Secretary  of  the  Treasury,  or  other  advocates  of  this 
bill,  may  conceive  the  doctrine  they  entertain  in  favor  of  it  to  be  supported 
by  the  clause  of  the  constitution  which  has  been  mentioned,  I  must  beg  leave 


552  BANK  OF  THE  UNITED  STATES. 

to  differ  from  them  entirely  in  opinion.  1  consider  it  affording  no  solid,  no 
substantial  support  at  all  to  such  a  doctrine;  and  never,  in  my  opinion,  was 
an  appellation  more  improperly  bestowed  upon  any  thing,  than  the  appellation 
which  has  been  bestowed  upon  that  clause.  On  account,  then,  of  the  very  ex- 
tensive latitude  of  construction  given  to  the  clause,  ascribing  to  it  abundantly 
more  force  than  it  actually  possesses,  I  have  been  inclined  to  think  that  it 
might  have  been  better,  perhaps,  if  the  clause  had  never  been  inserted  in  the 
constitution;  or,  at  least,  that  part  of  it  which  relates  to  the  several  grants  of 
power  specified  in  the  preceding  clauses  of  the  section.  For,  so  far  from 
sweeping — by  which,  it  would  seem,  is  meant  (if,  indeed,  the  appellation  is 
designedto  mean  any  thing)  a  carrying  along  with  it  powers  not  specified  in 
the  enumeration  of  slants  immediately  preceding  the  clause — it  carries  along 
with  it  nothing  at  all.  It  imparts  not  a  scintilla  of  power  to  Congress  which 
the  preceding  enumeration  does  not  grant.  If,  then,  by  the  ascription  to  it 
of  the  sweeping  quality,  be  really  meant  that  it  imparts  to  Congress  powers 
other  than  those  enumerated  in  the  preceding  clauses  of  the  section,  which 
are  distinct  from,  and  additional  to  them,  indefinite  in  number  and  extent,  a 
little  reflection,!  should  imagine,  might  convince  any  one  that  such  construc- 
tion must  involve  dangerous  consequences — that  such  would  be  a  sweeping 
quality,  indeed — that  it  might  sweep  away,  not  only  all  the  restrictions  in- 
tended by  the  specification  of  those  particular  grants  of  power,  but  also  every 
vestige  of  authority  reserved  to  the  States.  Yes,  sir,  such  must  be  its  quality, 
such  the  extent  of  its  force,  if  it  be  allowed  that  the  clause  conveys  to  Con- 
gress any  real  substantive  powers  not  contained  in  the  special  grants  enume- 
rated. For  if  it  be  admitted  that  it  conveys  any  such  additional  powers  at 
all,  since  they  are  not  defined,  they  would  consequently  be  general  as  well 
as  unlimited.  To  give  to  the  clause,  then,  the  full  force  which  the  appella- 
tion by  which  it  has  been  distinguished,  were  it  a  proper  appellation  tor  it, 
would  be,  in  fact,  to  give  to  Congress  general,  unlimited,  discretionary  powers. 
I  presume,  sir,  that  nothing  would  be  hazarded  by  the  declaration,  were  I  to 
take  upon  myself  to  affirm,  that  not  a  single  member  of  this  honorable  body 
will  admit  that  it  contains  a  grant  of  such  general,  discretionary  powers. 
Hence,  sir,  it  is  clear  to  my  mind,  that  those  who  ascribe  to  the  clause  in 
cmestion  the  quality  which  seems  to  have  been  ascribed  to  it,  must  be  involved 
in  the  dilemma  of  either  advocating  so  great  an  extent  of  power  as  existing  in 
this  body,  as  would  render  altogether  useless  and  nugatory  the  special  grants 
of  power  enumerated  in  the  constitution,  and,  therefore,  much  more  power 
than  they  would  really  be  willing  to  allow  it  to  convey;  or  of  admitting,  at 
last,  that  it  conveys  none  at  all  more  than  what  the  enumeration  of  itself 
grants  without  that  clause.  Hence,  too,  it  is  equally  clear  to  me,  that,  so  far 
from  conferring  on  this  body  any  real  powers  additional  to  those  described  in 
the  preceding  enumeration,  the  clause  is  merely  the  recognition  of  a  general 
principle,  necessarily  inherent  in  each  grant  of  power,  that  Congress,  being  in- 
vested with  the  power >  may  use,  or  authorize  by  law  a  use  of  the  natural  ap- 
propriate means  of  carrying  the  power  into  execution,  for  which  purpose 
alone  such  means  can  be  used,  the  application  of  them  depending  entirely 
upon  the  exercise  of  the  power  granted,  and  without  which  right  allthe  seve- 
ral grants  expressed,  would  be  merely  so  many  naked  grants,  and  would  con- 
vey to  this  body  no  such  powers  as  the  grants  purport  to  convey. 

Permit  me,  sir,  to  illustrate  the  position  I  have  now  advanced,  by  a  refer- 
ence to  one  of  the  special  grants  of  power  enumerated.  1  say  one  of  them, 
because  it  would  be  unnecessary  to  trouble  the  committee  with  any  more,  al- 
though observations  similar  to  those  about  to  be  made  on  the  one  selected, 
might  be  made  upon  all,  or  nearly  all  of  them,  tending  equally  to  establish  the 
truth  of  the  position,  but  which  would  require  more  time  than,  perhaps,  it  might 
be  either  convenient  or  agreeable  to  the  committee  to  be  detained;  and  be- 
cause it  is  believed  that  the  observations  on  one  of  them,  may  suffice  for  my 
purpose  as  amply  as  if  I  were  to  trouble  the  committee  with  similar  remarks 
on  all  of  them.  I  will  take  the  first  grant,  enumerated  in  these  words:  "Con- 
gress shall  have  power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises," 


PROCEEDINGS  OF    1814.  553 

&c.  To  this  grant  let  the  clause  in  question  be  applied,  and  the  recognition 
of"  the  principle  I  have  mentioned,  may,  I  think,  be  clearly  perceived.  What 
is  its  operation?  The  words  of  the  grant  expressly  confer  on  Congress  a  spe- 
cific power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises.  Now,  sir, 
does  this  grant  operate  no  further  than  merely  to  authorize  Congress  to  pro- 
vide, by  law,  that  "  taxes,  duties,"  &c.,  on  certain  articles,  at  certain  rates, 
or  to  certain  amounts,  shall  be  laid  and  collected,  and  to  do  no  more?  To 
confine  its  operation  to  this  limit,  would  be  to  ascribe  no  efficient  meaning,  to 
give  no  force  at  all  to  the  words  toy  and  collect.  But  they  certainly  have  such 
meaning — they  certainly  have  some  force;  and.  from  the  operation  of  the  ge- 
neral principle,  such  as  I  have  alluded  to,  which  is  necessarily  inherent  in  the 
grant  of  "power  to  lay  and  collect  taxes,  duties,*'  &c.,  Congress  becomes  vest- 
ed with  a  right  to  authorize,  by  law,  a  use  of  the  natural,  appropriate  means 
of  causing  taxes,  duties,  &c.,  to  be  laid  and  collected,  which,  in  fact,  is  no- 
thing more  than  an  efficient  exercise  of  the  simple  "  power  to  lay  and  collect 
taxes,  duties,"  &c.;  such  as  to  authorize,  by  law,  the  establishment  of  custom 
houses,  rules  for  the  entrances  and  clearances  of  vessels,  the  employment  of 
public  armed  vessels  about  the  mouths  of  rivers,  or  other  inlets  and  outlets, 
and  on  the  coasts,  to  prevent  smuggling  and  evasions  of  duties  directed  by 
law  to  be  laid  on  imports,  the  appointments  of  collectors,  inspectors,  and 
other  necessary  officers  for  collection  of  the  revenues  arising  therefrom,  and 
conveyance  of  them  into  the  treasury:  so  also  in  relation  to  the  system  of  in- 
ternal taxation  lately  established,  and  now  enlarged,  as  appropriate  means  of 
carrying  the  system  into  effect,  the  appointments  of  a  commissioner  of  that 
revenue,  collectors,  assessors,  and  other  necesssary  (.officers,  and  rules  of  pro- 
ceeding in  every  case  of  taxation,  have  been  all  authorized  by  law,  for  the 
purposes  of  levying  the  taxes  and  bringing  them  into  the  use  of  the  Govern- 
ment. 

Now,  sir,  I  beg  leave  to  ask,  would  not  Congress  have  had  a  constitutional 
right  to  make  laws  authorizing  all  the  several  proceedings  I  have  just  noticed, 
if  the  clause,  which  has  been  cited,  had  never  been  inserted  at  the  end  of  the 
section  which  has  been  mentioned?  Can  there  exist  any  doubt  respecting  its 
authority  to  have  done  so?  It  seems  to  me  that  not  a  shadow  of  ground  for 
doubting  its  authority  would  have  existed;  but  that  the  words  "  shall  have 
power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises,"  convey  to  this 
body  the  same  extent  of  authority  as  the  grant  would,  if  it  had  been  expressed 
that  Congress  shall  have  power  to  lay  and  collect  taxes,  duties,  imposts,  and 
excises,  by  making  the  necessary  and  proper  laws  for  laying  and  collecting 
them.  For  a  legislature  cannot  lay  and  collect  taxes,  duties,  imposts,  or  ex- 
cises, but  by  makmg  some  law  or  laws  for  laying  and  collecting  .them;  that  is 
to  say,  some  law  or  laws  appropriate  to  the  purposes  of  laying  and  collecting 
them. 

The  "  power  to  lay  and  collect  taxes,  duties,  imposts,  and  excises,"  is  the 
same,  then,  as  a  power  to  make  laws  which  shall  be  "  necessary  and"  proper" 
to  lay  and  collect  taxes,  duties,  imposts,  and  excises.  But  to  make  laws 
which  shall  be  "  necessary  and  proper"  to  lay  and  collect  taxes,  duties,  &c., 
is  the  same  as  to  make  laws  which  shall  be  tfc  necessary  and  proper  for  carry- 
ing intc  execution"  the  power  to  lay  and  collect  taxes,  duties,  &c.  Hence, 
then,  a  power  to  make  laws  which  shall  be  "  necessary  and  proper  for  cany- 
ing  into  execution"  the  power  to  lay  and  collect  taxes?  duties,  imposts,  and 
excises,  is  the  same  as,  and  can  be  no  more  than,  the  simple  power  "  to  lay 
and  collect  taxes,  duties,  imposts,  and  excises."  It  is  evident,  therefore,  to 
my  mind,  sir,  that  what  have  been  generally  called  powers  incidental  to  ex* 
press  powers,  are  not  real,  distinct  powers,  but  nothing  more  than  modes  of 
exercising  the  express  powers  to  which  they  belong,  or  using  the  natural,  ap- 

Eropriate  means  of  carrying  them  into  execution,  which  are  the  only  purposes 
>r  which  the  means  are  required,  and  to  which  only  they  can  be  applied,  the 
objects  on  which  they  can  operate  being  those  only  on  which  the  express 
powers,  to  which  they  respectively  belong,  are  exercised;  that  nothing  more 
is  comprehended  within  the  meaning  of  the  words  "  to  make  all  laws  which 
70 


554        BANK  OF  THK  UNITED  STATES. 

shall  be  necessary  and  proper  for  carrying  into  execution  the  foregoing  powers/* 
&c.f  contained  in  the  clause  which  has  been  characterized  as  the  sweeping 
clause,  and  to  which  so  extensive  a  scope  has  been  given. 

Now,  Mr.  Chairman,  if  the  words  tfc  to  make  all  laws,  which  shall  be  ne- 
cessary and  proper,"  instead  of  having  been  inserted  at  the  end  of  the  sec- 
tion, had  been  inserted  in  the  first  grant,  between  the  word  "  power"  and  the 
words  "  to  lay  and  collect  taxes,  duties,"  &c.  so  as  to  have  made  the  clause  read 
thus:  "  Congress  shall  have  power  to  make  all  laws  which  shall  be  necessary 
and  proper  to  lay  and  collect  taxes,  duties,"  &c.  would  any  gentleman  con- 
tend that  Congress,  under  this  grant,  so  modified,  would  have  a  constitutional 
right  to  exercise,  as  the  means  of  laying  and  collecting  taxes,  duties,  &c.,  a 
distinct  substantive  power,  not  expressed  in  the  grant,  and  not  necessarily 
belonging  to  the  power  of  laying  and  coil-acting  taxes,  duties,  &c.,  but  which 
could  be  exercised  independently  of  the  exercise  of  that  power,  and  operate  on 
objects  not  at  all  connected  with  the  exercise  of  it?  Surely  not:  yet,  it  is  the 
same  thing  to  contend  that  those  words  of  the  clause,  at  the  end  of  the  section, 
contain  a  grant  of  such  power;  for,  they  apply  to  each  special  grant  of  power 
enumerated  in  the  same  manner,  and  only  in  the  same  manner,  as  if  they  had 
been  incorporated  into  the  body  of  each  grant,  respectively.  Nothing  can  be 
more  clear  and  evident  than  that  the  words  so  apply,  and  so  only.  Neverthe- 
less, sir,  this  famous  clause  has  been  so  construed,  and  I  suppose,  still  is  so  con- 
strued as  to  give  to  Congress  separate,  distinct,  and  substantive  powers,  not 
expressed  in  the  enumeration  of  grants.  Expediency  is  made  the  basis  of  such 
construction;  and,  from  an  opinion  entertained  by  some  gentlemen,  that  the 
proposed  banking  institution  may  afford  a  useful  engine  to  the  Government  in  its 
financial  arrangements;  though  the  correctness  of  that  opinion  is  controverted 
by  ethers,  and  is,  upon  the  whole,  extremely  problematical:  yet,  from  their 
opinion  merely  of  its  expediency,  a  right  to  establish  the  institution  is  claim- 
ed, and  now  in  rapid  exercise;  although  nothing  can  be  more  evident,  than 
that,  to  do  so,  is  to  exercise  a  distinct,  substantive  power,  not  contained  in  the 
enumeration;  a  power  as  distinct  and  substantive  as  any  of  those  enumerated 
are,  with  respect  to  the  others,  on  the  list.  This  observation  leads  me,  sir, 
and,  indeed,  almost  irresistibly  impels  me,  to  brine  to  the  notice  of  the  com- 
mittee, one  particular  grant  of  power  enumerated,  so  extremely  apt,  in  my 
opinion,  and  well  fitted  is  it  for  a  further  illustration  of  the  principles  I  con- 
tend for.  It  is  the  power  "  to  establish  post  offices  and  post  roads." 

Here,  sir,  is  a  power  distinctly  expressed  in  the  enumeration,,  of  so  much 
importance  to  the  Government,  in  affording  ready,  convenient,  and  expedi- 
tious means  of  conveyance  of  intelligence,  to  and  from  every  department, 
every  branch,  and  every  individual  member  of  every  branch  and  department 
of  the  Government,  as  well  as  to  and  from  the  citizens  of  the  United  States 
at  large,  as  to  render  it  almost  absolutely  necessary  for  carrying  on  the  affairs 
of  the  Government.  Yet,  we  see  this  power  expressly  designated  in  the  enu- 
meration. "Why  do  we  see  it  here  expressly  designated?  For  this  very  ob- 
vious and  undeniable  reason — that  it  is  a  power  completey  substantive  in  its 
nature;  distinct  and  separate  from,  and  independent  of,  all  others  enumerat- 
ed. Whence  the  iramers  of  the  constitution,  from  a  consideration  of  its 
great  importance  to  the  General  Government,  and  the  manifest  propriety  of 
vesting  it  in  this  Government,  took  care  to  insert  it  in  the  enumeration  of 
express  grants — well  knowing  that  it  could  not,  by  any  possible  just  construc- 
tion, be  considered  as  the  incident  of  any  of  those  express  grants;  and,  con- 
sequently, that,  however  necessary  and  proper  it  might  be  for  carrying  on  the 
affairs  of  the  Government,  such  a  power  could  not  be  constitutionality  exer- 
cised, unless  inserted  amongst  the  express  grants. 

Now,  Mr.  Chairman,  1  will  seriously,  I  will  solemnly,  address  myself  to 
the  members  of  this  honorable  body,  and  ask,  will  any  gentleman  undertake 
to  say,  that  the  power  to  establish  such  an  institution  as  the  one  now  proposed; 
an  institution  of  such  vast  moment,  involving  interests  so  deep,  so  extensive, 
so  fathomless,  indeed,  as  almost  to  baffle  the  powers  of  human  language 
to  describe  them;  an  institution  which,  if  established,  as  was  said,  and  justly 


PROCEEDINGS    OF    1814.  555 

said,  by  a  gentleman  from  New  York,  (Mr.  OAKLEY)  some  time  ago,  in  rela- 
tion to  the  bill  on  the  same  subject,  then  under  discussion,  will  be  likely  to 
wield  the  destinies  of  this  nation  for  ages  to  come?  I  say,  sir,  will  any  gen- 
tleman undertake  to  affirm  that  a  power  to  establish  sush  a  monstrous  institu- 
tion as  this,  is  not  a  power  as  completely  substantive  in  its  nature,  as  the 
power  to  establish  post  offices,  and  to  direct  that  the  mails  shall  be  carried  on 
certain  roads?  Sir,  is  the  sun,  shining  in  his  meridian  splendor,  clearer  to 
the  eye,  than  it  must  be  to  every  mind,  high  and  low,  wise  and  ignorant,  that 
a  power  to  create  so  terrific  and  stupendous  an  establishment  as  this,  is  no 
less  a  substantive  power,  and  no  less  distinct  and  separate  from,  and  inde- 
pendent of,  all  others,  whatever,  than  is  the  power  to  establish  post  offices  and 
post  roads?  Sir,  this  is  too  clear  and  too  plain  to  need  any  illustration.  It 
would  be  but  an  idle  waste  of  time,  indeed,  to  trouble  the  committee  with  any 
observations  upon  it,  with  a  view  of  attempting  to  prove  more  clearly  that  it 
is  such  a  power;  and,  if  gentlemen  are  determined  to  assume  the  power,  the 
exercise  of  it  will  be  totally  unconnected  with  that  of  any  of  the  express 
povyers  enumerated  in  the  constitution,  and  its  operation  is  independent  of 
their  operation,  as  the  power  itself  is  independent  of  all  those  express  pow- 
ers. These  are  the  characteristic  properties  of  a  distinct,  substantive  power. 
Strange,  I  think,  must  be  the  construction,  then,  which  interprets  it  to  be  a 
power  merely  incidental  to  either  of  those  express  powers,  and,  since  it  is  not 
itself  one  of  them,  my  impressions  are  irresistible,  that  it  is  not  in  any  man- 
ner vested  in  this  body,  and  therefore  cannot  be  constitutionally  exercised 
by  it. 

Sir,  if  the  doctrine,  under  which  this  power  is  assumed  and  exercised, 
should  be  generally  tolerated  and  sanctioned;  if  this  vast  unlimited  latitude 
of  construction  should  become  the  established  construction  of  the  clause  in  the 
constitution,  which  has  been  so  often  referred  to,  what  will  become  of  the  great 
land  marks  of  the  constitution?  Will  they  not,  in  effect,  be  all  levelled  with 
the  ground?  Will  not  the  wide  unbounded  ocean  of  human  affairs  be  then 
laid  open  to  this  restricted  Federal  Legislature,  (as  every  body,  who  pretends 
to  know  any  thing  of  the  principles  of  the  constitution,  acknowledges  it  to  be} 
to  select  from  them  such  subjects  as  it  may  choose,  as  bases  of  its  lawsr 
Surely,  sir,  it  will.  All  the  restrictions  contained  in  the  constitution,  which 
have  been  marked  out  by  the  specification  of  particular  powers,  as  limitations 
to  Congress,  in  legislating  for  these  United  States,  will  be  swept  away— will 
be  annihilated;  and  there  will  be  nothing  to  hinder  a  course  of  legislation 
from  being  pursued  without  restraint,  without  any  limitation,  whatever,  but 
its  own  discretion,  as  to  what  it  may  determine  upon  as  necessary  or  proper 
to  be  done.  Sir,  can  a  single  object  fall  within  the  compass  of  the  human 
imagination,  which  may  not  be  also  drawn  within  the  scope  of  this  boundless 
construction,  and,  according  to  it,  be  deemed  a  legitimate  subject  of  congres- 
sional legislation?  Not  one,  sir.  Every  possible  object  of  human  legislation, 
not  palpably  repugnant  to  the  first  principles  of  our  nature,  of  which  the  mind 
can  conceive,  under  this  very  extensive  construction,  may  as  well,  and  as 
rightfully,  form  a  basis  of  legislation  for  this  body,  as  the  subject  on  which  it  is 
now  acting.  Admit  this  doctrine  as  correct,  and  in  vain,  sir,  has  your  con- 
stitution been  framed  upon  the  principle  that  "  the  powers,  not  delegated  to 
the  United  States  by  the  constitution,  nor  prohibited  by  it  to  the  States,  are 
reserved  to  the  States,  respectively,  or  the  People."  In  vain  has  this  hallow- 
ed principle  been  solemnly  recognised,  and  expressly  incorporated  into  'he 
constitution,  by  way  of  amendment.  In  vain  have  the  People  of  these  States 
confided  in  this  great  fundamental  principle  as  a  solemn  and  safe  guarantee 
of  their  State  sovereignties.  There  is  not  a  single  power,  heretofore  consi- 
dered as  reserved,  and  heretofore  deemed  sacred  to  the  States,  which  may  not 
be  as  rightfully  exercised  by  this  body,  as  the  power  now  proposed  to  be  exer- 
cised by  it:  for,  I  aver  that  not  a  single  power  is  more  completely  reserved 
to  the  States,  under  the  constitution,  than  this  power  is;  that,  if  this  power  is 
not  reserved,  no  power,  whatever,  is  reserved  to  them;  and  it  would  be  pre- 
posterous, indeed,  to  talk  or  think  of  reserved  poweri  at  all.  But,  sir,  I  under- 


556  BANK  OF  THE  UNITED  STATES. 

take  to  aver  that  this  power  is  not  delegated  to  this  body,  either  expressly  or 
incidentally,  and  I  do  consider  an  exercise  of  it,  by  this  body,  as  an  unau- 
thorized assumption — as  an  usurpation  not  only  not  warranted,  but  absolutely 
forbidden  to  it  by  the  constitution.  I  assert,  then,  that  this  monstrous  con- 
struction operates  no-  less  than  a  complete  reversal  of  the  great  and  essential 
principle  which  has  been  spoken  of — introduces  the  fatal,  destructive  one? 
that  all  powers,  whatever,  are  delegated  to  the  United  States,  which  are  not 
expressly  reserved  to  the  States;  and,  in  effect,  converts  this  Government  of 
special,  defined,  express  powers,  into  one  entire  consolidated  government, 
of  general,  undefined  powers. 

Let  this  alarming  doctrine  be  fully  confirmed  and  established,  what  a  fatal 
rerification  will  it  be  of  the  presages  of  some  of  our  venerable  statesmen r 
whose  mortal  remains  have  long  since  been  mouldering  in  the  grave!  At  the 
ever  memorable  and  important  epoch  when  the  People  of  these  States  were 
called  upon  to  deliberate  on  the  great  and  interesting  question  relating  to  the 
adoption  of  this  constitution,  the  minds  of  many  were  impressed  with  serious, 
with  solemn,  and  with  awful  apprehensions,  mingled  with  no  small  degree  of 
alarm,  that  the  very  clause  in  the  eighth  section  of  the  first  article  of  the  con- 
stitution, which  has  been  so  often  cited,  might  be  resorted  to  as  a  ground  for 
legislating  to  an  extent  never  contemplated  by  the  framers  of  the  constitution 
as  being  within  the  scope  of  its  true  and  legitimate  meaning.  It  was  feared 
that  the  term  fr*  necessary,"  contained  in  the  clause,  though  qualified  and  re- 
stricted in  its  meaning'1  bv  the  addition  of  the  term  u  proper,"  from  the  union 
and  combination  of  which  two  qualities,  it  was  manifestly  intended  to  apply 
the  clause  to  the  making  of  such  laws  only,  as  should  have  an  immediate  re- 
lation to,  and  a  natural,  intimate  connexion  with,  the  enumerated  ex- 
press powers,  as  means  or  instruments  of  carrying  them  efficiently  into  exe- 
cution, might,  nevertheless,  be  so  perverted  as  toliaye  a  construction  given  to 
the  clause,  not  confined  to  the  limits  embraced  within  that  intention,  but  arbi- 
trarily extended  to  laws  having  no  manner  of  relation  to,  and  no  sort  of  na- 
tural connexion  with, 


construction,  once  est 

self  to  the  widest  c 

general,  were  satisfied,  however,  to  receive  the  constitution  as  proposed,  with 

that  clause  in  it,  resting  their  hopes  upon  the  principles  and  structure  of  it. 

that  these  were  sufficiently  clear  and  explicit  to  guard  against  the  abuses  and 

dangers  so  much  apprehended  by  some. 

Now,  Mr.  Chairman,  will  the  thirteenth  Congress  of  the  United  States — 
fatally  to  those  hopes — fatally  to  the  pleasing  expectations  then  entertained  by 
the  People  who  adopted  this  constitution — will  they  so  soon  verify  the  pre- 
sages which  have  been  alluded  to?  Will  they,  in  the  re- establishment  of  so 
dangerous  a  precedent,  which  was  thought  to  have  been  happily  demolished 
but  three  or  four  years  ago,  by  a  refusal  to  re-charter  a  similar  institution; 
will  thev.  I  say,  at  so  early  a  period  after  that  event,  by  a  creation  of  the 
proposed  huge  mammoth  institution,  sufficiently  capacious  to  swallow  up  four 
or  nve  of  the  former  establishment;  thus,  hermetically  seal  and  secure,  per- 
haps forever,  the  ground  work  of  future  assumptions  of  power,  and  this,  too. 
by  adopting  a  measure,  of  itself  fraught  with  inconceivable  danger,  the  natural 
tendency  of  which  will  be  gradually,  at  least,  if  not  rapidly,  (and  if  such  a 
sad  misfortune  must  befal  this  country,  I  pray  that  it  may  be  but  gradual!) 
to  break  down  the  barriers  of  the  constitution,  and  sweep  away  the  restric- 
tions and  limitations  of  power,  marked  out  by  the  specification  of  particular 
grants,  as  designated  in  the  constitution?  Sir,  should  such  a  state  of  things 
ever  arrive— should  such  ever  be  the  condition  of  this  country,  when  this  Le- 
gislature should  so  entirely  change  its  true  character — when  it  should  no 
longer  confine  its  proceedings  to  the  limits  of  its  "  delegated"  powers,  and  the 
great  leading  principles  of  the  constitution—when  these  principles  snould  be 
disregarded,  and  cease  to  have  any  force,  who  could  undertake  to  say  how 
far  an  evil  of  such  great  magnitude  might  not  progress?  No  man,  F  undertake 
to  affirm,  could  prophetically  explore  the  full  extent  of  its  progress. 


PROCEEDINGS  OF  1814.  557 

It  is  not  much  to  be  wondered  at,  perhaps,  that  gentlemen  should  differ  in 
opinion  as  to  the  extent  to  which  a  power,  though  expressly  granted,  ought  to 
be  exercised,  when  that  power  is  in  its  nature  limited,  or  qualified  by  the 
terms  of  the  grant,  to  which  different  gentlemen  may  give  different  construc- 
tions, as  on  several  recent  occasions  we  have  witnessed.  But,  when  a  power 
is  assumed,  which  is  not  even  mentioned  in  the  constitution,  I  must  confess, 
sir,  it  appears  to  me  as  something  much  more  extraordinary.  If  an  erroneous 
construction  in  the  first  case  should  prevail  at  one  time,  the  evil  will  be  re- 
medied, perhaps,  by  a  more  correct  construction  at  another  time,  the  express 
power  being  always  a  fixed,  defined  standard,  to  which  the  mind  can  resort? 
and,  therefore,  the  precedent  is  not  likely  to  be  as  durable  and  dangerous  as 
in  the  latter  case,  where  a  mere  arbitrary  interpretation,  or  opinion,  having, 
at  any.time,  prevailed,  upon  the  general  ground  of  necessity  or  expediency, 
without  any  such  fixed,  defined  standard  to  judge  by;  one  assumption  is  much 
more  likely  to  form  a  durable  precedent  for  future  similar  assumptions  from 
time  to  time,  in  succession,  and,  consequently,  so  much  the  more  dangerous. 
If,  therefore,  it  be  not  too  late— if  gentlemen  have  not  irrevocably  made  up 
their  minds  upon  this  subject,  I  would  beseech  this  honorable  assembly  to 
consider — to  pause  for  a  while — to  meditate  on  a  subject  of  such  vast  magni- 
tude, before  they  come  to  such  irrevocable  decision  in  favor  of  it,  and  not  pre- 
cipitately hurry  into  the  adoption  of  a  measure  so  big  with  momentous,  incal- 
culable consequences — consequences,  the  extent  of  which  the  keenest  fore- 
sight of  man  cannot  now  discern — the  baneful  influences  of  the  evils  of  which 
may  be  such  as  the  most  eagle  eyed  statesman  our  country  produces,  may  not 
be  able  to  trace,  until  they  shall  have  extended  themselves  beyond  the  reach 
of  any  practicable  remedy ! 

The  question  being  about  to  be  put  on  Mr.  CLOPTON'S  motion,  without  de- 
bate, 

Mr.  GASTON,  of  North  Carolina,  took  the  floor.  Among  the  most  alarming 
indications  of  the  times,  he  remarked,  was  the  apathy  which  pervaded  the 
House  on  this  occasion;  an  apathy  resembling  the  numbness  which  generally 
precedes  mortal  dissolution,  under  the  influence  of  which  a  question  of  such 
importance  as  this  was  about  to  be  taken  without  debate,  and  almost  without 
deliberation.  If  the  bill  would  produce  that  effect  which  its  friends  predicted, 
it  would  prove  a  beneficial  and  valuable  institution;  if  fraught  with  the  mis- 
chiefs which  he  saw  in  it,  its  passage  would  bring  with  it  certain  destruction 
to  the  nation.  He  took  it  for  granted,  from  the  course  of  proceedings  which 
had  taken  place  in  the  house,  when  this  subject  was  before  under  considera- 
tion, that  all  hope  of  obtaining  a  bank,  at  all  resembling  what  banks  have  here- 
tofore been,  must  now  cease;  and  that  the  institution  embraced  by  (his  bill,  if 
it  passed,  would  be  a  mere  paper  bank,  and  nothing  else,  from  which  no  bene 
fit  could  result  to  the  Government  or  the  community.  He  examined  the  cha- 
racter of  this  bill,  and  particularly  objected  to  the  extent  of  the  capital;  the 
limited  proportion  of  specie  to  be  employed  in  it;  and  the  power  to  suspend 
specie  payments.  Upon  a  full  view  of  all  its  features,  he  denied  that  it  would 
restore  public  credit,  o-r  establish  an  adequate  circulating  medium,  the  pur- 
poses which  its  friends  hoped  it  would  accomplish.  It  would,  on  the  con- 
trary, from  the  moment  of  its  establishment,  give  birth  to  a  monstrous  scene 
of  stock  jobbing  and  speculation,  always  detrimental  to  the  public  credit. 
By  a  system  of  ri<nd  economy,  and  carrying  into  effect  the  taxes  agreed  to  by 
the  House,  he  said,  he  had  some  hope  that  the  Government  would  weather  the 
storm  with  which  it  was  assailed,  without  national  bankruptcy;  but,  if  Con- 
gress passed  a  bill  of  this  kind,  he  conscientiously  believed  it  would  not  be 
possible  to  avoid  the  evil;  and  that,  if  they  passed  this,  they  might  as  well,  at 
the  same  time,  pass  a  bill  of  national  bankruptcy. 

Mr.  M'KiM,  of  Maryland,  said,  without  saying  how  he  should  vote  on  the 
final  question,  he  should  vote  against  the  motion  to  strike  out  the  first  section 
of  the  bill,  in  the  present  stage  of  it,  from  motives  of  respect  to  the  co-ordinate 


558  BANK    OF  THE    UNITED    STATES. 

branch  of  the  Legislature,  from  which  the  bill  came,  and  to  those  who  advo- 
cated the  bill  in  mis  House. 

The  motion  to  strike  out  the  first  section  of  the  bill  was  then  decided  in  the 
negative,  by  the  following  vote: 

For  striking  it  out,     50, 

Against  it, *71. 

Mr.  FISK  then  briefly  explained  the  character  of  this  bill,  and  in  what  re- 
spect the  amendments  proposed  by  the  committee  would  change  the  features 
of  it.  The  bill,  as  it  came  from  the  Senate,  and  as  it  now  stands,  proposes 
that  the  forty  millions  to  be  subscribed  by  individuals,  shall  be  at  the  rate  of 
twenty-seven  millions  of  dollars  in  war  stock,  five  millions  in  specie,  and 
eight  millions  in  treasury  notes;  and  that  subscriptions  shall  be  opened  in 
Boston,  Baltimore,  New  York,  Philadelphia,  Richmond,  Charleston,  and 
Pittsburg.  The  committee  had  recommended  to  reduce  the  proportion  sub- 
scribable  by  individuals,  to  thirty -five  millions,  of  which  twenty  to  be  in  pub 
lie  stock,  five  in  specie,  and  ten  in  treasury  notes.  The  details  of  the  bill, 
being  nearly  the  same  as  those  of  the  bill  originally  reported  in  this  House, 
were  not  proposed  to  be  changed,  except  that  the  committee  had  recommended 
that  books  ot  subscription  should  be  opened  at  one  place  in  every  State,  in  con- 
formity with  what  appeared  to  be  the  sentiment  of  the  House  when  the  bill  was 
before  under  consideration. 

The  amendments  proposed  by  the  Committee  of  Ways  and  Means  to  the 
bill,  were  separately  considered,  and  agreed  to  by  a  considerable  majority. 

The  committee  proceeded  in  further  consideration  of  the  bill;  rose,  after  4 
o'clock,  reported  progress,  and  obtained  leave  to  sit  again. 

DECEMBER  24,  1814. 

On  motion  of  Mr.  FISK,  of  New  York,  the  House  again  resolved  itself  into 
a  committee  of  the  whole,  Mr.  MACON,  of  North  Carolina,  in  the  chair,  on  the 
bill. 

The  whole  of  the  day  was  consumed  in  the  discussion  of  the  details  and 
propositions  to  amend  this  bill,  without  giving  birth  to  any  material  amend- 
ments. 

The  amendments  made  in  the  committee,  were  reported  to  the  House,  and 
agreed  to,  before  the  House  adjourned. 

As  amended,  the  bill  exhibited  the  following  features,  viz: 

The  capital  to  consist  of  fifty  millions  of  dollars,  divided  into  shares  of  five 
hundred  dollars  each,  subscribable  and  payable  as  follows:  by  the  Government, 
in  stock,  to  bear  an  interest  of  four  per  cent,  per  annum,  fifteen  millions;  by  in- 
dividuals, the  remaining  thirty-five  millions,  payable  as  follows,  viz:  Jive  mil- 
lions in  specie,  ten  millions  in  treasury  notes,  and  twenty  millions  in  what  is 
usually  called  the  war  stock.  The  bank  to  commence  its  operations  so  soon 
as  eleven  millions  five  hundred  thousand  dollars  are  paid  in,  in  the  proportions 
before  mentioned,  of  specie,  treasury  notes,  and  stock. 

Other  amendments  were  proposed  to  the  bill;  when  the  House  adjourned, 
at  dusk,  without  taking  a  question  on  the  bill's  going  to  a  third  reading. 

DECEMBER  26,  1814. 

The  House  proceeded  to  consider  the  amendments  reported  by  the  commit- 
tee of  the  whole  house;  and,  the  amendments  being  further  amended,  were 
concurred  in  by  the  House,  except  that  which  goes  to  add  a  new  section  to 
the  bill,  which  was  concurred  in,  by  a  subsequent  vote;  Yeas  95,  Nays  36; 
which  section  is  as  follows: 

SEC.  14.  And  be  it  further  enacted.  That  it  shall  at  all  times  be  lawful  for 
a  committee,  of  either  House  of  Congress,  appointed  for  that  purpose,  to  in- 
spect the  books,  and  to  examine  into  the  proceedings  of  the  corporation  hereby 


PROCEEDINGS   OF   1814. 

created  j  and  to  report  whether  the  provisions  of  this  charter  have  been  by  the 
same  violated  or  not:  and  whenever  any  committee,  as  aforesaid,  shall  find 
and  report,  or  the  President  of  the  United  States  shall  have  reason  to  believe, 
that  the  charter  has  been  violated,  it  may  be  lawful  for  Congress  to  direct,  or 
the  President  to  order,  a  scire  facias  to  be  sued  out  of  the  circuit  court,  for  the 
district  of  Pennsylvania,  in  the  name  of  the  United  States,  which  shall  be  ex- 
ecuted upon  the  President  of  the  corporation,  for  the  time  being,  at  least  fifteen 
days  before  the  commencement  of  the  term  of  said  court,  calling  on  the  said 
corporation  to  show  cause  wherefore  the  charter,  hereby  granted,  shall  not  be 
declared  forfeited:  and  it  shall  be  lawful  for  the  said  court,  upon  the  return  of 
the  said  scire  facias,  to  examine  into  the  truth  of  the  alleged  violation,  and,  if 
such  violation  be  made  appear,  then  to  pronounce  and  adjudge  that  the  said 
charter  is  forfeited  and  annulled :  Provided^  however,  Every  issue  of  fact, 
which  may  be  joined  between  the  United  States  and  the  corporation  aforesaid, 
shall  be  tried  by  jury;  and  it  shall  be  lawful  for  the  court,  aforesaid,  to  require 
the  production  of  such  of  the  books  of  the  corporation,  as  it  may  deem  neces- 
sary for  the  ascertainment  of  the  controverted  facts;  and  the  final  judgment  of 
the  circuit  court  aforesaid,  shall  be  examinable  in  the  Supreme  Court  of  the 
United  States,  by  writ  of  error,  and  may  be  there  reversed  or  affirmed,  ac- 
cording to  the  usages  of  law. 

DECEMBER  27,  1814. 
The  House  then  resumed  the  consideration  of  the  bill: 

A  motion  was  made  by  Mr.  HALE  to  amend  the  bill,  by  striking  out  the 
thirteenth  section  of  the  bill,  which  authorizes  occasional  suspensions  of  pay- 
ments in  specie  by  the  bank.  Whereupon, 

Mr.  IXGEROSLL,  of  Pa.  required  the  previous  question,  (which  precludes  all 
further  debate  or  amendment  of  the  bill.) 

This  call  being  duly  sustained,  the  previous  question  was  taken  and  decided, 
as  follows: 

For  taking  the  main  question,       72. 

Against  taking  it,       70. 

The  previous  question  having  thus  been  decided  in  the  affirmative,  a  motion 
was  made  by  Mr.  WEBSTER,  to  lay  the  bill  and  amendments  on  the  table. 

The  Chair  decided,  (Mr.  MACON,  in  the  absence  of  Mr.  CHEVES,  occupy- 
ing the  chair,}  that  the  motion  was  not  in  order;  inasmuch  as,  the  House 
having  decided  that  the  main  question  shall  be  now  put,  no  other  motion  can 
obtain,  unless  a  motion  to  adjourn. 

An  appeal  was  taken  from  this  decision  of  the  chair;  which,  after  some  de- 
bate, was  confirmed,  by  yeas  and  nays,  by  the  following  vote: 

In  favor  of  the'chair, 108. 

Against  it, 36. 

An  inquiry  was  then  niade  as  to  what  question  was  before  the  House:  the 
Speaker  decided  the  main  question  to  be,  4*  shall  the  amendments  agreed  to 
be  engrossed,  and  the  bill  be  read  the  third  time? 

Mr.  GASTOX,  of  N.  C.  then  took  an  appeal  from  the  decision  of  the  Chair. 
(Mr.  MACON  still  occupying  it.)  He  contended,  that  the  mam  question  was 
that  on  the  amendment  under  discussion,  when  the  previous  question  was 
called. 

[This  question  has  more  than  once  been  decided  in  the  same  manner,  by  the 
present  and  late  Speaker,  and  affirmed  with  much  solemnity.  ] 

After  some  debate,  the  decision  of  the  Chair  was  affirmed  by  the  following 
vote: 

In  favor  of  the  decision, 91. 

Against  it, 52. 

The  main  question,  viz.  Shall  the  amendments  be  engrossed,  and,  together 
with  the  bill,  be  read  a  third  time?  was  then  put,  and  decided  as  follows: 


560  BANK  OF  THE  UNITED   STATES. 

Those  who  voted  in  the  affirmative,  are, 


Messrs.  Alexander, 

Messrs.  Fisk,  ofN.  Y. 

Messrs.  Moore, 

Alston, 

Forney, 

Murfree, 

Anderson, 

Forsyth, 

Nelson, 

Archer, 

Gourdin, 

Ormsby, 

Avery, 

Griffin, 

Parker, 

Bard, 

Harris, 

Pickens, 

Barnett, 

Hasbrouck, 

Pleasants, 

Bines, 

Hawes, 

Rea,  of  Penn. 

Bradley, 

Hawkins, 

Rhea,  of  Tennessee, 

Brown, 

Hopkins,  of  Ken, 

Rich, 

Caldwell, 

Hubbard, 

Ringgold, 

Calhoun, 

Ingersoll, 

Robertson, 

Cannon, 

Ingham, 

Sage, 

Chappell, 

Irving, 

Sharp, 

Clark, 

Irwin, 

Skinner, 

Clendenin, 

Kent,  of  Maryland, 

Smith,  of  Penn. 

Comstock, 

Kerr, 

Smith,  of  Virginia, 

Conard, 

Kershaw, 

Strong, 

Creighton, 

Kilbourn, 

Tannehill, 

Cuthbert, 

King,  of  N.  Carolina, 

Taylor, 

Dana, 

Lefterts, 

Telfair, 

Davis,  of  Penn. 

Lowndes, 

Udree, 

Denoyelles, 

Lyle, 

Ward,  of  N.  Jersey, 

Duval, 

M'Coy, 

Williams, 

Earle, 

M'Kee, 

Wilson,  of  Penn. 

Farrow, 

M'Lean, 

Yancey.  —  80. 

Findley, 

Montgomery, 

Those  who  Toted  in 

the  negative,  are, 

Messrs.  Baylies,  of  Mass 

Messrs.  Gholson, 

Messrs.  John  Reed, 

Bigelow, 

Hale, 

William  Reed, 

Bowen, 

Hall, 

Ruggles, 

Boyd, 

Henderson, 

Schureman, 

Bradbury, 

Humphreys, 

Seybert, 

Brigham, 

Jackson,  of  R.  I. 

Sheffey, 

Butler, 

Johnson,  of  Vir. 

Sherwood, 

Caperton, 

Kennedy, 

Shipherd, 

Champion, 

King,  of  Mass. 

Slaymaker, 

Cilley, 

Law, 

Stanford, 

Clopton, 

Lovett, 

Stockton, 

Cooper, 

Macon, 

Thompson, 

Cox, 

Miller, 

Vose, 

Crawford, 

Moseley, 

Ward,  of  MM*. 

Davenport, 

Markell, 

Webster, 

Davis,  of  MAM. 

Newton, 

Wheaton, 

Desha, 

Oakley, 

White, 

Ely, 

Pearson, 

Wilcox, 

Evans, 

Pickering, 

Wilson,  of  Mass. 

Franklin, 

Pitkin, 

Winter—  62. 

Gaston, 

Potter, 

So  the  bill  was  ordered  to  be  read  a  third  time,  to-morrow;  and  the  House 

adjourned. 

DECEMBER  28,  1814. 

The  bill  was  taken  up  for  a  third  reading,  as  amended: 

Mr.  GASTON,  moved,  that  the  bill  be  re-committed  to  the  Committee  of 
Ways  and  Means,  witn  instructions  to  report  an  amendment  to  the  second 
section,  authorizing  twenty  millions  of  dollars  (therein  directed  to  be  paid  in 
gold  or  silver  coin,  or  in  public  debt  of  the  United  States,  contracted  under 
the  act  of  Congress  of  the  14th  March,  1812,  or  subsequent  acts,)  to  be  paid  in 


PROCEEDINGS  OF  1814. 

gold  or  silver  coin;  or  in  any  public  debt  of  the  United  States,  contracted,  or 
to  be  contracted,  which  at  the  time  of  payment  shall  bear  an  accruing  interest 
of  six  per  centum,  per  annum;  and  to  extend  the  time  of  opening  the  sub- 
scriptions at  New  Orleans,  Lexington,  and  Chillicothe;  and  also,  to  strike  out 
so  much  of  the  eighteenth  fundamental  rule,  as  directs  that  all  the  money  pay- 
ments, made  by  said  bank,  during  the  present  war,  shall  be  made  at  Philadel- 
phia. 

And  the  question  being  taken  thereon,  it  passed  in  the  affirmative:  Yeas  79, 
Nays  76. 

DECEMBER  29,  1814. 

Mr.  ARCHER,  of  Maryland,  from  the  Committee  of  Ways^ 
whom  the  bill  was  re-committed,  reported  three  amendment 
formity  to  the  instructions  of  the  House. 

The  first  amendment  proposes  to  substitute  the  second  MwWau^i  February 
for  the  third  Monday  in  January,  as  the  day  on  which  the  books  of  subscrip- 
tion to  the  bank  shall  be  opened. — Agreed  to. 

The  second  amendment  proposes  to  strike  out  so  much  of  the  bill  as  de- 
scribes the  (war)  stock  which  shall  be  subscribable  to  the  bank,  and  in  lieu, 
thereof  to  insert,  "  any  public  debt  of  the  United  States  contracted,  or  to  be 
contracted,  which,  at  the  time  of  payment,  shall  bear  an  accruing  interest  of 
six  per  centum  per  annum." 

After  a  few  words  from  Mr.  GASTOX  and  Mr.  OAKLEY,  expressive  of  a 
hope  that  this  amendment  would  pass  and  from  Mr.  INGHAM  and  Mr- 
DESHA,  to  the  contrary,  the  question  on  this  amendment  was  decided, 
without  debate,  by  the  following  vote: 

For  the  amendment,       -  72, 

Against  it,  73. 

So  the  House  refused  to  accept  this  amendment. 

The  other  amendment  proposes  to  strike  out  that  part  of  the  eighteenth 
rule  which  restricts  the  payment  of  the  notes  in  specie  to  such  as  are  presented 
at  the  principal  bank. 

The  adoption  of  this  amendment  was  opposed  by  Mr.  ARCHER,  Mr.  FOR- 
SYTH,  Mr.  IxiniAM,  Mr.  HAWKINS,  and  others,  on  the  ground,  generally,  that 
the  provision  would  not,  in  fact,  be  effectual,  because  it  would  be  in  the  power 
of  the  bank,  notwithstanding  such  provision,  to  issue  notes  payable  at  the 
principal  bank:  but,  if  it  would  be  operative,  its  effect  would  be  injurious  in 
the  highest  degree,  inasmuch  as  it  would,  in  a  very  few  days  after  the  bank 
commenced  operation,  compel  it  to  cease  payment  in  specie,  owing  to  its 
liability  to  pay  it  at  so  many  points,  and  the  great  demand  for  specie  noyv 
existing,  and  likely  to  continue  during  the  war,  to  the  end  of  which  this 
proposition  was  limited. 

The  amendment  was  supported  by  Mr.  SHARP  and  Mr.  OAKLEY,  and 
others,  on  the  ground,  principally >  that  it  would  be  infinitely  better  that  the 
notes  should  bear  on  their  face  their  actual  value,  and  place  of  payment,  than 
that  they  should  purport  to  be  payable  at  places  at  which  in  fact  they  would 
not  be  payable  in  specie.  If  made  payable  at  Philadelphia  only,  the  persons 
receiving  the  paper  would  know  its  real  value,  and  not  under  a  deceptive 
aspect  ol  being  payable  at  any  of  the  branches,  where  in  fact  no  payment  in 
specie  was  to  be  made,  &c.  It  was  also  objected  to  the  bill,  as  it  stood, 
that  it  would  drain  all  the  specie  in  the  country,  to  accumulate  it  at  Phila- 
delphia. « 

The  question  on  the  amendment  resulted,  by  Yeas  and  Nays,  as  follows: 
For  the  amendment,       -  ...  76, 

Against  it,  -  76. 

The  Speaker  (Mr.  CHEVES)  decided  it  in  the  affirmative  by  his  casting  vote. 


562  BANK   OF  THE   UNITED    STATES. 

Mr.  FARROW  then  moved  to  amend  the  bill,  by  striking  out  so  much  as  de- 
scribes the  stock  to  be  subscribable,  and  inserting,  in  lieu  thereof,  a  provision 
limiting  the  privilege  of  subscription  in  the  stock  of  the  bank,  to  such  public 
debt  as  shall  be  hereafter  contracted. 

This  motion  was  opposed   by  Mr.  INGHAM,  and  Mr.  FORSYTH,  and  others 
and  supported  by  Mr.  GASTOX,  Mr.  OAKLEY,  Mr.  POTTER,  and  others.    The 
latter  gentleman  took  this  occasion  to  make  a  speech  of  some  length  against 
the  bill  generally. 

The  question  on  Mr.  FARROW'S  motion  was,  after  a  warm  debate,  at  length 
decided  as  follows: 

For  the  motion,  •  65, 

Against  it,  89.' 

Mr.  PITKIN  then  proposed  a  further  amendment  to  the  bill,  viz.  to  strike 
out  the  word  "fifty,"  so  as  to  leave  the  amount  of  the  capital  blank. 

The  previous  question  having  been  thereupon  demanded  by  Mr.  HARRIS, 
of  Tennessee,  and  supported  by  a  sufficient  number,  viz.  75  for  it,  67  against  it, 
Mr-  WEBSTER  moved  to  lay  the  bill  on  the  table;  which  motion  was  nega- 
tived by  Yeas  and  Nays,  by  the  following  vote: 

For  the  motion,  -  56, 

Against  it,  93. 

Another  motion  was  then  made  to  adjourn,  and  negatived. 
The  previous  question  was  then  put,  in  the  usual  form:  "  Shall  the  main 
question  be  now  put P"  And  decided  as  follows: 

Yeas,        -  ------  83, 

Nays,  ^    -  -  63. 

The  question  on  ordering  the  bill  to  a  third  reading  was  then  decided  in 
the  affirmative  without  a  division. 

On  the  question  when  the  bill  should  be  read  a  third  time,  to-morrou)  and 
to-day  were  named.  The  question  being  taken  on  to-morrow,  it  was  decided 
in  the  negative. 

The  bill  was  then  ordered  to  be  read  a  third  time  to-day. 

A  motion  was  then  made  to  adjourn,  and  negatived  by  a  vote  of  75  to  60. 

The  bill  was  then  announced  for  a  third  reading. 

Mr.  BIGELOW  raised  a  question  of  order,  whether  it  was  proper  to  read  the 
bill  a  third  time  before  the  other  orders  of  the  day  were  disposed  of.  The 
Speaker  having  decided  that  bills  on  their  reading  had  preference  in  the 
orders  of  the  day,  Mr.  B.  appealed  from  the  decision  of  the  Speaker,  (Mr. 
MACON)  which  was  affirmed  by  the  House. 

Mr.  WEBSTER  moved  to  re-commit  the  bill  to  a  select  committee,  with 
instructions,  substantially,  as  follows: 

1.  To  reduce  the  capital  to  twenty-five  millions  of  dollars,  with  liberty  to  the  Go- 
vernment to  subscribe  five  millions  additional  at  any  future  time. 

2.  To  strike  out  the  provision  allowing  the  bank  to  cease  specie  payment. 

3.  To  strike  out  so  much  of  the  bill  as  makes  it  obligatory  on  the  bank  to  lend 
money  to  the  Government. 

4.  To  introdnce  a  provision,  that,  if  the  bank  shall  not  commence  operations  within 
months  after  the  passage  of  the  act,  the  charter  shall  be  forfeited. 

5.  To  allow  an  interest  of per  cent,  per  annum,  on  any  note,  payment  of 

which  shall  have  been  demanded  of  the  bank,  and  refused. 

6.  To  provide  that,  of  the  twenty -five  millions,  five  shall  be  payable  in  specie,  and 
twenty  in  any  United  States'  six  per  cent,  stock,  or  in  treasury  notes. 

7.  To  strike  out  that  provision  which  restrains  the  bank  from  selling  its  stock 
during  the  war. 

Mr.  W.  supported  his  motion  by  a  number  of  remarks,  the  general  purport 
of  which  was,  that  he  had  resorted  to  this  method  to  show  to  the  world  what 
sort  of  a  bank  he  and  his  friends  were  willing  to  support. 


PROCEEDINGS  OF   1815.  553 

Mr  GASTON  followed,  in  a  short  speech  in  favor  of  this  motion,  and  with 
the  zeal  he  has  uniformly  exhibited  on  this  subject,  in  opposition  to  the  bill. 

Mr.  WM.  REED,  of  Massachusetts  next  took  the  floor  in  decided  opposi- 
tion to  this  bill,  of  which  he  expressed  the  utmost  abhorrence,  and  the  greatest 
dread  of  its  effects. 

After  the  rejection  of  several  motions  to  adjourn— 

Mr.  BIGELOW  made  a  speech  on  the  same  side  of  the  question  as  the  two 
gentlemen  who  had  preceded  him  in  debate. 

Before  Mr.  BIGELOW  finished  his  speech,  however,  a  motion  to  adjourn 
prevailed. 

JANUARY  2,  1815. 

The  House  resumed  the  consideration  of  the  bill— Mr.  WEBSTER'S  motion 
tore-commit  the  bill  being  still  under  consideration. 

It  was  supported  by  Messrs.  PICKERING,  WEBSTER,  SHIPHERD,  and 
WHEATON,  in  speeches  of  considerable  length,  and  opposed  by  Messrs.  FOR- 
SYTH  and  RHEA,  of  Tenn. 

Mr.  WEBSTER,  in  support  of  his  motion,  spoke  as  follows: 

However  the  House  may  dispose  of  the  motion  before  it,  I  do  not  regret 
that  it  has  been  made.  One  object  intended  by  it,  at  least,  is  accomplished. 
It  presents  a  choice,  and  it  shows  that  the  opposition  which  exists  to  the  bill 
in  its  present  state,  is  not  an  undistinguishing  hostility  to  whatever  may  be 
proposed  as  a  national  bank,  but  a  hostility  to  an  institution  of  such  a  useless 
and  dangerous  nature,  as  it  is  believed  the  existing  provisions  of  the  bill  would 
establish. 

If  the  bill  should  be  recommitted  and  amended  according  to  the  instruc- 
tions which  I  have  moved,  its  principles  will  be  materially  changed.  The 
capital  of  the  proposed  bank  will  be  reduced  from  fifty  to  thirty  millions;  and 
composed  of  specie  and  stocks  in  nearly  the  same  proportions  as  the  capital 
of  the  former  Bank  of  the  United  States.  The  obligation  to  lend  thirty  mil- 
lions of  dollars  to  Government,  an  obligation  which  cannot  be  performed  with- 
out committing  an  act  of  bankruptcy,  will  be  struck  out.  The  power  to  sus- 
pend the  payment  of  its  notes  and  bills  will  be  abolished,  and  the  prompt  and 
faithful  execution  of  its  contracts  secured,  as  far  as,  from  the  nature  or  things, 
it  can  be  secured.  The  restriction  on  the  sale  of  its  stocks  will  be  removed, 
and  as  it  is  a  monopoly,  provision  will  be  made  that,  if  it  should  not  commence 
its  operations  in  reasonable  time,  the  grant  shall  be  forfeited.  Thus  amended, 
the  bill  would  establish  an  institution  not  unlike  the  last  Bank  of  the  United 
States  in  any  particular  which  is  deemed  material,  excepting  only  the  legal- 
ized amount  of  capital. 

To  a  bank  of  this  nature,  I  should  at  any  time  be  willing  to  give  my  sup- 
port, not  as  a  measure  of  temporary  policy,  or  as  an  expedient  to  find  means 
of  relief  from  the  present  pfoverty  of  the  treasury;  but  as  an  institution  of  per- 
manent interest  and  importance,  useful  to  the  Government  and  country  at  all 
times,  and  most  useful  in  times  of  commerce  and  prosperity. 

I  am  sure,  sir,  that  the  advantages  which  would  at  present  result  from  any 
bank,  are  greatly  overrated.  «To  Took  to  a  bank,  as  a  source  capable,  not  only"^ 
of  affording  a  circulating  medium  to  the  country,  but  also  of  supplying  the   I 
ways  and  means  of  carrying  on  the  war,  especially  at  a  time  wl.cn  the  country 
is  without  commerce,  is  to  expect  much  more  than  ever  will  be  obtained.    , 
Such  high- wrought  hopes  can  end  only  in  disappointment.    The  means  of  ' 
supporting  an  expensive  war  are  not  of  quite  so  easy  acquisition.    Banks  are_^ 
not  retenue.,.  They  cannot  supply  its  place.    They  may  afford  facilities  to   f 
its  collection  and  distribution;  they  may  furnish,  with  convenience,  tempo- 
rary loans  to  Government,  in  anticipation  of  its  taxes,  and  render  important 
assistance,  in  divers  ways,  to  the  general  operation  of  finance;  they  are  use- 


564  BANK  OF  THE  UNITED   STATES. 

ful  to  the  State  in  their  proper  place  and  .sphere;  but  they  are  not  sources  of 
national  income. 

The  fountains  of  revenue  must  be  sunk  deeper.  The  credit  and  circulation 
of  bank  paper  are  the  effects,  rather  than  the  causes  of  a  profitable  commerce, 
and  a  well  ordered  system  of  finance.  They  are  the  props  of  national  wealth 
and  prosperity,  not  the  foundations  of  them.  Whoever  shall  attempt  to  re- 
store the  fallen  credit  of  this  country,  by  the  creating  of  new  banks,  merely 
that  they  may  create  ne\v  paper,  and  that  Government  may  have  a  chance  of 
borrowing  where  it  has  not  borrowed  before,  will  find  himself  miserably  de- 
ceived. It  is  under  the  influence  of  no  such  vain  hopes,  that  I  yield  my  as- 
sent to  the  establishment  of  a  bank  on  sound  and  proper  principles.  The 
principal  good  I  expect  from  it  is  rather  future  than  present.  I  do  not  see, 
indeed,  that  it  is  likely  to  produce  evil  at  any  time.  In  times  to  come,  it  will, 
I  hope,  be  useful.  If  it  were  only  to  be  harmless,  there  would  be  sufficient 
reason  why  it  should  be  supported,  in  preference  to  such  a  contrivance  as  is 
now  in  contemplation. 

The  bank  which  will  be  erected  by  the  bill,  if  it  should  pass  in  its  present 
form,  is  of  a  most  extraordinary,  and,  as  I  think,  alarming  nature.  The  capi- 
tal is  to  be  fifty  millons  of  dollars;  five  millions  in  gold  and  silver,  twenty 
millions  in  the  public  debt  created  since  the  war,  ten  millions  in  treasury 
notes,  and  fifteen  millions  to  be  subscribed  by  Government,  in  stock  to  be 
created  for  that  purpose.  The  ten  millions  in  treasury  notes,  when  received 
in  payment  of  subscriptions  to  the  bank,  are  to  be  funded  also  in  United 
States'  stocks.  The  stock  subscribed  by  Government  on  its  own  account, 
and  those  in  which  the  treasury  notes  are  to  be  funded,  to  be  redeemable  only 
at  the  pleasure  of  the  Government.  The  war  stock  will  be  redeemable  ac 
cording  to  the  terms  upon  which  the  late  loans  have  been  negotiated. 

The  capital  of  the  bank,  then,  will  be  five  millions  of  specie  and  forty-five 
millions  of  Government  stocks.  In  other  words,  the  bank  will  possess  five 
millions  of  dollars,  and  the  Government  will  owe  it  forty-five  millions.  This 
debt  from  Government,  the  bank  is  restrained  from  selling  during  the  war, 
and  Government  is  excused  from  paying,  until  it  shall  see  fit.  The  bank  is 
also  to  be  under  obligation  to  loan  Government  thirty  millions  of  dollars  on 
demand,  to  be  repaid,,  not  when  the  convenience  or  necessity  of  the  bank  may 
require,  but  when  debts  due  to  the  bank,  from  Government,  are  paid;  that  isT 
when  it  shall  be  the  good  pleasure  of  Government.  This  sum  of  thirty  mil- 
lions is  to  supply  the  necessities  of  Government,  and  to  supersede  the  occa- 
sion of  other  loan:?.  This  loan  will  doubtless  be  made  on  the  first  day  of  the 
existence  of  the  bank,  because  the  public  wants  can  admit  of  no  delay.  Its 
condition,  then,  will  be,  that  it  has  five  millions  of  specie,  if  it  has  been  able 
to  obtain  so  much,  and  a  debt  of  seventy-five  millions,  no  part  of  which  it  can 
either  sell  or  call  in,  due  to  it  from  Government. 

The  loan  of  thirty  millions  to  Government  can  only  be  made  by  an  imme- 
diate issue  of  bills  to  that  amount.  If  these  bills  should  return,  the  bank  will 
not  be  able  to  pay  them.  This  is  certain;  and  to  remedy  this  inconvenience* 
power  is  given  to  the  directors,  by  the  act,  to  suspend,  at  their  own  discre- 
tion, the  payment  of  their  notes,  until  the  President  of  the  United  States  shall 
otherwise  order.  The  President  will  give  no  such  order,  because  the  neces- 
sities of  Government  will  compel  it  to  draw  on  the  bank  till  the  bank  becomes 
as  necessitous  as  itself.  Indeed,  whatever  orders  may  be  given  or  withheld,  it 
will  be  utterly  impossible  for  the  bank  to  pay  its  notes,  No  such  thing  is  ex- 

/'  pected  from  it.  The  first  note  it  issues  will  be  dishonored  on  its  return,  and 
yet  it  will  continue  to  pour  out  its  paper,  so  long  as  Government  can  apply  it 
in  any  degree  to  its  purposes. 

What  sort  of  an  institution,  sir,  is  this?  It  looks  less  like  a  bank,  than  a 
department  of  Government.  It  will  be  properly  the  paper-money  department. 
Its  capital  is  Government  debts;  the  amount  ot  its  issues  will  defend  on  Go- 
vernment necessities;  Government,  in  effect,  absolves  itself  from  its  own 
debts  to  the  bank,  and  by  way  of  compensation,  absolves  the  bank  from  its- 
own  contracts  with  others.  This  is,  indeed,  a  wonderful  scheme  ot  nuance, 


PROCEEDINGS  OF   1815. 

The  Government  is  to  grow  rich,  because  it  is  to  borrow  without  the  obliga- 
tion of  repaying,  and  is  to  borrow  of  a  bank  which  issues  paper  without  lia- 
bility to  redeem  it.  If  this  bank,  like  other  institutions  which  dull  and  plod- 
ding common  sense  has  erected,  were  to  pay  its  debts,  it  must  have  some 
limits  to  its  issues  of  paper,  and  therefore,  there  would  be  a  point  beyond 
which  it  could  not  make  loans  to  Government.  This  would  fall  short  of  the 
wishes  of  the  contrivers  of  this  system.  They  provide  for  an  unlimited  issue 
of  paper,  in  an  entire  exemption  from  payment.  They  found  their  bank,  in 
the  first  place,  on  the  discredit  of  Government,  and  then  hope  to  enrich  Go- 
vernment out  of  the  insolvency  of  their  bank.  With  them,  poverty  itself  is 
the  main  source  of  supply,  and  bankruptcy  a  mine  of  inexhaustible  treasure. 
They  rely  not  in  the  ability  of  the  bank,  but  in  its  beggary;  not  in  gold  and 
silver  collected  in  its  vaults,  to  pay  its  debts,  and  fulfil  its  promises,  but  in  its 
locks  and  bars?  provided  by  statute,  to  fasten  its  doors  against  the  solicitations 
and  clamors  of  importunate  creditors.  Such  an  institution,  they  flatter  them- 
selves, will  not  only  be  able  to  sustain  itself,  but  to  buoy  up  the  sinking  cre- 
dit of  the  Government.  A  bank  which  does  not  pay,  is  to  guaranty  the  en- 
gagements of  a  Goverment  which  does  not  pay!  "John  Doe  is  to  become 
security  for  Richard  Roe."  Thus  the  empty  vaults  of  the  treasury  are  to  be 
filled  from  the  equally  empty  vaults  of  the  bank,  and  the  ingenious  invention 
of  a  partnership  between  insolvents,  is  to  restore  and  re-establish  the  credit 
of  both. 

Sir,  I  can  view  this  only  as  a  system  of  rank  speculation,  and  enormous 
mischief.  Nothing  in  our  condition  is  worse,  in  my  opinion,  than  the  incli- 
nation of  Government  to  throw  itself  upon  such  desperate  courses.  If  we  are 
to  be  saved,  it  is  not  to  be  by  such  means.  If  public  credit  is  to  be  restored, 
this  is  not  one  of  the  measures  that  will  help  to  restore  it.  If  the  treasury  is 
exhausted,  this  bank  will  not  fill  it  with  any  thing  valuable.  If  a  safe  circu- 
lating medium  be  wanted  tor  the  community,  it  will  not  be  found  in  the  paper 
of  such  a  corporation. 

I  wish,  sir,  that  those  who  imagine  that  these  objects,  or  any  of  them,  will 
be  effected  by  such  a  bank  as  this,  would  describe  the  manner  in  which  they 
expect  it  to  be  done.  What  is  the  process  which  is  to  produce  these  results? 
If  it  is  perceived,  it  can  be  described.  The  bunk  will  not  operate  either  by 
miracle  or  magic.  Whoever  expects  any  good  from  it,  ought  to  be  able  to 
tell  us  in  what  way  that  good  is  to  be  produced.  As  yet,  we  have  had  nothing 
but  general  ideas,  and  vague  and  loose  expressions.  An  indefinite  and  indis- 
tinct notion  is  entertained,  nobody  here  seems  to  know  on  what  ground,  that 
this  bank  is  to  reanimate  public  credit,  fill  the  treasury,  and  remove  all  the. 
evils  that  have  arisen  from  the  depreciation  of  the  paper  of  the  existing  banks. 

Some  gentlemen,  who  do  not  profess  themselves  to  be,  in  all  respects,  pleased 
with  the  provisions  of  the  bill,  seem  to  content  themselves  with  an  idea  that 
nothing  better  can  be  obtained,  and  that  it  is  necessary  to  do  something.  A 
strong  impression  that  something  must  be  done,  is  the  origin  of  many  bacfmea- 
sures.  It  is  easy,  sir,  to  do  something,  but  the  object  is  to  do  something  use- 
ful. It  is  better  to  do  nothing  than  to  do  mischief.  It  is  much  better,  in  my 
opinion,  to  make  no  bank,  than  to  pass  the  bill  as  it  now  is. 

The  interests  to  be  affected  by  this  measure,  the  finances,  the  public  credit, 
and  the  circulating  medium  of  the  country,  are  too  important  to  be  hazarded 
in  schemes  like  these.  If  we  wish  to  restore  the  public  credit,  and  to  re- 
establish the  finances,  we  have  the  beaten  road  before  us.  All  true  analogy, 
all  experience,  and  all  just  knowledge  of  ourselves  and  our  condition,  point 
one  way.  A  wise  and  systematic  economy,  and  a  settled  and  substantial 
revenue,  are  the  means  to  be  relied  on;  not  excessive  issues  of  bank  notes,  a 
forced  circulation,  and  all  the  miserable  contrivances  to  which  political  folly 
can  resort,  with  the  idle  expectation  of  giving  to  mere  paper  the  quality  of 
money. 

These  are  all  the  inventions  of  a  shortsighted  policy,  vexed  and  goaded  by 
the  necessities  of  the  moment,  and  thinking  less  of  a  permanent  remedy,  than 
of  shifts  and  expedients  to  avoid  the  present  distress.  They  have  been  a 


586  BANK  OF  THE  UNITED  STATES. 

thousand  times  adopted,  and  a  thousand  times  exploded  as  delusive  and  ruin-1 
ous,  as  destructive  of  all  solid  revenue,  and  incompatible  with  the  security  of 
private  property. 

It  is,  sir,  sufficiently  obvious,  that,  to  produce  any  benefit,  this  bank  must 
be  so  constructed,  as  that  its  notes  shall  have  credit  with  the  public.  The 
first  inquiry,  therefore,  should  be,  whether  the  bills  of  a  bank  of  this  kind 
will  not  be  immediately  and  greatly  depreciated,  1  think  they  will.  It  would 
be  a  wonder  if  they  should  not.  This  effect  will  be  produced  by  that  exces- 
sive issue  of  its  paper  which  the  bank  must  make  in  its  loan  to  Government* 
Whether  its  issues  of  paper  are  excessive,  will  depend  not  on  the  nominal 
amount  of  its  capital,  but  on  its  ability  to  redeem  it.  This  is  the  only  safe 
criterion.  Very  special  cases  nay  perhaps  furnish  exceptions,  but  there  is, 
in  general,  no  security  for  the  credit  of  paper,  but  the  ability,  in  those  who 
emit,  to  redeem  it.  Whenever  bank  notes  are  not  convertible  into  gold  and 
silver,  at  the  will  of  the  holder,  they  become  of  less  value  than  gold  arid  silver. 
All  experiments  on  this  subject  have  come  to  the  same  result.  It  is  so  clear, 
and  has  been  so  universally  admitted,  that  it  would  be  waste  of  time  to  dwell 
upon  it.  The  depreciation  may  not  be  sensibly  perceived  the  first  day,  or  Ihe 
first  week,  it  takes  place.  It  will  first  be  discerned  in  what  is  called  the  rise 
of  specie;  it  will  next  be  seen  in  the  increased  price  of  all  commodities.  The 
circulating  medium  of  a  commercial  community  must  be  that  which  is  also 
the  circulating  medium  of  other  commercial  communities,  or  must  be  capable 
of  being  converted  into  that  medium,  without  loss.  It  must  be  able,  not  only 
to  pass  in  payments  and  receipts,  among  individuals  of  the  same  society  and 
nation,  but  to  adjust  and  discharge  the  balance  of  exchanges  between  different 
nations.  It  must  be  something  which  has  a  value  abroad,  as  well  as  at  home, 
and  by  which  foreign  as  well  as  domestic  debts,  can  be  satisfied.  The  pre- 
cious metals  alone  answer  these  purposes.  They  alone,  therefore,  are  money, 
and  whatever  else  is  to  perform  the  offices  of  money,  must  be  their  represen- 
tative, and  capable  of  being  turned  into  them  at  will.  So  long  as  bank  paper 
retains  this  quality,  it  is  a  substitute  for  money;  divested  of  this,  nothing  can 
give  it  that  character.  No  solidity  of  funds,  no  sufficiency  of  assets,  no  con- 
fidence in  the  solvency  of  banking  institutions,  has  ever  enabled  them  to  keep 
up  their  paper  to  the  value  of  gold  and  silver,  any  longer  than  they  paid  gold 
and  silver  for  it  on  demand.  This  will  continue  to  be  the  case  so  long  as 
those  metals  shall  continue  to  be  the  standard  of  value,  and  the  general  cir- 
culating medium  among  nations. 

A  striking  illustration  of  this  common  principle  is  found  in  the  early  history 
of  the  Bank  of  England.  In  the  year  1 697,  it  had  been  so  liberal  of  its  loans, 
that  it  was  compelled  to  suspend  the  payment  of  its  notes.  Its  paper  imme- 
diately fell  to  a  discount  of  near  twenty  per  cent.  Yet  such  was  the  public 
opinion  of  the  solidity  of  its  funds,  that  its  stock  then  sold  for  one  hundred  and 
ten  per  cent.,  although  no  more  than  sixty  per  cent,  upon  the  subscription  had 
been  paid  in. 

The  same  fate,  as  is  well  known,  attended  the  banks  of  Scotland,  when 
they  adopted  the  practice  of  inserting  in  their  notes  a  clause,  giving  the  banks 
an  option  of  paying  their  notes  on  demand,  or  six  months  after  demand,  with 
interest.  Paper  of  this  sort  was  not  convertible  into  specie,  at  the  pleasure  of 
the  holder;  and  no  conviction  of  the  ability  of  the  bank  which  issued  it,  could 
preserve  it  from  depreciation. 

The  suspension  of  specie  payments  by  the  Bank  of  England,  1797,  and  the 
consequences  which  followed,  afford  no  argument  to  overthrow  this  general 
experience.  If  Bank  ot  England  notes  were  not  immediately  depreciated,  on 
that  occasion,  depreciation,  nevertheless,  did  ensue.  Very  favorable  causes 
existed  to  prevent  their  sudden  depression.  It  was  an  old  and  rich  institu- 
tion. It  was  known  to  be  under  the  most  discreet  and  independent  manage- 
ment. Government  had  no  control  over  it,  to  force  it  to  make  loans,  against 
its  interest  or  its  will .  On  the  contrary,  it  compelled  the  Government  to  pay, 
though  with  much  inconvenience  to  itself,  a  very  considerable  sum  which 
was  due  to  it.  The  country  enjoyed,  at  that  time,  an  extensive  commerce, 


PROCEEDINGS    OF   1815. 

and  a  revenue  of  three  hundred  millions  of  dollars  was  collected  and  dis- 
tributed through  the  bank.  Under  ill  these  advantages,  however,  the  dif- 
ference of  price  between  bank  notes  and  coin  became  at  one  time  so  great,  as 
to  threaten  the  most  dangerous  consequences. 

Suppose  the  condition  of  England  to  have  been  reversed.  Suppose  that, 
instead  of  a  prosperous  and  increasing  commerce,  she  had  suffered  the  ruin 
of  her  trade,  and  that  the  product  of  her  manufactures  had  lain  upon  her  hands, 
as  the  product  of  our  agriculture  now  perishes  in  ours.  Does  any  one  imagine 
that  her  circulating  paper  could  have  existed,  and  maintained  any  credit,  in 
such  a  change  of  her  condition?  What  ought  to  surprise  us  is  not  that  her 
bank  paper  was  depreciated,  but  that  it  was  not  depreciated  sooner  and  lower 
than  in  fact  it  was.  The  reason  can  only  be  found  in  that  extraordinary  com- 
bination of  favorable  circumstances,  which  never  existed  before,  and  is  hardly 
to  be  expected  again.  Much  less  is  it  to  be  discovered  in  our  condition  at 
present. 

But  we  have  experience  nearer  home.  The  paper  of  all  the  banks  south  of 
New  England  has  become  depreciated  to  an  alarming  extent.  This  cannot 
be  denied.  All  that  is  said  of  the  existence  of  this  depreciation,  remote  from 
the  banks,  is  unfounded  and  idle.  It  exists  every  where.  The  rates  of  ex- 
change, both  foreign  and  domestic,  put  this  point  beyond  controversy.  If  a 
bill  of  exchange  on  Europe  can  be  purchased,  as  it  may,  twenty  per  cent, 
cheaper  in  Boston  than  in  Baltimore,  the  reason  must  be  that  it  is  paid  for, 
in  Boston,  in  money,  and,  in  Baltimore,  in  something  twenty  per  cent,  less 
valuable  than  money. 

Notwithstanding  the  depression  of  their  paper,  it  is  not  probable  that  any 
doubt  is  entertained  of  the  sufficiency  of  the  funds  of  the  principal  banks. 
Certainly  no  such  doubt  is  the  cause  of  the  fall  of  their  paper;  because  the 
depression  of  the  paper  of  all  the  banks  in  any  place  is,  as  far  as  I  learn,  gene- 
rally uniform  and  equal;  whereas,  if  public  opinion  proceeded  atall  upon  the 
adequacy  or  inadequacy  of  their  funds,  it  would  necessarily  come  to  different 
results,  in  different  cases,  as  some  of  these  institutions  must  be  supposed  to 
be  richer  than  others. 

Sir,  something  must  be  discovered  which  has  hitherto  escaped  the  observa- 
tion of  mankind,  before  you  can  give  to  paper,  intended  for  circulation,  the 
value  of  a  metallic  currency,  any  longer  than  it  represents  that  currency,  and 
is  convertible  into  it,  at  the  will  of  the  holder. 

The  paper,  then,  of  this  bank,  if  you  make  it,  will  be  depreciated,  for  the 
same  reason  that  the  p:\per  of  other  banks  that  have  gone  before  it,  and  of 
those  which  now  exist  around  us,  has  been  depreciated:  because  it  is  not  to 
pay  specie  for  its  notes. 

Other  institutions,  setting  out  perhaps  on  honest  principles,  have  fallen  into 
discredit,  through  mismanagement  or  misfortune.  But  this  bank  is  to  begin 
with  insolvency.  It  is  to  issue  its  bills  to  the  amount  of  thirty  millions,  when 
everybody  knows  it  cannot  pay  them.  It  is  to  commence  its  existence  in 
dishonor.  It  is  to  draw  its  first  breath  in  disgrace.  The  promise  contained 
in  the  first  note  it  sends  forth  is  to  be  a  false  promise^  and  whoever  receives 
the  note,  is  to  take  it  with  the  knowledge  that  it  is  not  to  be  paid  according 
to  the  terms  of  it. 

But  this,  sir,  is  not  all.  The  frarners  of  this  bill  have  not  done  their  work 
by  halves.  They  have  put  the  depreciation  of  the  notes  of  their  bank  beyond 
all  doubt  or  uncertainty.  They  have  made  assurance  doubly  sure.  In  addi- 
tion to  excessive  issues  of  paper,  and  the  failure  to  make  payments,  both 
which  they  provide  for  by  law,  they  make  the  capital  of  tne  bank  to  consist 
principally  of  public  stock. 

If  this  stock  should  be  sold,  as  in  the  former  bank  of  the  United  States,  the 
evil  would  be  less.  But  the  bank  has  not  the  power  to  sell  it,  and,  for  all  pur- 
poses of  enabling  it  to  fulfil  its  engagements,  its  funds  might  as  well  be  at  the 
bottom  of  the  ocean  as  in  Government  stocks,  of  which  it  cannot  enforce  pay- 
ment, and  of  which  it  cannot  dispose. 


5(3  ft  BANK   OF  THE    UNITED    STATES. 

The  credit  of  this  institution  is  to  be  founded  on  public  funds,  not  on  pri- 
vate property,  or  commercial  credit.  It  is  to  be  a  financial,  not  a  commercial 
bank.  Its  credit  can  hardly,  therefore,  be  better  at  any  time  than  the  credit 
of  tl  ^  Government.  If  the  stocks  be  depreciated,  so  of  course  must  every 
thing  be  which  rests  on  the  stocks. 

It  would  require  extraordinary  ingenuity  to  show  how  a  bank,  which  is 
founded  on  the  public  debt,  is  to  have  any  better  reputation  than  the  debt  it- 
self. It  must  be  some  very  novel  invention  which  makes  the  superstructure 
keep  its  place  after  the  foundation  has  fallen.  The  argument  seems  to  stand 
thus:  The  public  funds,  it  is  admitted,  have  little  credit;  the  bank  will  have 
no  credit  which  it  does  not  borrow  of  the  funds;  but  the  bank  will  be  in  full 
credit. 

If,  sir,  we  were  in  a  temper  to  learn  wisdom  from  experience,  the  history 
of  most  of  the  banks  on  the  continent  bf  Europe  might  teach  us  the  futility  of 
all  these  contrivances.  Those  were,  like  this  before  us,  established  for  the 
purposes  of  finance,  not  purposes  of  commerce.  The  same  fortune  has  hap- 
pened to  them  all.  Their  credit  has  sunk.  Their  respective  Governments 
go  to  them  for  money,  when  they  can  get  it  no  where  else,  and  the  banks  can 
relieve  their  wants  only  by  new  issues  of  their  own  paper.  As  this  is  not  re- 
deemed, the  invariable  consequence  of  depreciation  follows;  and  this  has 
sometimes  led  to  the  miserable  and  destructive  expedient  of  depreciation  of 
the  coin  itself. 

Such  are  the  banks  of  Petersburg,  Copenhagen,  Vienna,  and  other  cities  of 
Europe;  and  while  the  paper  of  these  Government  banks  has  been  thus  de- 
pressed, that  of  other  banks,  existing  in  their  neighborhood,  unconnected  with 
Government,  and  conducting  their  business  on  the  basis  of  commercial  credit, 
has  retained  a  value  equivalent  to  that  of  coin. 

Excessive  issues  of  paper,  and  a  close  connexion  with  Government,  are  the 
circumstances  which,  of  all  others,  are  the  most  certain  to  destroy  the  credit 
of  bank  paper.  If  there  were  no  excessive  issues,  or,  in  other  words,  if  the 
bank  paid  its  notes  in  specie,  on  demand,  its  connexion  with  Government, 
and  its  interest  in  the  funds,  would  not,  perhaps,  mat  eri  illy  affect  the  circu- 
lation of  its  paper,  although  they  would  naturally  diminish  the  value  of  its 
stock.  But,  when  these  two  circumstances  exist  in  the  condition  of  any  bank, 
that  it  does  not  pay  its  notes,  and  that  its  funds  are  in  public  stocks,  and  all 
its  operations  intimately  blended  with  the  operations  of  Government,  nothing 
further  need  be  known,  to  be  quite  sure  that  its  paper  will  not  answer  the  pur- 
pose of  a  creditable  circulating  medium. 

I  look  upon  it,  therefore,  sir,  as  certain,  that  a  very  considerable  discount 
will  attach  itself  to  the  notes  of  this  bank,  the  first  day  of  their  appearance; 
that  this  discount  will  continue  to  increase;  and,  unless  Congress  should  be 
able  to  furnish  some  remedy,  which  is  not  certain,  the  paper,  in  the  end,  will 
be  worth  nothing.  If  this  happens,  not  only  will  no  one  of  the  benefits  pro- 
posed be  obtained,  but  evils  of  the  most  alarming  magnitude  will  follow.  All 
the  horrors  of  a  paper-money  system  are  before  us.  If  we  venture  on  the 
present  expedient,  we  shall  hardly  be  able  to  avoid  them.  The  ruin  of  public 
affairs  and  the  wreck  of  private  property  will  ensue. 

I  would  ask,  sir,  whether  the  friends  of  this  measure  have  well  considered 
what  effect  it  will  produce  on  the  revenue  of  the  country?  By  the  provisions 
of  this  bill,  the  notes  of  this  bank  are  to  be  received  in  payment  of  all  taxes 
and  other  dues  to  Government.  They  cani:ot  be  refused  on  account  of  the  de- 
preciation of  their  value.  Government  binds  itself  to  receive  them  at  par, 
although  it  should  be  obliged  immediately  to  pay  them  out,  at  a  discount  of  a 
hundred  per  cent.  It  is  certain,  then?  that  a  loss  in  the  revenue  will  be  sus- 
tained, equal  to  any  depreciation  which  may  take  place  in  this  paper;  and, 
when  the  paper  shall  come  to  nothing,  the  revenue  of  the  country  will  come  to 
nothing  along  with  it.  This  has  happened  to  other  countries,  where  this 
wretched  system  has  been  adopted,  and  it  will  happen  here. 

The  Austrian  Government  resorted  to  a  similar  experiment,  in  a  very  criti- 
cal period  of  its  affairs,  in  1809,  the  year  of  the  last  campaign  between  that 


PROCEEDINGS   OF   1815, 

tountry  and  France,  previous  to  the  coalition.  Pressed  by  the  necessities  of 
the  occasion,  the  Government  caused  a  large  quantity  of  paper  to  be  issued, 
which  was  to  be  received  in  imposts  and  taxes.  The  paper  immediately  fell 
to  a  depreciation  of  four  for  one.  The  consequence  was,  that  the  Government 
lost  its  revenue,  and,  with  it,  the  means  of  supplying  its  armies  and  defend- 
ing its  empire. 

Is  this  Government  now  ready,  sir,  to  put  its  resources  all  at  hazard,  by 
pursuing  a  similar  course?  Is  it  ready  to  sacrifice  its  whole  substantial  reve- 
nue arid  permanent  supplies  to  an  ill-contrived,  ill-considered,  dangerous,  and 
ruinous  project,  adopted  only  as  the  means  of  obtaining  a  little  present  and 
momentary  relief? 

It  ought  to  be  considered,  also,  what  effects  this  bank  will  produce  on  other 
banking  institutions,  already  existing,  and  on  the  paper  which  they  have  issu- 
ed. Tee  aggregate  capital  of  these  institutions  is  large.  The  amount  of  their 
notes  is  large,  and  these  notes  constitute,  at  present,  in  a  great  portion  of  the 
country,  the  only  circulating  medium,  if  they  can  be  called  a  circulating  me- 
dium. Whatever  aft'ects  this  paper,  either  to  raise  it,  or  depress  it  lower  than 
it  is,  affects  the  interests  of  every  man  in  the  community. 

It  is  sufficient,  on  this  point,  to  refer  to  the  memorial  from  the  banks  of  New 
York.  That  assures  us,  that  it  must  be  the  operation  of  such  a  bank  as  this 
bill  would  establish,  to  increase  the  difficulties  and  distress  which  the  existing 
banks  now  experience,  and  to  render  it  nearly  impossible  for  them  to  resume 
the  payment  of  their  notes.  This  is  what  every  man  would  naturally  expect. 
Paper,  already  depreciated,  will  necessarily  be  sunk  still  lower,  when  another 
flood  of  depreciated  paper  is  forced  into  circulation. 

Very  recently  this  Government  refused  to  extend  the  charter  of  the  bank  of 
the  United  States,  upon  the  ground  that  it  was  unconstitutional  for  Congress 
to  create  banks.  Many  of  the  State  banks  owe  their  existence  to  this  deci- 
sion. It  was  an  invitation  to  the  States  to  incorporate  as  much  banking  capi- 
tal as  would  answer  all  the  purposes  of  the  country.  Notwithstanding  what 
we  may  now  see  and  hear,  it  would  then  have  been  deemed  agross  imputation 
on  the  consistency  of  Government,  if  any  man  had  expressed  an  expectation, 
that,  in  five  years,  all  these  constitutional  scruples  would  be  forgotten;  all 
the  dangers  to  political  liberty  from  moneyed  institutions  disregarded,  and  a 
bank  proposed  upon  the  most  extraordinary  principles,  with  an  unprecedented 
amount  of  capital,  and  with  no  obligation  to  fulfil  its  contracts. 

The  State  banks  have  not  forced  themselves  in  the  way  of  Government. 
They  were  established,  many  of  them  at  least,  when  Government  had  declar- 
ed its  purpose  to  have  no  bank  of  its  own.  They  deserve  some  regard  on  their 
own  account,  and  on  account  of  those  particularly  concerned  in  them.  But 
they  deserve  much  more  consideration,  on  account  of  the  quantity  of  paper 
which  is  in  circulation,  and  the  interest  which  the  whole  community  has  in  it. 

Let  it  be  recollected,  also,  sir,  that  the  present  condition  of  the  banks  is 
principally  owing  to  their  advances  to  Government.  The  treasury  has  bor- 
rowed of  the  banks,  or  of  those  who  themselves  borrowed  of  the  banks,  till 
the  banks  have  become  as  poor?  and  almost  as  much  discredited,  as  the  trea- 
sury itself.  They  have  depreciated  their  paper,  nearly  ruined  themselves, 
and  brought  the  sorest  distress  OH  the  country,  by  doing  that  on  a  small  scale 
\vhich  this  bank  is  to  perform  on  a  scale  vastly  larger. 

It  is  almost  unpardonable,  in  the  conductors  of  these  institutions,  not  to  have 
foreseen  the  consequences  which  have  resulted  from  the  course  pursued  by 
them.  They  were  all  plain  and  visible.  If  they  have  any  apology,  it  is,  that 
they  were  no  blinder  than  the  Government,  and  that  they  yielded  to  those  who 
would  take  no  denial.  It  will  be  altogether  unpardonable  in  us,  if,  with  this, 
as  well  as  all  other  experience  before  us,  we  continue  to  pursue  a  system 
which  must  inevitably  lead  us  through  depreciation  of  currency,  paper-money. 
tender-laws,  and  all  the  contemptible  and  miserable  contrivances  ot  disordered 
finance  and  national  insolvency,  to  complete  and  entire  bankruptcy  in  the  end. 

I  hope  the  House  will  recommit  the  bill  for  amendment 
72 


570  BANK  OF  THE  UNITED  STATES. 

The  question  on  re-commitment  was  at  length  decided  in  the  negative, 
Yeasy  68, 

Nays,      -  89. 

The  bill  was  then  read  through  in  the  usual  manner. 

Mr.  RHEA,  of  Tenn.  spoke  a  short  time  in  explanation  of  the  motives  which 
would  govern  his  vote  in  this  case. 

Mr.  GROSVENOR,  for  the  purpose  of  introducing  a  motion  in  aid  of  the  rule 
to  prevent  those  members  interested  in  the  question  from  voting,  moved  t& 
lay  the  bill  an  the  table, 

The  motion  was  predicated  on  the  fact,  that  one  member  of  the  House 
(and  perhaps  others  might  be)  was  the  proprietor  of  certain  of  the  public 
stock,  which  is  allowed  to  be  paid  iriy  in  partr  on  account  of  shares  to  be  sub- 
scribed to  the  bank. 

This  motion  was  opposed  by  Mr.  FISK,  of  New  York,  and  Mr.  FINDLEY, 
of  Pennsylvania j  by  whom  it  was  contended,  that  the  rule  of  the  House  in 
this  respect  was  sufficiently  operative  without  this  aid.  It  was  supported  by 
the  mover,  and  by  Mr.  WARI>,  and  Mr.  FARROW. 

The  question  on  laying  the  bill  on  the  table,  was  decided  by  Yeas  and  Nays,, 
as  follows: 

For  laying  the  bill  on  the  table y  58, 

Against  it,  104. 

The  question  was  then  taken  on  the  passage  of  the  bill.  The  Yeas  and 
Nays  thereon  stood  as  follows: 

Those  who  voted  in  the  affirmative,  are, 

Messrs..  Alexander,,  Messrs*.  Fisk,  of  N.  Y,  Messrs.  Montgomery, 

Alston,  Forney,  Moore, 

Anderson,  Forsyth^  Murfree, 

Archer,,  Gholson,  Nelson, 

Avery,  Gourdin,  Ormsby, 

Barnett,  Griffin,  Parker, 

Bigelow,  Harris,  Pickens, 

Bradley,  Hasbrouck,  Pleasants, 

Brown,.  Hawes,  Rea,  of  Pa. 

Caldwell,  Hawkins,  Rhea,  of  Tenn,. 

Cannon,  Hopkins,  of  Ky  Rich, 

Ghappell,  Hubbard,  Ringgold, 

Clark,  Ingersoll,  Robertson, 

Clendenin,  Ingham,  Sage, 

Comstock,  Irving,  Sevier, 

Conard,  Irwin,  Sharp, 

Creighton,.  Kent,  of  Mo!,  Skinner, 

•     Crouch,  Kerr,  Smith,  of  Fs- 

Cuthbert,  Kershaw,  Strong, 

Dana,  Kilbourn,  Tannehill, 

Davis,  of  Pa  King,  of  N.  C.  Taylor, 

Denoyelles,  Lefferts,  Telfair, 

Duvall,  Lowndes.  Udree, 

Earle,  Lyle,  Ward,  of  N.  J. 

Farrow,  M'Coy,  Williams, 

Findley,  M'Kee,  Wilson,  of  Pent* 

Fisk,  of  Vt.  M'Lean,  Yancey— 81. 
Those  who  voted  in  the  negative,  are, 

Messrs.  Bard,  Messrs.  Boyd,  Messrs.  Butler, 

Baylies,  of  Mass.  Bradbury,.  Caperton, 

Bayly,  of  Va.  Breckenridge,.  Calhoun, 

Bines,.  Brigham,  Champion, 

Bowen,  Burwell,  Cilley> 


PROCEEDINGS  OF  1816.  571 

Messrs.  Clopton,  Messrs.  Jackson,  of  R.  I.         Messrs.  Ruggles, 

Cooper,  Johnson,  of  Va.  Schureman, 

C»xe,  Johnson,  of  Ky.  Seybert, 

Crawford,  Kennedy,  Sheffey, 

Culpeper,  Kent,  of  N.  Y.  Sherwood, 

Davenport,  King,  of  Mass.  Shepherd, 

Davis,  of  MasB.  Law,  Slaymaker, 

Desha,  Lewis,  Stanford, 

Ely,  Lovett,  Stockton, 

Evans,  Macon,  Stuart, 

Franklin,  M'Kim,  Sturges, 

Gaston,  Miller,  Taggart, 

Geddes,  Mosele.y,  Thompson, 

Glasgow,  Markell,  Vose, 

Grosvenor,  Newton,  Ward,  of  Mas.* 

Hale,  Oakley,  Webster, 

Hall,  Pearson,  Wheaton, 

Hanson,  Pickering,  White, 

Henderson,  Pitkin,  Wilcox, 

Howell,  Potter,  Wilson,  of  Mass. 

Humphreys,  John  Reed,  Winter — 80. 

Hurlbert,"  Win.  Reed, 

The  state  of  the  vote  having  been  declared— 

The  Speaker  (Mr.  CHBVES,  of  South  Carolina)  rose.  After  adverting  to 
the  rule  of  the  House,  which  makes  it  the  right  and  duty  of  the  Speaker  to 
vote  in  two  cases,  of  which  this  was  one,  he  proceeded  to  assign  briefly,  the 
reasons  which  influenced  him  to  vote  against  the  bill.  He  noticed  the  opin- 
ions expressed  on  both  sides  of  the  House,  for  and  against  the  measure;  and 
declared  his  own  conviction,  that  the  bill  proposed  a  dangerous,  unexampled, 
and,  he  might  almost  say,  a  desperate  resort.  He  cursorily  examined  the 
three  views  in  which  the  passage  of  the  bill  had  been  advocated,  namely,  as 
calculated  to  resuscitate  public  credit;  to  establish  a  circulating  medium; 
and  to  afford  the  ways  and  means  for  the  support  of  Government.  He 
delivered,  with  even  more  of  his  usual  eloquence  and  impressiveness,  his 
opinions  on  these  several  points,  and  concluded  with  expressing  his  solemn 
belief,  that  neither  of  these  purposes  would  be  answered  by  the  bill.  He 
denied  that  the  passage  of  this  bill  was  demanded  by  the  safety  of  the  nation; 
but  intimated  his  opinion,  that  a  national  bank  bill  might  be  framed,  by  which 
the  avowed  objects  of  the  present  bill  might  be  accomplished,  which  he  had 
no  doubt  would  unite  a  majority  in  its  favor.  Although  the  vote  was  painful 
to  him  to  give,  he  was,  therefore,  obliged  to  vote  in  the  negative. 

The  Speaker's  vote  having  produced  an  equality  of  votes*  he  declared  the 
decision  of  the  House  to  be,  that  the  bill  should  not  pass. 

So  THE  BILL  WAS  REJECTED. 

Mr.  HALL,  of  Georgia,  who  had  voted  against  the  bill,  then  moved  a  re- 
consideration of  the  vote  just  taken.  He  said  he  was  opposed  to  this  bill, 
and  should  be  opposed  to  any  bill  for  the  establishment  of  a  national  bank; 
but  he  was  willing  that  his  friends  should  have  an  opportunity  of  giving  such 
a  shape  to  the  bill  on  that  subject,  as  should  unite  the  votes  of  all  who  were 
friendly  on  principle  to  the  establishment  of  a  national  bank. 

The  question  for  a  re-consideration  of  the  vote  having  been  stated  from  the 
chair — 

A  motion  was  made  to  adjourn,  and  decided  in  the  affirmative. 

JANUARY  3,  1815. 

The  House  resumed  the  consideration  of  the  unfinished  business,  being  a 
motion  to  reconsider  the  vote  to  reject  the  bill. 


572  BANK    OF  THE   UNITED    STATES. 

Ou  this  motion  there  arose  a  desultory,  but  very  interesting  debate,  which 
occupied  the  House  from  12  to  about  5  o'clock* 

Mr.  HALL,  of  Georgia,  commenced  the  debate,  by  assigning  the  reasons 
which  had  influenced  him  to  move  a  reconsideration  of  the  question,  which 
were,  generally,  that,  though  he  was,  and  should  continue  to  be.  opposed  to 
any  bank  that  could  be  established,  unless  within  the  District  of  Columbia, 
yet  the  state  of  the  vote  of  last  night  gave  him  reason  to  believe  that  some 
plan  might  be  adopted  to  meet  the  views  of  what  was  evidently  a  majority  of 
the  House  on  that  subject.  He  therefore  proposed,  if  the  vote  should  be  re- 
considered, to  call  up  the  proposition  laid  upon  the  tabb  by  him  some  time 
ago,  respecting  an  issue  of  treasury  notes,  and  to  move  its  reference,  together 
with  this  bill,  to  the  Committee  of  Ways  and  Means,  that,  from  a  combina- 
tion of  the  principles  of  both,  some  measure  might  be  adopted  which  would 
subserve  the  public  interest.  He  called  upon  gentlemen  of  the  majority,  in 
an  impressive  manner,  to  rally  themselves  around  the  public  good,  to  sacri- 
fice to  each  other  a  little  of  their  own  opinion,  in  order  to  serve  the  nation. 
Having  to  contend,  not  only  with  a  foreign  enemy,  but  with  internal  traitors, 
it  was  high  time,  instead  of  putting  themselves  into  the  hands  of  merchants, 
and  men  who  are  determined,  if  they  could,  to  crush  the  present  administra- 
tion, to  draw  on  the  real  solid  resources  of  the  nation,  &c.  Mr.  H.  took  oc- 
casion to  express  his  disgust  at  the  attempt,  twice  repeated,  which  he  had 
witnessed,  to  prevent  an  individual  from  voting,  because  he  had  lent  money 
to  the  Government,  or  held  Government  security  (meaning  Mr.  INGERSOLL.) 
Such  proceedings,  lie  said,  made  his  blood  run  cold.  They  required  the 
friends  of  the  Government  to  unite,  to  beware  how  they  act,  instead  of  aiding 
those  whose  only  object  was  to  defeat  every  act  calculated  for  the  defence  of 
the  country,  &c. 

Mr.  ALEXANDER,  of  Ohio,  made  a  few  general  remarks  as  to  the  readiness 
with  which  he  should  approach  this  question  to  reconsider  what  had  been 
denounced  as  a  rash,  desperate,  and  destructive  measure.  His  remarks  were 
evidently  intended  to  reflect  on  the  observations  with  which  the  Speaker  had, 
on  the  preceding  evening,  prefaced  his  vote.  He  should  feel  no  pain,  he  said, 
when  acting  from  his  own  choice,  in  giving  a  vote  which  was  to  destroy  a  ru- 
inous measure;  he  should  rather  rejoice  in  the  opportunity  of  giving  such  a 
vote,  and  not  complain  that  he  did  it  with  pain,  &c. 

Mr.  M'KEE,  of  Kentucky,  favored  the  reconsideration  of  the  bill,  in  the 
hope  that,  when  reconsidered,  it  would  be  recommitted,  and  its  features 
changed.  He  had  voted  for  it,  in  its  present  shape,  with  much  reluctance;  he 
had  so  voted,  however,  because  he  believed  the  taxes  could  not  be  paid  by  the 
people,  unless  they  were  aided  by  the  establishment  of  a  medium  of  general 
circulation,  &c.  He  did  not  believe,  in  its  present  shape,  that  the  bill  would 
pass,  but  he  did  believe  it  might  be  so  modified  as  to  meet  the  views  of  a  ma- 
jority of  the  House. 

Mr.  INGERSOLL,  of  Pennsylvania,  said  he  should  vote  fora  reconsideration 
of  the  bill,  because  he  was  of  the  same  opinion  to-day  that  he  was  yesterday. 
He  was  not  tenacious  as  to  the  plan  of  it,  but  a  national  bank  he  believed  to  be 
indispensable,  &c.  He  took  occasion  to  remark,  in  allusion  to  the  observa- 
tion of  Mr.  HALL,  that,  although  he,  with  several  other  gentlemen  of  the 
House,  possessed  a  small  interest  in  the  public  stock,  he  had  no  idea  that  it 
could  disqualify  him,  or  any  one  else,  from  voting  on  this  question,  any  more 
than  on  the  tax,  or  any  other  revenue  or  loan  bills,  &c. 

Mr.  MACON,  of  North  Carolina,  said  he  should  vote  against  re-considera- 
tion: for,  although  he  had,  of  late,  uniformly  entertained  the  opinion  that  it 
would  be  convenient  and  expedient  to  establish  a  national  bank,  he  as  firmly 
believed  that  there  was  no  delegated  power  in  Congress  to  establish  such  a 


PROCEEDINGS   OF    1815.  573 

bank.  He  had  given  such  votes  as  he  thought  calculated  to  improve  or  perfect 
the  various  bills  before  the  House,  but  he  must,  eventually,  vote  against  any 
bank.  Mr.  M.  concluded  his  examination  of  this  question,  by  expressing  the 
opinion  that  treasury  notes  would  circulate,  and  obtain  as  good  a  credit,  as 
the  notes  of  the  bank  proposed  to  be  established,  and  to  those  the  nation 
must,  he  believed,  at  last  resort,  &c. 

Mr.  ROBERTSON,  of  Louisiana,  was  in  favor  of  reconsideration,  and  made  an 
animated  appeal  to  those  who  were  friendly  to  the  establishment  of  a  bank, 
and  yet  had  opposed  this  bill  because  the  details  did  not  exactly  meet  their 
views.  He  called  upon  them  to  sacrifice  their  particular  prejudices,  and  not 
prostrate  die  public  interest  at  the  shrine  of  their  own  pricle,  or  independence 
of  opinion.  Scarcely  any  subject,  he  said,  could  come  before  the  House,  in 
regard  to  which  gentlemen  might  not  urge  that  there  were  certain  of  the  de- 
tails which  did  not  meet  their  approbation,  and  for  which  they  could  not  vote. 
This  bill  had  been  called  a  desperate — a  dangerous  measure.  It  might  be  so, 
Mr.  R.  said;  but,  from  the  nettle  danger,  we  frequently  pluck  the  flower  safety. 
Nothing  could  be  more  dangerous  than  the  very  situation  in  which  we  now 
are,  which  could  not  be  worsted  even  by  the  failure  of  the  novel  experiment 
which  this  bill  had  been  pronounced  to  be,  &c. 

Mr.  ALSTON,  of  North  Carolina,  said  he  should  vote  against  re-considera- 
tion. Believing  no  good  could  result  from  further  attempts  to  unite  conflict- 
ing opinions  on  this  subject,  he  was  in  favor  of  putting  it  to  rest,  and  letting 
the  responsibility  rest  on  the  shoulders  of  those  who  had  twice  already  defeat- 
ed the  bill,  &c. 

Mr.  DUVAL,  of  Kentucky,  in  advocating  a  re-consideration,  called  upon 
those  who  had  refused  to  sacrifice  their  individual  opinions,  to  remember  the 
sacrifices  made  by  those  of  their  own  party,  and  to  exhibit  that  liberality  and 
spirit  of  mutual  concession,  without  which  there  could  bs  no  legislation.  He 
believed  there  was  a  decided  majority  in  the  House  in  favor  of  a  national 
bank,  and  he  entreated  gentlemen  to  consent  to  re  commitment,  to  make  one 
last  effort  to  save  the  sinking  credit  of  the  country,  &c.  Ha  dwelt  at  some 
length  on  the  absurdity  of  every  man  in  a  public  body  clinging  to  his  own 
opinion  as  the  standard  of  perfection.  Unless  men  yield  occasionally  their 
particular  opinions  on  minor  points,  and  mere  matters  of  detail,  no  majority 
could  ever  be  obtained  in  favor  of  any  particular  measure.  He  had  thus  yield- 
ed his  opinions  when  he  voted  for  this  bill,  and  he  hoped  a  sufficient  number 
would  now  do  so  to  obtain  a  re-consideration  of  the  bill. 

Mr.  GHOLSOV,  of  Virginia,  conjured  gentlemen  to  put  an  end  to  debate,  and 
to  act.  Whilst  they  were  debating,  the  army  was  suffering  for  the  want  of 
necessary  supplies;  the  nation  was  suffering  at  every  point.  He  intreated 
gentlemen  to  permit  the  question  to  be  taken. 

Mr.  HAWKINS,  of  Kentucky,  addressed  himself  to  the  majority  of  the 
House,  exhorted  them  to  unite,  and  no  longer  suffer  themselves  to  be  driven 
from  ground  to  ground,  from  shift  to  shift,  by  the  pertinacity  of  a  minority 
who  openly  disavowed  any  responsibility  for  the  failure  of  measures  which 
they  were  frequently  the  means  of  thwarting'  He  adverted  to  the  majority 
which,  a  day  or  two  ago,  had  appeared  in  favor  of  this  bill,  who  had  been 
driven  from  their  ground  by  the  pertinacity  of  the  minority,  in  violation  of  the 
usages  and  decorum  of  legislation,  £c.  He  appealed,  also,  to  the  liberality  of 
those  opposed  to  this  bill  on  mere  points  of  detail,  whether  an  opportunity 
ought  not  to  be  afforded  to  those  who  were  friendly  to  the  principle  to  try  this 
question  again.  He  dwelt  with  much  emphasis  on  the  weight  of  responsi- 
bility attaching  to  every  one  who  voted  on  this  question,  and  the  propriety  of 
allowing  them  to  vote  again,  on  a  vote  on  which  the  House  was  equally  divid- 
ed, after  having  an  opportunity  since  to  reflect  on  it. 


574  BANK   OF  THE  UNITED  STATES. 

Mr.  PEARSON  expressed  himself  favorably  towards  a  national  bank,  but  as 
strongly  opposed  to  the  bill  now  before  the  House,  the  vote  on  which  he  would 
not  consent  to  reconsider,  lest  the  bill  might  then  pass,  though  he  was  willing 
to  suspend  the  rule  of  the  House  forbidding  a  bill,  once  rejected,  to  be  origi- 
nated anew,  so  as  to  give  an  opportunity  to  obtain  the  establishment  of  a  bank 
on  proper  banking  principles,  &c. 

Mr.  FISK,  of  New  York,  said  the  very  importance  of  this  bill  was  a  reason 
why  a  question,  decided  as  it  had  been,  should  be  reconsidered;  that,  if  a  ma- 
jority should  not  favor  its  passage  in  its  present  shape,  it  might  be  put  in  such 
a  form  as  should  ensure  it  the  support  of  a  majority.  The  proposal  of  the 
gentleman  who  preceded  him,  to  dispense  with  the  rule,  he  considered  as 
more  objectionable  by  far,  than  the  practice  of  reconsidering  a  vote. 

Mr.  FORSYTH,  of  Georgia,  at  some  length  warmly  contended  for  the  recon- 
sideration of  the  bill,  avowing  himself  still  friendly  to  it,  in  preference  to  any 
other  plan  which  could  be  proposed. 

Mr.  CALHOUN  was  in  favor  of  reconsideration  of  the  bill,  but  on  different 
grounds  from  Mr.  FORSYTH.  He  was,  and  should  continue,  opposed  to  the 
present  bill. 

Mr.  GASTON,  Mr.  CULPEPER,  Mr.  WEBSTER,  and  Mr.  GROSVENOR,  express- 
ed themselves  friendly  to  a  national  bank,  on  the  principles  they  have  hereto- 
fore advocated,  but  decidedly  opposed  to  this;  and,  therefore,  determined  to 
vote  against  reconsidering  it,  though  they  were  willing  to  suspend  the  rule 
forbidding  future  reconsideration. 

Mr.  WILSON,  of  Pennsylvania,  advocated  a  reconsideration  of  the  bill,  on 
the  grounds  of  partiality  to  the  form  of  the  present  bill,  which  he  examined 
and  supported  by  a  train  of  argument  going  to  exhibit  its  particular  merits. 

Mr.  HALL  then  said  he  had  made  his  motion  with  the  hope  of  obtaining  a 
compromise  of  conflicting  opinions,  and  a  modification  of  the  present  bill. 
But,  finding  its  friends  so  wedded  to  it  as  to  attempt  to  force  it  through  the 
House,  he  withdrew  his  motion  for  a  reconsideration. 

Mr.  WEBSTER  took  this  opportunity  to  lay  upon  the  table  the  following 
resolution: 

Resolved^  That  the  rule  of  the  House  which  prevents  a  subject,  once  acted 
upon,  from  being  acted  upon  again,  during  the  same  session,  be  suspended 
until  otherwise  ordered. 

Mr.  M4KiM  renewed  the  motion  to  reconsider  the  vote  on  the  bank  bill; 
not  from  any  intention  to  change  his  vote,  but  from  a  disposition  to  accommo- 
date his  friends  on  a  question  of  so  much  magnitude. 

Mr.  SHARP,  of  Kentucky,  opposed,  and  Mr.  NEWTON,  of  Virginia,  advocat- 
ed the  reconsideration;  the  one,  on  grounds  of  unabated  hostility  to  the  present 
bill;  the  other,  from  a  disposition  to  afford  the  utmost  latitude  to  the  consider- 
ation of  a  subject  so  highly  important  to  the  nation. 

The  question  on  reconsideration  was  at  length  decided  by  yeas  and  nays. 
For  reconsideration,  107, 

Against  it,       -  54. 

And  the  question  being  again  stated:    "  Shall  the  bill  pass  r" 

Mr.  M'KEE  moved  to  recommit  the  bill  to  a  select  committee,  and  present- 
ed his  view  of  the  change  which,  he  conceived,  ought  to  be  made  in  its  pro- 
visions. 

Mr.  BUTLER,  of  Vermont,  supported  this  motion,  and,  in  a  speech  of  some 
length,  exhibited  his  views  on  the  same  subject. 

Mr.  FOBSYTH  opposed  the  recommitment  with  much  zeal  and  eloquence,  on 
grounds  of  preference  to  the  present  bill. 


PROCEEDINGS   OF   1816  575 

Mr.  KING,  of  Massachusetts,  expressed  his  opinions,  generally,  in  hostility 
to  the  establishment  of  any  bank,  at  that  time,  and  in  opposition  to  any  com- 
promise. 

Mr.  FINDLEY  advocated  the  recommitment,  principally  on  the  ground  of 
opposition  to  that  feature  of  the  bill  which  requires  the  bank  to  make  a  loan  to 
Government,  which  he  believed  at  once  superfluous  and  inexpedient. 

Mr.  OAKLEY  and  Mr.  STOCKTON  advocated  recommitment  with  earnest- 
ness and  ability,  in  order  to  procure  a  modification  of  the  details.  If  modi- 
fied, as  they  believed  it  might  be,  they  pledged  themselves  to  vote  for  the 
bank  bill,  and  expressed  their  opinion  that,  in  that  vote,  they  would  be  join- 
ed by  a  majority  of  their  political  friends. 

The  question  on  recommitment  was  decided  by  yeas  and  nays,  as  follows: 
For  recommitment,  89, 

Against  it,  71. 

And  it  was  determined  to  recommit  the  bill  to  a  select  committee  of  seven 
members. 

The  committee  to  whom  the  bill  was  recommitted,  consists  of  Messrs. 
M'Kee,  Findley,  Stockton,  Pitkin,  Taylor,  Cuthbert,  and  Yancey. 

JANUARY  6,  1815. 

Mr.  M'K.EE,  from  the  select  committee  to  whom  was  recommitted  the  bill, 
reported  sundry  amendments  thereto;  which  were  read. 

A  motion  was  then  miitU1  by  Mr.  ROBERTSON  to  lay  the  report  on  the  table 
for  one  day,  that  it  might  be  printed  for  the  more  particular  information  of  the 
members,  which  motion  was  negatived:  Ayes  36. 

Mr.  M'ivEE  explained,  briefly,  the  nature  and  amount  of  the  amendments 
now  proposed  to  the  bill.     The  first  principle  introduced  into  the  bill,  he  said, 
was  a  reduction  of  the  capital  stock  fromjifty  to  thirty  millions:  such  capital 
to  be  composed  of  five  millions   in  specie,  fifteen  millions  in  treasury  notes, 
ten  millions  in  stock  of  the  United  States,  created  since  the  declaration  of  the 
war.    The  capital  to  be  subscribable  in  shares  of  one  hundred  instead  of  Jive 
hundred  each.     The  payments  of  the  subscription  to  be  so  apportioned  that 
two  fifths  of  the  amount  of  the  capital  should  be  paid   in  at  the  time  of  sub- 
scribing.   This  would  brin»  at  once  into   the  bank,  $1,666,000  in  specie,  and 
the  residue  in  treasury  notes,  and  stock,  amounting  to  twelve  millions  in  the 
whole.    There  was  every  reason  to  believe,  that  this  payment  could  be  made, 
at  the  time  of  subscription,  to  the  full  amount  proposed.    If  so,  the  bank  could 
forthwith  go  into  operation,  and  its  capital   would  not  remain  inactive,  as  a 
part  of  it  must  do  if  a  less  amount  were  payable  at  the  time  of  subscription. 
The  principle  requiring  the  bank  to  make  a  loan  of  thirty  millions  to  the  Go- 
vernment, to  be  stricken  out,  and  the  provision  respecting  the   suspension  of 
payments  in  specie,  which  appeared  to   be  inseparably  connected    with  the 
compulsory  loan,  to  be  also  stricken  out.     The  immediate  aid  which  the  plan 
would  aftbrd  to  the  Government,   in  addition  to  the  establishment  of  a  circu- 
lating medium  of  undoubted  credit,  would  be  in  the  issue  and  free  circulation 
of  fifteen  millions  of  treasury  notes,  and  the  relief  to  the  stock  market  by  the 
abstraction  from  it  often  millions,  to  be  subscribed  into  the  stock  of  the  bank. 
The  bank  thus  to  be  established,  was  predicated  on  the  idea  of  a  specie  bank, 
on  which  principle  alone  must  forever  rest  a  sound  circulating  medium.  There 
was  no  danger,  as  had  been  frequently  observed,  but,  without  a  requisition  to 
that  effect  in  its  charter,  the  bank  would,  for  its  own  interest,  afford  to  the  Go- 
vernment every  assistance  and  accommodation  in  its  power.    A   right  was 
also  reserved  to  the  Government,  to  subscribe,  on  its  own  behalf,  and  for  its 
benefit,  whenever  Congress   shall   authorize  it  by  law,  five  millions  to  the 
stock  of  the  bank,  payaole  in  certificates  of  stock,   bearing  an  interest  of  four 


576  BANK    OF    THE   UNITED    STATES. 

per  centum.     This  stock   it  might  sell  at  great  advantage;   even  during  the 
present  year,  if  the  bank  went  successfully  into  operation. 


JL   I1V'     C4.111  VAlVlllAV^l  J  CO    LV*        HIV      U1OU       vJV^Vv  Vf.VH.1.     IJM,*AftJ^      VXWBW  M*«,WUJ      M**M         \11\.         V|lA\_,k7l«WI«. 

being  proposed  to  the  House  on  that  amendment  which  reduces  the  proposed 
ipital  from  fifty  to  thirty  millions  of  dollars, 


The  amendments  to  the  first  section  having  been  stated,  and  the.  question 
iing  i 
capital 

Mr.  TELFAIR,  of  Georgia,  being  desirous  of  fixing  the  capital  of  the  bank  at 
forty  millions,  as  a  proper  medium,  said  he  should  vote  against  this  amend- 
ment, and  briefly  assigned  his  reasons  for  so  doing. 

Mr.  HAWKINS,  of  Kentucky,  stated  the  reasons  why  he  should  vote  against 
this  amendment,  though  willing  to  make  what  he  deemed  reasonable  conces 
sions  to  those  who  differed  from  him. 

Mr.  TAYLOR  explained,  at  some  length,  the  reasons  which  had  induced  him, 
as  a  last  effort  to  relieve  the  finances  of  the  country,  by  the  establishment  of  a 
bank,  to  consent  to  this  report,  embracing  a  compromise  of  his  own  opinions. 
He  spoke  at  some  length,  in  explanation  of  the  provisions  of  this  bill,  and  of 
the  advantage  which  it  held  forth  to  the  public  interest. 

Mr.  FORSYTH  briefly  stated  the  grounds  on  which  he  was  opposed  to  the  re- 
port of  the  committee,  and  preferred  the  bill  in  its  present  shape.  If  the 
amendments  prevailed,  he  contended  that  the  will  of  the  majority  would  in 
fact  be  defeated,  and  a  bill  passed  on  a  plan,  of  which  the  majority  had  al- 
ready expressed  their  decided  disapprobation. 

Mr.  M'KEE  spoke  at  some  length  in  defence  of  the  report,  and  to  shew  its 
superiority  to  the  present  features  of  the  bill. 

Mr.  INGERSOLL  explained  briefly  why,  although  entertaining  a  decided  pre- 
ference for  the  bill,  as  it  now  stood,  he  should  vote  for  the  report  of  the  com- 
mittee in  all  its  parts;  because,  being  the  result  of  a  compromise,  if  it  were  not 
accepted,  he  feared  no  National  Bank  would  be  established — a  measure  which 
he  deemed  at  this  moment  absolutely  indispensable. 

Mr.  YANCEY  said,  he  should  give  the  report  his  decided  support,  and  re- 
gretted that  any  of  his  friends  should  act  differently.  He  considered  the  pro- 
posed amendments  highly  expedient,  and,  withal,  that,  if  they  were  not  adopt- 
ed, no  bank  could  be  established  at  this  session. 

Mr.  PITKIN,  in  a  speech  of  some  length,  explained  the  reasons  why  he  had 
been  induced  to  compromise  a  part  of  his  own  opinions,  in  agreeing  to  this  re- 
port, to  which  he  had  acceded  with  some  reluctance,  and  for  the  success  of 
which  he  did  not  consider  himself  responsible.  Being  willing  to  lend  his  aid 
to  extricate  the  Government  from  its  present  financial  difficulties,  he  had 
agreed  to  this  report,  which,  however,  he  believed,  embraced  much  too  ex- 
tensive a  scale  for  the  proposed  institution.  He  went  into  an  examination  at 
some  length  of  the  principles  of  banking,  principally  to  shew  that  a  forced 
loan  would  be  destructive  to  the  ability  or  prospects  of  any  bank. 

Mr.  FORSYTH  replied  at  some  length  to  some  of  the  objections  which  had 
been  made  to  the  bill  as  it  now  stands,  and  in  vindication  of  his  own  opinion;  and 

Mr.  PEARSON  added  a  few  words  of  explanation  in  reply  to  a  part  of  Mr. 
FORSYTH'S  speech. 

The  question  being  taken,  after  nearly  two  hours'  debate,  on  the  first  amend- 
ment reported  by  the  select  committee,  (substituting  thirty  for  fifty  millions) 
was  decided  as  follows: 


PROCEEDINGS  OF   1815. 


57? 


Those  who  voted  in  the.affirmative,  are, 


Messrs.  Alexander, 

Messrs,  Findley, 

Messrs.    Pickens, 

Anderson, 

Forney, 

Pitkin, 

Archer, 

Gaston, 

Pleasants, 

Barbour, 

Geddes, 

Potter, 

Bard, 

Gholson, 

J.  Reed, 

Barnett, 

Grosvenor, 

W.  Reed. 

Baylies,  of  Mass. 

Hanson, 

Rea,ofPa. 

Bayly,  of  Va, 

Harris, 

R-hea,  of  Tenn 

Bigelow, 

Hasbrouck, 

Rich, 

Bines, 

Hawes, 

Robertson, 

Bowen, 

Henderson, 

Huggles, 

Boyd, 

Howell, 

Sage, 

Bradbury, 

Humphreys, 

Schureman, 

Breckenridge, 
Brig.iam, 

Hulbert, 
Ingersoll, 

Seybert, 
Sharp, 

Bunvell, 

Irving, 

Sheffey, 

Butler, 

Jackson,  of  R.J[. 

Sherwood, 

Caperton, 

Jackson,  of  Va 

Shipherd, 

Calhoun, 
Cannon, 

Johnson,  of  Va 
Johnson,  of  Ky. 

Slaymaker, 
Smith,  of  N.  V. 

Champion,- 

'Kennedy, 

Smith,  of  Penn 

Chappell, 

Kent,  of  N.  V 

Stanford, 

Cilley, 

Kent,  of  Md. 

Stockton, 

Clark, 

Kerr, 

Stuart, 

Clendenin, 

Kershaw, 

Sturges, 

Clopton, 

King,  of  M 

Taggart, 

Comstock, 

King,  of  N.  C. 

Tannehill, 

Coxe, 

Law, 

Taylor, 

Crawford, 

Lovett, 

Thompson, 

Creighton, 

JLowndes, 

Troup, 

Crouch, 

M'Kee, 

Udree, 

•Culpeper, 

M'Kim, 

Vose, 

Cuthbert, 

M'Lean, 

Ward,  of  Mass 

Dana, 

Miller, 

Ward,  of  N.  J 

Davenport, 

Montgomery, 

Webster, 

Davis,  of  Mas*. 

Moore, 

Wheaton, 

Davis,  of  Penn. 

Moseley, 

White, 

Desha, 

Markefl, 

Wilcox, 

Duval, 

Newton, 

Williams, 

Earl, 

Oakley, 

Wilson,  of  Ma*. 

Ely, 

Ormsby, 

Winter, 

Evans, 

Pearson, 

Wood,  and 

Farrow, 

Pickering, 

Yancey—129. 

Those  who  voted  in  the 

negative,  are, 

Messrs.  Alston, 

Messrs.  Griffin, 

Messrs.   Macon, 

Brown, 

Hall, 

M'Coy, 

Caldwell, 

Hawkins, 

Murfree, 

Conard, 

Hopkins,  of  Kv. 

Nelson, 

Denoyelles, 

Hubbard, 

Parker, 

Eppes, 

Ingham, 

Ringgold, 

Fisk,  of  Vt. 

Irwin, 

Roane, 

Fisk,  of  N.  Y. 

Kilboum, 

Sevier, 

Forsyth, 

Lefferts, 

.    Telfair,  and 

Franklin, 

Lyle, 

Wilson,  of  Pa.—  31 

Gourdin, 

The  other  amendments,  as  indicated  above  in  Mr.  M'KEE'S  remarks,  were 
then  all  agreed  to— among  them  being  an  amendment  to  postpone  the  opening 
of  the  books  of  subscription  to  the  last  instead  of  the  second  Monday  in  Fe- 
bruary. 


578  BANK  OF  THE  UNITED  STATES. 

A  motion  was  made  by  Mr.  GASTON,  further  to  amend  the  bill,  by  striking 
out  that  part  of  the  amendment  describing  the  (war)  stock  which  shall  be  sub- 
scribable  to  the  Bank,  and  inserting,  in  lieu  thereof,  "  or  in  any  of  the  public 
debt  of  the  United  States,  drawing  an  accruing  interest  of  six  |>er  centum, 
per  annum,  contracted  or  to  be  contracted  by  virtue  of  any  act  of  Congress;'* 
which  motion  was  negatived. 

The  bill,  as  amended,  was  then  ordered,  without  a  division,  to  be  read  a  third 
time  to-morrow, 

JANUARY  7,  1815. 

The  engrossed  amendments  to  the  bill  were  read,  and  the  question  stated, 
"  Shall  this  bill  pass  as  amended?"  and  the  yeas  and  nays  thereon  having 
been  required  by  Mr.  STANFORD: 

Mr.  FISK,  of  New  York,  rose  to  assign  the  reasons  which  now  influenced 
him  to  vote  against  this  bill.  His  objections  were,  to  the  reduction  of  the  ca- 
pital, and  to  the  omission  of  what  had  been  miscalled  the  forced  loan  feature  of 
the  bill,  which  he  considered  one  of  the  best.  The  bill,  before  it  was  amend- 
ed, would,  he  said,  have  afforded  to  the  Government,  a  benefit  to  the  amount 
of  twenty  millions,  but  now  would  not  afford  to  it  a  greater  bonus  than  three 
millions.  He  objected  to  the  amendments  which  had  taken  from  the  bill  the 
control  which  the  Government  ought  to  have  over  it,  and  would  throw 
the  Government  and  the  moneyed  resources  of  the  nation  into  the  power  of  its 
political  adversaries.  There  were  also  other  features  of  the  bill  to  which  he 
objected,  so  strongly,  upon  the  whole,  that  he  would  not  vote  for  the  bill. 

Mr-  HANSON  of  Maryland,  expressed  his  regret  to  see  any  impediment 
thrown  in  the  way  of  the  bill.  He  expressed  all  the  satisfaction  he  felt  at  be- 
ing able  on  this  occasion  to  redeem  his  pledge  to  co-operate  with  the  majority, 
in  any  measure  which  he  could  hope  or  bslieve  would  be  beneficial  to  the  na- 
tion. This  billy  in  its  present  shape,  he  remarked,  was  the  result  of  a  com- 
promise, produced  by  mutual  and  magnanimous  concessions,  and  at  a  period 
like  this,  of  bitter  polictial  animosity,  concessions  reflecting  equal  honor  on 
both  sides  of  the  House. 

Mr.  GROSVENOR,  of  New  York,  assigned,  at  some  length,  the  reason  why  he 
should  vote  against  the  bill.  He  expressed,  in  a  feeling  manner,  his  regret  at 
being  compelled  to  vote,  on  this  occasion,  against  so  many  of  those  with  whom 
he  had  heretofore  acted  in  opposition  to  the  measures  of  this  administration. 
His  objections  were  more  to  the  time  when,  and  purposes  for  which*  a  bank  is 
to  be  established,  than  to  the  features  of  this  bill;  to  some  of  which  he  object- 
ed. He  denied  that  it  could  be  a  specie  bank,  or  that  the  bank  would  ever 
be  able  to  get  a  million  of  its  notes  into  circulation.  The  Government  rely- 
ing upon  it  would  be  disappointed,  and  ruin  soon  stare  them  in  the  face.  He 
denied  the  operation  upon  himself,  of  the  argument  that  this  was  a  lesser  evil 
than  what  might  be  substituted  for  it  if  it  did  not  pass.  He  would  not,  he  said, 
embrace  this  evil,  in  order  to  avoid  a  greater,  which  might  not  happen;  he 
would  never,  he  said,  adopt  a  principle,  looking  towards  that  which  imports, 
that  the  end  may  justify  the  means. 

Mr.  TELFAIR,  of  Georgia,  stated  the  reasons  why,  although  he  decidedly 
approved  of  the  bill  which  had  been  first  before  the  House,  he  should  yet  vote 
for  this  bill.  He  was  seriously  convinced,  he  said,  that,  under  the  present  em- 
barrassment of  our  circulating  medium,  and  of  the  fiscal  concerns  of  the  na- 
tion, a  bank  was  indispensable;  and,  though  the  system  now  before  the 
House  was  one,  the  details  of  which  he  could  not  approve,  he  would  vote  for 
it  as  a  last  resort.  He  frankly  intimated  his  hope,  that  the  other  House  would 
propose  some  modification  of  the  amendments  of  this  House,  that  would  ren- 
der the  compromise  of  opinion  more  equitable  than  as  it  now  stood.  Mr.  T. 
went  into  a  general  examination  of  the  principles  and  history  of  banking, 


PROCEEDINGS  OF    1815.  579 

principally  to  shew  that  banks  founded  on  the  credit  of  Governments,  and  on 
public  stocks,  h^d  not  been  as  generally  unsuccessful  as  had  been  contended; 
and  he  then  compared  the  present  system  with  that  which  came  from  the  Se- 
nate, to  the  latter  of  which  he  gave  a  decided  preference. 

Mr.  INGHAM,  of  Pennsylvania,  believed, he  said,  a  National  Bank  to  be  es- 
sentially necessary,  to  give  relief  to  the  present  embarrassed  state  of  things. 
Believing  this  bill  would  contribute,  in  some  degree,  to  relieve  the  national 
wants,  it  would  receive  his  vote,  though  reluctantly;  and  he  wished  it  to  be 
distinctly  understood,  that,  instead  of  its  being  a  preferred  measure,  he  con- 
sidered the  first  bill  as  more  efficient,  and  calculated  to  give  the  Govern- 
ment aU  it  wanted.  The  vote  of  the  House  this  day,  he  said,  would  be  no 
test  of  the  excellence  of  this  system,  or  even  of  the  approbation  of  it  by  the 
House;  the  question  being  whether  the  House  would  take  this  or  no  bank. 
Mr.  I.  made  a  statement  of  the  comparative  advantages  and  disadvantages  of 
the  two  plans,  giving  the  decided  superiority  to  the  original  plan,  &c. 

The  question  on  the  final  passage  of  this  bill  was  then  decided  as  follows: 
Those  who  voted  in  the  affirmative,  are, 

Messrs.  Alexander, 
Alston, 
Anderson, 
Barnett, 
Bayly,  of  Va. 
Big-clow, 
Bines, 

Breckenridge, 
Brigham, 
Brown, 
Butler, 
Caperton, 
Caldwell, 
Calhoun, 
Cannon, 
Champion, 
Chappell, 
Cilley. 
Clark, 
Clendenin, 
Comstock, 
Conard, 
Cooper, 
Coxe, 
Creighton, 
Crouch, 
Culpeper, 
Cuthbert, 
Dana, 
Davenport, 
Davis,  of  Mass. 
Davis,  of  Pa. 
Duvall, 
Earle, 
Ely, 
Farrow, 
Findley, 
Fisk,  of  Vt. 
Forney, 
Forsyth, 


Messrs.  Gaston, 
Geddes, 
Gholson, 
Hale, 
Hanson, 
Harris, 
Hasbrouck, 
Hawes, 
Hawkins, 
Henderson, 
Hopkins,  of  Ky. 
Howell, 
Hungerford, 
Hulbert, 
Ingersoll, 
Ingham, 
Irving-, 

Jackson,  of  R.  1. 
Kent,  of  N.  Y. 
Kent,  of  Md. 
Kerr, 
Kershaw, 
Kilbourn, 
King,  ofN.  C. 
Lefferts, 
Lovett, 
Lowndes, 
M'Coy, 
M'Kee, 
M'Kim, 
M'Lean, 
Montgomery, 
Moore, 
Moseley, 
Markell, 
Oakley, 
Ormsby, 
Pearson, 
Pickering, 
Pickens, 


Messrs.  Pitkin, 

Pleasants, 

Potter, 

John  Reed, 

Win.  Reed, 

Rea,  of  Penn. 

Rhea,  of  Tenn. 

Rich, 

Ringgold, 

Robertson, 

Ruggles, 

Sage, 

Schureman, 

Sevier, 

Sharp, 

Sheffey, 

Sherwood, 

Shipherd, 

Slaymaker, 

Smith,  ofN.  Y. 

Smith,  of  Penn, 

Stockton, 

Stuart, 

Sturges, 

Taggart, 

Tannehill, 

Taylor, 

Telfair, 

Thompson, 

Udree, 

Vose, 

Ward,  of  Mass. 

Ward,  of  N.  J. 

Webster, 

Wheaton, 

White, 

Williams, 

Winter, 

Wood, 

Yancey.  — 120. 


580  BANK   OF  THE    UNITED    STATES. 

Those  who  voted  in  the  negative,  are, 

Messrs.  Baylies,  of  Mass.       Messrs.  Griffin,  Messr?.  Murfree* 

Boyd,                                         Grosvenor,  Nelson, 

Bradbury,                                 Hubbard,  Newton, 

Burwell,                                   Humphreys,  Parker, 

Clopton,                                    Irwin,  Roane, 

Crawford,                                  Johnson,  of  Va.  Seybert, 

Denoyelles,                              Johnson,  of  Ky.  Stanford, 

Desha,.                                      Kennedy,  Strong-, 

Eppesr                                     King,  of  Mass.  Wilcox, 

Evans,                                      Law,  Wilson,  of  Mass. 

Fisk,  of  N.  Y.                          Lewis,  Wilson,  of  Pa.— 37 
Franklin,                                  Lyle, 
Gourdin,                                    Maeon, 

So  the  bill  was  passed,  and  the  amendments  sent  to  the  Senate  for  their 
concurrence. 


IN  SENATE. 


JANUARY  9,   1 81 5. 


Ordered*  That  the  bill  and  amendments  from  the  House  of  Representatives, 
be  referred  to  a  select  committee,  and  Messrs.  Smith^Bibb,  Anderson,  Giles, 
and  Varnum,  were  appointed  the  said  committee. 

JANUARY  13,  1815. 

Mr.  SMITH,  from  the  said  committee,  reported  the  bill  with  a  number  of 
amendments. 

[The  amendments  to  the  amendments  of  the  House,  propose  to  increase 
the  fixed  capital  of  the  bank  from  thirty  to  thirty -Jive  millions  of  dollars;  to 
make  the  capital  consist  of  shares  of  four  hundred  instead  of  one  hundred 
dollars  each;  that  the  five  millions  proposed  to  be  added  to  the  capital,  shall 
be  added  also  to  the  amount  subscribable  in  public  debt;  to  disagree  to  the 
proposition  of  the  House  for  striking  out  the  section  which  authorizes  suspen- 
sion of  payments  in  specie;  to  agree  to  the  section  which  compels  the  bank  to 
commence  its  operations  before  the  first  day  of  January,  and  to  disagree  to 
that  which  proposes  to  authorize  a  committee  of  Congress,  at  any  time,  to  ex- 
amine the  books,  &c.  and  prescribes  the  course  of  proceeding  in  the  courts 
against  the  bank,  in  case  of  violation  of  its  charter.] 

The  consideration  of  this  report  was  postponed  to,  and  made  the  order  of 
the  day  for,  to-morrow. 

JANUARY  14,  1815. 

The  Senate  resumed  the  consideration  of  the  report  of  their  select  commit- 
tee, on  the  amendments  received  from  the  House  of  Representatives. 

On  the  proposition  to  make  the  fixed  capital  of  the  bank  thirty -Jive,  (instead 
of  thirty  millions,  as  proposed  by  the  House)  there  were, 

For  the  increase — Messrs.  Anderson,  Barbour,  Bibb,  Chase,  Condlt,  Giles,  Kerr,  La- 
cock,  Morrow,  Roberts,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker,  Wharton — 17» 

JJgainst  it — Messrs.  Brown,  Daggett,  Dana,  Fromentin,  Gaillard,  German,  Gore, 
Horsey,  Hunter,  King,  Lambert,  Mason,  Thompson,  Wells— 14, 

On  the  proposition  to  increase  by  five  millions  the  amount  of  public  debt 
on  war  stock,  to  be  subscribable  to  the  bank,  the  vote  was  precisely  the  same 
as  the  above. 

After  making  further  progress  in  the  discussion,  the  Senate  adjourned  be- 
fore they  had  gone  through  the  bill. 


PROCEEDINGS  OF    1815. 

JANUARY  16,  1815. 

The  Senate  were  engaged  nearly  the  whole  of  the  day  on  the  amendments 
to  the  bill;  which  subject  they  finished  just  before  adjournment.  They  agreed 
to  the  amendments  of  the  House,  amended  by  increasing  the  capital  five  mil- 
lions, so  as  to  make  it  thirty-five,  and  reinstating  the  section  to  authorize  the 
bank,  in  case  of  necessity,  to  suspend  payment  in  specie. 

JANUARY  17,  1815. 

The  Senate  resumed  the  consideration  of  the  subject  of  the  bill. 

Various  questions  relating  to  the  amendments  and  re-amendments  to  the 
same,  were  decided  by  the  yeas  and  nays;  among  which  was  the  following: 

On  the  question  to  reinstate  in  the  bill  the  section  authorizing  a  suspension* 
in  certain  cases,  of  payment  in  specie  by  the  bank,  (which  section  was  strick- 
en out  by  the  House  of  Representatives)  the  votes  were  as  follow: 

For  retaining  the  section — Messrs.  Anderson,  Barbour,  Bibb,  Chase,  Condit,  Howell, 
Lacock,  Morrow,  Roberts,  Robinson,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker, 
Wharton— 17. 

Against  it — Messrs,  Brown,  Daggett,  Dana,  Fromentin,  Gaillard,  German,  Giles, 
Gore,  Horsey,  Hunter,  Kerr,  King1,  Lambert,  Mason,  Thompson,  Wells — 16. 

The  Senate  having  then  agreed  to  some,  and  disagreed  to  others  of  the 
amendments  of  the  House,  the  same  were  returned  to  tne  House. 

HOUSE  OF  REPRESENTATIVES. 

JANUARY  17,  1815. 

A  motion  was  made  by  Mr.  INGIIAM,  of  Pennsylvania,  that  the  .  maining 
orders  of  the  day  be  then  postponed  until  to-morrow,  in  order  to  fc.k  *  up  the 
message  this  morning  received  from  the  Senate  respecting  their  d  v  ision  on 
the  amendments  to  the  national  bank  bill;  which  motion  was  negat:v  -d  by  the 
following  vote: 

For  the  motion,      -  71, 

Against  it, 73. 

JANUARY  18,  1815. 

The  House  resumed  the  consideration  of  the  message  from  the  Senate,  an- 
nouncing their  amendments  to  the  amendments  of  this  House  to  the  bill. 

The  first  amendment  having  been  stated,  which  proposes  to  make  the  capi- 
tal of  the  bank  thirty-five  millions  instead  of  thirty  millions — 

Mr.  M*KEE,  of  Kentucky,  expressed  his  hope  that  the  amendment  would 
not  be  agreed  to,  considering  it  as  the  key-stone  of  all  the  amendments  of  the 
Senate.  He  could  see  no  possible  advantages  to  result  from  the  addition  of 
five  millions  of  capital,  particularly  as  connected  with  the  section  authorizing 
the  stoppage  of  payment  in  specie.  He  could  see  no  consequence  to  result 
from  that  clause,  which  was  not  disastrous  and  ruinous,  &c.,  and  he  therefore 
hoped  it  would  not  be  agreed  to. 

Mr.  HAWKINS,  of  Kentucky,  denied  the  applicability  of  the  remarks  of  Mr. 
M'KEE  to  the  amendments  of  the  Senate.  The  only  question,  since  the  Se- 
nate had  agreed  to  expunge  the  condition  of  a  permanent  loan  to  the  Govern- 
ment, was.  whether  the  Senate  should  be  accommodated  by  increasing  the 
capital  of  me  bank  by  the  addition  thereto  of  five  millions:  for,  in  fact,  the 
retention  of  the  clause  authorizing  the  suspension  of  specie  payment  was  im- 
material, unless  that  it  is  more  expedient  to  incorporate  such  a  provision  at 
once,  than  yield  it  to  the  importunity  of  the  bank  hereafter.  For  he  had  no 
doubt,  if  the  war  continued,  the  bank  must,  sooner  or  later,  suspend  specie 


582  BANK   OF  THE   UNITED    STATES. 

payment — even  the  banks  of  Kentucky  and  Ohio  (where  specie  abounded) 
had  at  length  been  compelled,  in  self-defence,  to  stop  payment  of  specie. 
The  advantage  to  Government,  in  the  proposed  amendment,  Mr.  H.  argued, 
would  be  found  in  the  taking  out  of  the  market  so  much  more  of  the  war  stock, 
&c.  Something,  he  contended,  was  due  to  the  Senate,  in  the  spirit  of  accom- 
modation which  that  body  had  exhibited  in  yielding  so  far  to  the  wishes  of  the 
House,  as  to  accept  the  greater  part  of  the  amendments — and  particularly, 
inasmuch  as,  in  several  cases  of  difference  with  that  body,  the  House  had  ex- 
hibited much  pertinacity  in  adhering  to  its  peculiar  opinions,  &c.  &c.  He 
treated,  as  altogether  ideal,  the  argument  of  danger  to  the  existence  of  the 
republic,  from  the  refusal  to  incorporate  a  bank.  He  had,  he  said,  higher 
opinions  of  the  destinies  of  this  Government,  and  of  its  durability  and  ability 
to  overcome  every  difficulty;  opinions  which  gained  ground  by  every  day's 
experience,  &c.  &c. 

Mr.  STOCKTON,  of  New  Jersey,  rose  to  say,  that  he,  and  those  with  whom 
he  had  acted,  in  the  concessions  they  had  made  relative  to  the  features  of  the 
bank  bill,  had  gone  as  far  as  they  could  go,  and  further  than  they  had  origi- 
nally intended,  in  order  to  conciliate  with  gentlemen  on  the  other  side  of  the 
House.  After  they  had  done  this,  it  could  not  be  expected,  he  said,  that  they 
should  recede.  He  wished  it,  therefore,  to  be  understood,  that,  whilst  he 
should  be  happy  to  pay  all  due  respect  to  the  other  branch  of  the  Legislature, 
it  could  not  be  expected  that  they  should  yield  up  to  them  their  honest  con- 
victions; and,  therefore,  that  they  could  not  yield  their  assent  to  the  amend- 
ments of  the  Senate. 

Mr.  WRIGHT,  of  Maryland,  made  a  speech  of  some  length,  expressive  of 
his  hope  that  a  spirit  of  accommodation  would  have  induced  the  House  at 
once  to  have  acceded  to  the  amendmen.s  of  the  Senate,  which  he  deemed  ad- 
vantageous. He  considered  it  particularly  important,  that  a  provision  should 
exist  to  prevent  the  agents  or  friends  of  the  enemy  from  drawing  all  its  specie 
from  the  vaults  of  the  bank.  The  state  of  war,  he  considered  as  changing 
essentially  the  usual  state  of  mercantile  operations,  and  requiring  from  the 
banks  a  suspension  of  payments  in  specie.  He  concluded  his  speech  with  the 
following  quotations  from  legal  authorities — Inter  arma  silent  leges;  necessi- 
tas  non  nabet  legem. 

Mr.  GROSVENOR,  of  New  York,  after  remarking  that  he  felt  not  at  all  en- 
cumbered by  the  stipulations  of  compromise,  inasmuch  as  he  was  not  a  party 
to  it,  having  voted  against  the  bill,  proceeded  to  assign  the  reasons  why  he 
should  vote  for  this  amendment.  He  found  himself  obliged  to  do  so  from  a 
regard  to  his  own  consistency:  for,  though  he  doubted  of  the  efficacy  of  any 
bank  that  could  be  established,  he  was  pretty  certain  that  the  plan  of  the  bank 
would  be  improved  by  the  addition  to  its  capital  as  proposed  by  the  Senate. 

Mr.  FORSYTH,  of  Georgia,  advocated,  at  some  length,  the  adoption  of  the. 
amendments  of  the  Senate.  He  believed  the  addition  of  five  millions  to  the 
capital  of  the  bank  would  operate  as  a  benefit  to  the  Government,  by  taking 
so  much  of  the  stock  put  of  the  market,  &c.  He  denied  the  necessity,  or 
even  the  propriety,  of  any  part  of  the  House  sacrificing  their  views  of  the  na- 
tional interest  to  any  ideas  of  compromise  or  conciliation.  At  least,  he  dis- 
claimed, for  himself,  the  operation  of  any  such  consideration  on  him. 

Mr.  CUTIIBERT,  of  Georgia,  made  a  speech  of  some  length  against  the  amend- 
ments of  the  Senate.  He  considered  them  as  inseparably  connected  with  each 
other,  and  being  so,  he  was  altogether  opposed  to  them.  To  the  amendment 
now  under  consideration,  he  was  particularly  opposed,  because,  by  extending 
the  quantity  of  war  stock  to  be  purchased,  the  ability  to  purchase  treasury 
notes  would  be  so  far  diminished,  and  the  immediate  benefits  to  the  Govern- 
ment so  tar  curtailed.  Mr.  C.  also  dwelt  with  some  emphasis  on  the  pro- 
priety of  carrying  into  effect,  in  good  faith,  the  compromise,  by  the  aid  of 


PROCEEDINGS   OF    1815. 

which  the  bill  had  passed  this  House  in  the  form  in  which  it  had  been  return- 
ed to  the  Senate,  &c. 

Mi.  FORSYTH  denied  the  operation  on  him  of  the  compromise  alleged  to 
have  taken  place  in  regard  to  this  question.  He  was  no  party  to  it,  and 
was  ignorant  of  its  terms.  If  the  agreement  had  been  in  writing*  lie  should 
like  to  see  the  names  signed  to  it,  to  know  who  it  was  that  was  willing  to  bind 
the  solid  interests  of  the  country  as  a  propitiatory  sacrifice  on  the  altar  of  con- 
ciliation. 

[Considerable  further  debate  took  place  on  this  amendment,  in  the  course 
of  which  Mr.  HAWKINS,  of  Ken.,  Mr.  TELFAIR,  of  Geo.,  Mr.  RHKA,  of  Tenn., 
and  Mr.  ALSTON,  of  N.  C.,  denied  the  authority  of  the  compromise  alleged  to 
have  taken  place  on  a  former  occasion;  which  was,  on  the  other  hand,  assert- 
ed by  Mr.  CUTHBERT  and  Mr.  OAKLEY,  and  incidentally  by  Mr.  M'KEE. 
The  first  named  gentleman  supported  the  amendment,  and  the  latter  opposed 
the  amendment.  Mr.  HAWKINS,  in  the  course  of  his  speech,  took  occasion 
to  pay  a  high  tribute  to  the  talents  and  independence  of  the  present  Secretary 
of  the  Treasury,  of  which  lie  challenged  a  denial.] 

Mr.  FORSYTH,  in  conclusion  of  the  debate,  by  way  of  disproving  the  obli- 
gation of  the  republican  to  conciliate  the  federal  side  of  the  House,  on  any 
question  affecting  the  national  bank,  quoted  the  yeas  and  nays  on  the  question 
of  reconsideration  of  the  bill,  (after  it  had  been  rejected  by  the  casting  vote  of 
the  Speaker)  from  which  it  appeared  that,  of  the  fifty-four  who  voted  against 
reconsideration,  but  &/./:  belonged  to  the  republican  side  of  the  Hou 

The  question  on  concurrence  in  the  first  amendment  of  the  Senate,  was 
finally  decided  in  the  negative,  by  yeas  and  nays,  as  follow^: 

For  the  amendment,    -  -        80, 

Against  it,  -        -        87. 

The  other  material  amendments  were  also  disagreed  to,  after  debate. 
Among  others,  was  the  amendment  going  to  reinstate  the  section  suspend- 
ing payment  in  specie;  on  which  the  vote  was  as  follows: 

For  reinstating  it,  -        80, 

Against  it,  ....        85. 

So  the  House  refused  to  reinstate  that  section. 

The  House,  after  agreeing  to  some  other  amendments,  determined  to  insist 
on  those  of  their  amendments  to  which  the  Senate  had  disagreed,  and  ordered 
the  bill  to  be  returned  to  the  Senate. 

IN  SENATE. 

JANUARY  19,  1815. 

The  Senate  proceeded  to  the  consideration  of  the  message  from  the  House, 
announcing  its  disagreement  to  the  amendments  of  the  Senate. 

[The  state  of  this  question  is  so  intricately  interwoven  with  matters  of  form, 
and  technicalities,  that  we  shall,   in  describing  the  question  which  came  up  ^ 
to-day,  disregard  the  mere  form  of  them,  and  endeavor  to  present  our  readers  ^ 
with  the  substance.] 

The  first  question  was,  the  proposition  sent  from  the  Senate,  to  which  the 
House  had  disagreed,  to  increase  the  capital  of  the  bank,  five  millions,  to  be 
subscribable  in  public  stock  created  since  the  war. 

On  this  proposition,  Mr.  BIBB  proposed  to  insist. 

This  motion  was  supported  by  Mr.  BIBB,  Mr.  SMITH,  Mr.  ROBERTS,  and 
Mr.  TAYLOR,  and  opposed  by  Mr.  BARBOUR,  Mr.  KING,  and  Mr.  GILES. 
The  debate  turned  principally  on  the  merits  of  the  specie-payment-suspending 
section,  (to  which  also  the  other  House  had  disagreed)  which  was  considered 
as  intimately  connected  with  the  question  immediately  before  the  Senate. 


584  BANK  OF  THE  UNITED  STATES. 

The  first  named  gentlemen  insisted  on  the  advantages  to  the  Government- 
from  the  increase  oi  the  capital,  and  also  from  the  proposed  power  to  suspend 
payment  in  specie,  without  which,  it  was  said,  the  operations  of  the  bank 
must,  for  some  time  at  least,  be  greatly  restricted,  &c.  and  wholly  useless  to 
the  Government.  Mr.  BIBB,  Mr.  ROBERTS",  and  Mr.  TAYLOR  intimated,  if 
the  Senate  should  yield  these  points  to  the  House,  that  they  should  vote  for  the 
indefinite  postponement  of  the  bill,  under  the  impression  that  it  would  be  rather 
an  injury,  than  a  benefit  to  the  community,  to  pass  it  in  its  present  shape. 

Messrs.  BARBOUR,  KING,  and  GILES,  urged  the  recession  of  the  Senate  from 
these  amendments,  principally  on  the  ground  of  necessary  concession,  (al- 
though the  two  latter  gentlemen  objected  to  them  on  principle  also)  conces- 
sions which  it  was  said  the  times  now  more  than  ever  demand.  Mr.  BAR- 
BOUR, particularly,  in  an  eloquent  manner,  enforced  the  necessity  of  acting 
decisively  on  a  subject,  which  had  been  so  long  pending  between  the  two 
Houses,  and  so  greatly  interested  the  feelings  of  the  community,  which  turned 
its  eyes  with  ceaseless  anxiety  on  the  dilatory  proceedings  of  Congress.  Mr. 
SMITH,  in  allusion  to  these  remarks,  took  occasion  to  absolve  the  Executive 
and  Senate  from  the  blame  of  delay  and  apathy,  and  by  inference  to  cast  it  on 
the  shoulders  of  the  House  of  Representatives. 

The  question  being  about  to  be  taken,  Mr.  ROBERTS  moved  to  postpone  the 
subject  till  to-morrow,  with  the  view  of  submitting  a  resolution  that  Mr. 
BLEDSOE  (the  Kentucky  Senator)  was  entitled  to  a  seat  in  Senate,  inasmuch 
as  the  election  of  his  successor,  Mr.  TALBOT,  had  not  yet  been  notified  to  the 
Senate.  This  motion  was  negatived,  25  to  9,  by  yeas  and  nays. 

The  question  to  insist  on  the  first  amendment,  as  stated  above,  was  then  de- 
cided as  follows: 

For  insisting . — Messrs.  Anderson,  Bibb,  Chase,  Condit,  Howell,  Lacock,  Morrow, 
Roberts,  Smith,  Taylor,  Turner,  Varnum,  Walker. — 13 

Against  insisting. — Messrs.  Barbour,  Brown,  Dag-gelt,  Dana,  Fromentin,  Gaillard, 
German,  Giles,  Goldsboroug-h,  Gore,  Horsey,  Hunter,  Kerr,  King-,  Lambert,  Mason, 
Robinson,  Tait,  Thompson,  Wells,  Wharton. — 21. 

So  the  Senate  refused  to  insist  on  this  amendment. 

Mr.  GILES  moved  to  recede  from  the  said  amendment. 

Mr.  ROBERTS  then  moved  to  postpone  the  further  consideration  of  the  whole 
subject  to  the  second  Monday  in  March,  (equivalent  to  a  motion  to  reject.) 
In  support  of  the  motion,  Mr.  ROBERTS  spoke  at  some  length. 

Mr.  BIBB  intimated  that  he  should  vote  against  the  postponement  now,  be- 
cause the  amendment  respecting  which  he  was  most  anxious,  had  not  been  de- 
cided, (meaning  the  section  respecting  specie  payments.) 

Mr.  TAYLOR  said  he  should  vote  for  the  postponement,  because  he  perceiv- 
ed the  amendment  referred  to  by  Mr.  BIBB,  would  not  be  insisted  on. 

The  question  on  the  postponement  (or  rejection)  was  then  decided  as  fol- 
lows: 

For  the  postponement. — Messrs.  Gaillard,  German,  Kerr,  Lacock,  Lambert,  Roberts, 
«.  Taylor,  Turner,  Varnum. — 9. 

Against  the  postponement. — Messrs.  Anderson,  Barbour,  Bibb,  Brown,  Chase,  Con* 
dit,  Dagg-ett,  Dana,  Fromentin,  Giles,  Goldsborough,  Gore,  Horsey,  Ho  well,  Hunter, 
King1,  Mason,  Morrow,  Robinson,  Smith,  Tait,  Thompson,  Walker,  Wells,  Whar- 
ton.— 25. 

The  question  on  Mr.  Giles's  motion,  to  recede  from  the  said  first  amend- 
ment, was  then  decided  in  the  affirmative,  ayes  18. 

Mr.  KING  then  moved  to  recede  from  all  the  other  amendments  to  which 
the  House  had  disagreed. 

The  Senate  then  receded  from  such  of  the  said  remaining  amendments  as 
preceded  the  following: 


PROCEEDINGS  OP  1815,  535 

The  question  on  receding  from  the  insertion  of  the  section  authorizing  the 
bank,  under  certain  circumstances,  to  suspend  payment  of  their  notes  in  spe- 
cie, was  decided  as  follows: 

For  receding.— Messrs.  Barbour,  Brown,  Dagg-ett,  Dana,  Fromentin,  Gaillard,  Ger- 
man, Giles,  Goldsboroug-h,  Gore,  Horsey,  Hunter,  Kerr,  King,  Lambert,  Mason, 
Thompson,  Wells.— 18. 

Against  receding  .—Messrs.  Anderson,  Bibb,  Chace,  Condit,  Howell,  Lacock,  Mor- 
row, Roberts,  Robinson,  Smith,  Tait,  Taylor,  Turner,  Varnum,  Walker,  Wharton. — 
16. 

So  the  Senate  virtually  disagreed  to  the  insertion  of  such  a  section. 
Whereupon, 

Mr.  BIBB  moved  to  postpone,  to  the  second  Monday  in  March,  (to  reject) 
the  further  consideration  of  this  bill. 

Mr.  SMITH,  then,  expressing  a  desire  to  have  a  night's  reflection  on  this 
question,  moved  to  adjourn. 

There  were  nineteen  yeas  in  favor  of  the  motion:  and  the  Senate  adjourned 
at  a  late  hour. 

JANUARY  20. 

The  Senate  resumed  the  consideration  of  the  amendments  to  the  bill. 

The  question  on  Mr.  BIBB'S  motion,  to  postpone  to  the  2d  Monday  in  March, 
(to  reject)  the  further  consideration  of  the  subject,  being  yet  under  conside- 
ration, a  very  able  and  highly  interesting  debate  took  place,  in  the  course  of 
which  Mr-  BIBB.  Mr.  TAYLOR,  and  Mr.  ROBF.RTS,  supported  the  affirmative, 
and  Mr.  GILES  tne  negative  side. 

The  question  was  decided  at  a  late  hour,  as  follows: 

For  postponement. — Messrs.  Anderson,  Bibb,  Condit,  Gaillard,  Howell,  Kerr,  La 
cock,  Morrow,  Roberts,  Smith,  Taylor,  Turner,  Varnum,  Walker. — 14. 

Against  postponement. — Messrs.  Barbour,  Brown,  Chase,  Daggett,  Dana,  Fromen- 
tin, German,  Giles,  Goldsboroug-h,  Gore,  Horsey,  Hunter,  King-,  Lambert,  Mason, 
Robinson,  Tait,  Thompson,  Wells,  Wharton. — 20. 

So  the  Senate  refused  to  postpone  the  bill. 

On  motion  of  Mr.   GILES,  the  Senate  then   determined  to  recede  from  its 
disagreement  with  the  House;  and 
The  Senate  adjourned. 

The  bill,  as  passed  by  both  Houses,  is  as  follows,  to  wit : 
AN  ACT  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States  of  America. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  oftfmfrica  in  Congress  assembled,  That  a  Bank  of  the  United  States 
of  America  shall  be  established,  the  capital  stock  of  which  shall  be  thirty  mil- 
lions of  dollars,  divided  into  three  hundred  thousand  shares,  of  one  hundred 
dollars  each  share;  and  that  subscriptions  for  thirty  millions  of  dollars,  to-  • 
wards  constituting  the  said  capital  stock,  shall  be  opened,  on  the  last  Monday 
of  February  next,  at  the  following  places,  viz:  at  Portland,  in  Maine,  Ports- 
mouth, in  New  Hampshire,  Windsor,  in  Vermont,  Boston,  Providence,  New 
Haven,  New  York,  New  Brunswick,  in  New  Jersey,  Philadelphia,  Balti- 
more, the  city  of  Washington,  Richmond,  Raleigh,  Charleston,  Savannah, 
Lexington,  in  Kentucky,  Nashville,  in  Tennessee,  Chillicothe,  in  Ohio,  and 
New  Orleans,  under  the  superintendence  of  the  following  persons,  as  com- 
missioners to  receive  the  same:  at  Portland,  Matthew  Cobb,  Isaac  Ilsley, 
Joshua  Wingate,  junior;  at  Portsmouth,  John  Goddard,  Nathaniel  A.  Haven, 
Henry  S.  Langdon;  at  Windsor,  Elias  Lyinan,  William  Leveret,  Eleazer 
May;  at  Boston,  Israel  Thorndike,  Thomas  H.  Perkins,  William  Gray,  Aa- 
74 


586  «ANK  OF  THE  UNITED  STATES. 

roil  Hill,  Samuel  Brown;  at  Providence,  Seth  Wheaton,  Ebenezer  K.  Dex- 
ter, Henry  Smith;  at  New  Haven,  Abraham  Bishop,  William  W.  Woolsey, 
Henry  Jones;  at  New  York,  Robert  Troup,  William  Paulding,  junior, 
Robert  Lenox,  John  Jacob  As  tor,  Samuel  Tooker,  Isaac  Bronson,  Henry  A. 


Coster;  at  New  Brunswick,  James  Vanderpool,  John  Bray,  Peter  Gordon: 

^  A.    r*l    '1111*  T  l¥  11       rr^i  m  «       -m»T*ii"  r^  t  I  ^-^  •  »      *-*  «  i  • 


at  Savannah,  John  Bolton,  Charles  Harris,  James  Johnson;  at  Lexington,  in 
Kentucky,  Charles  Wilkins,  Lewis  Sanders,  John  H.  Morton;  at  Nashville, 
Robert  Weakly,  Felix  Grundy,  John  R.  Bedford;  at  Chillicothe,  Samuel 
Finley,  Thomas  James,  William  M'Farland;  at  New  Orleans,  Dominick 
A.  Hall,  Benjamin  Morgan.  Paul  Lanuse,  Thomas  L.  Harman,  and  William 
Flood:  which  subscriptions  shall  continue  open  every  day,  from  the  time  of 
opening  the  same,  from  ten  o'clock  in  the  forenoon,  until  four  o'clock  in  the 
afternoon,  until  the  Saturday  following,  at  four  o'clock  in  the  afternoon,  when 
the  same  shall  be  closed;  and  immediately  thereafter,  the  commissioners,  or 
any  two  of  them,  at  the  respective  pi  aces  aforesaid,  shall  cause  two  transcripts 
or  fair  copies  of  such  subcnptions  to  be  made,  one  of  which  they  shall  send  to 
the  Secretary  of  the  Treasury,  one  they  shall  retain,  and  the  original  shall, 
within  three  days  from  the  closing  of  the  same,  be  by  the  said  commissioners 
transmitted  to  the  said  commissioners  at  Philadelphia,  or  to  one  of  them;  and 
on  the  receipt  thereof,  the  said  commissioners  at  Philadelphia,  or  any  three  of 
them,  shall  immediately  thereafter  convene  and  proceed  to  take  an  account 
of  the  said  subscriptions;  and  if  more  than  the  amount  of  thirty  millions  of 
dollars  shall  have  been  subscribed,  then  the  said  last  mentioned  commissioners 
shall  apportion  the  same  among  the  several  subscribers,  according  to  their 
several  and  respective  subscriptions:  Provided  however,  That  such  commis- 
sioners shall,  by  such  apportionment,  allow  and  apportion  to  each  subscriber 
at  least  one  share;  and,  in  case  the  aggregate  amount  of  the  said  subscriptions 
shall  exceed  thirty  millions  of  dollars,  the  said  commissioners,  after  having 
apportioned  the  same  as  aforesaid,  shall  cause  lists  of  the  said  apportioned 
subscriptions  to  be  made  out,  including  in  each  list  the  apportioned  subscrip- 
tion for  the  place  where  the  original  subscription  was  made,  one  of  which  lists 
shall  be  transmitted  to  the  commissioners,  or  to  one  of  the  commissioners, 
under  whose  superintendence  such  subscriptions  were  originally  made,  that 
the  subscribers  may  ascertain  from  them  the  number  of  shares  apportioned  to 
such  subscribers,  respectively;  and,  if  the  amount  of  thirty  millions  of  dollars 
shall  not  be  subscribed,  during  the  period  aforesaid,  at  all  the  places  aforesaid, the 
subscription  to  complete  the  said  sum  shall  afterwards  be  and  remain  open  at 
Philadelphia,  under  the  superintendence  of  the  said  commissioners  appointed 
at  that  place,  and  the  subscription  may  be  then  made  by  any  corporation,  co- 
partnership, or  person,  for  any  number  of  shares  not  exceeding  the  amount 
required  to  complete  the  said  sum  of  thirty  millions  of  dollars.  And,  in  case 
of  the  death,  or  refusal  to  serve,  of  any  of  the  commissioners  aforesaid,  it  shall 
be  lawful  for  the  President  of  the  Umted  States  to  supply  the  vacancy  or  va- 
cancies thus  created,  by  appointing  some  suitable  person  or  persons. 

SEC.  2.  Jlndbe.  it.  further  enacted.  That  it  shall  be  lawful  for  any  person, 
copartnership,  or  body  politic,  to  subscribe  for  so  many  shares  of  me  said 
capital  stock  of  the  said  bank,  as  he,  she,  or  they,  shall  think  fit,  not  exceed- 
ing three  thousand  shares,  except  as  is  hereinafter  provided  for  the  subscrip- 
tion on  behalf  of  the  United  States;  and  the  sums  respectively  subscribed,  ex- 
cept on  behalf  of  the  United  States,  as  is  hereinafter  provided,  shall  be  pay- 
able in  the  manner  following,  that  is  to  say:  five  millions  of  dollars  thereof  in 
gold  or  silver  coin  of  the  United  States,  or  of  foreigtvcoin  at  the  value  here- 
tofore established  by  the  act  of  Congress,  entitled  *"  An  act  regulating  the  cur- 


r run: F,M> ix to   OF   iei/>.  537 

rency  of  foreign  coins,"'  passed  the  10th  day  of  April,  one.  thousand  eight  hun- 
dred and  six;  ten  millions  of  dollars  thereof  in  gold  or  silver  coin,  as  afore- 
said, or  in  the  public  debt  of  the  United  States,  contracted  by  virtue  of  the 
act  of  Congress,  entitled  "An  act  authorizing  a  loan  for  a  sum  not  exceed- 
ing eleven  millions  of  dollars,"  passed  the  fourteenth  day  of  March,  one  thou- 
sand eight  hundred  and  twelve,  or  contracted,  or  to  be  contracted,  bjr  virtue 
of  any  subsequent  act  and  acts  of  Congress,  heretofore  passed,  authorizing  a 
loan  or  loans;  and  fifteen  millions  of  dollars  thereof  in  gold  and  silver  coin, 
or  in  treasury  notes,  issued  under  the  act  of  Congress,  entitled  *'  An  act  to 
authorize  the  issuing  of  treasury  notes,"  passed  the  thirtieth  day  of  June,  one 
thousand  eight  hundred  and  twelve,  or  issued,  or  to  be  issued,  under  the  au- 
thority of  any  subsequent  act  or  acts  of  Congress,  authorizing,  or  which  shall 
authorize,  treasury  notes  to  be  issued,  previously  to  the  final  closing  of  the 
subscriptions  to  the  said  bank-  And  the  said  payment  shall  be  made  and 
completed  in  tho  sums  and  at  the  tines  hereinafter  declared,  that  is  to  say: 
at  the  time  of  subscribing  there  shall  be  paid  six  dollars  and  sixty-six  cents 
and  two-thirds  of  a  cent  on  each  share,  in  gold  or  silver  coin;  twenty  dollars 
in  the  treasury  notes  aforesaid;  and  thirteen  dollars  thirty-three  cents  and  one- 
third  of  a  cent  in  the  public  debt  of  the  United  States,  contracted,  or  to  be 
contracted,  as  aforesaid;  at  tin1,  expiration  of  four  calendar  months  after  the 
time  of  subscribing,  then-  shall  bepaid  the  further  sum  of  three  dollars  thirty- 
thin'  cents  and  one-third  of  a  cent  on  each  share,  in  gold  or  silver  coin;  ten 
dollars  in  the  treasury  notes  aforesaid:  and  six  dollars  sixty-six  cents  and 
two-thirds  of  a  cent  in  the  public  debt  of  the  United  States,  contracted,  or  to 
be  contracted,  as  aforesaid;  at  the  expiration  of  six  calendar  months  from  the 
time  of  subscribing,  there  shall  be  paid  the  further  sum  of  three  dollars  thirty- 
three  cents  and  one-third  of  a  cent  on  each  share,  in  gold  and  silver  coin; 
ten  dollars  in  the  treasury  notes  aforesaid;  and  six  dollars  and  sixty-six  cents 
and  two-thirds  of  a  cent' in  the  public  debt  of  the  United  Slates,  contracted, 
or  to  be  contracted,  as  aforesaid;  at  the.  expiration  of  eight  calendar  months 
from  the  time  of  subscribing,  there  shall  lie  paid  the  further  sum  of  three  dol- 
lars thirty-three  cents  and  one-third  of  a  cent  in  gold  or  silver  crin;  ten  dol- 
lars in  the  treasury  notes  aforesaid;  and  six  dollars  sixty-six  cents  and  two- 
thirds  of  a  cent  in  the  public  debt  of  the  United  States,  contracted,  or  to  be 
contracted,  as  aforesaid.  And  the  subscriptions  in  public  stock  and  treasury 
notes,  as  aforesaid,  shall  be  taken  and  credited  for  the  principal  and  so  much 
of  the  interest  thereof,  respectively,  as  shall  have  accrued  on  the  day  of  sub- 
scribing the  same.  And,  at  the  time  of  subscribing  to  the  capital  stock  of  the 
said  bank,  as  aforesaid,  each  and  every  subscriber  shall  deliver  to  the  com- 
missioners, at  the  place  of  subscribing,  as  well  the  specie  amount  of  their  sub- 
scriptions, respectively,  as  the  certificates  of  stock  for  the  stock  proportion 
of  tneir  subscriptions,  respectively,  together  with  a  inwer  of  attorney  autho- 
rizing the  said  commissioners,  or  a  majority  of  them,  to  transfer  the  said  stock, 
in  due  form  of  law,  to  "  The  President,  Directors,  and  Company,  of  the  said 
Bank  of  the  United  States  of  America,"  as  soon  as  the  said  bank  shall  be  or- 
ganized; and,  also,  treasury  notes  for  the  proportion  of  the  subscriptions,  re- 
spectively, payable  in  treasury  notes,  as  aforesaid:  Provided,  always,  That 
if,  in  consequence  of  the  apportionment  of  shares  in  the  said  bank  among  the 
subscribers,  in  the  case  and  in  the  manner  hereinbefore  prescribed,  any  sub- 
scriber shall  have  delivered  to  the  commissioners,  at  the  time  of  subscribing, 
a  greater  amount  of  specie,  stock,  and  treasury  notes,  than  shall  be  necessary 
to  complete  the  payments  for  the  share  or  shares  to  such  subscriber,  appor- 
tioned as  aforesaid,  the  commissioners  shall  only  retain  so  much  of  the  said 
money,  stock,  and  treasury  notes,  as  shall  be  necessary  to  complete  such  pay- 
ments, and  shall  forthwith  return,  on  application  for  the  same,  the  surplus 
thereof  to  the  subscriber  lawfully  entitled  thereto.  And  the  commissioners, 
respectively,  shall  deposite  the  gold  and  silver,  certificates  of  stock,  and  trea- 
sury notes,  by  them  respectively  received,  as  aforesaid,  from  the  subscribers 
to  the  said  bank,  in  some  place  of  secure  and  safe  keeping,  so  that  the  same 
may  and  shall  be  specifically  delivered  and  transferred,  as  the  same  were  by 


588  BANK  OF  THE  UNITED  STATES. 

them  respectively  received,  to  the  said  President,  Directors,  and  Company,  of 
the  said  Bank  of  the  United  States  of  America,  or  to  their  order,  as  soon  as 
shall  be  required  after  the  organization  of  the  said  bark. 

.SEC.  3.  And  be  it  further  enacted,  That  the  United  States  may,  at  any  time 
before  the  expiration  of  this  act,  in  pursuance  of  any  law  which  may;  be  passed 
by  Congress  for  that  purpose,  cause  to  be  subscribed,  for  the  use  of  the  Unit- 
ed States,  to  said  bank,  fifty  thousand  additional  shares,  to  be  paid  in  public 
stock,  bearing  an  interest  of  four  per  cent,  per  annum,  redeemable  in  any 
sums,  and  at  any  periods,  which  the  Government  may  deem  fit. 

SEC.  4.  Jlndbe  it  further  enacted,  That  whenever  and  as  often  as  any  of 
the  treasury  notes,  subscribed  as  aforesaid,  to  the  said  capital  stock  of  the  said 
bank,  shall  be  due  and  payable,  it  shall  be  lawful  for  the  Secretary  of  the 
Treasury  (and  he  is  hereby  authorized  and  required)  to  pay  and  redeem  the 
same,  principal  and  interest,  by  causing  certificates  of  public  stock  for  an 
equal  amount,  bearing  an  interest  of  six  per  cent,  per  annum,  and  redeem- 
able in  any  sums,  and  at  any  periods,  which  the  Government  may  deem  fit, 
to  be  prepared  and  made  ii;  the  usual  form,  and  the  same  to  be  delivered  to 
the  President  and  Directors  of  the  said  bank,  in  satisfaction  and  discharge  of 
such  treasury  notes. 

SEC.  5.  And  be  it  further  enacted,  That  the  subscribers  to  the  said  Bank  of 
the  United  States  of  America,  their  successors  and  assigns,  shall  be,  and  are 
hereby  created,  a  corporation  and  body  politic,  by  the  name  and  style  of  "  The 
President,  Directors,  and  Company,  of  the  Bank  of  the  United  States  of  Ame- 
rica," and  shall  so  continue  until  the  third  day  of  March,  in  the  year  one 
thousand  eight  hundred  and  thirty-five:  and  by  that  name  shall  be,  and  are 
hereby,  made  able  and  capable  in  law,  to  have,  purchase,  receive,  possess, 
enjoy,  and  retain,  to  them  and  their  successors,  lands,  rents,  tenements,  he- 
reditaments, goods,  chattels,  and  effects,  of  whatsoever  kind,  nature,  and 
quality,  to  an  amount  not  exceeding,  in  the  whole,  thirty-five  millions  of  dol- 
lars, including  the  amount  of  the  capital  stock  aforesaid;  and  the  same  to  sell, 
grant,  demise,  alien,  or  dispose  of,  to  sue  and  be  sued,  plead  and  be  implead- 
ed,  answer  arid  be  answered,  defend  and  be  defended,  in  all  courts  and  pla- 
ces whatsoever;  and  also  to  make,  have,  and  use,  a  common  seal,  and  the 
same  to  break,  alter,  and  renew,  at  their  pleasure;  and,  also,  to  ordain,  esta- 
blish, and  put  in  execution,  such  by-laws  and  ordinances,  and  regulations,  as 
they  shall  deem  necessary  and  convenient,  for  the  government  of  the  said  cor- 
poration, not  being  contrary  to  the  constitution  and  laws  of  the  United  States; 
and  generally  to  uo  and  execute  all  and  singular  the  acts,  matters,  and  things, 
which  to  them  it  shall  or  may  appertain  to  do;  subject,  nevertheless,  to  the 
rules,  regulations,  restrictions,  limitations,  and  provisions,  hereinafter  pre 
scribed  and  declared. 

SEC.  6.  And  be  it  further  enacted.  That,  for  the  management  of  the  affairs 
of  the  said  corporation,  there  shall  be  twenty -five  directors,  who  shall  be 
elected  at  the  banking  house  in  Philadelphia,  on  the  first  Monday  of  January, 
in  each  year,  by  the  stockholders  or  proprietors  of  the  capital  stock  of  the 
said  corporation,  and  by  a  plurality  of  votes  then  and  there  actually  given, 
according  to  the  scale  of  voting  hereinafter  prescribed.  And  the  directors, 
so  duly  chosen,  shall  be  capable  of  serving  by  virtue  of  such  choice,  until  the 
end  or  expiration  of  the  first  Monday  in  January  next  ensuing  the  time  of 
such  election,  and  no  longer:  Provided,  always,  That  the  first  election  and 
appointment  of  directors  shall  be  at  the  same  time,  and  for  the  period,  here- 
inafter declared. 

SEC.  7.  And  be  it  further  enacted,  That,  as  soon  as  the  sum  of  twelve  mil- 
lions of  dollars  in  gold  and  silver  coin,  and  in  the  public  debt  and  treasury 
notes,  shall  have  been  actually  received  on  account  of  the  subscriptions  to  the 
said  capital  stock,  (exclusively  of  the  subscription  aforesaid  on  the  part  of  the 
United  States)  notice  thereof  shall  be  given  by  the  persons  under  whose  su- 
perintendence the  subscriptions  shall  have  been  made  at  Philadelphia,  in  at 
least  two  public  newspapers,  printed  in  each  of  the  places  where  subscrip- 
tions shall  have  been  made;  and  the  said  persons  shall,  at  the  same  time,  and 


PROCEEDINGS    OF    1815-  589 

ill  like  manner,  notify  a  time  and  place  within  the  said  city  of  Philadelphia, 
at  the  distance  of  at  least  twenty  days  from  the  time  of  such  notification,  for 
proceeding  to  the  election  of  directors,  as  aforesaid;  and  it  shall  be  lawful  for 
such  election  to  be  then  and  there  made.  And  the  persons  who  shall  be  then 
and  there  chosen  as  aforesaid,  shall  be  the  first  directors,  and  shall  proceed  to 
elect  one  of  their  number  president  of  the  said  corporation,  and  they  shall  be 
capable  of  serving  by  virtue  of  such  choice,  until  the  end  and  expiration  of 
the  first  Monday  of  January  next  ensuing  the  time  of  making  the  same,  and 
shall  forthwith,  thereafter,  commence  the  operations  of  the  said  bank,  at  the 
said  city  of  Philadelphia:  Provided,  always.  That  in  case  it  should  at  any 
time  happen  that  an  election  of  directors  and  president  of  the  said  corporation 
should  not  be  made  upon  any  day  when,  in  pursuance  of  this  act,  they  ought 
to  be  made,  the  said  corporation  shall  not  for  that  cause  be  deemed  to  be  dis- 
solved; but  it  shall  be  lawful  on  any  other  day  to  hold  and  make  an  election 
of  directors  and  president  of  the  said  corporation,  (as  the  case  may  be)  in  such 
manner  as  shall  have  been  regulated  by  the  by-laws  and  ordinances  ot  the  said 
corporation;  and  until  such  election  be  so  made,  the  directors  and  president, 
for  the  time  being,  shall  continue  in  office:  And  provided,  also,  That,  in  case 
of  the  death,  resignation,  or  removal,  of  the  president  of  the  said  corporation, 
the  directors  shall  proceed  to  elect  another  president:  And  provided,  also, 
That,  in  case  of  the  death,  resignation,  or  absence  from  the  United  States,  or 
removal  of  a  director  from  office,  the  vacancy  shall  be  supplied  by  the  stock- 
holders. 

SEC.  8.  tfndbe  it  further  enacted,  That  the  directors,  for  the  time  being, 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants,  under  them,  as 
shall  be  necessary  for  executing  the  business  of  the  said  corporation,  and  to 
allow  them  such  compensation  for  their  services,  respectively,  as  shall  be  rea- 
sonable; and  shall  be  capable  of  exercising  such  other  powers  and  authorities 
for  the  well  governing  and  ordering  of  the  attairs  of  the  said  corporation,  as 
shall  be  prescribed,  fixed,  and  determined,  by  the  laws,  regulations,  and  or- 
dinances, of  the  same. 

SEC.  9.  And  be  it  fv.rthf r  cnuc!cd,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form  and  be  fundamental  articles  of  the  con- 
stitution of  the  said  corporation,  to  wit: 

1.  The  number  of  votes  to  which  the  stockholder*  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  number  of  shares  he,  she,  or  they, 
respectively,  shall  hold,  in  the  proportions  following,  that  is   to  say:  for  one 
share  and  not  more  than  two  shares,  one  vote;  for  every  two  shares  above  two 
and  not  exceeding  ten,  one  vote;  for  every   four  shares  above  ten  and  not  ex- 
ceeding thirty,  one  vote;  for  every  six  shares  above  thirty  and  not  exceeding 
sixty,  one  vote;  for  every  eight  shares   above   sixty   and  not  exceeding  one 
hundred,  one   vote;  and  for   every  ten  shares  above  one  hundred,  one  vote. 
But  no  person,  copartnership,   or  body   pulitic,  shall  be  entitled  to  a  greater 
number  than  thirty  votes;  and  after  the  first  election,  no  share  or  shares  shall 
confer  a  right  of  voting,  which   shall  not  have  been   holdeii  three   calendar 
months  previous  to  the  clay  of  election.     And  stockholders,  actually  resident 
within  the  United  States,  and  none  other,  may  vote  in  elections  by  proxy. 

2.  Not  more  than  three-fourths  of  the  directors  in  office,  at  the  time  of  an 
annual  election,  shall  be  elected  for  the  next  succeeding  year,  and  no  person 
shall  be  a  director  more  than  three   out  of  four  years;  but   the  director  who 
shall  be  the  president  at  the  time  of  an  election,  may  always  be  re-elected. 

3.  None  but  a  resident  citizen  of  the  United  States,  and  holding  at  the  time 
of  his  election  not  less  than  ten  shares,  bona  fide  in  his  own  right,  shall  be  a 
director;  and  if  any  director  shall  cease  to  be  a  stockholder  to  that  amount,  he 
shall  cease  to  be  a  director. 

1.  No  director  shall  be  entitled  to  any  emolument.  The  stockholders  may 
make  such  compensation  to  the  president,  for  his  extraordinary  attendance  at 
the  bank,  as  shall  appear  to  them  reasonable. 

5.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transaction 
of  business,  of  whom  the  president  shall  always  be  one,  except  in  case  of 


590  BANK  OF  THE  UNITED   STATES. 

sickness  or  necessary  absence,  in  which  case  his  place  may  be  supplied  by 
any  other  director  whom  he,  by  writing,  under  his  hand,  shall  depute  for  the 
purpose.  And  the  director,  so  deputed,  may  do  and  transact  all  the  necessary 
business  belonging  to  the  office  of  the  president  of  the  said  corporation,  during 
the  continuance  of  the  sickness  or  necessary  absence  of  the  president. 

6.  A  number  of  stockholders,  not  less    than  sixty,  who,  together,  shall  be 
proprietors  of  one  thousand  shares  or  upwards,  shall  have  power,  at  any  time, 
to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  in- 
stitution, giving,  at  least,   ten  weeks'  notice  in   two  public  newspapers  of  the 
place  where  the  bank  is  seated,  and  specifying  in  such  notice  the'object  or 
objects  of  such  meeting. 

7.  Every  cashier  or  treasurer,  before  he  enters  upon  the  duties  of  his  oflicc, 
shall  be  required  to  give  bond,  with  two  or  more   sureties,  to  the  satisfaction 
of  the  directors,  in  a  sum  not  less  than  fifty  thousand  dollars,  with  a  condition 
for  his  good  behavior  and  faithful  performance  of  his  duties  to  the  corporation. 

8.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for  its  im- 
mediate accommodation  in  relation  to  the  convenient  transacting  of  business, 
and  such  as  shall  have  been  bona  lide  mortgaged  to  it  by  way  ot  security,  or 
conveyed  to  it  in  satisfaction  of  debts  previously  contracted   in  the  course  of 
its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall  have  been  ob- 
tained for  such  debts. 

9.  The  total  amount  of  debts  which  the  said  corporation  shall,  at  any  time, 
owe,  whether  by  bond,  bill,  note,  or  other  contract,  over  and  above  the  debt 
or  debts  due  for  money  deposited  in  the  bank,  shall  not  exceed  the  sum  of 
thirty  millions  of  dollars,  unless  the  contracting  of  any  greater  debt  shall  have 
been  previously  authorized  by  a  law  of  the  United  States.    In  case  ofexcess, 
the  directors  under  whose  administration  it  shall  happen,  shall  be  liable  for  the 
same,  in  their  natural  and  private  capacities,  and  an  action  of  debt  may?  in 
such  case,  be  brought  against  them,  or  any  of  them,  their  or  any  of  their  heirs, 
executors,  or  administrators,  in  any  court  of  record  of  the  United  States,  or 
either  of  them,  by  any  creditor  or  creditors  of  the  said  corporation,  and  may 
be  prosecuted  to  judgment  and  execution,  any  condition,  covenant,  or  agree- 
ment, to  the  contrary,  notwithstanding.    But  this  provision  shall  not  be  con- 
strued to  exempt  the  said  corporation,  or  the  iands,jtenements,  goods,  or  chat- 
tels, of  the  same,  from  being  also  liable  for,  and  chargeable  with,  the  said  ex- 
cess.    Such  of  the  said  directors  who  may   have  been  absent  when  the  said 
excess  was  contracted  or  created,  or  who  may  have  dissented  from  the  reso- 
lution or  act  whereby  the  same  was  so  contracted  or  created,  may  respectively 
exonerate  themelves  from  being  so  liable,  by  forthwith  giving  notice  of  the  fact, 
and  of  their  absence  or  dissent,  to  the  President  of  the  United  States,  and  to 
the  stockholders,  at  a  general  meeting,  which  they  shall  have  power  to  call  for 
that  purpose. 

10.  The  said  corporation  shall  not,  directly  or  indirectly,  deal  or  trade  in 
any    thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of 
goods  really  and  truly  pledged  for  money  lent,  and  not  redeemed  in  due  time, 
or  goods  which  shall  be  the  proceeds  of  its  lands,     ft  shall  not  be  at  liberty  to 
purchase  any  public  debt  whatsoever;  nor  shall  it  take  more  than  at  the  rate 
of  six  per  cent,  per  annum  for  or  upon  its  loans  or  discounts. 

11.  The  said  corporation  shall  not,  in  any  oiae  year,  sell  any  portion  of  the 
public  debt  constituting  a  part  of  its  capital  stock  aforesaid,  to  an  amount  ex- 
ceeding five  millions  ot  dollars,  without  the  consent  of  Congress. 

12.  No  loan  shall  be  made  by  the  said  corporation,  for  the  use,  or  on  account, 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  five  hun- 
dred thousand  dollars;  or  of  any  particular  State,  to  an   amount  exceeding 
fifty  thousand  dollars;  or  to  any  foreign  prince  or  State,  unless  previously 
authorized  by  a  law  of  the  United  States. 

13.  The  stock  of  the  said  corporation  shall  be  assignable   arid  transferable 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same. 


PROCEEDINGS  OF   1815. 

14.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corporation, 
which  shall  be  made  to  any  person  or  persons,  shall  be  assignable  by  endorse- 
ment thereupon,  under  the  hand  or  hands  of  such  person  or  persons,  arid  his, 
her,  or  their  executors,  or  administrators,  and  of  his,  her,  or  their  assignee  or 
assignee?,  and  the  executors  or  administrators  of  such  assignee  or  assignees, 
and  so  as  absolutely  to  transfer  and  vest  the  property  thereof  in  each  and 
every  assignee  or  assignees,  successively,  and  to  enable  such  assignee   or 
assignees,  and  his,  her,  or  their  executors  or  adminstrators,  to  maintain  an 
action  thereupon,  in  his,  her,  or  their  own  name  or  names.    And  the  bills  or 
notes  which  may  be  issued  by  order  of  the  said  corporation,  signed  by  the  presi- 
dent and  countersigned  by  the  principal  cashier  or  treasurer  thereof,  promis- 
ing the  payment  of  money  to  any  person  or  persons,  his,  her,  or  their  order, 
or  to  bearer,  although  not  under  the  seal  of  the  said  corporation,  shall  be  bind- 
ing and  obligatory  upon  the  same,  in  the  like  manner,  and  with  the  like  force 
and  effect,  as  upon  any  private  person  or  persons,  if  issued  by  him,  her,  or 
them,  in  his,  her,  or  their  private  or  natural  capacity  or  capacities,  and  shall 
be  assignable  and  negotiable  in  like  manner,  as  if  they  were  so  issued  by  such 
private  person  or  persons,  that  is  to  say:  those  which  shall  be  payable  to  any 
person  or  persons,  his,  her,  or  their  order,  shall  be  assignable,  by  endorse- 
ment, in  like  manner,  arid  with  the  like  effect,  as  foreign  bills  of  exchange 
now  are;  and  those  which  are  payable  to  bearer,  shall  be  assignable  and   ne- 
gotiable by  delivery  only. 

15.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable:  and  once  in  every  three  years, 
the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting,  for  their 
information,  an  exact  and  particular  statement  of  the  debts  which  shall  have 
remained  unpaid  after  the  expiration  of  the  original  credit,  for  a  period  of  tre- 
ble the  term  of  that  credit,  and  of  the  surplus  of  profits,  if  any,  after  deduct- 
ing losses  and  dividends.     If  there  shall  be  a  failure  of  any  part  of  any  sum 
subscribed  by  any  person,  copartnership,  or  body  politic,  the  party  failing-  shall 
lose  the  benefit  ot  any  dividend  which  may  have  accrued  prior  to  the  time  for 
making  such  payment,  and  during  the  delay  of  the  same. 

16.  The  directors  of  said  corporation  shall  be  bound  to  establish  a  competent 
office  of  discount  and  deposite  in  the  District  of  Columbia,  vyhenever  any  law 
of  the  United  States  shall  require  such  establishment;  and  it  shall  be  lawful 
for  the  said  directors  to  establish  offices  wheresoever  they  shall  think  fit,  with- 
in the  United  States  or  the  territories  thereof,  for  the  purposes  of  discount,  de- 
posite, and  distribution;  or  tor  the  purposes  of  deposite  and  distribution  only; 
and  upon  the  same  terms,  and  in  the  same  manner,  as  shall  be  practised  at 
the  bank;  and  to  commit  the  management  of  the  said  offices,  and  the  business 
thereof,  respectively,  to  such  persons,  and  under  such  regulations,  as  they  shall 
deem  proper,  not  being  contrary  to  law  or  to  the  constitution  of  the  bank.   Or, 
instead  ot  establishing  such  offices,  it  shall  be  lawful  for  the  directors  of  the 
said  corporation,  from  time  to  time,  to  employ  any  other  bank  or  banks,  at  any 
place  or  places  that  they  may  deem  safe  and  proper,  to  manage  and  transact 
the  business  proposed,  as  aforesaid,  to  be  managed  and  transacted  by  such  of- 
fices, under  such  agreements,  and  subject  to  such  regulations,  as  they  shall 
deem  just  and  proper.     But  the  managers  or  directors  of  every  office  of  dis- 
count, deposite,  and  distribution,  established  as  aforesaid,  shall  be  annually 
appointed  by  the  directors  of  the  bank,  to  serve  one  year;  each  of  them  shall 
be  a  citizen  of  the  United  States,  and  shall  hold,  at  the  time  of  his  appoint- 
ment, not  less  than  five  shares  in  the  said  bank,  bona  fide  in  his  own  right; 
and,  if  he  shall  cease  to  be  a  stockholder  to  that  amount,  he  shall  cease  to  be 
a  manager  or  director  of  such  office  of  discount,  deposite,  and  distribution; 
and  not  more  than  three -fourths  of  the  said  managers  or  directors  in  office,  at 
the  time  of  an  annual  appointment,  shall  be  reappointed  for  the  next  succeed- 
ing year;  nor  shall  any  person  be  a  manager  or  director  for  more  than  three 
out  of  four  years;  but  the  president  may  be  always  reappointed. 

17.  The  said  corporation,  all  offices  of  discount,  deposite,  and  distribution, 
and  of  deposite  and  distribution  only,  which  shall  be  established  by  the  said 


BANK  OF  THE  UNITED  STATES. 

directors  as  aforesaid,  and  all  banks  by  the  said  directors  employed  in  lieu  of 
such  offices  as  aforesaid,  shall  be  bound  to  receive,  upon  deposite,  the  treasury 
notes  of  the  United  States,  which  have  been,  or  may  be  hereafter,  issued,  by 
virtue  of  any  law  or  laws  of  the  United  States;  but  it  shall  be  optional  with 
the  said  corporation  to  pay  and  discharge  the  checks  or  drafts  of  the  persons 
making  such  deposite,  in  treasury  notes,  for  the  amount  thereof,  either  in  gold 
or  silver  coin,  or  in  the  notes  of  the  bank,  or  in  treasury  notes.  And  all  banks 
employed  as  aforesaid,  in  lieu  of  the  offices  aforesaid,  shall  be  further  bound  to 
receive  on  deposite,  and  to 'circulate,  the  notes  of  the  said  corporation,  on  the 
same  terms  and  in  the  same  manner,  as  the  notes  of  the  said  banks,  respective- 
ly, are  received  and  circulated;  and,  from  time  to  time,  issue  and  exchange, 
for  the  said  notes  of  the  said  corporation,  other  notes  of  the  said  corporation, 
or  the  notes  of  the  said  banks,  respectively,  or  treasury  notes,  at  the  opiion  of 
the  persons  applying  for  such  issue  or  exchange.  The  said  corporation  shall,  at 
all  times,  distribute  among  the  offices  of  discount,  deposite,  and  distribution, 
and  of  deposite  and  distribution  only,  and  at  all  the  banks  employed  in  lieu 
of  such  offices,  as  aforesaid,  a  sufficient  sum,  in  the  various  denominations  of 
the  notes  of  the  said  corporation,  and  in  the  treasury  notes  which  it  may  receive 
upon  deposite  from  the  fGoyernment,  to  answer  the  demand  therefor,  and  to 
establish  a  sufficient  circulating  medium  throughout  the  United  States  and  the 
territories  thereof. 

18.  The  officer  at  the  head  of  the  Treasury   Department  of  the  United 
States  shall  be  furnished,  from  time  to  time,  as  often  as  he  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  capital  stock  of  the 
said  corporation,  and  of  the  debts  due  to  the  same;  of  the  moneys  deposited 
therein,  of  the  notes  in  circulation  and  of  the  cash  in  hand;  and  shall  have  a 
right  to  inspect  such  general  accounts  in  the  books  of  the  bank,  as  shall  relate 
to  the  said  statement:  Provided,  That  this  shall  not  be  construed  to  imply  a  right 
of  inspecting  the  account  of  any  private  individual  orindividuals  with  the  bank. 
SEC.  10.  And  beit  further  enacted,  That,  if  the  said  corporation,  or  any 
person  or  persons,  for  or  to  the  use  of  the  same,  shall  deal  or  trade  in  buying 
or  selling  any  goods,  wares,  merchandise,  or  commodities,  whatsoever,  contra- 
ry to  the  provisions  of  this  act,  all  and  every  person  and  persons  by  whom  any 
order  or  direction  for  so  dealing  or  trading  shall  have  been  given,  and  all  and 
every  person  and  persons  who  shall  have  been  concerned  as  parties  or  agents 
therein,  shall  forfeit  and  lose  treble  the  value  of  the  goods,  wares,  merchan- 
dises, and  ^commodities,  in  which  such  dealings  and  trade  shall  have  been; 
one  half  thereof  to  the  use  of  the  informer,  and  the  other  half  thereof  to  the  use 
of  the  United  States,  to  be  recovered  in  any  action  at  law,  with  costs  of  suit. 
SEC.   11.  And  be  it  further  enacted,  That,  if  the  said  corporation  shall  ad- 
vance or  lend  any  sum  of  money,  for  the  use,  or  on  account,  of  the  Govern- 
ment of  the  United  States,  to  an  amount  exceeding  three  hundred  thousand 
dollars;  or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand  dol- 
lars; or  of  any  foreign  prince  or  State,  (unless  previously  authoiized  thereto, 
by  a  law  of  the  United  States)  all  and  every  person  and  persons,  by  and  with 
whose  order,  agreement,  consent,  approbation,  and  connivance,  such  unlawful 
advance  or  loan  shall  have  been  made,  upon  conviction  thereof,  shall  forfeit 
and  pay,  for  every  such  offence,  treble  the  value  or  amount  of  the  sum  or 
sums  which  shall  have  been  so  unlawfully  advanced  or  lent;  one-fifth  thereof 
to  the  use  of  the  informer,  and  the  residue  thereof  to  the  use  of  the  United 
States. 

SEC.  12.  Jind  be  it  further  enacted,  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable,  on 
demand,  shall  be  receivable  in  all  payments  to  the  United  States,  until  other- 
wise directed  by  act  of  Congress. 

SEC.  13.  Jind  be  itfurther  enacted,  That,  if  the  subscriptions  and  payments 
to  the  said  bank  shall  not  be  made  and  completed,  so  as  to  enable  the  same  to 
commence  its  operations,  or  if  the  said  bank  shall  not  commence  its  operations 
on  or  before  the  first  day  of  March,  one  thousand  eight  hundred  and  sixteen, 
then,  and  in  that  case,  this  act  shall  be  null  and  void. 


PROCEEDINGS  OF   1815.  593 

SBC.  14.  rfnd  be  it  further  enact ed*  That  it  shall,  at  all  times,  be  lawful 
for  a  committee  of  either  House  of  Congress,  appointed  for  that  purpose,  to 
inspect  the  books,  and  to  examine  into  the  proceed ings  of  the  corporation  here- 
by created,  and  to  report  whether  the  provisions  of  this  charter  have  been  by 
the  same  violated  or  not:  and,  whenever  any  committee,  as  aforesaid,  shall 
find  and  report,  or  the  President  of  the  United  States  shall  have  reason  to  be- 
lieve, tliat  the  charter  has  been  violated,  it  may  be  lawful  for  Congress  to  di- 
rect, or  the  President  to  order,  a  scire  facias  to  be  sued  out  of  the  circuit  court 
of  the  district  court  of  Pennsylvania,  in  the  name  of  the  United  States,  (which 
shall  be  executed  upon  the  president  of  the  corporation,  for  the  time  being, 
at  least  fifteen  days  before  the  commencement  of  the  term  of  said  court)  call- 
ing on  the  said  corporation  to  show  cause  wherefore  the  charter,  hereby  grant- 
ed, shall  not  be  declared  forfeited^  and  it  shall  be  lawful  for  the  said  court, 
upon  the  return  of  the  said  scire  facias,  to  examine  into  the  truth  of  the  al- 
leged violation,  and,  if  such  violation  be  made  appear,  then  to  pronounce 
and  adjudge,  mat  the  said  charter  is  forfeited  and  annulled:  Provided*  how- 
ever, Every  issue  of  fact  which  may  be  joined  between  the  United  States  and 
the  corporation  shall  be  tried  by  jury.  And  it  shall  be  lawful  for  the  court 
aforesaid  to  require  the  production  of  such  of  the  books  of  the  corporation  as 
it  may  deem  necessary  tor  the  ascertainment  of  the  controverted  facts;  and 
the  final  judgment  of  the  court  aforesaid  shall  be  examinable  in  the  supreme 
court  of  the  United  States,  by  writ  of  error,  and  may  be  there  reversed  or  af- 
firmed, according  to  the  usages  of  law. 

SEC.  15.  rfndZe  it  further  enacted.  That,  during  the  continuance  of  this 
act,  and  whenever  required  by  the  Secretary  of  the^Treasury,  the  said  corpo- 
ration shall  do  and  perform  the  several  and  respective  duties  of  the  commis- 
sioners of  loans  for  the  several  States,  or  of  any  one  or  more  of  them,  at  the 
times,  in  the  manner,  and  upon  the  terms,  to  be  prescribed  by  the  Secretary 
of  the  Treasury. 

SEC.  16.  And  be  it  further  enacted.  That  no  other  bank  shall  be  established 
by  any  future  law  of  the  United  States,  during  the  continuance  of  the  corpo- 
ration hereby  created;  for  which  the  faith  of  the  United  States  is  hereby 
pledged:  Provided,  Congress  may  renew  existing  charters  for  banks  in  the 
District  of  Columbia,  not  increasing  the  capital  thereof;  and  may  grant  char- 
ters, if  they  deem  it  expedient,  to  any  banking  associations  now  in  opera- 
tion, in  the  said  district,  aad  renew  the  same,  not  increasing  the  capital  there- 
of. And,  notwithstanding  the  expiration  of  the  term  for  which  the  said  cor- 
poration is  created,  it  shall  be  lawful  to  use  the  corporate  name,  style, 
and  capacity,  for  the  purpose  of  suits,  for  the  final  settlement  and  liquida- 
tion of  the  affairs  and  accounts  of  the  corporation^  and  for  the  sale  and  dispo- 
sition of  their  estate,  real,  personal,  and  mixed,  but  not  for  any  other  purpose, 
or  in  any  other  manner  whatsoever:  nor  for  a  period  exceeding  two  years  af- 
ter the  expiration  of  the  said  term  of  incorporation. 

LANGDON  CHEVES, 

Speaker  of  the  House  of  Representatives. 

JOHN  GAILLARD, 

President  of  the  Senatf^pro  tempore. 


594  BANK  OF  THE  UNITED  STATES. 

IN  SENATE. 

JANUARY  30,  1815. 

THE  PRESIDENT'S  VETO  OF  THE  BILL. 

Mr.  COLES,  the  President's  secretary, returned  the  bill  "to  incorporate  the 
subscribers  to  the  Bank  of  the  United  States  of  America,"  with  the  following 
message : 

To  the  Senate  of  the  United  Stales: 

Having  bestowed  on  the  bill,  entitled  "An  act  to  incorporate  the  subscri- 
bers to  the  Bank  of  the  United  States  of  America,"  that  full  consideration 
which  is  due  to  the  great  importance  of  the  subject,  and  dictated  by  the  re- 
spect which  I  feel  for  the  two  Houses  of  Congress,  I  am-  constrained,  by  a 
deep  and  solemn  conviction  that  the  bill  ought  not  to  become  a  law,  to  return 
it  to  the  Senate,  in  which  it  originated,  with  my  objections  to  the  same. 

Waiving  the  question  of  the  constitutional  authority  of  the  Legislatwe  to 
establish  an  incorporated  bank,  as  being  precluded,  in  my  judgment,  by  re- 
peated recognitions,  under  varied  circumstances,  of  the  validity  of  such  an 
institution,  in  acts  of  the  legislative,  executive,  and  judicial  branches  of  the 
Government,  accompanied  py  indications,  in  different  modes,  of  a  concur- 
rence of  the  general  will  of  the  nation;  the  proposed  bank  does  not  appear  to 
be  calculated  to  answer  the  purposes  of  reviving  the  public  credit,  of  providing 
a  national  medium  of  circulation,  and  of  aiding  the  treasury  by  facilitating  the 
indispensable  anticipations  of  the  revenue,  and  by  affording  to  the  public 
more  durable  loans- 

1.  The  capital  of  the  bank  is  to  be  compounded  of  specie,  of  public  stock, 
and  of  treasury  notes  convertible  into  stock,  with  a  certain  proportion  of  each 
of  which  every  subscriber  is  to  furnish  himself. 

The  amount  of  the  stock  to  be  subscribed  will  not,  it  is  believed,  be  suffi- 
cient to  produce,  in  favor  of  the  public  credit,  any  considerable  or  lasting 
elevation  of  the  market  price,  whilst  this  maybe  occasionally  depressed  by 
the  bank  itself,  if  it  should  carry  into  the  market  the  allowed  proportion  of  its 
capital  consisting  of  public  stock,  in  order  to  procure  specie,  which  it  may 
find  its  account  in  procuring.,  with  some  sacrifice  on  that  part  of  its  capital. 

Nor  will  any  adequate  advantage  arise  to  the  public  credit  from  me  sub- 
scription of  treasury  notes.  The  actual  issue  of  tnese  notes  nearly  equals,  at 
present,  and  will  soon  exceed,  the  amount  to  be  subscribed  to  the  bank.  The 
direct  effect  of  this  operation  is  simply  to  convert  fifteen  millions  of  treasury 
notes  into  fifteen  millions  of  six  per  cent,  stock,  with  the  collateral  effect  of 
promoting  an  additional  demand  for  treasury  notes, beyond  what  might  other- 
wise be  negotiable. 

Public  credit  might  indeed  be  expected  to  derive  advantage  from  the  esta- 
blishment of  a  national  bank,  without  regard  to  the  formation  of  its  capital,  if  the 
full  aid  and  co-operation  of  the  institution  were  secured  to  the  Government  during 
the  war,  and  during  the  period  of  its  fiscal  embarrassments.  But  the  bank 
proposed  will  be  free  from  all, legal  obligation  to  co-operate  with  the  public 
measures;  and  whatever  might  be  the  patriotic  disposition  of  its  directors  to 
contribute  to  the  removal  of  those  embarrassments,  and  to  invigorate  the  prose- 
cution of  the  war,  fidelity  to  the  pecuniary  and  general  interest  of  the  institu- 
tion, according  to  their  estimate  of  it,  might  oblige  them  to  decline  a  connexion 
of  their  operations  with  those  of  the  national  treasury,  during  the  continuance 
of  the  war  and  the  difficulties  incident  to  it.  Temporary  sacrifices  of  inter- 
est, though  over  balanced  by  the  future  and  permanent  profits  of  the  charter, 
not  being  requirable  of  right  in  behalf  of  the  public,  might  not  be  gratuitously 
made;  and  the  bank  would  reap  the  full  benefit  of  the  grant,  whilst  the  public 
would  lose  the  equivalent  expected  from  it.  For  it  must  be  kept  in  view,  that 


tniOCEEDlNGS  OF   1815.  595 

the  sole  inducement  to  such  a  grant,  on  the  part  of  the  public,  would  be  the 
prospect  of  substantial  aids  to  its  pecuniary  means  at  the  present  crisis,  and 
during  the  sequel  of  the  war.  It  is  evident  that  the  stock  of  the  bank  will, 
on  the  return  of  peace,  if  not  sooner,  rise  in  the  market  to  a  value  which,  if 
the  bank  were  established  in  a  period  of  peace,  would  authorize  and  obtain 
for  the  public  a  bonus  to  a  very  large  amount.  In  lieu  of  such  a  bonus  the 
Government  is  fairly  entitled  to,  and  ought  not  to  relinquish  or  risk,  the  need- 
ful services  of  the  bank,  under  the  pressing  circumstances  of  war. 

2cl.  The  bank,  as  proposed  to  be  constituted,  cannot  be  relied  on,  during 
the  war,  to  provide  a  circulating  medium, nor  to  furnish  loans,  or  anticipations 
of  the  public  revenue. 

Without  a  medium,  the  taxes  cannot  be  collected;  and  in  the  absence  of 
specie,  the  medium  understood  to  be  the  best  substitute,  is  that  of  notes 
issued  by  a  national  bank.  The  proposed  bank  will  commence  and  conduct 
its  operations,  under  an  obligation  to  pay  its  notes  in  specie,  or  be  subject  to 
the  loss  of  its  charter.  Without  sutfi  an  obligation,  the  notes  of  the  bank, 
though  not  exchangeable  for  specie,  yet  resting  on  good  pledges,  and  perform- 
ing Uie  uses  of  specie,  in  the  payment  of  taxes,  and  in  other  public  transac- 
tions, would,  as  experience  has  ascertained,  qualify  the  bank  to  supply  at 
once  a  circulating  medium,  and  pecuniary  aids  to  the  Government.  Under 
the  fetters  imposed  by  the  bill,  it  is  manifest  that,  during  the  actual  state  of 
thing's,  and  probably  during  the  war,  the  period  particularly  requiring  such  a 
medium  awl  such  a  resource  for  loans  and  advances  to  the  Government,  notes 
for  which  the  bank  would  be  compilable  to  give  specie  in  exchange  could  not 
be  kept  in  circulation.  The  most  the  bank  could  effect,  and  the  most  it  could 
be  expected  to  aim  at,  would  be  to  keep  the  institution  alive,  by  limited  and 
local  transactions,  which,  with  the  interest  on  the  public  stock  in  the  bank, 
might  yield  a  dividend  sufficient  for  the  purpose,  until  a  change  from  war  to 
peace  should  enable  it,  by  a  flow  of  specie  into  its  vaults,  and  a  removal  of  the 
external  demand  for  it,  to  derive  its  contemplated  emoluments  from  a  safe  and 
full  extension  of  its  operations. 

On  the  whole,  when  it  is  considered  that  the  proposed  establishment  will 
enjoy  a  monopoly  of  the  profits  of  a  national  bank,  fora  period  of  twenty  years; 
that  monopolized  profits  will  be  continually  growing  with  the  progress  of  the 
national  population  and  wealth;  that  the  nation  will,  during  the  same  period, 
be  dependent  on  the  notes  of  the  bank  for  that  species  of  circulating  medium, 
whenever  the  precious  metals  may  be  wanted,  and  at  all  times  for  so  much 
thereof  as  may  be  an  eligible  substitute  i<  r  a  specific  medium;  and  that  the 
extensive  employment  of  the  notes  in  the  collection  of  the  augmented  taxes, 
will,  moreover,  enable  the  bank  greatly  to  extend  its  profitable  issues  ot  them, 
without  the  expense  of  specie  capital  to  support  their  circulation;  it  is  as  rea- 
sonable as  it  is  requisite,  that  the  Government,  in  return  for  these  extraordi- 
nary concessions  to  the  bank,  should  have  a  greater  security  for  attaining  the 
public  objects  of  the  institution,  than  is  presented  in  the  bill,  and  particularly 
for  every  practicable  accommodation,  both  in  the  temporary  advances  neces- 
sary to  anticipate  the  taxes,  and  in  those  more  durable  loans  which  are  equally 
necessary  to  diminish  the  resort  to  taxes. 

In  discharging  this  painful  duty  of  Stating  objections  to  a  measure  which 
has  undergone  the  deliberations  and  received  the  sanction  of  the  two  Houses 
of  the  National  Legislature,  I  console  myself  with  the  reflection,  that,  if  they 
have  not  the  weight  which  I  attach  to  them,  they  can  be  constitutionally  over- 
ruled; and  with  a  confidence  that,  in  a  contrary  event,  the  wisdom  of  Con- 
gress will  hasten  to  substitute  a  more  commensurate  and  certain  provision  for 
the  public  exigencies. 

JAMES  MADISON. 

WASHINGTON,  January  307 /J,  1815. 


596  BANK  OF  THE  UNITED  STATES. 

JANUARY  31,  1815, 

On  proceeding  to  reconsider  the  bill,  returned  by  the  President,  the  said 
bill,  and  the  objections  of  the  President  thereto,  were  read;  when,  after  some 
debate,  the  further  consideration  thereof  was,  on  motion  of  Mr.  BARBOUR, 
postponed  to  Thursday  next,  by  the  following  vote: 

For  the  postponement,          -  -  -  16, 

Against  it,      -  .  13. 

FEBRUARY  2,  1815. 

The  Senate  resumed  the  consideration  of  the  bill  returned  by  the  President 
of  the  United  States,  "to  incorporate  the  subscribers  to  the  Bank  of  the  Unit- 
ed States,"  together  with  his  objections  thereto;  and,  after  some  debate,  the 
question  was  again  put,  "Shall  the  bill  pass?"  and  decided  as  follows: 

YEAS — Messrs.  Brown,  Dag-g*ett,  Dana,  Fromentin,  German,  Giles,  Goldsboroug-h, 
Gore,  Horsey,  Hunter,  King-,  Lambert,  Mason,  Tait,  Thompson — 15. 

NAYS — Messrs,  Anderson,  Harbour,  Bibb,  Barry,  Chase,  Condit,  Gailkrd,  Kerr, 
Lacock,  Morrow,  Roberts,  Robinson,  Smith,  Talbot,  Taylor,  Turner,  Varnum,  Wells, 
Wharton — 19. 

So  the  Senate  refused  to  pass  the  bill,  (to  do  which,  after  the  refusal  of  the 
President  to  sanction  it,  would  have  required  the  votes  of  two -thirds  of  all  the 
members  present)  and  the  bill  was  therefore  lost. 

FEBRUARY  6,  1815. 

Agreeably  to  notice  on  the  4th  instant,  Mr.  BARBOUR,  leave  being  given, 
introduced  the  following  bill;  which  was  read  a  second  time: 

A  Bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States  of  America. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  a  Bank  of  the  United  States 
of  America  shall  be  established,  the  capital  stock  of  which  shall  be  fifty  mil- 
lions of  dollars,  and  no  more,  divided  into  one  hundred  and  twenty-five 
thousand  shares,  of  four  hundred  dollars  each  share;  and  that  subscriptions 
for  forty  millions  of  dollars,  towards  constituting  the  said  capital  stock,  shall 
be  opened  on  the  first  Monday  of  April  next,  at  the  following  places,  viz:  at 
Portland,  in  Maine,  Portsmouth,  in  New  Hampshire,  Windsor,  in  Vermont, 
Boston,  Providence,  New  Haven,  New  York,  New  Brunswick,  in  New  Jersey, 
Philadelphia,  Baltimore,  the  city  of  Washington/Richmond,  Raleigh,  Charles- 
ton, Savannah,  Lexington,  in  Kentucky,  Nashville,  in  Tennessee,  Cnitlicothe, 
in  Ohio,  and  New  Orleans,  under  the  superintendence  of  the  following  per- 
sons, as  commissioners  to  receive  the  same:  at  Portland,  Matthew  Cobb,  Isaac 
Ilsley,  Joshua  Wingate,  junior;  at  Portsmouth,  John  Goddard,  Nathaniel  A. 
Haven,  Henry  S.  Langdon;  at  Windsor,  Elias  Lyman,  William  Leveret, 
Eleazar  May;  at  Boston,  Israel  Thorndike.  Thomas  H.  Perkins,  William 
Gray,  Aaron  Hill.  Samuel  Brown;  at  Providence,  Seth  Wheaton,  Ebenezer 
K. Dexter,  Henry  Smith;  at  New  Haven,  Abraham  Bishop,  William  W.Wool- 
sey,  Henry  Jones;  at  New  York,  Robert  Troup,  William  Paulding,  Junior, 
Robert  Lenox,' John  Jacob  Astor,  Samuel  Tooker,  Isaac  Bronson,  Henry  A. 
Coster;  at  New  Brunswick,  James  Vanderpool,  John  Bray,  Peter  Gordon;  at 
Philadelphia,  Jared  Ingersoll,  Thomas  M.  Willing,  Stephen  Girard,  Chandler 
Price,  Anthony  Taylor,  John  Sergeant?  CadwaTlader  Evans;  at  Baltimore, 
James  A.  Buchanan,  Henry  Payson,  William  Wilson;  at  the  city  of  Wash- 
ington, John  Mason,  Robert  Brent,  John  P.  Van  Ness;  at  Richmond,  Ben- 
jamin Hatcher,  John  Brockenborough,  John  Preston;  at  Raleigh,  Sherwood 
Haywood,  Beverly  Daniel,  William  Peace;  at  Charleston,  John  C.  Faber, 
Thomas  Jones,  Stephen  Elliot,  Charles  B.  Cochran,  Thomas  Blackwood;  at 


PROCEEDINGS  OF   1816.  597 

Savannah,  John  Bolton,  Charles  Harris,  James  Johnson;  at  Lexington,  in  Ken- 
tucky, Charles  Wilkins,  Lewis  Sanders,  John  H.  Morton:  at  Nashville, Robert 
Weakly,jFelix  Grundy,  John  R. Bedford;  at  Chillicothe,  Samuel  Finley,  Thos. 
James,  Win.  M'Farland;  at  New  Orleans,  Dominick  A.  Hall?  Benj.  Morgan. 
Paul  Lanuse,  Thos.  L.  Harman,and  Wm.  Flood :  which  subscriptions  shall  con- 
tinue open  every  day,  from  the  time  of  opening  the  same,  from  ten  o'clock,  in  the 
forenoon,  until  four  o'clock,  in  the  afternoon,  until.the  Saturday  following,  at 
four  o'  clock  in  the  afternoon,  when  the  same  shall  be  closed;  and  immediately 
thereafter,  the  commissioners,  or  any  two  of  them,  at  the  respective  places 
aforesaid,  shall  cause  two  transcripts  or  fair  copies  of  such  subscriptions  to  be 
made,  one  of  which  they  shall  send  to  the  Secretary  of  the  Treasury,  one  they 
shall  retain,  and  the  original  shall,  within  three  days  from  the  closing  of  the 
same,  t>e,  by  the  said  commissioners,  transmitted  to  the  said  commissioners  at 
Philadelphia,  or  to  one  of  them;  and  on  the  receipt  thereof,  the  said  commis- 
sioners at  Philadelphia,  or  any  three  of  them,  shall  immediately  thereafter 
convene,  and  proceed  to  take  an  account  of  the  said  subscriptions;  and  if  more 
than  the  amount  of  forty  millions  of  dollars  shall  have.been  subscribed, then  the 
said  last  mentioned  commissioners  shall  apportion  the  same  among  the  several 
subscribers,  according  to  their  several  and  respective  subscriptions:  Provided, 
however,  That  such  commissioners  shall,  by  such  apportionment,  allow  and 
apportion  to  each  subscriber,  at  least  one  share;  and  in  case  the  aggregate 
amount  of  the  said  subscriptions  shall  exceed  forty  millions  of  dollars,  the  said 
commissioners,  after  having  apportioned  the  same  as  aforesaid,  shall  cause  lists  of 
the  said  apportioned  subscriptions  to  be  madeput,  including  in  each  list  the  appor- 
tioned subscription  lor  the  place  where  the  original  subscription  was  made,  one  of 
which  lists  shall  be  transmitted  to  the  commissioners,  or  to  one  of  the  commis- 
sioners, under  whose  superintendence  such  subscriptions  were  originally  made, 
that  the  subscribers  may  ascertain  from  them  the  number  of shares  apportioned 
to  such  subscribers,  respectively;  and  if  the  amount  of  forty  millions  of  dollars 
shall  not  be  subscribed  during  the  period  aforesaid,  at  all  the  places  aforesaid, 
the  subscription  to  complete  the  said  sum  shall  afterwards  be  and  remain  open 
at  Philadelphia,  under  the  superintendence  of  the  said  commissioners  appoint- 
ed at  that  place,  and  the  subscription  may  be  then  made  by  any  corporation,  co- 
partnership, or  person,  for  any  number  of  shares  not  exceeding  the  amount 
required  to  complete  the  said  sum  of  forty  millions  of  dollars.  And  in  case  of 
the  death,  or  refusal  to  serve,  ot  any  of  the  commissioners,  aforesaid,  it  shall 
be  lawful  for  the  President  of  the  United  States  to  supply  the  vacancy  or  vacan- 
cies thus  created,  by  appointing  some  suitable  person  or  persons. 

Sec.  2.  And  be.  it  further  enacted,  That  it  shall  be  lawful  for  any  person, 
copartnership,  or  body  politic,  to  subscribe  for  so  many  shares  of  the  said  capi- 
tal stock  of  the  said  bank,  as  he,  she,  or  they,  shall'think  tit,  not  exceeding 
one  thousand  shares,  except  as  is  hereinafter  provided  for  the  subscription  on 
behalf  of  the  United  States;  and  the  sums  respectively  subscribed,  except  on 
behalf  of  the  United  States,  as  is  hereinafter  provided,  shall  be  payable  in  the 
manner  following,  that  is  to  say:  five  millions  of  dollars  thereof,  in  gold  or 
silver  coin  of  the  United  States,  or  of  foreign  coin,  at  the  value  heretofore  es- 
tablished by  the  act  of  Congress,  entitled  4'  An  act  regulating  the  currency  of 
foreign  coins."  passed  the  tenth  of  April,  one  thousand  eight  hundred  and  six; 
fifteen  millions  of  dollars,  thereof,  in  gold  or  silver  coin  aforesaid,  or  in  any 
of  the  six  per  cent,  stock  of  the  United  States,  heretofore  created,  or  hereaf- 
ter to  be  created,  by  virtue  of  any  act  of  Congress,  heretofore  passed,  autho- 
rizing a  loan  or  loans;  and  twenty  millions  of  dollars  thereof  in  gold  or  silver 
coin,  or  in  treasury  notes,  issued  under  the  act  of  Congress,  entitled  "  An 
act  to  authorize  the  issuing  of  treasury  notes,"  passed  the  thirtieth  day  of 
June,  one  thousand  eight  hundred  and  twelve,  or  issued,  or  to  be  issued,  un- 
der the  authority  of  any  subsequent  act  or  acts  of  Congress,  authorizing  or 
which  shall  authorize,  treasury  notes  to  be  issued,  previously  to  the  final  clos- 
ing of  the  subscriptions  to  the  said  bank.  And  the  said  payment  shall  be 
made  and  completed,  in  the  sums,  and  at  the  times,  hereinafter  declared,  that 
is  so  say:  at  the  time  of  subscribing,  there  shall  be  paid  ten  dollars  on  each 


598  BANK  OF  THE  UNITED  STATES. 

share,  in  gold  or  silver  coin,  forty  dollars  in  the  treasury  notes  aforesaid, 
and  thirty  dollars  in  the  public  debt  of  the  United  States,  contracted  or  to  be 
contracted  as  aforesaid.  And  payments  to  the  same  amount,  arid  in  the  same 
proportions  of  specie,  treasury  notes,  and  public  stock,  as  aforesaid,  shall  be 
made  on  each  share  at  ihe  expiration  of  three,  six,  nine,  and  twelve  calendar 
months,  from  the  time  of  subscribing.  And  the  subscriptions  in  public  stock 
and  treasury  notes,  as  aforesaid,  shall  be  taken  and  credited  for  the  principal 
and  so  much  of  the  interest  thereof,  respectively,  as  shall  have  accrued  on  the 
day  of  subscribing  the  same.  And  at  the  time  of  subscribing  to  the  capital 
stock  of  the  said  bank,  as  aforesaid,  each  and  every  subscriber  shall  deliver  to 
the  commissioners,  at  the  place  of  subscribing,  as  well  the  specie  amount  of 
their  subscriptions,  respectively,  as  the  certificates  of  stock  for  the  stock  pro- 
portion of  their  subscriptions,  respectively,  together  with  a  power  of  attorney 
authorizing  the  said  commissioners,  or  a  majority  of  them,  to  transfer  the 
said  stock,  in  due  form  of  law,  to  "4  the  president,  directors,  and  company,  of 
the  said  Bank  of  the  United  States  of  America,"  as  soon  as  the  said  bank  shall 
be  organized,  and,  also,  treasury  notes  for  the  proportion  of  the  subscriptions, 
respectively,  payable  in  treasury  notes  as  aforesaid:  Provided  always,  That 
if,  inconsequence  of  the  apportionment  of  shares  in  the  said  bank  among  the  sub- 
scribers, in  ihe  case  and  in  the  manner  hereinbefore  prescribed,  any  subscri- 
ber shall  have  delivered  to  the  commissioners,  at  the  time  of  subscribing,  a 
greater  amount  of  specie,  stock,  and  treasury  notes,  than  shall  be  necessary  to 
complete  the  payments  for  the  share  or  shares  to  such  subscriber,  apportioned 
as  aforesaid,  the  commissioners  shall  only  retain  so  much  of  the  said  money, 
stock,  and  treasury  notes,  as  shall  be  necessary  to  complete  such  payments, 
and  shall  forthwith  return,  on  application  for  the  same,  the  surplus  thereof  to 
the  subscriber  lawfully  entitled  thereto.  And  the  commissioners,  respective- 
ly,  shall  deposite  the  gold  and  silver,  certificates  of  stock,  and  treasury  notes, 
by  them  respectively  received  as  aforesaid  from  the  subscribers  to  the  said  bank, 
in  some  place  of  secure  and  safe  keeping,  so  that  the  same  may  and  shall  be 
specifically  delivered  and  transferred,  as  the  same  were  by  them  respectively 
received,  to  the  said  president,  directors,  and  company,  of  the  said  Bank  of 
the  United  States  of  America,  or  to  their  order,  as  soon  as  shall  be  required 
after  the  organization  of  the  said  bank. 

Sec.  3.  Jind  belt  further  enacted,  That,  at  the  opening  of  the  subscriptions 
to  the  capital  stock  of  the  Bank  of  the  United  States  of  America,  the  Secretary 
of  the  Treasury  shall  subscribe,  or  cause  to  be  subscribed,  on  behalf  of  the 
United  States,  to  the  said  capital  stock  of  the  said  bank,  the  amount  of  ten 
millions  of  dollars,  to  be  paid  in  public  stock,  bearing  an  interest  of  four  per 
cent,  per  annum,  from  the  time  of  subscribing  the  same,  and  reedeemable  in 
any  sums,  and  at  any  periods,  which  the  Government  may  deem  tit;  and  the 
certificates  of  such  public  stock,  the  Secretary  of  the  Treasury  shall  cause  to 
be  prepared  and  made  in  the  usual  form,  and  shall  pay  and  deliver  to  the  pre- 
sident and  directors  of  the  said  bank,  at  the  expiration  of  three  calandar 
months,  after  the  time  of  opening  the  said  subscription  to  the  capital  stock  of 
the  said  bank  as  aforesaid. 

Sec.  4.  And  be  it  further  enacted,  That  whenever,  and  as  often,  as  any 
of  the  treasury  notes,  subscribed  as  aforesaid,  to  the  said  capital  stock  of  the 
said  bank,  shall  be  paid  on  such  subscription,  it  shall  be  lawful  for  the  Secreta- 
ry of  the  Treasury  (and  he  is  hereby  authorized  and  required)  to  pay  and  re- 
deem the  same,  principal  and  interest,  by  causing  certificates  of  public  stock  for 
an  equal  amount,  bearing  an  interest  of  six  per  cent,  per  annum,  and  redeema- 
ble in  any  sums,  and  at  any  periods,  which  the  Government  may  deem  fit,  to 
be  prepared  and  made  in  the  usual  form,  and  the  same  to  be  delivered  to  the 
president  and  directors  of  the  said  bank,  in  satisfaction  and  discharge  of  such 
treasury  notes. 

SEC.  5.  And  be  it  further  enacted,  That  the  subscribers  to  the  said  Bank  of 
the  United  States  of  America,  their  successors  and  assigns,  shal  be,  and  are 
hereby,  created  a  corporation  and  body  politic,  by  the  name  and  style  of  "  the 
President,  Directors,  and  Company,  ot  the  Bank  of  the  United  States  of 


PROCEEDINGS   OF    1815.  599 

America,"  and  shall  so  continue  until  the  third  day  of  March,  in  the  year  one 
thousand  eight  hundred  and  thirty-five;  and  by  that  name  shall  be,  and  are 
hereby,  made  able  and  capable  in  law,  to  have,  purchase,  receive,  possess,  en- 
joy, and  retain,  to  them  and  their  successors,  lands,  rents,  tenements,  here- 
ditaments, goods,  chattels, and  effects,  of  whatsoever  kind,  nature, and  quality, 
to  an  amount  not  exceeding  in  the  whole  fifty-five  millions  of  dollars,  includ- 
ingthe  amount  of  the  capital  stock  aforesaid ;  and  the  same  to  sell,  grant,  demise, 
alien,  or  dispose  of,  to  sue  and  be  sued,  plead  and  be  impleaded,  answer  and 
be  answered,  defend  and  be  defended,  in  all  courts  and  places  whatsoever; 
and  also  to  make,  have,  and  use,  a  common  seal,  and  the  same  to  break, 
alter,  and  renew,  at  their  pleasure;  and  also,  to  ordain,  establish,  and  put  in 
execution,  such  by-laws,  and  ordinances,  and  regulations,  as  they  shall  deem 
necessary  and  convenient  for  the  government  of  the  said  corporation,  not  be- 
ing contrary  to  the  constitution  and  laws  of  the  United  States;  and  generally 
to  do  and  execute  all  and  singular  the  acts,  matters,  and  things,  which  to  them  it 
shall  or  may  appertain  to  do;  subject,  nevertheless,  to  the  rules,  regulations, 
restrictions,  limitations,  and  provisions,  hereinafter  prescribed  and  declared. 

SEC.  6.  And  be  it  further  enacted,  That,  for  the  management  of  the  affairs 
of  the  said  corporation,  there  shall  be  twenty-five  directors,  who  shall  be 
elected  at  the  banking  house  in  Philadelphia, on  the  first  Monday  of  February, 
in  each  year,  by  the  stockholders  or  proprietors  of  the  capital  stock  of  the 
said  corporation,  and  by  a  plurality  of  votes  then  and  there  actually  given, 
according  to  I  he  scale  of  voting  hereinafter  prescribed.  And  the  directors, 
HO  duly  chosen,  shall  be  capable  of  sen  ing,  by  virtue  of  such  choice,  until  the 
end  or  expiration  of  the  first  Monday  in  February  next,  ensuing  the  time  of 
such  election,  and  no  longer:  Provided^  however.  That  there  shall  be  no  elec- 
tion for  directors,  other  than  to  fill  varancir-,  until  the  first  Monday  in  Feb- 
ruary, in  the  year  one  thousand  eight  hundred  and  sixteen:  and  that,  in 
the  mean  time,  WiUiatn  Gray  and  Thomas  II.  Perkins,  of  Massachusetts; 
James  IV  Wolf,  of  Rhode  Island;  Archibald  Oracle,  Robert  Lenox.  John  G. 

Coster,  Isaac  Pierson,  Augustus  Wright,  Samuel  Tooker, ,  of 

New  York:  Jared  Ingersoll,  Stephen  Girard,  Thomas  M.  Willing,  William 
Jones,  Nicholas  Biddle,  Thomas  Leiper,  James  C.  Fisher,  Chandler  Price, 
Cadwallader  Kvnns,  Jacob  G.  Koch,  of  Pennsylvania;  Robert  Gilmor.James 
A.  Buchanan,  Isaac  M'lvim,  Dennis  A.  Smith,  of  Maryland:  John  P.  Van 
Ness  and  Thomas  Swann,  of  the  District  of  Columbia,  be,  and  they  are.here- 
by  declared  to  be,  directors  of  the  said  corporation. 

SEC.  7.  And  be  it  further  enacted.  That,  as  soon  as  the  sum  of  twenty  millions 
of  dollars,  in  gold  and  silver  coin,  and  in  the  public  debt  and  treasury  notes, 
shall  have  been  subscribed,  and  the  first  payment  actually  received  on  ac- 
count of  the  subscriptions  to  the  said  capital  stock,  (exclusively  of  the  subscrip- 
tion aforesaid,  on  the  part  of  the  United  States)  notice  thereof  shall  tie  given 
by  the  persons  under  whose  superintendence  the  subscriptions  shall  have  been 
made  at  Philadelphia,  to  each  of  the  directors  aforesaid;  and  the  persons 
herein  before  named  to  be  the  first  directors,  shall  proceed  to  elect  one  of  their 
number  president  of  the  said  corporation,  and  they  shall  be  capable  of  serving 
until  the  end  and  expiration  of  me  first  Monday  of  February,  in  the  year  one 
thousand  eight  hundred  and  sixteen;  and  shall  forthwith  commence  the  oper- 
ations of  the  said  bank,  at  the  said  city  of  Philadelphia:  Provided  always, 
That,  in  case  it  should,  at  any  time,  happen  that  an  election  of  directors  and 
president  of  the  said  corporation  should  not  be  made  upon  any  clay  when,  in 
pursuance  of  this  act,  they  ought  to  be  made,  the  said  corporation  shall  not, 
for  that  cause,  be  deemed  to  be  dissolved;  but  it  shall  be  lawful  on  any  other 
day  to  hold  and  make  an  election  of  directors  and  president  of  the  said  cor- 
poration, (as  the  case  may  be)  in  such  manner  as  shall  have  been  regulated  by 
the  by-laws  and  ordinances  of  the  said  corporation;  and  until  such  election 
be  so  made,  the  directors  and  president,  for  the  time  being,  shall  continue  in 
office:  Jlnd  provided,  also,  That,  in  case  of  the  death,  resignation,  or  removal 
of  the  president  of  the  said  corporation,  the  directors  shall  proceed  to  elect 
another  president:  .find  provided,  also.  That,  in'case  of  the  death,  resignation, 


600  BANK    OF   THE    UNITED    STATES. 

or  absence  from  the  United  States,  or  removal  of  a  director  from  office,  the 
vacancy  shall  be  supplied  by  the  stockholders. 

SEC.  8.  And  be  it  further  enacted^  That  the  directors,  for  the  time  being, 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants,  under  them* 
as  shall  be  necessary  tor  executing  the  business  of  the  said  corporation,  ana 
to  allow  them  such  compensation  for  their  services,  rsepectively,  as  shall  be 
reasonable;  and  shall  be  capable  of  exercising  such  other  powers  and  autho- 
rities for  the  well  governing  and  ordering  of  the  affairs  of  the  said  corpora- 
tion, as  shall  be  prescribed,  fixed,  and  determined,  by  the  laws,  regulations, 
and  ordinances,  of  the  same. 

SEC.  9.  Jlnd  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form  and  be  fundamental  articles  of  the  con- 
stitution of  the  said  corporation,  to  wit: 

1.  The  number  of  votes  to  which  the  stockholders  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  number  of  shares  he,  she,  or  they, 
respectively,  shall   hold,  in  the  proportions  following,  that  is  to  say:  for  one 
share  and  not  more  than  two  shares,  one  vote;  for  every  two  shares  above  two 
and  not  exceeding  ten,  one  vote;  for  every  four  shares  above  ten  and  not  ex- 
ceeding thirty,  one  vote;  for  every  six  shares  above  thirty  and  not  exceeding 
sixty,  one  vote;  for  every  eight  shares  above  sixty  and  not  exceeding  one  hun- 
dred, one  vote;  and  for  every  ten  shares  above  one  hundred,  one  vote.    But 
no  person,  copartnership,  or  body  politic,  shall  be  entitled  to  a  greater  number 
than  thirty  votes;  and  no  share  or  shares  shall  confer  a  right  of  voting,  which 
shall  not  have  been  holden  three  calendar  months  previous  to  the  day  of  elec- 
tion.   And  stockholders  actually  resident  within  the  United  States  or  the 
territories  thereof,  and  none  other,  may  vote  in  elections  by  proxy. 

2.  Not  more  than  three-fourths  of  the  directors  in  office  at  the  time  of  an 
annual  election,  shall  be  elected  for  the  next  succeeding  year,  and  no  person 
shall  be  a  director  more  than  two  out  of  three  years;  but  the  director  who 
shall  be  the  president  at  the  time  of  an  election,  may  always  be  re-elected. 

3.  None  but  a  resident  citizen  of  the  United  States,  and  holding,   at  the 
time  of  his  election,  not  less  than  ten  shares  bonafide  in  his  own  right,  shall 
be  a  director;  and  if  any  director  shall  cease  to  be  a  stockholder  to  that  amount, 
he  shall  cease  to  be  a  director. 

4.  No  director  shall  be  entitled  to  any  emolument.     The  stockholders  may 
make  such  compensation  to  the  president,  for  his  extraordinary  attendance  at 
the  bank,  as  shall  appear  to  them  reasonable. 

5.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transaction 
of  business,  of  whom  the  president  shall  always  be  one,  except  in  case  of 
sickness  or  necessary  absence,  in  which  case,  his  place  may  be  supplied  by 
any  other  director  whom  he,  by  writing  under  his  hand,  shall  depute  for  the 
purpose-    And  the  director  so  deputed,  may  do  and  transact  all  the  necessary 
business  belonging  to  the  office  ot  the  president  of  the  said  corporation,  dur- 
ing the  continuance  of  the  sickness  or  necessary  absence  of  the  president. 

6.  A  number  of  stockholders,  not  less  than  sixty,  who,  together,  shall  be 
proprieters  of  one  thousand  shares  or  upwards,  shall  have  power,  at  any  time, 
to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  in- 
stitution, giving  at  least  ten  weeks'  notice  in  two  public  newspapers  of  the 
place  where  the  bank  is  seated,  and  specifying,  in  such  notice,  the  object  or 
objects  of  such  meeting. 

7.  Every  cashier  or  treasurer,  before  he  enters  upon  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satisfac- 
tion of  the  directors,  in  a  sum  not  less  than  titty  thousand  dollars,  with  a  con- 
dition for  his  good  behavior  and  the  faithful  performance  of  his  duties  to  the 
corporation. 

8.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for  its  im- 
mediate accommodation  in  relation  to  the  convenient  transacting  of  its  business, 
and  such  as  shall  have  been  bona  Jide  mortgaged  to  it  by  way  of  security,  or 
conveyed  to  it  in  satisfaction  of  debts  previously  contracted  in  the  course  ot 


PROCEEDINGS  OF  1815.  501 

its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall  have  been 
obtained  tor  such  debts. 

9.  The  total  amount  of  debts  which  the  said  corporation  shall,  at  any  time, 
owe,  whether  by  bond,  bill,  note,  or  other  contract,  over  and  above  the  debt 
or  debts  due  for  money  deposited  in  the  bank,  shall  not  exceed  the  sum  of 
fifty  millions  of  dollars,  unless  the  contracting  of  any  greater  debt  shall  have 
been  previously  authorized  by  a  law  of  the  United  Stales.    In  case  of  excess, 
the  directors  under  whose  administration  it  shall  happen,  shall  be  liable  for 
the  same,  in  their  natural  and  private  capacities,  and  an  action  of  debt  may, 
in  such  case,  be  brought  against  them,  or  any  of  them,  their,  or  any  of  their 
heirs,  executors,  or  administrators,  in  any  court  of  record  of  the  United 
States,  or  either  of  them,  by  any  creditor  or  creditors  of  the  said  corporation, 
and  may  be  prosecuted  to  judgment  and  execution,  any  condition,  covenant, 
or  agreement,  to  the  contrary  notwithstanding.     But  this  provision  shall  not 
be  construed  to  exempt  the  said  corporation,  or  the  lands,  tenements,  goods, 
or  chattels  of  the  same,  from  being  also  liable  for,  and  chargeable  with,  the 
said  excess.    Such  of  the  said  directors  who  may  have  been  absent  when  the 
said  excess  was  contracted  or  created,  or  who  may  have  dissented  from  the 
resolution  or  act  whereby  the  same  was  so  contracted  or  created,  may,  re- 
spectively, exonerate  themselves  from  being  so  liable,  by  forthwith  giving 
notice  ot  the  fact,  and  of  their  absence  or  dissent,  to  the  President  of  the 
United  States,  and  to  the  stockholders,  at  a  general  meeting  which  they  shall 
have  power  to  call  for  that  purpose. 

10.  The  said  corporation  shall  not,  directly  nor  indirectly,  deal  or  trade  in 
any  thing,  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the   sale  of 
goods  really  and  truly  pledged  for  money  lent  and  not  redeemed  in  due  time, 
or  goods  which  shall  be  the  proceeds  of  its  lands.     It  shall  not  be  at  liberty  to 
purchase  any  public  debt  whatsoever,  nor  shall  it  take  more  than  at  the  rate 
of  six  per  cent,  per  annum,  for  or  upon  its  loans  or  discounts. 

11.  The  said   corporation  shall  not,  during  the  continuance  of  the  present 
war  between  the  United  States  and  Great  Britain,  sell  any  portion  of  the 
public  debt  constituting  a  part  of  its  capital  stock  aforesaid,  nor  at  any  time 
thereafter  to  an  amount  exceeding  one  moiety  of  the  public  debt  so  constitut- 
ing a  part  of  its  capital  stock,  without  the  consent  of  Congress. 

12.  No  loan  shall  be  made  by  the  said  corporation,  for  the  use  or  on  account 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  five  hundred 
thousand  dollars,  or  of  any  particular  State,  to  an  amount  exceeding  fifty 
thousand  dollars,  or  of  any  foreign  prince  or  State,  unless  previously  authoriz- 
ed by  a  law  of  the  United  States.    But  the  said  corporation  shall  be  bound  to 
lend  to  the  Government  of  the  United  States,  reimbursable  at  their  pleasure, 
thirty  millions  of  dollars,  at  an  interest  not  exceeding  six  per  centum  per  an- 
num, in  such  sums,  and  at  such  periods,  as  may  be  made  convenient  to  the 
Government  of  the  United  States,  whenever  any  law  or  laws  of  the  United 
States  shall  authorize  and  require  such  loan  or  loans. 

13.  The  stock  of  the  said  corporation  shall  be  assignable  and  transferable 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same. 

14.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corpora- 
tion, which  shall  be  made  to  any  person,  or  persons,  shall  be  assignable  by 
endorsement  thereupon,  under  the  hand,  or  hands,  of  such  person,  or  per- 
sons, and  his,  her,  or  their  executors,  or  administrators,  and  of  his,  her,  or 
their  assignee,  or  assignees,  and  the  executors,  or  administrators,  of  such  as- 
signee, or  assignees,  and  so  as  absolutely  to  transfer  and  vest  the  property 
thereof  in  each  and  every  assignee,  or  assignees,  successively,  and  to  enable 
such  assignee,  or  assignees,  and  his,  her,  or  their  executors,  or  administra- 
tors, to  maintain  an  action  thereupon  in  his,  her,  or  their  own  name,  or 
names.    And  the  bills,  or  notes,  which  may  be  issued  by  order  of  the  said 
corporation,  signed  by  the  president,  and  countersigned  by  the  principal 
cashier  or  treasurer  thereof,  promising  the  payment  oF  money  to  any  person, 
or  persons,  his,  her,  or  their  order,  or  to  bearer,  although  not  under  the  seal 

76 


602  BANK  OF  THE  UNITED  STATES. 

of  the  said  corporation,  shall  be  binding  and  obligatory  upon  the  same,  in  the 
like  manner,  and  with  the  like  force  and  effect,  as  upon  any  private  person, 
or  persons,  if  issued  by  him,  her,  or  them,  in  his,  her,  or  their  private  or  natu- 
ral capacity,  or  capacities,  and  shall  be  assignable  and  negotiable  in  like 
manner,  as  if  they  were  so  issued  by  such  private  person,  or  persons;  that  is 
to  say:  those  which  shall  be  payable  to  any  person,  or  persons,  his,  her,  or 
their  order,  shall  be  assignable  by  endorsement,  in  like  manner,  and  with  the 
like  effect,  as  foreign  bills  of  exchange  now  are;  and  those  which  are  payable 
to  bearer,  shall  be  assignable  and  negotiable  by  delivery  only. 

15.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable,  and  once  in  every  three  years, 
the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting,  for  their 
information,  an  exact  and  particular  statement  of  the  debts  which  shall  have 
remained  unpaid  after  the  expiration  of  the  original  credit,  for  a  period  of  tre- 
ble the  term  of  that  credit,  arid  of  the  surplus  of  profits,  if  any,  after  deduct- 
ing losses  and  dividends.     If  there  shall  be  a  failure  in  the  payment  of  any 
part  of  any  sum  subscribed  by  any  person,  copartnership,  or  body  politic,  the 
party  failing  shall  lose  the  benefit  of  any  dividend  which  may  have  accrued 
prior  to  the  time  for  making  such  payment,  and  during  the  delay  of  the  same. 

16.  The  directors  of  the  said  corporation  shall  be  bound  to  establish  a  com- 
petent office  of  discount  and  deposite  in  the  District  of  Columbia,  whenever 
any  law  of  the  United  States  shall  require  such  establishment;  and  it  shall 
be  lawful  for  the  directors  of  the  said  corporation  to  establish  offices  where- 
soever they  shall  think  fit,  within  the  United  States  or  the  territories  thereof, 
for  the  purposes  of  discount,  deposite,  and  distribution;  or,  for  the  purposes 

«*)f  deposite  and  distribution  only;  and  upon  the  same  terms,  and  in  the  same 
manner,  as  shall  be  practised  at  the  bank;  and  to  commit  the  management  of 
the  said  offices,  and  the  business  thereof,  respectively,  to  such  persons,  and 
under  such  regulations,  as  they  shall  deem  proper,  not  being  contrary  to  law 
or  to  the  constitution  of  the  bank.  Or,  instead  of  establishing  such  offices,  it 
shall  be  lawful  for  the  directors  of  the  said  corporation,  from  time  to  time,  to 
employ  any  other  bank,  or  banks,  at  any  place,  or  places,  that  they  may  deem 
safe  and  proper,  to  manage  and  transact  the  business  proposed,  as  aforesaid, 
to  be  managed  and  transacted  by  such  offices,  under  such  agreements,  and 
subject  to  such  regulations,  as  they  shall  deem  just  and  proper.  But  the 
managers,  or  directors,  of  every  office  of  discount,  deposite,  ana  distribution, 
established,  as  aforesaid,  shall  be  annually  appointed  by  the  directors  of  the 
bank  to  serve  one  year;  each  of  them  shall  be  a  citizen  of  the  United  States, 
and  shall  hold,  at  the  time  of  his  appointment,  not  less  than  five  shares  in  the 
said  bank,  bona  fide  in  his  own  right;  and  if  he  shall  cease  to  be  a  stockhold- 
er to  that  amount,  he  shall  cease  to  be  a  manager  or  director  of  such  office 
of  discount,  deposite,  and  distribution;  and  not  more  than  three  fourths  of 
the  said  managers,  or  directors,  in  office,  at  the  time  of  an  annual  appoint- 
ment, shall  be  re-appointed  for  the  next  succeeding  year;  nor  shall  any  per- 
son be  a  manager,  or  director,  for  more  than  two  out  of  three  years;  but  the 
president  may  be  always  re-appointed. 

17.  The  said  corporation,  all  offices  of  discount,  deposite,  and  distribution, 
and  of  deposite  and  distribution  only,  which  shall  be  established  by  the  said 
directors,  as  aforesaid,  and  all  banks  by  the  said  directors  employed,  in  lieu 
of  such  offices,  as  aforesaid,  shall  be  bound  to  receive,  upon  deposite,  the 
treasury  notes  of  the  United  States,  which  have  been,  or  may  be  hereafter, 
issued,  by  virtue  of  any  law  or  laws  of  the  United  States.     But  it  shall  be 
optional  with  the  said  corporation,  to  pay  and  discharge  the  checks,  or  drafts, 
of  the  persons  making  such  deposite,  in  treasury  notes,  for  the  amount  there- 
of, either  in  gold  or  silver  coin,  or  in  the  notes  of  the  bank,  or  in  treasury 
notes-     And  all  banks,  by  the  said  directors  employed,  as  aforesaid,  in  lieu 
of  offices,  aforesaid,  shall  be  further  bound  to  receive,  on  deposite,  and  to  cir- 
culate the  notes  of  the  said  corporation,  on  the  same  terms,  and  in  the  same 
manner,  as  the  notes  of  the  said  banks,  respectively,  are  received  and  circu- 
lated; and,  from  time  to  time,  to  issue  and  exchange  for  the  said  notes  of  the 


PROCEEDINGS   OF   1815. 

said  corporation,  other  notes  of  the  said  corporation*  or  treasury  notes,  at  the 
option  of  the  person  applying  for  such  issue  or  exchange. 

18.  Until  the  first  Monday  of  April,  eighteen  hundred  and  sixteen,  it  shall 
not  be  obligatory  on  the  said  corporation  to  pay  its  notes  in  specie,  but  all  the 
notes  of  the  said  corporation,  whether  payable  at  the  seat  of  the  bank,  in  Phi- 
ladelphia, or  elsewhere,  shall  be  payable  in  other  notes  of  the  said  corpora- 
tion, or  in  treasury  notes,  at  the  option  of  the  applicant.     And,  if  at  any  time, 
during  the  continuance  of  the  present  war  between  the  United  States  and 
Great  Britain,  and  a  period  of  one  year  after  the  termination  of  the  said  war, 
demands  shall  be  made,  upon  the  said  corporation,  for  gold  or  silver  coin,  to 
an  amount,  and  under  circunistances,  which  induce  a  reasonable  and  proba- 
ble belief  that  the  specie  capital  may  be  greatly  diminished  or  endangered,  it 
shall  be  lawful  for  Congress,  on  the  petition  ot  the  directors,  to  authorize  the 
suspension  of  specie  payments,  for  such  time  or  times  as  they  may  deem 
proper.     And  the  said  corporation  shall,  at  all  times,  distribute  among  the 
offices  and  banks  aforesaid,  a  sufficient  sum,  in  the  various  denominations  of 
the  notes  of  the  said  corporation,  and  in  treasury  notes,  to  answer  the  demand 
therefor,  and  to  establish  a  sufficient  circulating  medium  throughout  the 
United  States  and  the  territories  thereof;  and  the  treasury  notes  to  be  distri- 
buted and  circulated  the  Secretary  of  the  Treasury  shall  cause  to  be  deliver- 
ed, from  time  to  time,  to  the  said  bunk  at  Philadelphia;  and  the  same  shall 
be  distributed  and   circulated  by  tin*  said   bank,  under  directions  in  that  be- 
half, given  by  the  officer  at  the  head  of  the  Treasury  Department:  Provided* 
That  the  officer  at  the  head  of  the  said  department  shall  not  be  obliged,  at  any 
time,  to  deposite  more  treasury  notes  for  distribution  than  he  may  think  ne- 
cessary for  the  public  interest. 

19.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United 
States  shall  be  furnished,  from  time  to  time,  as  often  as  he  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  the  capital  stock  of 
the  said  corporation,  and  of  the  debts  due  to  the  same;  of  the  moneys  depo- 
sited therein;  of  the  notes  in  circulation,  and  of  the  specie  in  hand;  and  shall 
have  a  right  to  inspect  such  general  accounts  in  the  books  of  the  bank  as  shall 
relate  to  the  said  statement:   Provided,  That  this  shall  not  be  construed  to 
imply  a  right  of  inspecting  the  account  of  any  private  individual  or  indivi- 
duals with  the  bank. 

SEC.  10.  And  be  it  further  enacted.  That,  if  the  said  corporation,  or  any 
person,  or  persons,  for  or  to  the  use  of  the  same,  shall  deal  or  trade  in  buying 
or  selling  any  goods,  wares,  merchandise,  or  commodities,  whatsoever,  con- 
trary to  the  provisions  of  this  act,  all,  and  every  person,  and  persons,  by 
whom  any  order  or  direction  for  so  dealing  or  trailing  shall  have  been  given; 
and  all,  and  every  perbon,  and  persons,  who  shall  have  been  concerned  as 
parties,  or  agents,  therein,  shall  forfeit  and  lose  treble  the  value  of  the  goods, 
wares,  merchandises,  and  commodities,  in  which  such  dealing  and  trade  shall 
have  been,  one  half  thereof  to  the  use  of  the  informer,  and  the  other  half 
thereof  to  the  use  of  the  United  States,  to  be  recovered  in  any  action  at  law 
with  costs  of  suit. 

SEC.  11.  And  be  it  further  enacted,  That,  if  the  said  corporation  shall  ad- 
vance, or  lend,  any  sum  of  money,  for  the  use,  or  on  account,  of  the  Govern- 
ment of  the  United  States,  to  an  amount  exceeding  five  hundred  thousand 
dollars,  or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand 
dollars;  or  of  any  foreign  Prince  or  State,  (unless  previously  authorized  there- 
to by  a  law  of  the  United  States)  all,  and  every  person,  and  persons,  by  and 
with  whose  order,  agreement,  consent,  approbation,  and  connivance,  such 
unlawful  advance,  or  loan,  shall  have  been  made,  upon  conviction  thereof, 
shall  forfeit  and  pay,  for  every  such  offence,  treble  the  value  or  amount  of  the 
sum  or  sums  which  shall  have  been  so  unlawfully  advanced,  or  lent,  one  fifth 
thereof  to  the  use  of  the  informer,  and  the  residue  thereof  to  the  use  of  the 
United  States. 

SEC.  12.  And  be  it  further  enacted,  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable,  on 


604  BANK  OF  THE  UNITED  STATES. 

demand,  shall  be  receivable  in  all  payments  to  the  United  States,  unless 
otherwise  directed  by  act  of  Congress. 

SEC.  13.  And  be  it  further  enacted.  That  if  the  subscriptions  and  payments 
to  the  said  bank  shall  not  be  made  and  completed,  so  as  to  enable  the  same  to 
commence  its  operations,  or  if  the  said  bank  shall  not  commence  its  operations 
on  or  before  the  first  day  of  April,  one  thousand  eight  hundred  and  sixteen, 
then,  and  in  that  case,  this  act  shall  be  null  and  void. 

SEC.  14.  And  be  it  further  enacted,  That  it  shall,  at  all  times,  be  lawful  for 
a  joint  committee,  of  both  Houses  of  Congress,  appointed  for  that  purpose,  to 
inspect  the  books,  and  to  examine  into  the  proceedings  of  the  corporation 
hereby  created,  and  to  report  whether  the  provisions  of  this  charter  have  been. 
by  the  same,  violated  or  not;  and  whenever  any  committee,  as  aforesaid,  shall 
find  and  report  that  the  charter  has  been  violated,  it  may  be  lawful  for  Con- 
gress to  direct  a  scire  facias  to  be  sued  out  of  the  circuit  court  of  the  district 
of  Pennsylvania,  in  the  name  of  the  United  States,  (which  shall  be  executed 
upon  the  president  of  the  corporation  for  the  time  being,  at  least  fifteen  days 
before  the  commencement  of  the  term  of  said  court)  calling  on  the  said  cor- 
poration to  show  cause  wherefore  the  charter  hereby  granted,  shall  not  be 
declared  forfeited;  and  it  shall  be  lawful  for  the  saia  court,  upon  the  return 
of  the  said  scire  facias,  to  examine  into  the  truth  of  the  alleged  violation,  and 
if  such  violation  be  made  appear  to  the  satisfaction  of  the  court,  the  same 
shall  be  certified  to  Congress,  who  shall  have  power,  by  law,  to  annul  the 
said  charter:  Provided,  however,  Every  issue  of  fact  which  may  be  joined 
between  the  United  States  and  the  corporation  aforesaid,  shall  be  tried  by 
jury.  And  it  shall  be  lawful  for  the  court  aforesaid,  to  require  the  production 
of  such  of  the  books  of  the  corporation  as  it  may  deem  necessary  for  the  as- 
certainment of  the  controverted  facts. 

SEC.  15.  Jind  be  it  further  enacted,  That,  during  the  continuance  of  this 
act,  and  whenever  required  by  the  Secretary  of  the  Treasury,  the  said  cor- 
poration shall  do  and  perform  the  several  and  respective  duties  of  the  com- 
missioners of  loans  for  the  several  States,  or  of  any  one  or  more  of  them,  at 
the  times,  in  the  manner,  and  upon  the  terms  to  be  prescribed  by  the  Secre- 
tary of  the  Treasury. 

SEC.  16.  Jindbe  it  further  enacted,  That  no  other  bank  shall  be  establish- 
ed, by  any  future  law  of  the  United  States,  during  the  continuance  of  the 
corporation  hereby  created,  for  which  the  faith  of  the  United  States  is  hereby 
pledged:  Provided,  Congress  may  renew  existing  charters  for  banks  in  the 
District  of  Columbia,  not  increasing  the  capital  thereof;  and  may  grant  char- 
ters, if  they  deem  it  expedient,  to  any  banking  association,  now  in  operation  in 
the  said  district,  and  renew  the  same,  not  increasing  the  capital  thereof.  And 
notwithstanding  the  expiration  of  the  term  for  which  the  said  corporation  is 
created,  it  shall  be  lawful  to  use  the  corporate  name,  style,  and  capacity,  for 
the  purpose  of  suits,  for  the  final  settlement  and  liquidation  of  the  affairs  and 
accounts  of  the  corporation,  and  for  the  sale  and  disposition  of  their  estate, 
real,  personal,  and  mixed,  but  not  for  any  other  purpose,  or  in  any  other  man- 
ner whatsoever,  nor  for  a  period  exceeding  two  years,  after  the  expiration  of 
the  said  term  of  incorporation. 

FEBRUARY  8,  1815. 
A  motion  was  made,  by  Mr.  GILES,  to  refer  the  bill  to  a  select  committee. 

On  this  motion  a  wide  debate  took  place.  The  argument  for  reference  was, 
the  usage  in  such  cases,  where  a  bill  was  introduced  by  an  individual  mem- 
ber; the  argument  against  it  was,  that,  though  the  bill  was  recently  introduced 
by  an  individual  member,  the  subject  was  one  which  had  been  widely  dis- 
cussed, and  was  well  understood  by  every  member. 

The  motion  to  commit  the  bill  was  negatived— 18  to  16. 

The  Senate  proceeded,  as  in  committee  of  the  whole,  Mr.  ANDERSOX  in  the 
chair,  to  the  consideration  of  the  bill. 


PROCEEDINGS   OF   1815. 

Mr.  GILES  moved  an  amendment,  the  object  of  which  was  to  confine  the 
stock,  (payable  on  account  of  subscriptions  to  the  capital  of  the  bank)  to  such 
stock  as  should  be  hereafter  created. 

After  an  animated  and  interesting  debate,  this  motion  was  negatived. 

For  the  motion, 15, 

Against  it, 18. 

FEBRUARY  10,  1815. 

The  Senate  resumed  the  consideration  of  the  bill- 
Mr.  GILES  moved  to  strike  out  that  part  of  the  rules  for  the  government  of 
the  bank,  which  follows: 

"  But  the  said  corporation  shall  be  bound  to  lend  to  the  Government  of  the  United 
States,  reimbursable  at  their  pleasure,  thirty  millions  of  dollars,  at  an  interest  not  ex- 
ceeding1 six  per  centum  per  annum;  in  such  sums,  and  at  such  periods,  as  may  be  con- 
venient to  the  Government  of  the  United  States,  whenever  any  law  or  laws  of  the 
United  States  shall  authorize  and  require  such  loan  or  loans.*' 

"  Until  the  first  Monday  of  April,  1816,  it  shall  not  be  obligatory  on  the  said  corpo- 
ration to  pay  its  notes  in  specie;  but  all  the  notes  of  the  said  corporation,  whether  pay- 
able at  the  seat  of  the  bank  in  Philadelphia,  or  elsewhere,  shall  be  payable  in  other 
notes  of  the  said  corporation,  or  in  treasury  notes,  at  the  option  of  the  applicant;  and, 
if  at  any  time  during1  the  continuance  of  the  present  war  between  the  United  States 
and  Great  Britain,  and  a  period  of  one  year  after  the  termination  of  the  said  war,  de- 
mand shall  be  made  upon  the  said  corporation  for  gold  or  silver  coin,  to  an  amount,  and 
under  circumstances,  which  induce  a  reasonable  and  probable  belief  that  the  specie 
capital  may  be  greatly  diminished  or  endangered,  it  shall  be  lawful  for  Congress,  on 
the  petition  of  the  directors,  to  authorize  the  suspension  of  specie  payments,  for  such 
time  or  times  as  they  may  deem  proper.  " 

After  much  debate,  the  question  on  this  motion  was  decided  as  follows: 
YEAS. — Messrs.  Brown,  Daggett,  Dana,  Fromentin,  Gaillard,  German,  Giles,  Golds- 
borough,  Gore,  Hunter,  King,  Lambert,  Mason,  Thompson,  Wells — 15. 

NATS. — Messrs.  Anderson,  Barbour,  Barry,  Bibb,  Chace,  Condit,  Howell,  Kerr, 
Lacock,  Morrow,  Roberts,  Robinson,  Smith,  Talbot,  Tait,  Turner,  Varnum,  Whar- 
ton— 18. 

On  motion,  by  Mr.  GORE,  to  amend  the  bill,  by  inserting  therein  a  provi- 
sion "that  the  authority  of  the  bank,  to  pay  its  notes  otherwise  than  by  spe- 
cie, shall  be  expressed  on  such  note,"  the  vote  stood  as  follows: 

YBA*. — Messrs.  Brown,  Daggett,  Dana,  Fromentin,  Gaillard,  German,  Giles,  Golds- 
borough,  Gore,  Hunter,  Kerr,  King,  Lambert,  Mason,  Thompson — 15. 

NATS. — Messrs.  Anderson,  Barbour,  Barry,  Bibb,  Chase,  Condict,  Howell,  La- 
cock,  Morrow,  Roberts,  Robinson,  Smith,  Talbot,  Tait,  Turner,  Varnum,  Wells, 
Wharton— 18. 

On  the  question,  "  Shall  the  bill  be  engrossed  and  read  a  third  time,  as 
amended?"  the  vote  stood  as  follows: 

YEAS — Messrs.  Anderson,  Barbour,  Barry,  Bibb,  Chace,  Condict,  Howell,  Kerr, 
Lacock,  Morrow,  Roberts,  Robinson,  Smith,  Talbot,  Tait,  Turner,  Varnum,  Whar- 
ton— 18. 

NATS. — Messrs.  Brown,  Daggett,  Dana,  Fromentin,  Gaillard,  German,  Giles,  Golds- 
borough,  Gore,  Hunter,  King,  Lambert,  Mason,  Thompson,  Wells — 15. 

FEBRUARY  11,  1815. 

The  bill  was  read  the  third  time;  and,  on  the  question,  "Shall  the  bill 
pass?"  the  vote  stood  as  follows: 

YEAS. — Messrs.  Anderson,  Barbour,  Barry,  Bibb,  Chace,  Condict,  Howell,  Lacock, 
Morrow,  Roberts,  Robinson,  Smith,  Talbot,  Tait,  Taylor,  Turner,  Varnum,  Whar- 
ton— 18. 

•"  NATS. — Messrs.     Brown,     Daggett,    Dana,    Fromentin,   Gaillard,    German,   Giles, 
Goldsborough,  Gore,  Horsey,  Hunter,  Kerr,  King,  Lambert,  Mason,  Thompson — 16. 

So  the  bill  was  passed,  and  the  concurrence  of  the  House  requested  therein, 


606  BANK  OF  THE  UNITED  STATES. 

HOUSE  OF  REPRESENTATIVES. 

FEBRUARY  13,  1815. 

A  bill  from  the  Senate,  to  incorporate  the  subscribers  to  the  Bank  of  the 
United  States  of  America,  was  brought  up,  and  read  the  first  and  second 
time. 

Mr.  GASTON  moved  to  refer  the  bill  to  the  Committee  of  Ways  and  Means, 
with  a  view  to  the  amendment  of  its  details;  which  he  pronounced  to  be  in- 
correct, and,  in  many  respects,  impracticable. 

This  motion  was  opposed  by  Mr.  FORSYTH,  and  by  Mr.  FISK,  of  N.  Y.? 
who  argued  in  favor  of  the  correctness  of  the  details  of  the  bill,  and  denied 
that  any  other  object  but  delay  would  be  answered  by  the  proposed  reference. 

The  motion  was  negatived . 

Mr.  SHARP  then  moved  to  refer  the  bill  to  a  select  committee,  with  the  fol- 
lowing instructions: 

1.  To  strike  out  all  that  part  of  the  bill  that  allows  fifteen  millions  of  dollars  of  the 
capital  of  the  said  bank  to  be  paid  in  six  per  cent,  stock  of  the  United  States,  hereto- 
fore created,  and  now  in  the  hands  of  stockholders;  and  then  amend  the  bill,  so  as  to 
allow  the  Government  to  take  the  said  fifteen  millions  on  their  account. 

2.  That  all  the  Government  subscriptions  shall  be  paid  in  stock  at  five  per  cent, 
interest. 

3.  That  the  Government  shall  have  a  number  of  directors  in  said  bank,  equal  to  the 
proportion  it  may  have  of  the  capital  of  the  bank;  who  shall  be  appointed  by  the  Pre. 
sident  of  the  United  States. 

4.  That,  so  long-  as  the  bank  shall  not  be  required  to  pay  specie  for  its  notes  or  bills, 
or  after  having1  commenced  paying1  of  specie,  shall,  from  any  cause,  stop  the  payment 
of  the  same,  the  Government  shall  not  be  required  to  pay  to  the  bank  a  higher  rate  of 
interest,  on  any  loans  to  Government,  either  as  permanent  loans,  or  in  anticipation  of 
loans,  than  four  per  cent. 

5.  That  the  bank  shall  not  be  allowed  to  sell,  or  transfer,  any  part  of  the  Govern- 
ment stock,  that  it  may  acquire  by  permanent  loans  to  Government,  until  the  end  of 
one  year  after  the  war. 

In  support  of  this  motion,  Mr.  S.  made  a  speech  of  nearly  an  hour  in  length. 
Mr.  FORSYTH  replied  to  the  principal  points  of  this  speech,  at  considerable 
length. 

Mr.  SHARP  explained. 

Mr.  OAKLEY  expressed  himself,  in  a  speech  of  some  length,  as  favorable  to 
some  of  the  objects  of  the  motion  of  Mr.  Sharp,  and  as  preferring  them,  gene- 
rally, to  the  present  provisions  of  the  bill. 

Mr.  CALHOUN  expressed  himself  in  favor  of  commitment,  though  friendly 
only  to  two  of  the  proposed  instructions,  viz:  the  reduction  of  the  interest  on 
loans  to  the  Government,  and  striking  out  the  old  stock.  He  assigned  the 
reasons,  also,  why  the  plan  of  a  bank  now  before  the  House,  did  not  meet 
his  approbation. 

Mr.  HAWKINS,  Mr.  WRIGHT,  Mr.  RHEA,  of  Term,  and  Mr.  FORSYTH, 
further  opposed  the  commitment;  and  Mr.  OAKLEY,  Mr.  BOWEN,  and  Mr. 
GASTON,  advocated  it. 

The  question  on  Mr.  SHARP'S  motion  having  been  divided,  the  question  on 
reference  to  a  select  committee  was  taken,  separately  from  the  instructions 
proposed  to  be  given  to  the  committee,  and, 

On  the  question  of  commitment,  the  vote  stood,  by  yeas  and  nays,  as  fol- 
lows: 

For  commitment, 75, 

Against  it, •  .     80. 

Mr.  GASTON  then  moved  to  refer  the  bill  to  a  committee  of  the  whole;  which 
motion  was  decided  in  the  negative. 


PROCEEDINGS  OF    1815. 

Mr.  SHARP  then  moved  to  amend  the  bill,  by  striking  out  so  much  as  allows 
the  subscription  of  stock  heretofore  created. 

This  motion  was  supported  by  Mr.  DUVAL,  and  opposed  by  Messrs. 
WRIGHT  and  HUMPHREYS;  and  was  negatived,  by  yeas  and  nays,  by  the  fol- 
lowing vote: 

For  the  motion, 72, 

Against  it, 82. 

Mr.  SHARP  then  moved  to  amend  the  bill,  by  limiting  the  interest  to  be  given 
by  the  Government  on  loans  from  the  bank,  to  four  per  cent;  which  motion 
was  also  negatived,  by  yeas  and  nays,  as  follows: 

For  the  motion, 74, 

Against  it, , 77. 

FEBRUARY  17,  1815. 

The  House  resumed  the  consideration  of  the  bill. 
Mr.  FORSYTH  moved  to  refer  the  bill  to  a  select  committee. 

Mr.  LOWNDES  superseded  this  motion  by  a  motion  to  postpone  it  indefi- 
nitely. He  made  this  motion,  not  from  any  hostility  to  a  National  Bank, 
wishing,  as  the  gentleman  did,  that  a  National  Bank  should  be  established; 
but,  because  he  wished  it  to  be  done  at  a  time,  and  under  circumstances, 
which  would  give  the  House  ability  to  decide  correctly  on  the  subject.  He 
believed,  he  said,  and  he  was  not  alone  in  that  opinion,  that  the  present  mo- 
ment w,as  a  most  unfavorable  one  for  the  establishment  of  a  bank.  It  must 
be  known  that,  lon£  as  the  subject  of  a  bank  had  been  agitated,  there  had 
been  important  differences  of  sentiment  as  to  the  principles  of  such  an  insti- 
tution, which  had  been  suppressed  because  of  the  pressure  of  the  times. 
Among  other  objections  to  acting  on  this  subject  at  present,  he  said,  it  was  no 
trifling  one,  that  the  suspension  of  specie  payments  by  the  State  banks,  which 
every  one  considered  an  evil,  would,  unquestionably,  be  prolonged  by  it. 
In  the  fragment  of  the  session  which  now  remains,  there  would  not  be  time  to 
enter  into  a  consideration  of  these  points;  and,  if  there  were  full  time,  the 
mere  circumstance  of  the  new  and  almost  insuperable  difficulties  arising  from 
a  new  state  of  things  which  now  present  themselves,  ought  to  suggest  a  reason 
for  postponement.  Congress  could  not  now  establish  a  bank  half  so  eligible, 
or  half  so  durable,  as  they  could  at  a  future  session. 

Mr.  FORSYTH  said  he  was  perfectly  aware,  that  the  subject  of  a  National 
Bank  was  attended  with  great  difficulty,  at  this  or  any  other  session;  but  his 
opinion  was,  that  this  was  the  best  time  for  an  attempt  of  this  kind.  The  sub- 
ject had  been  so  much  discussed,  that  he  apprehended  every  gentleman  was 
prepared  to  decide  on  it  without  much  further  discussion.  It  was  from  a 
nope  that  all  sides  of  the  House  could  now  come  to  some  understanding,  and 
agree  on  the  establishment  of  such  an  institution,  as  should  be  not  only  valua- 
ble to  the  United  States,  but  satisfactory  to  all  parties,  that  he  had  now 
moved  to  commit  the  bill,  which  he  hoped  would  not  be  indefinitely  post- 
poned. 

Mr.  GASTON  conceived  there  would  be  less  difficulty  in  acting  on  this  sub- 
ject at  the  present  session,  than  was  anticipated  by  the  gentleman  from  South 
Carolina.  The  subject  has  been  so  repeatedly  discussed,  that  he  thought  it 
could  be  acted  on  more  advantageously  in  the  small  remnant  of  the  present 
session,  than  in  the  first  session  of  a  new  Congress,  bringing  together  indivi- 
duals not  acquainted  with  each  others'  views,  and  not  having  the  advantage  of 
hearing  the  subject  frequently  discussed.  Having  always  been  friendly  to 
such  an  institution,  and  believing  it  as  important  in  peace  as  in  war,  he  hoped 
an  experiment  would  be  made,  by  referring  this  subject  to  a  committee,  which, 
whether  successful  or  not,  would  not  consume  much  time  of  the  House. 


6Q8  BANK  OF  THE  UNITED  STATES. 

Mr.  GROSVENOR,  Mr.  WRIGHT,  Mr.  PICKERING,  and  Mr.  FARROW,  ad- 
vocated the  postponement,'  and  Mr.  KILBOURN,  Mr.  FISK,  of  Vermont,  Mr. 
CALHOUN,  and  Mr.  TELFAIR,  opposed  it. 

On  the  queston  of  postponement,  which  was  decided  by  yeas  and  nays,  the 
vote  stood  as  follows: 

Those  who  voted  in  the  affirmative,  are, 

Messrs.  Avery,  Messrs.  Hale,                          Messrs.  Roane, 

Harbour,  Hall,  Ruggles, 

Bard,  Hasbrouck,  Schureman, 

Barnett,  Hawes,  Seybert, 

Baylies,  of  Mas*.  Henderson,  Sheffey, 

Bigelow,  Hulbert,  Shipherd, 

Boyd,  Jackson,  of  R.  I.  Slaymaker, 

Bradbury,  Johnson,  of  Ky.  Smith,  of  N.  Y. 

Brigham,  Kennedy,  Stanford, 

Champion,  Kent,  ofN.  Y.  Stockton, 

Cilley,  King-,  of  Mass.  Stuart, 

Clopton,  Law,  Taggart, 

Cooper,  Lowndes,  Thompson, 

Crawford,  Macon,  Troup, 

Cuthbert,  M'Kee,  Vose, 

Davenport,  Montgomery,  Ward,  of  Mast, 

Desha,  Moseley,  Ward,  of  N.  J- 

Ely,  Markell,  Wheaton, 

Eppes,  Nelson,  White, 

Farrow,  Ormsby,  Wilcox, 

Franklin,  Pickering,  Williams, 

Geddes,  Pitkin,  Wilson,  of  Maw. 

Glasgow,  Potter,  Winter, 

Goodwin,  John  Reed,  Wright — 74. 

Grosvenor,  Wm.  Reed, 

Those  who  voted  in  the  negative,  are, 

Messrs.  Alston,  Messrs.  Gaston,  Messrs.  Parker, 

Anderson,  Gholson,  Pearson, 

Bayly,  of  Va.  Gourdin,  Pickens, 

Bines,  Griffin,  Piper, 

Bowen,  Hanson,  Pleasants, 

Breckenridge,  Hawkins,  Rea,  of  Penn. 

Brown,  Hubbard,  Rhea,  of  Tenn. 

Butler,  Hungerford,  Rich, 

Caperton,  Ingersoll,  Ringgold, 

Calhoun,  Ingham,  Robertson, 

Cannon,  Jackson,  of  Va.  Sage, 

Clendenin,  Kent,  of  Md.  Sevier, 

Comstock,  Kerr,  Sharp, 

Connard,  Kershaw,  Sherwood, 

Cox,  Kilbourn,  Smith,  of  Vir. 

Creighton,  Lefferts,  Strong 

Crouch,  Lewis,  Sturges, 

Culpeper,  Lovett,  Tannehill, 

Duval,  Lyle,  Taylor, 

Earle,  M'Coy,  Telfair, 

Findley,  M'Lean,  Udree, 

Fisk,  of  Vt.  Moore,  Wilson,  of  Pa. 

Fisk,  of  N.  Y.  Murfree,  Wood, 

Forney,  Newton,  Yancey — 73. 

Forsyth,          

So  the  bill  was  indefinitely  postponed. 


CHAPTER    V. 

PROCEEDINGS    AND    DEBATES  ON   THE    GRANT  OF    THE    CHARTER    OF    1816, 

HOUSE    OF   REPRESENTATIVES. 

DECEMBER  5,  1815. 
Extract  from  the  annual  message  of  JAMKS  MADISON,  President  of  the  Untied  States. 

"  The  arrangements  ol  the  finances,  with  a  view  to  the  receipts  and  expen- 
ditures of  a  permanent  peace  establishment,  will  necessarily  enter  into  the 
deliberations  of  Congress  during  the  present  session.  It  is  true,  that  the  im- 
proved condition  of  the  public  revenue  will  not  only  afford  the  means  of  main- 
taining the  faith  of  the  Government  with  its  creditors  inviolate,  and  of  prose- 
cuting successfully  the  measures  of  the  most  liberal  policy,  but  will  also  jus- 
tify an  immediate  alleviation  of  (he  burdens  imposed  by  the  necessities  of  the 
war.  It  is,  however,  essential  to  every  modification  of  the  finances,  that  the 
benefits  of  an  uniform  national  currency  should  be  restored  to  the  community. 
The  absence  of  the  precious  metals  will,  it  is  believed,  be  a  temporary  evil; 
but,  until  they  can  again  be  rendered  the  general  medium  of  exchange,  it  de- 
volves on  the  wisdom  of  Congress  to  provide  a  substitute,  which  shall  equally 
engage  the  confidence,  and  accommodate  the  wants  of  the  citizens  throughout 
the  Union.  If  the  operation  of  the  State  banks  cannot  produce  this  result, 
the  probable  operation  of  a  national  bank  will  merit  consideration;  and  if 
neither  of  these  expedients  be  deemed  effectual,  it  may  become  necessary  to 
ascertain  the  terms  upon  which  the  notes  of  the  Government  (no  longer  re- 
quired as  an  instrument  of  credit)  shall  be  issued,  upon  motives  of  general  po- 
licy, as  a  common  medium  of  circulation." 

DECEMBER  6,  1815. 

Resolved,  That  so  much  of  the  President's  message  as  relates  to  an  uniform 
national  currency,  be  referred  to  a  select  committee. 

Ordered,  That  Mr.  Calhoun,  of  S.  C.  Mr.  Macon,of  N.  C.  Mr.  Pleasants, 
of  Va.  Mr.  Hopkinson,  of  Pa.  Mr.  Robertson,  of  La.  Mr.  Tucker,  of  Va. 
and  Mr.  Pickering,  of  Mass,  be  the  said  committee. 

DECEMBER  7,  1815. 

The  Speaker  laid  before  the  House  a  letter  from  the  Secretary  of  the  Trea- 
sury, transmitting  his  annual  report  on  the  state  of  the  finances,  of  which,  so 
much  thereof  as  relates  to  a  national  currency,  was  referred  to  the  committee 
on  that  subject. 

The  following  are  the  parts  of  the  said  report  alluded  to,  containing  sug- 
gestions on  the  currency,  and  a  proposition  for  the  establishment  of  a  bank: 

PROPOSITION  OF  MR.   DALLAS,   RELATING  TO  THE  NATIONAL  CIRCU- 
LATING MEDIUM. 

The  delicacy  of  this  subject  is  only  equalled  by  its  importance.  In  pre- 
senting it,  therefore,  to  the  consideration  of  Congress,  there  is  occasion  for  an 
implicit  reliance  upon  the  legislative  indulgence. 

77 


BANK  OF  THE  UNITED  STATES. 

By  the  constitution  of  the  United  States,  Congress  is  expressly  vested  with 
the  power  to  coin  money ,  to  regulate  the  value  of  the  domestic  and  foreign 
coins  in  circulation,  and  (as  a  necessary  implication  from  positive  provisions) 
to  emit  bills  of  creuitj  while  it  is  declared,  by  the  same  instrument,  that  "  no 
State  shall  coin  money,  or  emit  bills  of  credit."*  Under  this  constitutional 
authority,  the  money  of  the  United  States  has  been  established  by  law,  con- 
sisting of  coins  made  with  gold,  silver,  or  copper. |  All  foreign  gold  and  sil- 
ver coins,  at  specified  rates,  were  placed,  in  the  first  instance,  upon  the  same 
footing  with  the  coins  of  the  United  States;  but  they  ceased  (with  the  excep- 
tion ot  Spanish  milled  dollars,  and  parts  of  such  dollars)  to  be  a  legal  tender 
for  the  payment  of  debts  and  demands,  in  the  year  18094 

The  constitutional  authority  to  emit  bills  of  credit,  has  also  been  exercised 
m  a  qualified  and  limited  manner.  During  the  existence  of  the  Bank  of  the 
United  States,  the  bills  or  notes  of  the  corporation  were  declared  by  law  to 
be  receivable  in  all  payments  to  the  United  States;  and  the  treasury  notes 
which  have  been  since  issued  for  the  sen  ices  of  the  late  war,  have  been  en- 
dowed with  the  same  quality.  But  Congress  has  never  recognised,  by  law, 
the  notes  of  any  other  corporation,  nor  has  it  ever  authorized  an  issue  of  bills 
of  credit  to  serve  as  a  ie^al  currency.  The  acceptance  of  the  notes  of  banks 
which  are  not  established  by  the  federal  authority,  in  payments  to  the  United 
States,  has  been  properly  left  to  the  vigilance  and  discretion  of  the  Executive 
Department;  while  the  circulation  of  the  treasury  notes,  employed  either  to 
borrow  money  or  to  discharge  debts,  depends  entirely  (as  it  ought  to  depend) 
upon  the  option  ot  the  lenders  and  creditors  to  receive  them. 

The  constitutional  and  legal  foundation  of  the  monetary  system  of  the 
United  States,  is  thus  distinctly  seen;  and  the  power  of  the  Federal  Govern- 
ment to  institute  and  regulate  it,  whether  the  circulating  medium  consist  of 
coin,  or  of  bills  of  credit,  must,  in  its  general  policy,  as  well  as  in  the  terms 
of  its  investment,  be  deemed  an  exclusive  power.  It  is  true,  that  a  system 
depending  upon  the  agency  of  the  precious  metals,  will  be  aftected  by  the  va- 
rious circuinstances  which  diminish  their  quantity  or  deteriorate  their  quality. 
The  coin  of  a  State  sometimes  vanishes  under  the  influence  of  political  alarms: 
sometimes  in  consequence  of  the  explosion  of  mercantile  speculations;  and 
sometimes  by  the  drain  of  an  unfavorable  course  of  trade.  But,  whenever 
the  emergency  occurs  that  demands  a  change  of  system,  it  seems  necessarily 
to  follow,  that  the  authority  which  was  alone  competent  to  establish  the  na- 
tional coin,  is  alone  competent  to  create  a  national  substitute.  It  has  happen- 
ed, however,  that  the  coin  of  the  United  States  has  ceased  to  be  the  circulat- 
ing medium  of  exchange,  and  that  no  substitute  has  hitherto  been  provided 
by  the  national  authority.  During  the  last  year,  the  principal  banks  establish- 
ed south  and  west  of  New  England,  resolved  that  they  would  no  longer  issue 
coin  in  payment  of  their  notes,  or  of  the  drafts  of  their  customers  for  money 
received  upon  deposite.  In  this  act,  the  Government  of  the  United  States  had 
no  participation;  and  yet  the  immediate  effect  of  the  act  was  to  supersede  the 
only  legal  currency  of  the  nation.  By  this  act,  although  no  State  can  consti- 
tutionally emit  bills  of  credit,  corporations,  erected  by  the  several  States, 
have  been  enabled  to  circulate  a  paper  medium,  subject  to  many  of  the  practi- 
cal inconveniences  of  the  prohibited  bills  of  credit. 

[t  is  not  intended,  upon  this  occasion,  to  condemn,  generally,  the  suspen- 
sion of  specie  payments:  for  appearances  indicated  an  approaching  crisis, 
which  would,  probably,  have  imposed  it  as  a  measure  of  necessity,  if  it  had 
not  been  adopted  as  a  measure  of  precaution.  But  the  danger  which  origi- 
nally induced,  and  perhaps  justified  the  conduct  of  the  banks,  has  passed 
away,  and  the  continuance  of  the  suspension  of  specie  payments,  must  be  as- 
cribed to  a  new  series  of  causes.  The  public  credit  and  resources  are  no 
longer  impaired  by  the  doubts  and  agitations  excited  during  the  war -by  the. 

*  Constitution,  art.  1,  sec.  8,  10. 

f  See  2vol.  37,  120,  158,  161:  3  vol.  7,  22!,  31C:    1  vol.  62,  .T/5,  395 

±See2vol.  161:   4vol.  02:  8  vol.  CG. 


ON   TIIK   GUAM     OK  THE  CHAKTKU  ()!•    ISlfi.  ^  j  ) 

practices  oi "  ;ui  enemy,  or  by  the  inroads  of  an  illicit  commerce.  Vet,  the 
resumption  of  specie  payments  is  still  prevented,  either  by  the  reduced  state 
of  the  national  stock  of 'the  precious  metals,  or  by  the  apprehension  of  a  fur- 
ther reduction  to  meet  the  balances  of  foreign  trade,  or  by  the  redundant  issues 
oKJjank  paper.  The  probable  direction  and  duration  of  those  latter  causes. 
constitute,  therefore,  the  existing  subject  for  deliberation.  While  they  con- 
tinue to  operate,  singly  or  combined,  the  authority  of  the  States,  individually, 
or  the  agency  of  the  State  institutions,  cannot  afford  a  remedy  commensurate 
with  the  evil,  and  a  recurrence  to  the  national  authority  is  indispensable  for 
the  restoration  of  a  national  currency. 

In  the  selection  of  the  means  for  the  accomplishment  of  this  important  ob- 
ject, it  may  be  asked,  1st,  whether  it  be  practicable  to  renew  the  circulation 
of  the  gold  and  silver  coins?  2dly,  whether  (lie  State  banks  can  be  success- 
fully employed  to  furnish  a  uniform  currency?  3dly,  whether  a  national  bunk 
can  be  employed  more  advantageously  than  the  State  banks  for  the  same  pur- 
pose? And  4thly,  whether  the  Government  can,  itself,  supply  and  maintain 
a  paper  medium  of  exchange,  of  permanent  and  uniform  value  throughout  the 
United  Stale.-:- 

1st.    As  the  United  States  do  no  lines  of  sold  or  silver,  the  supply 

of  those  metals  must,  in  a  time  of  scarcity,  be  derived  from  foreign  com- 
merce. If  the  balance  of  foreign  commerce  be  unfavorable,  the  supply  will 
not  be  obtained  incidentally,  as  in  the  case  «>f  the  returns  for  a  surplus  of 
American  exports,  but  must  be  tho  subject  of  a  direct  purchase.  The  pur- 
chase of  bullion  is,  however,  a  common  operation  of  commerce,  and  depend-. 
like  other  operations,  upon  the  inducements  to  import  the  article, 

The  inducements  to  import  bullion  arise,  as  in  other  cases,  from  its  being 
<  heap  abroad,  or  from  its  being  dear  at  home.  Notwithstanding  the  commo- 
tions in  South  America,  as  well  as  in  Kurope,  there  is  no  reason  to  believe, 
that  the  quantity  of  the  precious  metals  is  now  (mare  than  jit  any  former  period) 
insufficient  for  the  demand  throughout  the  commercial  and  civilized  world. 
The  price  may  be  higher  in  some  countries  than  in  others,  and  it  may  be  dif- 
ferent in  the  same  country  at  different  times;  but,  generally,  the  European 
stock  of  gold  and  silver  has  been  abundant,  even  during  the  protracted  war 
which  has  afflicted  the  nations  of  Kurope. 

The  purchase  of  bullion  in  foreign  markets,  upon  reasonable  terms,  is  then 
deemed  practicable:  nor  can  its  importation  into  the  United  States,  fad,  even- 
tually, to  become  profitable.  The  actual  price  of  gold  and  silver,  in  the  Ame- 
rican market,  would,  in  itself,  aftbrd,  for  some  time,  an  ample  premium,  al- 
though tiie  fall  in  the  price  must,  of  course,  be  proportionable  to  the  increase 
ol  the  quantity.  But  it  i>  within  the  scope  of  a  wise  policy,  to  create  addi- 
tional demands  for  coin,  and  in  that  way,  to  multiply  the  inducements  to  im- 
port and  retain  the  metals  of  which  it  is  composed.  For  instance:  the  exces^ 
sive  issue  of  bank  paper  has  usurped  the  place  of  the  national  money;  and, 
under  such  circumstances,  gold  and  silver  will  always  continue  to  be  treated 
us  an  article  of  merchandise;  but,  it  is  hoped  that  the  issue  of  bank  paper 
will  be  soon  reduced  to  its  just  share  in  the  circulating  medium  of  the  coun- 
try; and  consequently,  that  the  coin  of  the  United  States  will  resume  its  le- 
gitimate capacity  and  character.  Again:  The  treasury,  yielding  from  neces- 
sity to  the  general  impulse,  has  hitherto  consented  to  receive  bank  paper  in 
payment  ot  duties  and  taxes;  but,  the  period  approaches,  when  it  will  proba- 
bly become  a  duty  to  exact  the  payment,  cither  in  treasury  notes,  or  in  gold 
or  silver  coin,  the  lawful  money  of  the  United  States.  Again:  The  institu- 
tions which  shall  be  deemed  proper,  in  order  to  remove  existing  inco'hvenien- 
ces,  and  to  restore  the  national  currency,  may  be  so  organized  as  to  engage 
the  interests  and  enterprise  of  individuals,  in  providing  the  means  to  establish 
them.  And,  finally,  such  regulations  maybe  imposed  upon  the  exportation 
ot  gold  and  silver,  as  will  serve,  in  future,  to  fix  and  retain  the  quantity  re- 
quired for  domestic  uses. 

But  it  is  further  believed,  that  the  national  stock  of  the  precious  metals  is 
not  so  reduced  as  to  render  the  operation  of  reinstating  their  agency  in  the 


BANK    OF   THE    UNITED    STATES. 

national  currency,  either  difficult  or  protracted.  The  quantity  actually  pos- 
sessed by  the  country,  is  considerable;  and  the  resuscitation  of  public  confi- 
dence in  bank  paper,  or  in  other  substitutes  for  coin,  seems  alone  to  be  want- 
ing, to  render  it  equal  to  the  accustomed  contribution  for  a  circulating  me- 
dium. In  other  countries,  as  well  as  in  the  United  States,  the  effect  of  an 
excessive  issue  of  paper  money,  to  banish  the  precious  metals,  has  been  seenr 
and  under  circumstances  much  more  disadvantageous  than  the  present;  the 
effect  of  public  confidence  in  national  institutions  to  recall  the  precious  metals 
to  their  uses  in  exchange,  has  also  been  experienced. 

Even,  however,  if  it  were  practicable,  it  has  sometimes  been  questioned 
whether  it  would  be  politic,  again  to  employ  gold  and  silver  for  the  purposes 
of  a  national  currency.  It  was  long  and  universally  supposed?  that,  to  main- 
tain a  paper  medium,  without  dereciation,  the  certainty  of  being  able  to  con- 
vert it  into  coin,  was  indispensable;  nor  can  the  experiment  which  has  given 
rise  to  a  contrary  doctrine,  be  deemed  complete  or  conclusive.  But,  what- 
ever may  be  the  issue  of  that  experiment  elsewhere,  a  difference  in  the  struc- 
ture of  the  Government,  in  the  physical  as  well  as  political  situation  of  the 
country,  and  in  the  various  departments  of  industry,  seems  to  deprive  it  of 
any  important  influence  as  a  precedent  for  the  imitation  of  the  United  States. 

In  offering  these  general  remarks  to  the  consideration  of  Congress,  it  is  not 
intended  to  convey  an  opinion  that  the  circulation  of  the  gold  and  silver  coins* 
can  at  once  be  renewed.  Upon  motives  of  public  convenience,  the  gradual 
attainment  of  that  object  isalone  contemplated;  but  a  strong,  though  respect- 
ful solicitude  is  felt,  that  the  measures  adopted  by  the  Legislature,  should  in- 
variably tend  to  its  attainment. 

2d.  Of  the  services  rendered  to  the  Government  by  some  of  the  State  banks, 
during  the  late  war,  and  of  the  liberality  by  which  some  of  them  are  actuated 
in  their  intercourse  with  the  treasury,  justice  requires  an  explicit  acknowledg- 
ment. It  is  a  fact,  however,  incontestibly  proved,  that  those  institutions  can- 
not, at  this  time,  be  successfully  employed  to  furnish  a  uniform  national  cur- 
rency. The  failure  of  one  attempt  to  associate  them,  with  that  view,  has  al- 
ready been  stated.  Another  attempt,  by  their  agency,  in  circulating  treasury 


affairs  of  the  banks,  and  to  give  to  each  bank  a  legitimate  share  in  the  circula- 
tion, is  not  likely  to  receive  the  general  sanction  of  the  banks.  The  truth  is, 
that  the  charter  restrictions  of  some  of  the  banks,  the  mutual  relation  and  de- 
pendence of  the  banks  of  the  same  State,  and  even  of  the  banks  of  the  differ- 
ent States,  arid  the  duty  which  the  directors  of  each  bank  conceive  they  owe 
to  their  immediate  constituents,  upon  points  of  security  or  emolument,  inter- 
pose an  insuperable  obstacle  to  any  voluntary  arrangement,,  upon  national  con- 
siderations alone,  for  the  establishment  of  a  national  medium,  through  the 
agency  of  the  State  banks.  It  is,  nevertheless,  with  the  State  banks,  that  the  • 
measures  for  restoring  the  national  currency  of  gold  and  silver  must  originate: 
for,  until  their  issues  of  paper  be  reduced,  their  specie  capitals  be  reinstated, 
and  their  specie  operations  be  commenced,  there  will  be  neither  room,  nor 
employment,  nor  safety,  for  the  introduction  of  the  precious  metals.  The 
policy  and  the  interest  of  the  State  banks  must,  therefore,  be  engaged  in  the 
great  fiscal  work,  by  all  the  means  which  the  treasury  can  employ,  or  the  le- 
gislative wisdom  shall  provide. 

3d.  The  establishment  of  a  national  bank  is  regarded  as  the  best,  and  per- 
haps the  only  adequate  resource,  to  relieve  the  country  and  the  Goverment 
from  the  present  embarrassments;  authorized  to  issue  notes,  which  will  be 
received  in  all  payments  to  the  United  States,  the  circulation  of  its  issues  will 
be  co-extensive  with  the  Union;  and  there  will  exist  a  constant  demand,  bear- 
ing a  just  proportion  to  the  annual  amount  of  the  duties  and  taxes  to  be  col- 
lected, independent  of  the  general  circulation,  for  commercial  and  social  pur- 
poses. A  national  bank  will,  therefore,  possess  the  means  and  the  opportunity 
of  supplying  a  circulating  medium,  of  equal  use  and  value  in  every  State,  ami 


ON  THE  GRANT  OF  THE  CHAKTKK  OF  1816. 

in  every  district  of  every  State.  Established  by  the  authority  of  the  Govern- 
ment of  the  United  States;  accredited  by  the  Government,  to  the  whole 
amount  of  its  notes  in  circulation;  and  entrusted  as  the  depository  of  the  Go- 
vernment, with  all  the  accumulations  of  the  public  treasure;  the  national 
bank,  independent  of  its  immediate  capital,  will  enjoy  every  recommendation 
which  can  merit  and  secure  the  confidence  of  the  public.  Organized  upon 
principles  of  responsibility,  but  of  independence,  the  national  bank  will  be 
retained  within  its  legitimate  sphere  of  action,  without  just  apprehension  from 
the  misconduct  of  its  directors,  or  from  the  encroachments  of  the  Govern- 
ment. Eminent  in  its  resources  and  in  its  example,  the  national  bank  will 
conciliate,  aid,  and  lead,  the  State  banks,  in  all  that  is  necessary  for  the  res- 
toration of  credit,  public  and  private.  And,  acting  upon  a  compound  capital, 
partly  of  stock  and  partly  of  gold  ami  silver,  the  national  bank  will  be  the 
ready  instrument  to  enhance  the  value  of  the  public  securities,  and  to  restore 
the  currency  of  the  national  coin. 

4th.  The  power  of  the  Government  to  supply  and  maintain  a  paper  medium 
of  exchange,  will  not  be  questioned;  but,  for  the  introduction  of  that  medium, 
there  must  be  an  adequate  motive.  The  sole  motive  for  issuing  treasury  notes, 
has  hitherto  been  to  raise  money  in  anticipation  of  the  revenue.  The  revenue, 
however,  will  probably  become,  in  the  course  of  the  year  1816,  and  continue 
afterwards,  sufficient  to  discharge  all  the  debts,  and  to  defray  all  the  expenses 
of  the  Government,  and,  consequently,  there  will  exist  no  motive  to  issue  the 
paper  of  the  Government  as  an  instrument  of  credit. 

It  will  not  be  deemed  an  adequate  object  for  an  issue  of  the  paper  of  the  Go- 
vernment, merely  that  it  may  be  exchanged  for  the  paper  of  the  banks;  since 
the  treasury  will  be  abundantly  supplied  with  bank  paper,  by  the  collection  of 
the  revenue,  and  the  Government  cannot  be  expected  to  render  itself  a  gene- 
ral debtor,  in  order  to  become  the  special  creditor  of  the  Stale  banks. 

The  co-operation  of  the  Government  with  the  national  bank,  in  the  intro- 
duction of  a  national  currency,  may,  however,  be  advantageously  employed, 
by  issues  of  treasury  note*,  so  long  as  they  shall  be  required  for  the  public 
service. 

Upon  the  whole,  the  state  of  the  national  currency,  and  other  important 
considerations  connected  with  the  operations  of  the  treasury,  render  it  a  duty 
respectfully  to  propose, 

That  a  national  bank  be  established  at  the  city  of  Philadelphia,  having  power 
to  erect  branches  elsewhere,  and  that  the  capital  of  the  bank  (being  of  a  com- 
petent amount)  consist,  three-fourths  of  the  public  stock,  and  one-fourth  of 
gold  and  silver. 

All  which  is  respectfully  submitted. 

A.  J.  DALLAS, 
Secretary  of  the  Treasury. 

TREASURY  DEPARTMENT,  December  6,  1815.  % 

The  Committee  on  a  National  Currency  having  directed  their  chairman  to 
address  a  letter  to  the  Secretary  of  the  Treasury,  requesting  his  views  upon 
certain  points  relating  to  the  currency,  the  Secretary,  on  the  24th  December, 
1815,  addressed  to  Mr.  CALHOUN,  as  chairman,  the  following  letter: 

Letter  from  the  Secretary  of  the  Treasury  to  the  Chairman  of  the  Committee, 
on  that  part  of  the  President's  message  which  relates  to  an  uniform  na- 
tional currency;  enclosing  an  outline  of  a  plan  for  a  National  Bank, 
accompanied  ivith  some  explanation  of  the  principles  upon  which  the  system 
is  founded. 

TREASURY  DEPARTME^F,  December  24,  1815. 

SIR:  I  have  the  honor  to  acknowledge  the  receipt  of  your  letter,  dated  the 
23d  instant,  informing  me  "  that  the  committee  on  so  much  of  the  President's 
message  as  relates  to  the  national  currency,  had  determined  that  a  National 


514  BANK  OF  THE  UNITED  STATES. 

Bank  is  the  most  certain  means  of  restoring  to  the  nation  a  specie  circulation;*' 
and  had  directed  you  to  obtain  the  opinion  of  this  Department  on  the  following 
j  mints: 

1.  The  amount  and  composition  of  the  capital  of  the  bank; 

2.  The  government  of  the  bank; 

3.  The  privileges  and  duties  of  the  bank; 

4.  The  organisation  and  operation  of  the  bank; 

5.  The  bonus  to  be  required  for  the  charter  of  the  bank: 

6.  The  measures  which  may  aid  the  bank  in  commencing  and  maintaining 

its  operations  in  specie. 

It  affords  much  satisfaction  to  find,  that  the  policy  of  establishing  a  National 
Bank  has  received  the  sanction  of  the  committee;  and  the  decision,  in  this 
respect,  renders  it  unnecessary  to  enter  into  a  comparative  examination  of  the 
superior  advantages  of  such  an  institution,  for  the  attainment  of  the  objects 
contemplated  by  the  Legislature.  Referring,  therefore,  to  the  outline  of  a 
National  Bank,  which  is  subjoined  to  this  letter,  as  the  result  of  an  attentive 
consideration  bestowed  upon  the  subjects  of  your  inquiry,  I  proceed,  with  de- 
ference and  respect,  to  otter  some  explanation  of  the  principles  upon  which 
the  system  is  founded: 

{.  It  is  proposed  that,  under  a  charter  for  twenty  years,  the  capital  of  the 
National  Bank  shall  amount  to  thirty -five  millions  of  dollars;  that  Congress 
shall  retain  the  power  to  raise  it  to  fifty  millions  of  dollars;  and  that  it  shall 
consist  of  three  fourths  of  public  stock,  and  one  fourth  of  gold  and  silver. 

1.  With  respect  to  the  amount  of  the  capital.  The  services  to  be  performed 
by  the  capital  of  the  bank,  are  important,  various,  and  extensive.  They  will 
be  required  through  a  period  almost  as  long  as  is  usually  assigned  to  a  genera- 
tion. They  will  be  required  for  the  accommodation  of  the  Government,  in 
the  collection  and  distribution  of  its  revenue,  as  well  as  for  the  uses  of  com- 
merce, agriculture,  manufactures,  and  the  arts,  throughout  the  Union.  They 
will  be  required  to  restore  and  maintain  the  national  currency;  and,  in  short, 
they  will  be  required,  under  every  change  of  circumstances,  in  a  season  of 
war  as  well  as  in  the  season  of  peace,  for  the  circulation  of  the  national 
wealth;  which  augments  with  a  rapidity  beyond  the  reach  of  ordinary  cal- 
culation. 

In  the  performance  of  these  national  services,  the  local  and  incidental  co- 
operation of  the  State  banks  may  undoubtedly  be  expected;  but  it  is  the  ob- 
ject of  the  present  measure,  to  create  an  independent,  though  not  a  discordant, 
institution;  and  while  the  Government  is  granting  a  monopoly  for  twenty 
years,  it  would  seem  to  be  improvident  and  dangerous  to  rely  upon  gratuitous 
or  casual  aids  for  the  enjoyment  of  those  benefits  which  can  be  effectually  se- 
cured by  positive  stipulation. 

Nor  is  it  believed  that  any  public  inconvenience  can  possibly  arise  from 
the  proposed  amount  of  the  capital  of  the  bank,  with  its  augmentable  quality. 
The  amount  may,  indeed,  be  a  clog  upon  the  profits  of  the  institution;  but.  it 
can  never  be  employed  for  any  injurious  purpose,  (not  even  for  the  purpose  of 
discount  accommodation  beyond  the  fair  demand)  without  an  abuse  of  trust, 
which  cannot,  in  candor,  be  anticipated;  or  which,  if  anticipated,  may  be  made 
an  object  of  penal  responsibility. 

The  competition  which  exists  at  present  among  the  State  banks,  will,  it  is 
true,  be  extended  to  the  National  Bank;  but  competition  does  not  imply  hos- 
tility. The  commercial  interests,  and  the  personal  association  of  the  stock- 
holders, will  generally  be  the  same,  in  the  State  banks  and  in  the  National 
Bank.  The  directors  of  both  institutions  will  naturally  be  taken  from  the 
same  class  of  citizens;  and  experience  has  shown,  not  only  the  policy,  but 
the  existence  of  those  sympathies,  by  which  the  intercourse  of  a  National  Bank 
and  the  State  banks  has  been,  and  always  ought  to  be,  regulated,  for  their  com- 
mon credit  and  security.  At  the  present  crisis,  it  will  be  peculiarly  incum- 
bent upon  the  National  Bank,  as  well  as  the  Treasury,  to  conciliate  the  State 
banks;  to  confide  to  them,  liberally,  a  participation  in  the  deposites  of  public 
revenue;  and  to  encourage  them,  in  every  reasonable  effort,  to  resume  the 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

payment  of  their  notes  in  coin.  But,  independent  of  these  considerations,  it 
is  to  be  recollected  that,  when  portions  of  the  capital  of  the  National  Bank 
shall  be  transferred  to  its  branches,  the  amount  invested  in  each  branch  will 
not,  probably,  exceed  the  amount  of  the  capital  of  any  of  the  principal  State 
banks;  and  will  certainly  be  less  than  the  amount  of  the  combined  capital  of 
the  State  banks,  operating  in  any  of  the  principal  commercial  cities.  The 
whole  number  of  the  banking  establishments  in  the  United  States  may  be 
stated  at  two  hundred  and  sixty;  and  the  aggregate  amount  of  their  capitals 
maybe  estimated  at  eighty-five  millions  ot  dollars;  but  the  services  of  the 
National  Bank  are  also  required  in  every  State  and  Territory,  and  the  capital 
proposed  is  thirty-five  millions  of  dollars,  of  which  only  one  fourth  part  will 
consist  of  gold  and  silver. 

2.  With  respect  to  the  composition  of  the  capital  of  the  bank.  There  does 
not  prevail  much  diversity  of  opinion  upon  the  proposition  to  form  a  compound 
capital  for  the  National  Bank,  partly  of  public  stock  and  partly  of  coin.  The 
proportions  now  suggested,  appear,  also,  to  be  free  from  any  important  objec- 
tions. Under  all  the  regulations  of  the  charter,  it  is  believed  that  the  amount 
of  gold  and  silver  required,  will  aftbrd  an  adequate  supply  for  commencing 
and  continuing  the  payments  of  the  bank  in  current  coin;  ^yhile  the  power 
which  the  bank  will  possess,  to  convert  its  stock  portion  of  capital  into  bullion 
or  coin,  from  time  to  time,  is  calculated  to  provide  for  any  probable  augmenta- 
tion of  the  demand.  This  object  being  sufficiently  secured,  the  capital  of  the 
bank  is  next  to  be  employed,  in  perfect  consistency  with  the  general  interests 
and  safety  of  the  institution,  to  raise  the  value  of  the  public  securities,  by  with- 
drawing almost  one  fifth  of  the  amount  from  the  ordinary  stock  market.  Nor 
will  the  bank  be  allowed  to  expose  the  public  to  the  danger  of  a  depreciation, 
by  returning  any  part  of  the  stock  to  the  market,  until  it  has  been  ottered,  at 
the  current  price,  to  the  commissioners  of  the  sinking  fund;  and  it  is  not  an 
inconsiderable  advantage,  in  the  growing  state  of  the  public  revenue,  that  the 
stock  subscribed  to  the  capital  of  the  bank,  will  become  redeemable  at  the 
pleasure  of  the  Government. 

The  subscription  to  the  capital  of  the  bank,  is  opened  to  every  species  of 
funded  stock.  The  estimate,  that  the  revenues  of  1816  and  1817  will  enable 
the  Treasury  to  discharge  the  whole  of  the  treasury  note  debt,  furnishes  tin- 
only  reason  for  omitting  to  authorise  a  subscription  in  that  species  of  debt. 
Thus— 

The  old  and  the  new  six  per  cent,  slocks  are  receivable  at  par. 

The  seven  per  cent,  stock,  upon  a  valuation  referring  to  the  30th  of  Septem- 
ber, 1816,  is  receivable  at  $106.51  per  cent. 

The  three  per  cent,  stock,  which  can  only  be  redeemed  for  its  nominal  or 
certificate  value,  may  be  estimated,  under  all  circumstances,  to  be  worth 
about  sixty -two  per  cent,  when  the  ^ix  per  cent,  stock  is  at  par;  but,  as  it  is 
desirable  to  accomplish  the  redemption  of  this  stock  upon  equitable  terms,  it 
is  made  receivable  at  sixty-five  per  cent,  the  rate  sanctioned  by  the  Govern- 
ment, and  in  part  accepted  by  the  stockholders,  in  the  year  1807. 

Of  the  instalments  for  paying  the  subscriptions,  it  is  only  necessary  to  ob- 
serve, that  they  are  regulated  by  a  desire  to  reconcile  an  early  commencement 
of  the  operations  of  the  bank,  with  the  existing  difficulties  in  the  currency,  and 
with  the  convenience  of  the  subscribers.  In  one  of  the  modes  proposed  for 
discharging  the  subscription  of  the  Government,  it  is  particularly  contem- 
plated to  aid  the  bank  with  a  medium  which  cannot  fail  to  alleviate  the  first 
pressure  for  payments  in  coin. 

II.  It  is  proposed  that  the  National  Bank  shall  be  governed  by  twenty-five 
directors,  and  each  of  its  branches  by  thirteen  directors;  that  the  President  of 
the  United  States,  with  the  advice  and  consent  of  the  Senate,  shall  appoint 
live  of  the  directors  of  the  bank,  one  of  whom  shall  be  chosen  as  President  of 
the  bank,  by  the  board  of  directors;  that  the  resident  stockholders  shall  elect 
twenty  of  the  directors  of  the  National  Bank,  who  shall  be  resident  citizens  of 
the  United  States;  and  that  the  National  Bank  shall  appoint  the  directors  of 
each  branch,  (bein^  resident  dti'/.eiiv  of  the  United  Stales)  one  of  whom  shall 


BANK  OF  THE  UNITED  STATES. 

be  designated  by  the  Secretary  of  the  Treasury,  with  the  approbation  of  the 
President  of  the  United  States,  to  be  President  of  the  branch  bank. 

The  participation  of  the  President  and  Senate  of  the  United  States,  in  the 
appointment  of  directors,  appears  to  be  the  only  feature  in  the  proposition  for 
the  government  of  the  National  Bank,  which  requires  an  explanatory  remark. 

Upon  general  principles,  wherever  a  pecuniary  interest  is  to  be  effected  by 
the  operations  of  a  public  institution,  a  representative  authority  ought  to  be 
recognised,  The  United  States  will  be  the  proprietors  of  one  fifth  of  the  ca- 
pital of  the  bank,  and  in  that  proportion,  upon  general  principles,  they  should 
be  represented  in  the  direction.  But  an  apprehension  has  sometimes  been  ex- 
pressed, lest  the  power  of  the  Government,  thus  inserted  into  the  administra- 
tion of  the  affairs  of  the  bank,  should  be  employed  eventually  to  alienate  the 
funds  and  destroy  the  credit  of  the  institution.  Whatever  may  have  been  the 
fate  of  banks  in  other  countries^  subject  to  forms  of  government  essentially 
different,  there  can  be  no  reasonable  cause  for  the  apprehension  here.  Inde- 
pendent of  the  obvious  improbability  of  the  attempt,  the  Government  of  the 
United  States  cannot,  by  any  legislative  or  executive  act,  impair  the  rights 
or  multiply  the  obligations  of  a  corporation,  constitutionally  established,  as 
long  as  the  independence  and  integrity  of  the  judicial  power  shall  be  main- 
tained. Whatever  accommodation  the  Treasury  may  have  occasion  to  ask 
from  the  bank,  can  only  be  asked  under  the  licence  of  a  law;  and  whatever 
accommodation  shall  be  obtained,  must  be  obtained  from  the  voluntary  assent 
of  the  directors,  acting  under  the  responsibility  of  their  trust. 

Nor  can  it  be  doubted  that  the  department  of  the  Government,  which  is  in- 
vested with  the  power  of  appointment  to  all  the  important  offices  of  the  state, 
is  a  proper  department  to  exercise  the  power  of  appointment  in  relation  to  a 
national  trust  of  incalculable  magnitude.  The  National  Bank  ought  not  to  be 
regarded  simply  as  a  commercial  bank.  It  will  not  operate  upon  the  funds 
of  the  stockholders  alone,  but  much  more  upon  the  funds  of  the  nation.  Its 
conduct,  good  or  bad,  will  not  affect  the  corporate  credit  and  resources  alone, 
but  much  more  the  credit  and  resources  of  the  Government.  In  fine,  it  is  not 
an  institution  created  for  the  purposes  of  commerce  and  profit  alone,  but  much 
more  for  the  purposes  of  national  policy,  as  an  auxiliary  in  the  exercise  of 
some  of  the  highest  powers  of  the  Government.  Under  such  circumstances, 
the  public  interests  cannot  be  too  cautiously  guarded,  arid  the  guards  pro- 
posed can  never  be  injurious  to  the  commercial  interests  of  the  institution. 
The  right  to  inspect  the  general  accounts  of  the  bank  may  be  employed  to 
detect  the  evils  of  a  mal -administration,  but  an  interior  agency  in  the  direc- 
tion of  its  affairs,  will  best  serve  to  prevent  them. 

III.  It  is  proposed  that,  in  addition  to  the  usual  privileges  of  a  corporation, 
the  notes  of  the  National  Bank  shall  be  received  in  all  payments  to  the  United 
States,  unless  Congress  shall  hereafter  otherwise  provide  by  law;  and  that, 
in  addition  to  the  duties  usually  required  from  a  corporation  of  this  descrip- 
tion, the  National  Bank  shall  be  employed  to  receive,  transfer,  and  distribute, 
the  public  revenue,  under  the  directions  of  the  proper  department. 

The  reservation  of  a  legislative  power  on  the  subject  of  accepting  the  notes 
of  the  National  Bank,  in  payments  to  the  Government,  is  the  only  new  stipu- 
lation in  the  present  proposition.  It  is  designed  not  merely  as  one  of  the  se- 
curities for  the  general  conduct  of  the  bank,  but  as  the  means  of  preserving 
entire  the  sovereign  authority  of  Congress,  relative  to  the  coin  and  currency 
of  the  United  States.  Recent  occurrences  inculcate  the  expediency  of  such 
a  reservation,  but  it  may  be  confidently  hoped  that  an  occasion  to  enforce  it 
will  never  arise. 

It  is  not  proposed  to  stipulate  that  the  bank  shall,  in  any  case,  be  bound 
to  make  loans  to  the  Government;  but,  in  that  respect,  whenever  a  loan  is 
authorized  by  law,  the  Government  will  act  upon  the  ordinary  footing  of  an 
applicant  for  pecuniary  accommodation. 

IV.  It  is  proposed  that  the  organization  of  the  National  Bank  shall  be 
effected  \yith  as  little  delay  as  possible;  and  that  its  operations  shall  commence 
and  continue,  upon  the  basis  of  payments  in  the  current  coin  of  the  United 


ON   THE  GRANT  OF  THE  C'HAKTKK  O*'   1816. 

State*,  \vith  a  qualified  power  under  the  authority  of  the  Government  to  sus- 
pend such  payments. 

The  proposition  now  submitted,  necessarily  implies  an  opinion  that  it  is 
practicable  to  commence  the  operations  of  the  National  Bank  upon  a  circula- 
tion of  gold  and  silver  coin;  and  in  support  of  the  opinion,  a  few  remarks  are 
respectfully  offered  to  the  consideration  of  the  committee. 

1.  The  actual  receipts  of  the  bank,  at  the  opening  of  the  subscription,  will 
amount  to  the  sum  of  $8,400,000;  of  which  the  sum  of  $1,400,000  will  consist 
of  gold  and  silver,  and  the  sum  of  $7,000,000  will  consist  of  public  stock,  con- 
vertible, by  sale,  into  gold  and  silver.  But  the  actual  receipts  of  the  bank, 
at  the  expiration  of  six  months  from  the  opening;  of  the  subscription,  will 
amount  to  the  sum  of  $16,800,000;  of  which  the  sum  of  $-2,800,000  will  be  in 

§old  and  silver,  and  the  sum  of  $14,000,000  will  be  in  public  stock,  converti- 
le  by  sale  into  gold  and  silver.  To  the  fund,  thus  possessed  by  the  bank, 
the  accumulations  of  the  public  revenue  and  the  deposites  of  individuals  being 
added,  there  can  be  little  doubt,  from  past  experience  and  observation  in  re- 
ference to  similar  establishments,  that  a  sufficient  foundation  will  exist  for  a 
gradual  and  judicious  issue  of  bank  notes,  payable  on  demand  in  current  coin; 
unless,  contrary  to  all  probability,  public  confidence  should  be  withheld  from 
the  institution:  or  sinister  combinations  Jiould  be  formed  to  defeat  its  opera- 
tions; or  the  demands  of  an  unfavorable  balance  of  trade  should  press  upon 
its  metallic  resources. 

4J.  The  public  confidence  cannot  be  withheld  from  the  institution.  The 
resources  of  the  nation  will  be  intimately  connected  with  the  resources  of 
the  bank.  The  notes  of  the  bank  arc  accredited  in  every  payment  to  the 
Government,  and  must  become  familiar  in  every  pecuniary  negotiation.  Un- 
less, therefore,  a  state  of  things  exist  in  which  gold  and  silver  only  can  com- 
mand the  public  confidence,  the  National  Bank  must  command  it.  But  the 
expression  of  the  public  sentiment  does  not,  even  at  this  period,  leave  the 
question  exposed  to  difficulty  and  doubt;  it  is  well  known,  that  the  wealth  of 
opulent  and  commercial  nations,  requires  for  its  circulation  something  more 
than  a  medium  composed  of  the  precious  metals.  The  incompetence  of  the 
existing  paper  substitutes,  to  furnish  a  national  currency,  is  also  well  known. 
Hence,  throughout  the  United  States,  the  public  hope  seems  to  rest,  at  this 
crisis,  upon  the  establishment  of  a  National  Bank;  and  every  citizen,  upon 
private  or  upon  patriotic  motives,  will  be  prepared  to  support  the  institution. 

3.  Sinister  combinations  to  defeat  the  operations  of  a  National  Bank,  ought 
not  to  be  presumed,  and  need  not  be  feared.     It  is  true,  that  the  influence  of 
the  State  banks  is  extensively  diffused;  but  the  State  banks,  and  the  patrons 
of  the  State  banks,  partake  of  the  existing  evils;  they  must  be  conscious  of 
the  inadequacy  of  State  institutions  to  restore  and  maintain  the  national  cur- 
rency; they  will  perceive  that  there  is  sufficient  space  in  the  commercial 
sphere,  for  the  movement  of  the  State  banks  and  the  National  Bank;  and, 
upon  the  whole,  they  will  be  ready  to  act  upon  the  impulse  of  a  common  duty, 
and  a  common  interest.    If,  however,  most  unexpectedly,  a  different  course 
should  be  pursued,  the  concurring  powers  of  the  National  Treasury  and  the 
National  Bank  will  be  sufficient  to  avert  the  danger. 

4.  The  demand  of  an  unfavorable  balance  ot  trade  apoears  to  be  much 
overrated.     It  is  not  practicable,  at  this  time,  to  ascertain  either  the  value,  of 
the  goods  imported  since  the  peace,  or  the  value  of  the  property  employed  to 
{>ay  for  them.     But  when  it  is  considered  that  a  great  proportion  of  the  im- 
portations arose  from  investments  of  American  funds  previously  in  Europe; 
that  a  great  proportion  of  the  price  has  been  paid  by  American  exports;  that 
a  great  proportion  has  been  paid  by  remittances  in  American  stocks;  and  that 
a  great  proportion  remains  upon  credit,  to  be  paid  by  gradual  remittances  cf 
goods,  as  well  as  in  coin;  it  cannot  be  justly  concluded,  that  the  balance  of 
trade  has  hitherto  materially  affected  the  national  stock  of  the  precious  metals. 
So  far  as  an  opportunity  has  occurred  for  observation,  the  demand  for  gold 
and  silver  to  export,  appears  rather  to  have  arisen  from  the  expectation  of  ob- 
taining a  higher  price  in  a  part  of  Europe,  and  from  the  revival  of  commerce 

78 


618  BANK  OF  THE  UNITED  STATES. 

with  the  countries  beyond  the  Cape  of  Good  Hope,  than  from  any  necessity 
to  provide  for  the  payment  of  the  recent  importations  of  goods  into  the  United 
States.  The  former  of  these  causes  will  probably  soon  cease  to  operate;  and 
the  operation  of  the  latter,  may,  if  necessary,  be  restrained  by  law. 

The  proposition  now  under  consideration  further  provides  for  a  suspension 
of  the  bank  payments  in  coin  upon  any  future  emergency.  This  is  merely  a 
matter  of  precaution;  but,  if  the  emergency  should  arise,  it  must  be  agreed 
on  all  hands  that  the  power  of  suspension  ought  rather  to  be  confided  to  the 
Government,  then  to  the  directors  of  this  institution. 

V.  It  is  proposed  that  a  bonus  be  paid  to  the  Government  by  the  subscribers 
to  the  National  Bank,  in  consideration  of  the  emoluments  to  be  derived  from 
an  exclusive  charter,  during  a  period  of  twenty  years. 

Independent  of  the  bonus,  here  proposed  to  be  exacted,  there  are  undoubt- 
edly many  public  advantages  to  be  drawn  from  the  establishment  of  the 
National  Bank;  but  these  are  generally  of  an  incidental  kind,  and  (as  in  the 
case  of  the  deposites  and  distribution  of  the  revenue)  may  be  regarded  in  the 
light  of  equivalents,  not  for  the  monopoly  of  the  charter,  but  for  the  reci- 
procal advantages  of  a  fiscal  connexion  with  the  public  treasury. 

The  amount  of  the  bonus  should  be  in  proportion  to  the  value  of  the  charter 
grant,  or,  in  other  words,  to  the  nett  profits  which  the  subscribers  will  pro- 
bably make,  in  consequence  of  their  incorporation.  The  average  rate  of  the 
dividends  of  the  State  banks,,  before  the  suspension  of  payments  in  coin,  was 
about  eight  per  cent,  per  annum.  It  appears  by  a  report  from  this  department 
to  the  House  of  Representatives,  dated  the  3d  of  April,  1810,  that  the  annual 
dividends  of  the  late  Bank  of  the  United  States  averaged,  throughout  the 
duration  of  its  charter,  the  rate  of  8  13-36  per  cent.  But,  under  all  the  circum- 
stances which  will  attend  the  establishment  and  operations  of  the  proposed 
National  Bank,  its  enlarged  capital,  and  the  extended  field  of  competition, 
it  is  not  deemed  reasonable,  for  the  present  purpose,  to  rate  the  annual  divi- 
dends of  the  institution  higher  than  seven  per  centum  upon  its  capital  of 
35, 000,000  of  dollars. 

Allowing,  therefore,  two,  three,  and  four  years  for  the  payment  of  the 
bonus,  a  sum  of  1,  500,000  dollars  would  amount  to  about  4  per  cent,  upon  the 
capital  of  the  bank;  and  would  constitute  a  just  equivalent  for  the  benefits  of 
its  charter. 

VI.  It  is  proposed  that  the  measures  suggested  by  the  following  considera- 
tions, be  adopted,  to  aid  the  National  Bank  in  commencing  and  maintaining, 
its  operations  upon  the  basis  of  payments  in  the  current  coin. 

1.  To  restore  the  national  currency  of  gold  and  silver,  it  is  essential  that  the 
quantity  of  bank  paper  in  circulation  should  be  reduced;  but  this  effort  alone 
will  be  sufficient  to  effect  the  object.    By  reducing  the  amount  of  bank  paper, 
its  value  must  be  proportionally  increased;  and  as  soon  as  the  amount  shall  be 
contracted  to  the  limits  of  a  just  proportion  in  the  circulating  medium  of  the 
country,  the  consequent  revival  of  the  uses  for  coin,  in  the  business  of  ex- 
change, will  ensure  its  re-appearance  in  abundance.     The  policy,  the  interest,, 
and  the  honor  of  the  State  banks,  will   stimulate  them  to  undertake  and  to 
prosecute  this  salutary  work.  But  it  will  be  proper  to  apprise  them  that,  after 
a  specified  day,  the  notes  of  such  banks  as  have  not  resumed  their  payments  in 
the  current  coin,  will  not  be  receive! I  in  payments,  either  to  the  Government 
or  to  the  National  Bank. 

2.  The  resumption  of  payments  in  current  coin,  at  the  State  banks,  will  re- 
move every  obstacle  to  the  commencement  of  similar  payments  at  the   Na- 
tional Bank.    The  difficulty  of  commencing  payments  in  coin  is  not,  how 
ever,  to  be  considered  as  equal  to  the  difficulty  of  resuming  them.    The  Na- 
tional Bank,  free   from  all  engagements,  will  be  able  to  regulate  its  issues  of 
paper,  with  a  view  to  the  danger  as  vyell  as  to  the  demand,  that  may  be  found 
to  exist.    But,  in  addition  to  the  privileges  granted  by  the  charter,  it  will  also 
be  proper  to  apprise  the  State  banks,  that,  after  the  commencement  of  the 
operations  of  the  National  Bank,  the  notes  of  such  banks  as  do  not  agree  to 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

receive,  re-issue,  and  circulate,  the   notes  of  that  institution,  shall  not  be  re- 
ceived in  payments  either  to  the  Government  or  to  the  National  Bank. 

3.  The  possibility  that  the  national  currency  of  coin  may  not  be  perfectly 
restored,  at  the  time  of  organizing  the  bank,  has  induced  the  proposition, 
that  the  payment  of  the  Government  subscription  to  the  capital  shall  be  made 
in  treasury  notes,  which  will  be  receivable  in  all  payments  to  the  Government, 
and  to  the  National  Bank,  but  which  will  not  be  demandablein  coin.  The 
principle  of  this  proposition  might  perhaps  be  usefully  extended,  to  authorize 
the  National  Bank  to  issue  notes  ot  a  similar  character,  for  a  limited  period; 
and  it  will  be  proper  further  to  apprise  the  State  banks  that  the  notes  of  sucn 
banks  as  do  not  agree  to_receive,  re-issue,  and  circulate,  these  treasury  notes, 
or  National  Bank  notes,  shall  not  be  received  in  payments,  either  to  the  Go- 
vernment or  to  the  National  Bank. 

I  have  the  honor  to  be,  &c. 

A.  J.  DALLAS. 

Hon.  JOHN  C.  CALHOUN-, 

Chairman  of  the  Committee  on  the  National  Currency. 

OUTLINE  OF  A  PLAN    FOR   THE   NATIONAL   BANK,  REFERRED  TO  IN 
THE  PRECEDING  LETTER. 

I.  The  Charier  of  the  Sank. 

1.  To  continue  twenty-one  years. 

2.  To  be  exclusive. 

II.  The  Capital  of  the  Sank. 

1.  To  be  $35,000,000,  at  present. 

2.  To  be  augmented  by  Congress  to  $50,000,000;  and  the  additional  sum  to 
be  distributed  among  the  several  States. 

3.  To  be  divided  into  350,000  shares,  of  100  dollars  each,  on  the  capital  of 
35.000,000;  and  to  be  subscribed, 

By  the  United  States,  one  fifth,  or  70,000  shares,         -        -       $7,000,000 
By  corporations  and  individuals,  four  fifths,  or  280,000  shares,      28,000,000 

$35,000,000 

4.  To  be  compounded  of  public  debt,  and  of  gold  and  silver,  as  to  the  sub- 
scriptions of  corporations  and  individuals,  in  the  proportions 

)f  funded  debt,  three-fourths,  equal  to  -        -•    $21,000,000 

Of  gold  and  silver,  one  fourth,  equal  to  -         7,000,000 

28,000,000 

The  subscriptions  of  6  per  cent,  stock  to  be  at  par. 

The  subscriptions  of  3  per  cent,  stock  to  be  at  56  percent. 

The  subscriptions  of  7  per  cent,  stock  to  be  at  106.51  per  cent. 

5.  The  subscriptions  in  public  debt  may  be  discharged  at  pleasure  by  the 
Government,  at  the  rate  at  which  it  is  subscribed. 

6.  The  subscriptions  of  corporations  or  individuals  to  be  payable  by  instal- 
ments. 

( 1 )  Specie,  at  subscribing, 

On  each  share,  five  dollars,  $1,400,000 

At  six  months,  five  dolllars,  -    1,400,000 

At  twelve  months,  five  dollars,    -  -        -     1,400,000 

At  eighteen  months,  ten  dollars,  -        -    2,800,000 

$7,000,000 


BANK  OF  THE  UNITED  STATES. 

(2)  Public  debt,  at  subscribing, 

Each  share,  twenty -five  dollars,  -  7,000,000 

At  six  months,  twenty  five  dollars,     -  -  7,000,000 

At  twelve  months,  twenty-five  dollars,  -        -        -  7,000,000 

$28,000,000 

7.  The  subscriptions  of  the  United  States  to  be  paid  in  instalments,  not  ex- 
tending beyond  a  period  of  seven  years;  the  first  instalment  to  be  paid  at  the 
time  ot  subscribing,  and  the  payments  to  be  made  at  the  pleasure  of  Govern- 
ment, either 

In  gold  and  silver;  or 

In  six  percent,  stock,  redeemable  at  the  pleasure  of  the  Government;  or 
In  treasury  notes,  not  fundable,  nor  bearing  interest,  nor  payable  at  a  par- 
ticular time,  but  receivable  in  all  payments  to  the  bank,  with  a  right,  on  the 
part  of  the  bank,  to  re-iss.ue  the  treasury  notes  so  paid,  from  time  to  time,  until 
they  are  discharged  by  payments  to  the  Government. 

8.  The  bank  shall  be  at  liberty  to  sell  the  stock  portion  of  its  capital,  to  ah 

amount  not  exceeding in  any  one  year;  but,  if  the  sales  are  intended  to 

be  effected  in  the  United  States,  notice  thereof  shall  be  given  to  the  Secretary 
of  the  Treasury,  that  the  commissioners  of  the  sinking  fund  may,  if  they  please, 
become  the  purchasers,  at  the  market  price,  not  exceeding  par. 

III.  The  Government  of  the  Bank. 

1.  The  bank  shall  be   established  at  Philadelphia,  with   power  to   erect 
branches,  or  to  employ  State  banks  as  branches  elsewhere. 

2.  There  shall  be  twenty  five  directors  for  the  bank   at  Philadelphia  and 
thirteen  directors  for  each  of  the  branches,  where  branches  are  erected,  with 
the  usual  description  and  number  of  officers. 

3.  The  President  of  the  United  States,  with  the  advice  and  consent  of  the 
Senate,  shall  annually  appoint  five  of  the   directors  of  the  bank  at  Philadel- 
phia. 

4.  The  qualified  stockholders  shall  annually  elect  twenty  of  the  directors  of 
the  bank  at  Philadelphia,  but  a  portion  of  the  directors  shall  be   changed  at 
every  annual  election,  upon  the  principle  of  rotation.   • 

5.  The  directors  of  the  bank  at  Philadelphia  shall,  annually,  at  their  first 
meeting  after  their  election,  choose  one  of  the  five  directors  appointed  by  the 
President  and  Senate  of  the  United   States  to  be  President  of  the  bank;  and 
the  President  of  the  bank  shall  always  be  re-  eligible  if  re-appointed. 

6.  The  directors  of  the  bank  at  Philadelphia  shall  annually  appoint  thirteen 
directors  for  each  of  the  branches,  where  branches  are  erected,  and  shall  trans- 
mit a  list  of  the  persons  appointed  to  the  Secretary  of  the  Treasury. 

7.  The  Secretary  of  the  Treasury,  with  the  approbation  of  the  President  of 
the  United  States,  shall  annually  designate,  from  the  list  of  the  branch  direc- 
tors, the  person  to  be  the  President  of  the  respective  branches. 

8.  None  but  resident  citizens  of  the  United  States  shall  be  directors  of  the 
Bank  or  its  branches. 

9.  The  stockholders  may  vote  for  directors  in  person  or  by  proxy;  but  no 
stockholder,  who  is  not  resident  within  the   United  States  at  the  time  of  elec- 
tion, shall  vote  by  proxy;  nor  shall   any  one  person  vote  as  proxy  a  greater 
number  of  votes  than  he  would  be  entitled  to  vote  in  his  own  right,  according 
to  a  scale  of  voting,  to  be  graduated  by  the  number  of  shares  which  the  voters, 
respectively,  hold. 

10.  The  Bank,  and   its  several  branches,  or  the  State  banks  employed  as 
branches,  shall  furnish  the  officer  at  the  head  of  the  Treasury  Department  with 
statements  of  their  officers,  in  such  form,  and  at  such   period,  as*&hall  be  re- 
quired. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1810. 

IV.  The  Privileges  and  Duties  of  the  Bank. 

1.  The  bank  shall   enjoy  the  usual  privileges,  and  be  subject  to  the  usual 
resstrictions  of  a  body  corporate  and  politic,  instituted  for  such  purposes,  and 
the  forgery  of  its  notes  shall  be  made  penal. 

2.  The  notes  of  the  bank  shall  be  receivable  in  all  payments  to  the  United 
States,  unless  Congress  shall  hereafter  otherwise  provide  by  law. 

3.  The  bank  and  its  branches,  and  State  banks  employed  as  branches,  shall 
give  the  necessary  aid  and  facility  to  the  Treasury  tor  transfering  the  public 
tunds  from  place  to  place,  and  for  making  payments  to  the  public  creditors; 
without  charging  commissions,  or  claiming  allowances  on  account  of  differences 
of  exchange,  &c- 

V.  The  Organization  and  Operation  of  the  Bank. 

1.  Subscriptions  to  be  opened  with  as  little  delay  as  possible,  and  at  as  few 
places  as  shall  be   deemed  just  and  convenient.     The  commissioners  may  be 
named  in  the  act,  or  appointed  by  the  President. 

2.  The  Bank  to  be  organized,  and  commence  its  operations  in  specie  as  soon 
as  the  sum  of  1,400,000  dollars  has  been  actually  received  from  the  subscribers, 
in  gold  and  silver. 

3.  The  Bank  shall  not  at  any  time  suspend  its  specie  payments,  unless  the 
same  shall  be  previously  authorized  by  Congress,  if  in  session,  or  by  the 
President  of  the  United  States,  if  Congress  be  not  in  session.     In  the  latter 
case,  the  suspension  shall  continue  for  six  weeks  after  the  meeting  of  Con- 
gress, and  no  longer,  unless  authorized  by  law. 

VI.  The  Bonus  for  the  Charter  of  the  Bank. 

The  subscribers  shall  pay  a  premium  to  the  Government  for  its  charter. 
Estimating  the  profits  of  the  bank  from  the  probable  advance  in  the  value  of  its 
stock,  and  the  result  of  its  business  when  in  full  operation,  at  seven  per  cent, 
a  bonus  of  1,500,000  dollars,  payable  in  equal  instalments  of  two,  three,  and 
tour  years  after  the  bank  commences  its  operations,  might,  under  all  circum- 
stances, be  considered  as  about  four  per  cent,  upon  its  capital,  and  would  con- 
tribute a  reasonable  premium. 

JANUARY  8,  1816. 

Mr.  CALHOUX,  from  the  committee  on  that  part  of  the  President's  message 
which  relates  to  an  uniform  national  currency,  reported  a  bill  *'  to  incorpo- 
rate the  subscribers  to  the  Bank  of  the  United  Slates;-'  which  was  read  the 
first  and  second  time,  and  committed  to  a  committee  of  the  whole  house. 

The  said  bill  is  as  follows: 

A  Bill  to  incorporate  the  Subscribers  to  the  Bank  of  the  United  States. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled.  That  a  Bank  of  the  United  States 
of  America  shall  be  established,  with  a  capital  of  thirty-five  millions  of  dollars, 
divided  into  three  hundred  and  fifty  thousand  shares,  of  one  hundred  dollars 
each  share;  but,  Congress  may,  at  any  time  hereafter,  augment  the  capital  of 
the  said  bank,  to  a  sum  not  exceeding  fifty  millions  of  dollars,  in  such  manner 
as  shall  be  by  law  provided.  Seventy  thousand  shares,  amounting  to  the  sum 
of  seven  millions  of  dollars,  part  of  the  capital  of  the  said  bank,  shall  be  sub- 
scribed, and  paid  for  by  the  United  States,  in  the  manner  hereinafter  speci- 
fied; and  two  hundred  and  eighty  thousand  shares,  amounting  to  the  sum  of 
twenty-eight  millions  of  dollars,  shall  be  subscribed  and  paid  for.  by  indi- 
viduals, companies,  or  corporations,  in  the  manner  hereinafter  specified. 

SEC.  2.  And  be  it  further  enacted,  That  subscriptions  for  the  sum  of  twen- 
ty eight  millions  of  dollars,  towards  constituting  the  capital  of  the  said  bank, 


§22  BANK   OF  THE    UNITED    STATES. 

shall  be  opened  on  the  first  Monday  in  June  next,  at  the  following  places, 
that  is  to  say:  at  Portsmouth,  in  the  State  of  New  Hampshire;  at  Boston,  in 
the  State  of  Massachusetts;  at  Providence,  in  the  State  of  Rhode  Island;  at 
New  Haven,  in  the  State  of  Connecticut;  at  Burlington,  in  the  State  of  Ver- 
mont; at  New  York,  in  the  State  of  New  York;  at  ,  in  the  State 

of  New  Jersey^  at  Philadelphia,  in  the  State  of  Pennsylvania;  at  Wilmington, 
in  the  State  ot  Delaware;  at  Baltimore,  in  the  State  of  Maryland;  at  Rich- 
mond, in  the  State  of  Virginia;  at  Lexington,  in  the  State  of  Kentucky;  at 

,in  the  State  of  Ohio;  at  Raleigh,  in  the  State   of  North  .Carolina; 

at  Nashville,  in  the  State  of  Tennessee;  at  Charleston,  in  the  State  of  South 
Carolina;  at  Augusta,  in  the  State  of  Georgia;  at  New  Orleans,  in  the  State 
of  Louisiana;  and  at  Washington,  in  the  District  of  Columbia.  And  the  said 
subscriptions  shall  be  opened  under  the  superintendence  of  three  commission- 
ers, to  be  appointed  at,  and  for,  each  of  the  said  places,  by  the  President  of 
the  United  States,  (who  is  hereby  authorized  to  make  such  appointments)  and 
shall  continue  open  every  day,  from  the  time  of  opening  the  same,  between 
the  hours  of  ten  o'clock  in  the  forenoon,  and  four  o'clock  in  the  afternoon, 
until  the  Saturday  following,  at  four  o'clock  in  the  afternoon,  when  the  same 
shall  be  closed;  and  immediately  thereafter,  the  commissioners,  or  any  two  of 
them,  at  the  respective  places  aforesaid,  shall  cause  two  transcripts  or  copies 
of  such  subscriptions  to  be  made,  one  of  which  they  shall  send  to  the  Secretary 
of  the  Treasury,  one  they  shall  retain,  and  the  original  they  shall  transmit, 
within  seven  d?;rs  from  the  closing  of  the  subscriptions  as  aforesaid,  to  the 
commissioners  at  Philadelphia  aforesaid.  And  on  the  receipt  of  the  said  ori- 
ginal subscriptions,  or  of  either  of  the  said  copies  thereof,  if  the  original  be  lost, 
mislaid,  or  detained,  the  commissioners  at  Philadelphia  aforesaid,  or  a  majo- 
rity of  them,  shall  immediately  thereafter  convene,  and  proceed  to  take  an  ac- 
count of  the  said  subscriptions.  And  if  more  than  the  amount  of  twenty-eight 
millions  of  dollars  shall  have  been  subscribed,  then  the  said  last  mentioned 
commissioners  shall  apportion  the  same  among  the  several  subscribers,  accord- 
ing to  their  several  respective  subscriptions,  allowing  and  apportioning  to 
each  subscriber,  at  least  one  share.  And  in  case  the  aggregate  amount  of  the 
said  subscriptions  shall  exceed  twenty-eight  millions  ot  dollars,  the  said  last 
mentioned  commissioners,  after  having  apportioned  the  same  as  aforesaid, 
shall  cause  lists  of  the  said  apportioned  subscriptions  to  be  made  out,  including 
in  each  list  the  apportioned  subscription  for  the  place  where  the  original  sub- 
scription was  made,  one  of  which  lists  they  shall  transmit  to  the  commission- 
ers, or  one  of  them,  under  whose  superintendence  such  subscriptions  were 
originally  made,  that  the  subscribers  may  thereby  ascertain  the  number  of 
shares  to  them  respectively  apportioned  as  aforesaid.  And  in  case  the  aggre- 
gate amount  of  the  said  subscriptions  made,  during  the  period  aforesaid,  at  all 
the  places  aforesaid,  shall  not  amount  to  twenty-eight  millions  of  dollars,  the 
subscriptions  to  complete  the  said  sum  shall  be  and  remain  open  at  Philadel- 
phia aforesaid,  under  the  superintendence  of  the  commissioners  appointed  for 
that  place;  and  the  subscriptions  may  be  then  made  by  any  individual,  compa- 
ny, or  corporation,  for  any  number  of  shares,  not  exceeding  in  the  whole  the 
amount  required  to  complete  the  said  sum  of  twenty-eight  millions  of  dollars. 
SEC.  3.  And  be  it  further  enacted,  That  it  shall  be  lawful  for  any  indi- 
vidual, company,  or  corporation,  when  the  subscriptions  shall  be"  opened,  as 
hereinbefore  directed,  to  subscribe  for  any  number  <of  shares  of  the  capital  of 
the  said  bank,  not  exceeding  three  thousand  shares|and  the  sums  so  subscrib- 
ed shall  be  payable,  andfpaid  in  the  manner  following,  that  is  to  say:  seven 
millions  of  dollars  thereof  in  gold  or  silver  coin,  of  the  United  States,  or  in  fo- 
reign gold  or  silver  coin,  at  the  value  thereof,  as  heretofore  established  by  an 
act,  entitled  "  An  act  regulating  the  currency  of  foreign  coins,"  passed  the 
tenth  day  of  April,  in  the  year  one  thousand  eighthundred  and  six;  and  twen- 
ty-one millions  of  dollars  thereof  in  like  gold  or  silver  coin,  or  in  the  funded 
debt  of  the  United  States,  contracted  at  the  time  of  the  subscriptions  respect- 
ively. And  the  payments  made  in  the  funded  debt  of  the  United  States  shall 
,be  paid  and  received  at  the  following  rates,  that  is  to  say  :  the  funded  debt, 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

bearing  an  interest  of  six  per  centum  per  annum,  at  the  nominal  or  par  value 
thereof;  the  funded  debt  bearing  an  interest  of  three  per  centum  per  annum,  at 
the  rate  of  sixty-five  dollars  for  every  sum  of  one  hundred  dollars  ot  the  no- 
minal amount  thereof;  and  the  funded  debt,  bearing  an  interest  of  seven  per 
centum  per  annum,  at  the  rate  of  one  hundred  and  six  dollars  and  fifty-one 
cents,  fur  every  sum  of  one  hundred  dollars  of  the  nominal  amount  thereof; 
together  with  the  amount  of  the  interest  accrued  on  the  said  several  denomina- 
tions of  funded  debt,  to  be  computed  and  allowed  to  the  time  of  subscribing 
the  same  to  the  capital  of  the  said  bank  as  aforesaid.  And  the  payments  of 
the  said  subscriptions  shall  be  made  and  completed  by  the  subscribers,  re- 
spectively, at  the  times  and  in  the  manner  following,  that  is  to  say:  at  the 
tune  of  subscribing,  there  shall  be  paid  five  dollars  on  each  share,  in  gold  or 
silver  coin  as  aforesaid,  and  twenty-five  dollars  more,  in  coin  as  aforesaid,  or 
in  funded  debt  as  aforesaid;  at  the  expiration  of  six  calendar  months  after  the 
time  of  subscribing,  there  shall  be  paid  the  further  sum  of  five  dollars  on  each 
share,  in  gold  or  silver  coin  as  aforesaid,  and  twenty-five  dollars  more,  in  coin 
as  aforesaid,  or  in  funded  debt  as  aforesaid;  at  the  expiration  of  twelve  calen- 
dar months  from  the  time  of  subscribing,  there  shall  be  paid  the  further  sum 
of  five  dollars  on  each  share,  in  gold  or  silver  coin  as  aforesaid,  and  twenty- 
five  dollars  more,  in  coin  as  aforesaid,  or  in  funded  debt  as  aforesaid;  and  at 
the  expiration  of  eighteen  calendar  months,  there  shall  be  paid  the  further 
sum  ot  ten  dollars  in  gold  or  silver  coin  as  aforesaid. 

SEC.  4.  find  be  it  further  enacted,  That,  at  the  time  of  subscribing  to  the 
capital  of  the  said  bank  as  aforesaid,  each  and  every  subscriber  shalldeliver 
to  the  commissioners,  at  the  place  of  subscribing,  as  well  the  amount  of  their 
subscriptions,  respectively,  in  coin  as  aforesaid,  as  the  certificates  of  funded 
debt,  for  the  funded  debt  proportion  of  their  respective  subscriptions,  together 
with  a  power  of  attorney,  authorizing  the  said  commissioners,  or  a  majority 
of  them,  to  transfer  the  said  stock  in  due  form  of  law,  to  '4  the  president,  di- 
rectors and  company,  of  the  Bank  of  the  United  States  of  America,"  as  soon 
as  the  said  bank  shall  be  organized.  Provided,  always,  That  if,  in  conse- 
quence of  the  apportionment  ot  the  shares  in  the  capital  of  the  said  bank  among 
the  subscribers,  in  the  case,  and  in  the  manner  hereinbefore  provided,  any 
subscriber  shall  have  delivered  to  the  commissioners,  at  the  time  of  subscribing, 
a  greater  amount  of  gold  or  silver  coin  and  funded  debt,  than  shall  be  neces- 
sary to  complete  the  payments  for  the  share  or  shares  to  such  subscribers,  ap- 
portioned as  aforesaid,  the  commissioners  shall  only  retain  so  much  of  the  said 
gold  or  silver  coin,  and  funded  debt,  as  shall  be  necessary  to  complete  such 
payments,  and  shall  forthwith  return  the  surplus  thereof,  on  application  for 
the  same,  to  the  subscribers  lawfully  entitled  thereto.  And  the  commission- 
ers, respectively,  shall  deposite  the  gold  and  silver  coin,  and  certificates  of 
public  debt,  by  them  respectively  received  as  aforesaid,  from  the  subscribers 
to  the  capital  of  the  said  bank,  in  some  place  of  secure  and  safe  keeping,  so 
that  the  same  may,  and  shall  be  specifically  delivered  and  transferred,  as  the 
same  were  by  them  respectively  received,  to  the  president,  directors,  and 
company  of  the  Bank  ot  the  United  States  of  America,  or  to  their  order,  as 
soon  as  shall  be  required  after  the  organization  of  the  said  bank.  And  the  said 
commissioners  appointed  to  superintend  the  subscriptions  to  the  capital  of  the 
said  bank  as  aforesaid,  shall  receive  a  reasonable  compensation  for  their  ser- 
vices, respectively,  and  shall  be  allowed  all  reasonable  charges  and  expenses 
incurred  in  the  execution  of  their  trust,  to  be  paid  by  the  president,  directors, 
and  company,  of  the  bank,  out  of  the  funds  thereof. 

SEC.  5.  And  be  it  further  enacted,  That  it  shall  be  lawful  for  the  United 
States  to  pay,  and  redeem  the  funded  debt  subscribed  to  the  capital  of  the  said 
bank,  at  the  rates  aforesaid,  in  such  sums,  and  at  such  times  as  shall  be  deemed 
expedient,  any  thing  in  any  act  or  acts  of  Congress  to  the  contrary  thereof 
notwithstanding.  And  it  shall  also  be  lawful  for  the  president,  directors,  and 
company,  of  the  said  bank,  to  sell  and  transfer,  for  gold  and  silver  coin  or  bul- 
lion, the  funded  debt  subscribed  to  the  capital  of  the  said  bank  as  aforesaid- 
Provided,  always*  That  they  shall  not  sell  more  thereof  than  the  sum  of  two 


624  BANK  °F  THE  UNITED  STATES. 

millions  of  dollars  in  any  one  year;  nor  sell  any  part  thereof,  at  any  time,  within 
the  United  States,  without  previously  giving  notice  of  their  intention,  to  the 
Secretary  of  the  Treasury,  and  offering  the  same  to  the  United  States  at  the 
current  price,  not  exceeding  the  rates  aforesaid. 

SEC.  6.  And  be  it  further  enacted,  That,  at  the  opening"of  the  subscription 
to  the  capital  stock  of  the  said  bank,  the  Secretary  of  the  Treasury  shall  sub 
scribe,  or  cause  to  be  subscribed,  on  behalf  of  the  United  States,  the  said 
number  of  seven  thousand  shares,  amounting  to  seven  millions  of  dollars,  as 
aforesaid,  to  be  paid  in  gold  or  silver  coin,  or  treasury  notes,  or  in  stock  of 
the  United  States,  bearing  interest  at  the  rate  of  six  per  centum  per  annum, 
in  seven  equal  annual  payments  of  one  million  of  dollars  each,  the  first  whereof 
shall  be  made  at,  or  as  nearly  as  conveniently  may  be  after,  the  opening  of  the 
said  subscriptions:  Provided,  always,  Thai  it  shall  be  lawful  for  the  Secretary 
of  the  Treasury,  with  the  approbation  of  the  President  of  the  United  States, 
and  the  consent  of  the  president,  directors,  and  company  of  the  said  bank,  to 
anticipate  and  pay  in  advance,  all  or  any  of  the  said  annual  payments,  at  such 
times,  and  in  such  manner,  as  shall  be  mutually  stipulated  and  agreed. 

SEC.  7.  And  be  it  further  enacted,  That  the  Secretary  of  the  Treasury, 
\yith  the  approbation  of  the  President  of  the  United  States,  shall,  from  time  to 
time,  select  and  designate  the  mode  of  paying  for  the  said  subscription  of  the 
United  States,  to  the  capital  of  the  said  bank  as  aforesaid.  And  if  payment 
thereof,  or  of  any  part  thereof,  be  made  in  public  stock,  bearing  interest  at  the 
rate  of  six  per  centum  per  annum,  as  aforesaid,  the  said  interest  shall  be  pay- 
able quarterly,  to  commence  from  the  time  of  making  such  payment  on  ac- 
count of  the  said  subscriptions,  and  the  principal  of  the  said  stock  shall  be 
redeemable  in  any  sums,  and  at  any  periods  which  the  Government  shall  deem 
fit.  And  the  Secretary  of  the  Treasury  shall,  from  time  to  time,  cause  the 
certificates  of  such  public  stock  to  be  prepared,  and  made  in  the  usual  form, 
and  shall  pay  and  deliver  the  same  to  the  president,  directors,  and  company, 
of  the  said  bank,  at,  or  as  soon  as  conveniently  may  be  after,  the  time  and 
times,  hereinbefore  prescribed  for  the  payment  of  the  said  subscription  of  the 
United  States,  to  the  capital  of  the  said  bank  as  aforesaid;  or  at  such  other 
time  and  times  as  may  be  agreed  upon  in  pursuance  of  the  authority  herein- 
before given,  to  anticipate  the  payments  of  the  said  subscription  as  aforesaid, 
And  if  payment  of  the  said  subscription  of  the  United  States  to  the  capital 
of  the  saia  bank  as  aforesaid,  or  of  any  part  thereof,  shall  be  made  in  treasury 
notes,  such  treasury  notes  shall  not  bear  interest,  but  shall  pass  by  endorse- 
ment, or  by  delivery,  for  such  sum,  to  be  specified  on  the  face  thereof,  respect- 
ively, as  the  Secretary  of  the  Treasury,  with  the  approbation  of  the  President 
of  the  United  States,  shall  direct;  and  shall  be  receivable  in  all  payments  to 
the  United  States,  and  in  all  payments  to  the  president,  directors,  and  com- 
pany, of  the  said  bank.  And  the  Secretary  of\the  Treasury  shall,  from  time 
to  time,  cause  the  said  treasury  notes  to  be  prepared,  and  shall  pay  and  deli- 
ver the  same  to  the  president,  directors,  and  company,  of  the  said  Dank,  at,  or 
as  soon  as  conveniently  may  be  after,  the  time  and  times  hereinbefore  pre- 
scribed, for  the  payment  of  the  said  subscription  of  the  United  States,  to  the 
capital  of  the  said  bank  as  aforesaid;  or  at  such  other  time  and  times  as  may 
be  agreed  upon,  in  pursuance  of  the  authority  hereinbefore  given,  to  anticipate 
the  payments  of  the  said  subscription  as  aforesaid.  And  it  shall  be  lawful 
for  the  Secretary  of  the  Treasury,  or  for  the  president,  directors,  and  com- 
pany, of  the  said  bank,  to  issue,  and  re -issue,  at  their  par  value,  such  of  the  said 
treasury  notes  as  shall  be  received  in  payments  by  the  United  States,  or  by 
the.  said  bank,  respectively,  as  aforesaicl:  Provided,  always,  That  the  United 
States  may  at  any  time  redeem  arid  cancel  the  said  treasury  notes,  or  any 
part  thereof,  while  the  same  shall  be  in  the  possession  of  the  said  bank  as  the 
property  thereof:  And  provided,  aho,  That  it  shall  be  the  duty  of  the  Secre- 
tary of  the  Treasury,  out  of  the  said  treasury  notes  received  in  payments  to 
the  United  States,  as  aforesaid,  to  cause  a  portion  thereof  to  be  cancelled 
yearly,  and  every  year,  so  that  the  whole  amount  issued  may  be  redeemed 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

and  cancelled  on  or  before  the  expiration  of  eight  years  from  the  time  of  open- 
ing the  subscription  to  the  capital  of  the  said  bank  as  aforesaid. 

SEC.  8.  And  be,  it  further  enacted,  That,  if  any  person  shall  falsely  make, 
forge,  or  counterfeit,  or  cause  or  procure  to  be  falsely  made,  forged,  or  coun- 
terfeited, or  willingly  aid  or  assist  in  falsely  making,  forging,  or  counterfeit- 
ing, any  note  in  imitation  of,  or  purporting  to  be  a  treasury  note  as  aforesaid; 
or  shall  falsely  alter,  or  cause  or  procure  to  be  falsely  altered,  or  willingly 
aid  or  assist  in  falsely  altering,  any  treasury  note  issued  as  aforesaid;  or  shall 
pass,  utter,  or  publish  as  true,  any  false,  forged,  or  counterfeit  note,  purporting 
to  be  a  treasury  note  as  aforesaid,  knowing  the  same  to  be  falsely  made,  forged, 
or  counterfeited;  or  shall  pas<=,  utter,  or  publish,  or  attempt  to  pass,  utter,  or 
publish  as  true,  any  falsely  altered  treasury  note  issued  as  aforesaid,  know- 
ing the  same  to  be  falsely  altered;  or  shall  be,  directly  or  indirectly,  knowing- 
ly concerned  in  any  of  the  offences  aforesaid,  every  such  person  shall  be 
deemed  and  adjudged  guilty  of  felony;  and  being  thereof  convicted  by  due 
course  of  law,  shall  be  sentenced  to  be  imprisoned,  and  kept  to  hard  labor, 
for  a  period  not  less  than  three  years,  nor  more  than  ten  years,  and  be  fined 
in  a  sum  not  exceeding  five  thousand  dollars. 

SEC.  9.  Jind  be  it  further  enacted*  That  the  subscribers  to  the  said  Bank  of 
the  United  States  of  America,  their  successors  and  assigns,  shall  be,  and  are 
hereby,  created  a  corporation  and  body  politic,  by  the  name  and  style  of 
44  The^President,  Directors,  and  Company,  of  the  Bank  of  the  United  States," 
and  shall  so  continue  until  the  third  day  of  March,  in  the  year  one  thousand 
eight  hundred  and  thirty-six,  and  by  that  name  shall  be,  and  are  hereby,  made 
able  and  capable,  in  law,  to  have,  purchase,  receive,  possess,  enjoy,  and  re- 
tain, to  them  and  their  successors,  lands,  rents,  tenements,  hereditaments, 
goods,  chattels,  and  effects,  of  whatsoever  kind,  nature,  and  quality,  to  an 
amount  not  exceeding,  in  the  whole,  fifty-live  millions  of  dollars,  including 
the  amount  of  the  capital  stock  aforesaid;  and  the  same  to  sell,  grant,  demise, 
alien,  or  dispose  of;  to  sue  and  be  sued,  plead  and  be  impleaded,  answer  and 
be  answered,  defend  and  be  defended,  in  all  courts  and  places  whatsoever; 
and  also  to  make,  have,  and  use  a  common  seal,  and  the  same  to  break,  alter, 
and  renew,  at  their  pleasure;  and  also  to  ordain,  establish,  and  put  in  execu- 
tion, such  by-lavys,  arid  ordinances,  and  regulations,  as  they  shall  deem  neces- 
sary and  convenient  for  the  government  ot  the  said  corporation,  not  being  con- 
trary to  the  constitution  and  laws  of  the  United  States:  and  generally  to  do 
and  execute  all  and  singular  the  acts,  matters,  and  things,  Which  to  them  it 
shall  or  may  appertain  to  do;  subject,  nevertheless,  to  the  rules,  regulations, 
restrictions,  limitations,  and  provisions,  hereinafter  prescribed  and  declared. 

SEC.  10.  Jind  be  it  further  enacted,  That,  for  the  management  of  the  affairs 
of  the  said  corporation,  there  shall  be  twenty-five  directors,  five  of  whom 
shall  be  annually  appointed  by  the  President  of  the  United  States,  by  and 
with  the  advice  and  consent  of  the  Senate,  and  twenty  of  whom  shall  be  an- 
nually elected  at  the  banking  house  in  the  city  of  Philadelphia,  on  the  first 
Monday  of  January,  in  each  year,  by  the  qualified  stockholders  of  the  capital 
of  the  said  bank,  and  by  a  plurality  of  votes  then  and  there  actually  given, 
according  to  the  scale  of  voting  hereinafter  prescribed.  And  the  directors,  so 
duly  appointed  and  elected,  shall  be  capable  of  serving,  by  virtue  of  such  ap- 
pointment and  choice,  from  the  first  Monday  in  the  month  of  January,  of  each 
year,  until  the  end  and  expiration  of  the  first  Monday  in  the  month  of  January 
of  the  year  next  ensuing  the  time  of  each  annual  election  to  be  held  by  the 
stockholders  as  aforesaid.  And  the  board  of  directors,  annually,  at  the  first 
meeting  after  their  election  in  each  and  every  year,  shall  proceed  to  elect  one 
of  the  five  directors  appointed  by  the  President  of  the  United  States,  to  be 
president  of  the  corporation,  who  shall  hold  the  said  office  during  the  same 
period  for  which  the  directors  are  appointed  and  elected  as  aforesaid:  Pro- 
vided, always,  That  the  first  appointment  and  election  of  the  directors  and  pre  - 
sident  of  the  said  bank  shall  be  at  the  time  and  for  the  period  hereinafter  de- 
clared: Jind  provided,  aho.  That,  in  case  it  should  at  any  time  happen  that  an 
appointment  or  election  ot  directors,  or  an  election  of  the  president  of  the 
79 


626  BANK  OF  THR  UNITED  STATES. 

said  bank,  should  not  be  so  made  as  to  take  effect  on  any  day  when,  in  pur- 
suance of  this  act,  they  ought  to  take  effect,  the  said  corporation  shall  not,  for 
that  cause,  be  deemed  to  be  dissolved:  but  it  shall  be  lawful,  at  any  other 
time,  to  make  such  appointments,  and  to  hold  such  elections;  (as  the  case 
may  be)  and  the  manner  of  holding  the  elections  shall  be  regulated  by  the  by- 
laws and  ordinances  of  the  said  corporation;  and  until  such  appointments  or 
elections  be  made,  the  directors  and  president  of  the  said  bank,  for  the  time 
being,  shall  continue  in  office:  And  provided,  also,  That,  in  case  of  the  death, 
resignation,  or  removal,  of  the  president  of  the  said  corporation,  the  directors 
shall  proceed  to  elect  another  president  from  the  directors  appointed  by  the 
President  of  the  United  States  as  aforesaid;  and  incase  of  the  death,  resigna- 
tion, or  absence  from  the  United  States,  or  removal,  of  a  director  from  office, 
the  vacancy  shall  be  supplied  by  the  President  of  the  United  States,  or  by  the 
stockholders,  as  the  case  may  be.  But  the  President  of  the  United  States 
alone  shall  have  power  to  remove  the  president  of  the  bank,  or  any  of  the  di- 
rectors appointed  by  him  as  aforesaid. 

SEC.  11.  find  be  it  further  enacted, ,  That,  as  soon  as  the  sum  of  eight  mil- 
lions four  hundred  thousand  dollars,  in  gold  and  silver  coin,  and  in  the  pub- 
lic debt,  shall  have  been  actually  received  on  account  of  the  subscriptions  to 
the  capital  of  the  said  bank,  (exclusively  of  the  subscription  aforesaid,  on  the 
part  ot  the  United  States)  notice  thereof  shall  be  given  by  the  persons  under 
whose  superintendence  the  subscriptions  shall  have  been  made  at  the  city  of 
Philadelphia,  in  at  least  two  newspapers  printed  in  each  of  the  places,  (if  so 
many  be  printed  at  such  places  respectively)  where  subscriptions  shall  have 
been  made,  and  the  said  persons  shall,  at  the  same  time,  and  in  like  mariner, 
notify  a  time  and  place  within  the  said  city  of  Philadelphia,  at  the  distance  of 
at  least  thirty  days  from  the  time  of  such  notification,  for  proceeding  to  the 
election  of  twenty  directors  as  aforesaid,  and  it  shall  be  lawful  for  such  elec- 
tion to  be  then  and  there  made.  And  the  President  of  the  United  States  is 
hereby  authorized,  during  the  present  session  of  Congress,  to  nominate,  and, 
by  and  with  the  advice  and  consent  of  the  Senate,  to  appoint,  five  directors  of 
the  said  bank;  and  the  persons  who  shall  be  elected  and  appointed  as  afore- 
said, shall  be  the  first  directors  of  the  said  bank,  and  shall  proceed  to  elect 
one  of  the  five  directors  appointed  by  the  President  of  the  United  States  as 
aforesaid,  to  be  president  of  the  said  bank;  and  the  directors  and  president 
of  the  said  bank,  so  appointed  and  elected  as  aforesaid,  shall  be  capable  of 
serving  in  their  respective  office,  by  virtue  thereof,  until  the  end  and  expira- 
tion of  the  first  Monday  of  the  month  of  January  next  ensuing  the  said  ap- 
pointments and  elections;  and  they  shall  then  and  thenceforth  commence  and 
continue  the  operations  of  the  said  bank,  at  the  city  of  Philadelphia. 

SEC.  12.  And  be  it  further  enacted,  That  the  directors  for  the  time  being 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants  under  them,  as 
shall  be  necessary  for  executing  the  business  of  the  said  corporation,  and  to 
allow  them  such  compensation  for  their  services,  respectively,  as  shall  be  rea- 
sonable; and  shall  be  capable  of  exercising  such  other  powers  and  authorities, 
for  the  well  governing  and  ordering  of  the  officers  of  the  said  corporation,  as 
shall  be  prescribed,  fixed,  and  determined,  by  the  laws,  regulations,  and  ordi- 
nances, of  the  same. 

SEC.  13.  Jind  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form  and  be  fundamental  articles  of  the  con- 
stitution of  the  said  corporation,  to  wit: 

1.  The  number  of  votes  to  which  the  stockholders  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  number  of  shares  he,  she,  or  they, 
respectively,  shall  hold,  in  the  proportions  following,  that  is  to  say:  for  one 
share,  and  not  more  than  two  shares,  one  votej  for  every  two  shares  above 
two,  and  not  exceeding  ten,  one  vote;  for  every  lour  shares  above  ten,  and  not 
exceeding  thirty,  one  vote;  for  every  six  shares  above  thirty,  and  not  exceed- 
ing sixty,  one  vote;  for  every  eight  shares  above  sixty,  and  not  exceeding  one 
hundred,  one  vote;  and  for  every  ten  shares  above  one  hundred,  one  vote; 
but  no  person,  co-partner?hip,  or  body  politic,  «hall  be  entitled  to  a  greater 


ON  THE  GRANT  OF  THE  CHARTER  OF  1810.         597 

number  than  thirty  votes;  and  alter  the  first  election,  no  share  or  .shares  ?%hall 
confer  a  right  of  voting,  which  shall  not  have  been  holiicn  three  calendar 
months  previous  to  the  (lay  of  election.  And  stockholders  actually  resident 
within  the  United  States,  and  none  other,  may  vote  in  elections  by  proxy. 
But  no  person  shall  give,  in  the  whole,  a  greater  number  of  votes,  as  proxy, 
and  in  his  own  right,  than  he  would  be  entitled  to  give  in  his  own  right  only, 
according  to  the  proportion  of  voting  hereinafter  prescribed. 

2.  Not  more  than  three-fourths  of  the  directors  elected  by  the  stockhold- 
ers, and  not  more  than  four-fifths  of  the  directors  appointed  by  the  President 
of  the  United  States,  who  shall  be  in  office  at  the  time  of  an  annual  election, 
shall  be  elected  or  appointed  for  the  next  succeeding  year;  but  the  director 
who  shall  be  the  president  at  the  time  of  an  election  may  always  be  re-appoint- 
ed by  the  President  of  the  United  States,  and  be  re-elected  president  of  the 
bank  by  the  directors  thereof. 

3.  None  but  a  resident  citizen  of  the  United  States  shall  be  a  director;  nor 
shall  a  director  be  entitled  to  any  emolument;  but  the  stockholders  may  make 
such  compensation  to  the  president,  for  his  extraordinary  attendance  at  the 
bank,  as  shall  appear  to  them  reasonable. 

1.  Not  less  than  seven  directors  shall  constitute  a  board  for  the  transaction 
of  business,  of  whom  the  president  shall  always  be  one,  except  in  case  of  sick- 
ness or  necessary  absence;  in  which  ca*e  his  place  may  be  supplied  by  any 
other  director  whom  he,  by  writing,  under  his  hand,  shall  depute  for  that 
purpose.  And  the  director  so  deputed  may  do  and  transact  all  the  ner 
rv  business  belonging  to  the  office  of  the.  president  <>f  the  said  corporation, 
(luring  the  continuance  of  the  sickness  or  necessary  absence  of  the  president. 

o.  A  number  of  stockholders,  not  less  than  sixty?  who,  together,  shall  he 
proprietors  of  one  thousand  shares  or  upwards,  *\]'A\\  have  power  at  any  time 
to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the  in- 
stitution, giving  at  least  ten  weeks' notice  in  two  public  newspapers  of  the 
place  where  the  bank  is  seated,  and  specifying  in  such  notice  the  objector 
objects  of  such  meeting. 

6.  Each  cashier  or  treasurer,  before  he  enters  upon  the  duties  of  his  office, 
shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the.  satisfaction  of 
the  directors,  in  a  sum  not  less  than   fifty  thousand  dollars,  with  a  condition 
for  his  good  behavior,  and  the  faithful  performance  of  his  duties  to  the  cor- 
poration. 

7.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  lawful  for 
the  said  corporation  to  hold,  shall  be  only  such   as  shall  be  requisite   lor  its 
immediate  accommodation  in  relation  to  the  convenient  transacting  of  its  bu- 
siness, and  such  as  shall  have  been  bona  Jlde  mortgaged  to  it  by  way  of  secu  • 
rity,  or  conveyed  to  it  in   satisfaction  of  debts  previously  contracted  in  the 
course  of  its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall 
have  been  obtained  for  such  debts. 

8.  The  total  amount  of  debts  which  the  said  corporation  shall  at  any  time 
owe,  whether  by  bond,  bill,  note,  or  other  contract,  over  and  above  the  debt 
or  debts  due  for  money  deposited  in  the  bank,  shall  not  exceed  the  sum  of 
fifty  millions  of  dollars,  unless  the  contracting  of  any  greater  debt  shall  have 
been  previously  authorized  by  a  law  of  the  United  States.     In  case  of  excess, 
the  directors  under  whose  administration  it  shall   happen,  shall  be  liable  for 
the  same  in  their  natural  and  private  capacities;  and  an  action  of  debt  may 
in  such  case  be  brought  against  them,  or  any  of  them,  their  or  any  of  their 
heirs,  executors,  or  administrators,  in  any  court  of  record  of  the  United  States, 
or  either  of  them,  by  any  creditor  or  creditors  of  the  said  corporation,  and 
may  be  prosecuted   to  judgment  and  execution,  any  condition,  covenant,  or 
agreement,  to  the  contrary  notwithstanding.     But  this  provision  shall  not  be 
construed  to  exempt  the  said   corporation,  or  the  lands,  tenements,  goods,  or 
chattels  of  the  same,  from  being  also  liable  for,  and  chargeable  with,  the  said 
excess. 

Such  of  the  said  directors,  who  may  have  been  absent  M  hen  the  said  ex- 
cess was  contracted  or  created,  or  who  may  have  dissented  from  the  resolu- 


628  BANK  OF  THE  UNITED  STATES. 

tion  or  act  whereby  the  same  was  so  contracted  or  created,  may  respectively 
exonerate  themselves  from  being  so  liable,  by  forthwith  giving  notice  of  the 
fact,  and  of  their  absence  or  dissent,  to  the  President  of  "the  United  States, 
and  to  the  stockholders,  at  a  general  meeting,  which  they  shall  have  power  to 
call  for  that  purpose. 

9.  The  said  corporation  shall  not,  directly  or  indirectly,  deal  or  trade  in 
any  thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  of  goods 
really  arid  truly  pledged  for  money  lent  and  not  redeemed  in  due  time,  or 
goods  which  shall  be  the  proceeds  of  its  lands.     It  shall  not  be  at  liberty  to 
purchase  any  public  debt  whatsoever;  nor  shall  it  take  more  than  at  the  rate 
of  six  per  centum  per  annum  for  or  upon  its  loans  or  discounts. 

10.  No  loan  shall  be  made  by  the  said  corporation,  for  the  use  or  on  account 
of  the  Government  of  the  United  States,  to  an  amount  exceeding  five  hundred 
thousand  dollars,  or  of  any  particular  State  to  an  amount  exceeding  fifty  thou- 
sand dollars,  or  of  any  foreign  prince  or  State,  unless  previously  authori/,ed 
by  a  law  of  the  United  States. 

11.  The  stock  of  the  said  corporation  shall  be  assignable  and  transferable 
according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the  laws  and 
ordinances  of  the  same. 

12.  The  bills  obligatory  and  of  credit,  under  the  seal  of  the  said  corpora- 
tion, which  shall  be  made  to  any  person  or  persons,  shall  be  assignable  by  en- 
dorsement thereupon,  under  the  hand  or  hands  of  such  person  or  persons,  and 
his,  her,  or  their  executors  or  administrators,  and  of  his  or  their  assignee  or 
assignees,  and   so  as  absolutely  to  transfer  and  vest  the  property  thereof  in 
each  and  every  assignee  or  assignees  successively,  and  to  enable  such  assignee 
or  assignees,  and  his,  her,  or  their  executors  or  administrators,  to  maintain  an 
action  thereupon  in  his,  her,  or  their  own  name  or  names.  And  the  bills  or  notes 
which  may  be  issued  by  order  of  the  said  corporation,  signed  by  the  president, 
and  countersigned  by  the  principal  cashier  or  treasurer  thereof,  promising  the 
payment  of  money  to  any  person  or  persons,  his,  her,  or  their  order?  or  to 
bearer,  although  not  under  the  seal  of  the  said  corporation,  shall  be  binding 
and  obligatory  upon  the  same,  in  like  manner,  and  with  like  force  and  effect, 
as  upon  any  private  person  or  persons,  if  issued  by  him,  her,  or  them,  in  his, 
her,  or  their  private  or  natural  capacity  or  capacities,  and  shall  be  assignable 
and  negotiable  in  like  manner  as  if  they  were  so  issued  by  such  private  per- 
son or  persons,  that  is  to  say:  those  which  shall  be  payable  to  any  person  or 
persons,  his,  her,  or  their  order,  shall  be  assignable  by  endorsement,  in  like 
manner,  and  with  the  like  effect  as  foreign  bills  of  exchange  now  are;  and 
those  which  are  payable  to  bearer  shall  be  assignable  and  negotiable  by  de- 
livery only. 

13.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits  of  the 
bank  as  shall  appear  to  the  directors  advisable;  and  once  in   every  three 
years  the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting,  for 
their  information,  an  exact  and  particular  statement  of  the  debts  which  shall 
have  remained  unpaid,  alter  the  expiration  of  the  original  credit,  for  a  period 
of  treble  the  term  of  that  credit,  and  of  the  surplus  ofthe  profits,  if  any,  after 
deducting  losses  and  dividends.    If  there  shall  be  a  failure  in  the  payment  of 
any  part  of  any  sum  subscribed  to  the  capital  of  the  said  bank,  by  any  person, 
copartnership,  or  body  politic,  the  party  failing  shall  lose  the  benefit  of  any 
dividend  which  may  have  accrued  prior  to  the  time  for  making  such  payment, 
and  during  the  delay  of  the  same. 

14.  The  directors  of  the  said  corporation  shall  establish  a  competent  office 
of  discount  and  deposite  in  the  District  of  Columbia,  whenever  any  law  of  the 
United  States  shall  require  such  an  establishment;  and  it  shall  be  lawful  for 
the  directors  of  the  said  corporation  to  establish  offices  wheresoever  they  shall 
think  fit,  within  the  United  States  or  the  territories   thereof,  and  to  commit 
the  management  of  the  said  offices,  and  the  business  thereof,  respectively,  to 
such  persons,  and  under  such  regulations,  as  they  shall  deem  proper,  not 
being  contrary  to  law  or  the  constitution  of  the  bank.     Or,  instead  of  esta- 
blishing such  offices,  it  shall  be  lawful  for  the  directors  of  the  said  corpora- 


ON   THE  GRANT  OF  THE  CHARTER  OF   1816. 

lion,  from  time  to  time  to  employ  any  other  bank  or  banks,  to  be  fit>t  approv- 
ed by  the  Secretary  of  the  Treasury,  at  any  place  or  places  that  they  may 
deem  safe  and  proper,  to  manage  and  transact  the  business  proposed,  as  afore- 
said, to  be  managed  and  transacted  by  such  offices,  under  such  agreements; 
and  subject  to  such  regulations  as  they  shall  deem  just  and  proper.  Thirteen 
managers  or  directors,  of  every  office  established  as  aforesaid,  shall  be  annu- 
ally appointed  by  the  directors  of  the  bank,  to  serve  one  year;  they  shall 
choose  a  president  from  their  own  number;  each  of  them  shall  be  a  citizen  of 
the  United  States;  and  not  more  than  three  fourths  of  the  said  managers  or 
directors,  in  office  at  the  time  of  an  annual  appointment,  shall  be  re-appoint- 
ed for  the  next  succeeding  year:  but  the  president  may  be  always  re-appointed. 
15.  The  officer  at  the  head  of  the  Treasury  Department  of  the  United 
States  shall  be  furnished,  from  time  to  time,  as  often  as  lie  may  require,  not 
exceeding  once  a  week,  with  statements  of  the  amount  of  the  capital  stock  of 
the  said  corporation,  and  of  the  debts  due  to  the  same;  of  the  moneys  depo- 
sited therein;  of  the  notes  in  circulation;  and  of  the  specie  in  hand;  and 
shall  have  a  right  to  inspect  such  general  accounts  in  the  books  of  the  bank  as 
shall  relate  to  the  said  statement:  Provided*  That  this  shall  not  be  construed 
to  imply  a  right  of  inspecting  the  account  of  any  private  individual  or  indi- 
viduals with  the  bank. 

SEC.  14.  And  be  it  further  enacted.  That,  if  the  said  corporation,  or  any 
person  or  persons,  for,  or  to  the  use  of  the  same,  shall  (leal,  or  trade,  in  buy- 
ing or  selling  goods,  wares,  merchandise,  or  commodities,  whatsoever,  con- 
trary to  the  provisions  of  this  act,  all  and  every  person  and  persons,  by  whom 
anv  order  or  direction  for  so  dealing  or  trading,  shall  have  been  given;  and 
all  and  every  person  and  persons  who  shall  have  been  concerned  as  parties  or 
agents  therein,  shall  forfeit  and  lose  treble  the  value  of  the  goods,  wares, 
merchandises,  and  commodities,  in  which  such  dealing  and  trade  snail  have 
been,  one  half  thereof  to  the  use  of  the  informer,  and  the  other  half  thereof 
to  the  use  of  the  United  States,  to  be  recovered  in  any  action  of  law,  with 
costs  of  suit. 

SEC.  15.  And  be  if  further  enacted,  That,  if  the  said  corporation  shall  ad- 
vance, or  lend  any  sum  of  money,  for  the  use,  or  on  account  of  the  Govern- 
ment of  the  United  States,  to  an  amount  exceeding  five  hundred  thousand 
dollars;  or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand  dol- 
lars; or  of  any  foreign  prince  or  State,  (unless  previously  authorized  thereto  by 
a  law  of  the  United  States)  all  and  every  person  and  persons,  by  and  with 
whose  order,  agreement,  consent,  approbation,  and  connivance,  such  unlawful 
advance  or  loan  shall  have  been  made,  upon  conviction  thereof,  shall  forfeit 
and  pay,  for  every  such  offence,  treble  the  value  or  amount  of  the  sum  or  sums 
which  have  been  so  unlawfully  advanced  orient,  one  fifth  thereof  to  the  use 
of  the  informer,  and  the  residue  thereof  to  the  use  of  the  United  States. 

SEC.  16.  And  be  it  further  enacted,  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable,  on  de- 
mand, shall  be  receivable  in  all  payments  to  the  United  States,  unless  other- 
wise directed  by  act  of  Congress. 

SEC.  17.  And  be  it  further  enacted.  That,  during  the  continuance  of  this 
act,  and  whenever  required  by  the  Secretary  of  the  Treasury,  the  said  cor- 
poration shall  give  the  necessary  facilities  for  transferring  the  public  funds 
from  place  to  place,  and  for  distributing  the  same  in  payment  of  the  public 
creditors,  without  charging  commissions,  or  claiming  allowance,  on  account  of 
difference  of  exchange,  and  shall,  also,  do  and  perform  the  several  and  re- 
spective duties  of  the  commissioners  of  loans  for  the  several  States,  or  of  any 
one  or  more  of  them,  at  the  times,  in  the  manner,  and  upon  the  terms,  prescrib- 
ed by  the  Secretary  of  the  Treasury. 

SEC.  18.  And  be  it  further  enacted,  That  the  said  corporation  shall  not,  at 
any  time,  suspend,  or  refuse  to  pay,  the  notes  thereof,  in  gold  or  silver  coin, 
upon  demand,  according  to  the  contract  and  promise  of  such  notes:  Provid- 
ed always,  nevertheless,  That,  upon  the  representation  of  the  said  corpora- 
tion, Congress  shall  have  power  to  authorize  the  suspension  or  refusal  afore- 


(J30  BANK    OF   THE    UNITED    STATES. 

s-tid,  tor  a  time  to  be  limited  by  law;  and  that,  during  the  recess  of  Congress, 
it  shall  be  lawful  for  the  President  of  the  United  States,  upon  a  like  represen- 
tation, to  authorize  such  suspension  for  a  term  which  shall  not  exceed  six 
weeks  after  the  opening  of  the  next  ensuing  session  of  Congress. 

SEC.  19.  find  be  it  further  enacted.  That,  in  consideration  of  the  exclusive 
privileges  and  benefits  conferred  by  this  act,  upon  the  said  bank,  the  Presi- 
dent, Directors,  and  Company  thereof,  shall  pay  to  the  United  States,  out  of 
the  corporate  funds  thereof,  the  sum  of  one  million  and  five  hundred  thou- 
sand dollars,  in  three  equal  payments,  that  is  to  say:  five  hundred  thousand 
dollars  at  the  expiration  of  two  years,  five  hundred  thousand  dollars  at  the 
expiration  of  three  years,  and  five  hundred  thousand  dollars  at  the  expiration 
of  four  years,  after  the  said  bank  shall  be  organized  and  commence  its  ope- 
rations, in  the  manner  hereinbefore  provided. 

SEC.  20.  Jlnd  be  it.  further  enacted,  That  no  other  bank  shall  be  established 
by  any  future  law  of  the  United  States,  during  the  continuance  of  the  corpo- 
ration hereby  created,  for  which  the  faith  of  the  United  States  is  hereby 
pledged:  Provided,  Congress  may  renew  existing  charters  for  banks  in  the 
District  of  Columbia,  not  increasing  the  capital  thereof;  and  may  grant  char- 
ters, if  they  deem  it  expedient,  to  any  banking  associations  now  in  operation 
in  the  said  district,  and  renew  the  same,  not  increasing  the  capital  thereof. 
And,  notwithstanding  the  expiration  of  the  term  for  which  the  said  corpora- 
tion is  created,  it  shall  be  lawful  to  use  the  corporate  name,  style?  and  ca- 
pacity, for  the  purpose  of  suits,  for  the  final  settlement  and  liquidation  of  the 
affairs  and  accounts  of  the  corporation,  and  for  the  sale  and  disposition  of 
their  estate,  real,  personal,  and  mixed;  but  not  for  any  other  purpose,  or  in 
any  other  manner  whatsoever,  nor  for  a  period  exceeding  two  years  after  the 
expiration  of  the  said  term  of  incorporation. 

FEBRUARY  26,  1816. 

On  motion  of  Mr.  CALHOUN,  the  House  postponed  the  intervening  orders 
of  the  day,  to  proceed  to  the  consideration  ot  the  National  Bank  bill. 

The  House  having  resolved  itself  into  a  committee  of  the  whole,  Mr.  Nel- 
son, of  Va.  in  the  chair,  on  that  subject;  the  bill  having  been  read,  establishing 
a  national  bank,  with  a  capital  of  thirty-five  millions  of  dollars- 
Mr.  CALHOUN  rose  to  explain  his  views  of  a  subject  so  interesting  to  the 
republic,  and  so  necessary  to  be  correctly  understood,  as  that  of  the  bill  now 
before  the  committee.  He  proposed  at  this  time  only  to  discuss  general  prin- 
ciples, without  reference  to  details.  He  was  aware,  he  said,  that  principle 
and  detail  might  be  united;  but  he  should  at  present  keep  them  distinct.  He 
did  not  propose  to  comprehend,  in  this  discussion,  the  power  of  Congress  to 
grant  bank  charters;  nor  the  question  whether  the  general  tendency  of  banks 
was  favorable  or  unfavorable  to  the  liberty  and  prosperity  of  the  country;  nor 
the  question  whether  a  national  bank  would  be  favorable  to  the  operations  of 
the  Government.  To  discuss  these  questions,  he  conceived,  would  be  an  use- 
less consumption  of  time.  The  constitutional  question  had  been  already  so 
freely  and  frequently  discussed,  that  all  had  made  up  their  mind  on  it.  The 
question  whether  banks  were  favorable  to  public  liberty  and  prosperity,  was 
one  purely  speculative.  The  fact  of  the  existence  of  banks,  and  their  incor- 
poration with  the  commercial  concerns  and  industry  of  the  nation,  proved  that 
inquiry  to  come  too  late.  The  only  question  was,  on  this  hand,  under  what  mo- 
difications were  banks  most  useful,  and  whether  the  United  States  ought  or 
ought  not  to  exercise  the  power  to  establish  a  bank.  As  to  the  question  whe- 
ther a  national  bank  would  be  favorable  to  the  administratioa  of  the  finances 
of  the  Government,  it  was  one  on  which  there  was  so  little  doubt,  that  gentle- 
men would  excuse  him  it  he  did  not  enter  into  it.  Leaving  all  these  questions, 
then,  Mr.  C.  said,  he  proposed  to  examine  the  cause  and  state  of  the  disorders 
of  the  national  currency,  and  the  question  whether  it  was  in  the  power  of  Con- 
gress, by  establishing  a  national  bank,  to  remove  those  disorders.  This,  he 


ON  THE  GRANT  OF  THT.  CHARTFR  OF  1816. 

observed,  was  a  question  of  novelty  and  vital  importance;  a  question  which 
greatly  affected  the  character  and  prosperity  of  the  country. 

As  to  the  state  of  the  currency  of  the  nation,  Mr.  C.  proceeded  to  remark 
that  it  was  extremely  depreciated,  and  in  degrees,  varying  according  to  the 
different  sections  ot  the  country,  all  would  assent.     That  this  state  of  the 
currency  was  a  stain  on  the  public  and  private  credit,  and  injurious  to  the 
morals  of  the  community,  was  so  clear  a  position  as  to  require  no  proof.   There 
were,  however,  other  considerations  arising  from  the  state  of  the  currency,  not 
so  distinctly  felt,  not  so  generally  assented  to.     The  state  of  our  circulating 
medium  was,  he  said,  opposed  to  the  principles  of  the  federal  constitution. 
The  power  was  given  to  Congress  by  that  instrument,  in  express  terms,  to  regu- 
late the  currency  of  the  United  States.    In  point  of  fact,  ne  said,  that  power, 
though  given  to  Congress,  is  not  in  their  hands.     The  power  is  excercised  by 
banking  institutions,  no  longer  responsible  for  the  correctness  with  which  they 
manage  it.    Gold  and  silver  have  disappeared  entirely;  there  is  no  money  but 
paper  money,  and  that  money  U  beyond  the  control  of  Congress.    No  one,  he 
said,  who  referred  to  the  constitution,  could  doubt  that  the  money  of  the  Unit- 
ed States  was  intended  to  be  placed  entirely  under  the  control  of  Congress. 
The  only  object  the  trainers  ot  the  constitution  could  have  in  view,  in  giving 
to  Congress  the  power"  to  coin  money,  regulate  the  value  thereof,  and  of  for- 
eign coin,"  must  have  been,  to  give  a  steadiness  and  fixed  value  to  the  cur- 
rency of  the  United  States.     The  state  of  tilings  at  the  time  of  the  adoption 
of  the  constitution,  afforded  Mr.C.  an  argument  in  support  of  his  construction. 
There  then  existed,  he  said,  a  depreciated  paper  currency,  which  could  only 
be  regulated  and   made  uniform  by  giving  a  power,  for  that  purpose,  to  the 
General  Government,  The  States  could  not  do  it.  He  argued,  therefore,  tak- 
ing into  view  the  prohibition  against  the  States  issuing  bills  of  credit,  that 
there  was  a  strong  presumption  this  power  was   intended  to  be  exclusively 
given  to  Congress.     Mr.  C.  acknowledged  there  was  no  provision  in  the  con- 
stitution bv  which  States  were  prohibited  from  creating  the  banks  which  now 
excersisc  this  power;  but,  he  said,  banks  were  then  but  little  known — there 
was  but  one,  the  Bank  of  North  America,  with  a  capital  of  only  400,000  dol- 
lars; and  the  universal  opinion  was,  that  bank  notes  represented  gold  and  sil- 
ver, and  that  there,  could  be  no  necessity  to  prohibit  banking  institutions 
under  this  impression,  because  their  notes  always  represented  gold  and  silver, 
and  they  could  not  be  multiplied  beyond  the  demands  of  the  country.     Mr. 
C.  drew  the  distinction  between  banks  of  deposite  and  banks  of  discount,  the 
latter  of  which  were  then  but  little  understood— and  their  abuse  not  conceived 
until  demonstrated  by  recent  experience.  No  man, he  remarked,  in  theconven- 
tion,  much  talent  and  wisdom  as  it  contained,  could  possibly  have  foreseen  the 
course  of  these  institutions;  that  they  would  have  multiplied  from  one  to  two 
hundred  and  sixty:  from  a  capital  of  400,000  dollars  to  one  of  eighty  millions; 
from  being  consistent  with  the  provisions  of  the  constitution,  and  the  exclu- 
sive right  of  Congress  to  regulate  the  currency,  that  they  would  be  directly 
opposed  to  it;  that,  so  far  from  their  credit  depending  on  their  punctuality  in 
redeeming  their  bills  with  specie,  they  might  go  on,  ad  infinitum,  in  violation 
of  their  contract,  without  a  dollar  in  their  vaults.   There  had,  indeed,  Mr.  C. 
said,  been  an  extraordinary  revolution  in  the  currency  of  the  country.     By  a 
sort  of  under-current,  the  power  of  Congress  to  regulate  the  money  of  the 
country  had  caved  in,  and  upon  its  ruin  had  sprung  up  those  institutions  which 
now  exercised  the  right  of  making  money  for,  and  in,  the  United  States:   for 
gold  and  silver  are  not  the  only  money,  but  whatever  is  the  medium  of  pur- 
chase and  sale,  in  which  bank  paper  alone  was  now  employed,  and  had,  there- 
lore,  become  the  money  of  the  country.    A  change,  great  and  wonderful,  has 
taken  place,  said  he,  which  divests  you  of  your  rights,  and  turns  you  back  to 
the  condition  of  the  Revolutionary  war,  in  which  every  State  issued  bills  of 
credit,  which  were  made  a  legal  tender,  and  were  of  various  value. 

This  then,  Mr.  C.  said,  was  the  evil.  We  have,  in  lieu  ot  gold  and  silver,  a 
paper  medium,  unequally  but  generally  depreciated,  which  affects  the  trade 
and  industry  of  the  nation;  which  paralyses  the  national  arm;  which  sullies 


632  BANK  OF  THE  UNITED  STATES. 

the  faith,  both  public  and  private,  of  the  United  States—a  paper  no  longer 
resting  on  gold  and  silver  as  its  basis.  We  have,  indeed,  laws  regulating  the 
currency  ot  foreign  coin;  but  they  are,  under  present  circumstances,  a  mockery 
of  legislation,  because  there  is  no  coin  in  circulation.  The  right  of  making 
money,  an  attribute  of  sovereign  power — a  sacred  and  important  right — was 
excercised  by  two  hundred  and  sixty  banks,  scattered  over  every  part  of  the 
United  States,  not  responsible  to  any  power  whatever  for  their  issues  of  paper. 
The  next  and  great  inquiry  was,  he  said,  how  this  evil  was  to  be  remedied? 
Restore,  he  said,  these  institutions  to  their  original  use;  cause  them  to  give  up 
their  usurped  power;  cause  them  to  return  to  their  legitimate  office  of  places 
of  discount  and  deposite;  let  them  be  no  longer  mere  paper  machines;  restore 
the  state  of  things  which  existed  anterior  to  1813,  which  was  consistent  with 
the  just  policy  and  interests  of  the  country;  cause  them  to  fulfil  their  contracts; 
to  respect  their  broken  faith;  resolve,  that  every  where,  there  shall  be  an  uni- 
form value  to  the  national  currency; — your  constitutional  control  will  then 
prevail. 

How,  then,  he  proceeded  to  examine,  was  this  desirable  end  to  be  attained? 
What  difficulties  stood  in  the  way?  The  reason  why  the  banks  could  riot  now 
comply  with  their  contract  was,  that  conduct,  which,  in  private  life,  frequently 
produces  the  same  effect.  It  was  owing  to'  the  prodigality  of  their  engage- 
ments, without  means  to  fulfil  them;  to  their  issuing  more  paper  than  they 
could  possibly  redeem  with  specie.  In  the  United  States,  according  to  the 
best  estimation,  there  were  not,  in  the  vaults  of  all  the  banks,  more  than  fifteen 
millions  of  specie,  with  a  capital  amounting  to  about  eighty  two  millions  of 
dollars;  hence  the  cause  of  the  depreciation  of  bank  notes — the  excess  of  paper 
in  circulation  beyond  that  of  specie  in  their  vaults.  This  excess  was  visible 
to  the  eye,  and  almost  audible  to  the  ear;  so  familiar  was  the  fact,  that  this 
paper  was  emphatically  called  trash,  or  rags.  According  to  estimation,  also, 
ne  said,  there  were  in  circulation,  at  the  same  date,  within  the  United  States, 
two  hundred  millions  of  dollars  of  bank  notes,  credits,  and  bank  paper,  in  one 
shape  or  other.  Supposing  thirty  millions  of  these  to  be  in  possession  of  the 
banks  themselves,  there  were  perhaps  one  hundred  and  seventy  millions  actu- 
ally in  circulation, or  on  which  the  banks  draw  interest.  The  proportion  between 
the  demand  and  supply,  which  regulates  the  price  of  every  thing,  regulates  also 
the  value  of  this  paper.  In  proportion  as  the  issue  is  extensive,  it  depre- 
ciates in  value — and  no  wonder,  when,  since  1810  or  1811,  the  amount  of  paper 
in  circulation  had  increased  from  80  or  90  to  200  millions.  Mr.  C.  here  ex- 
amined the  opinion  entertained  by  some  gentlemen,  that  bank  paper  had  not 
depreciated,  out  that  gold  and  silver  had  appreciated;  a  position  he  denied  by 
arguments  founded  on  the  portability  of  gold  and  silver,  which  would  equalize 
their  value  in  every  part  of  the  United  States,  and  on  the  facts,  that  gold  and 
silver  coin  had  increased  in  quantity  instead  of  diminishing,  and  that  the  ex- 
change with  Great  Britain  had  been,  (at  gold  and  silver  value/)  for  some  time 
past,  in  favor  of  the  United  States.  Yet,  he  said,  gold  and  silver  were  leav- 
ing our  shores.  In  fact,  we  have  degraded  the  metallic  currency;  we  have 
treated  it  with  indignity;  it  leaves  us,  and  seeks  an  asylum  on  foreign  shores. 
Let  it  become  again  the  basis  of  bank  transactions,  and  it  will  re- visit  us. 
Having  established,  as  he  conceived,  in  the  course  of  his  remarks,  that  the 
excess  of  paper  issues  was  the  true  and  only  cause  of  depreciation  of  our  pa- 
per currency,  Mr.  C.  turned  his  attention  to  the  manner  in  which  that  excess 
had  been  produced.  It  was  intimately  connected  with  the  suspension  of  specie 
payments;  they  stood  the  cause  and  effect.  First,  the  excessive  issues  caused 
the  suspension  of  specie  payments;  and  advantage  had  been  taken  of  that  sus- 
pension to  issue  still  greater  floods  of  it.  The  banks  had  undertaken  to  do  a 
new  business,  uncongenial  with  the  nature  of  such  institutions;  they  under- 
took to  make  long  loans  to  Government,  not  as  brokers,  but  as  stockholders — 
a  practice  wholly  inconsistent  with  the  system  of  specie  payments.  After 
showing  the  difference  between  the  ordinary  business  of  a  bank,  in  discounts, 
and  the  making  loans  for  twelve  years,  Mr.  C.  said,  indisputably  the  latter 
practice  was  a  great  and  leading  cause  of  the  suspension  of  specie  payments. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.          (333 

Of  this  species  of  property  (public  stock)  the  banks  in  the  United  States  held, 
on  the  30th  day  of  September  last,  about  eighteen  and  a  half  millions,  and  a 
nearly  equal  amount  of  treasury  notes,  besides  stock  tor  long  loans  made  to 
the  State  Governments,  amounting,  altogether,  to  within  a  small  amount  ol 
forty  millions,  being  a  large  proportion  of  their  actual  capital.  This,  he  said, 
was  the  great  cause  of  the  suspension  of  specie  payments.  Had  the  brinks 
(he  now  discussed  the  question)  the  capacity  to  resume  specie  paymentr  It 
they  have  the  disposition,  he  said,  they  may  resume  specie  payments, 
banks  are  not  insolvent,  he  said:  they  never  were  more  solvent.  If  so,  the 
term  itself  implies,  that,  if  time  be  allowed  them,  they  may,  before  long,  be 
in  a  condition  to  resume  payment  of  specie.  If  the  banks  would  regularly  and 
consentaniously  begin  to  dispose  of  their  stock,  to  call  in  their  notes  for  the 
treasury  notes  they  have,  and  moderately  curtail  their  private  discounts;  it 
they  would  act  in  concert  in  this  manner,  they  might  resume  specie  payments. 
If  they  were  to  withdraw,  by  the  sale  of  a  part  only  of  their  stock  and  treasury 
notes,  twenty-five  millions  of  their  notes  from  circulation,  the  rest  would  be 
appreciated  to  par,  or  nearly,  and  they  would  still  have  fifteen  millions  of 
stock  disposable  to  send  to  Europe  for  specie,  &c.  With  thirty  millions  of 
dollars  in  their  banks,  and  so  much  of  their  paper  withdrawn  from  circulation, 
they  would  be  in  a  condition  to  resume  payments  in  specie.  The  only  dim- 
culty,  that  of  producing  concert,  was  one  which  it  belonged  to  Congress  to 
surmount.  The  indisposition  of  the  banks,  from  motives  of  interest,  obviously 
growing  out  of  the  vast  profits  most  of  them  have  lately  realized,  by  vyhich  the 
stockholders  have  realized  from  twelve  to  twenty  per  cent,  on  their  stock, 
would  be,  he  showed,  the  greatest  obstacle.  What,  he  asked,  was  a  bank?  An 
institution,  under  present  uses,  to  make  money.  What  was  the  instinct  of  such 
an  institution?  Gain,  gain;  nothing  but  gain:  and  they  would  not  willingly 
relinquish  their  gain  from  the  present  state  of  things,  which  was  profitable  to 
them,  acting  as  they  did  without  restraint,  and  without  hazard.  Those  who 
believed  that  the  present  state  of  things  would  ever  cure  itself,  Mr.  C.  said, 
must  believe  what  is  impossible:  banks  must  change  their  nature,  lay  aside 
their  instinct,  before  they  will  aid  in  doing  what  it  is  not  their  interest  to  do.  By 
this  process  of  reasoning,  he  came  to  the  conclusion,  that  it  rested  with  Con- 
gress to  make  them  return  to  specie  payments,  by  making  it  their  interest  to 
do  so.  This  introduced  the  subject  of  the  national  bank. 

A  national  bank,  he  said,  paying  specie  itself,  would  have  a  tendency  to 
make  specie  payments  general,  as  well  by  its  influence  as  by  its  example.  It 
will  be  the  interest  of  the  national  bank  to  produce  this  state  of  things;  be- 
cause, otherwise,  its  operations  will  be  greatly  circumscribed,  as  it  must  pay 
out  specie  or  national  bank  notes:  for,  he  presumed,  one  of  the  first  rules  of 
such  a  bank  would  be  to  take  the  notes  of  no  bank  which  did  not  pay  in  gold 
.md  silver.  A  national  bank  of  thirty-five  millions,  with  the  aid  of  those 
banks  which  are  at  once  ready  to  pay  specie,  would  produce  a  powerful  effect 
nil  over  the  Union.  Further,  a  national  bank  would  enable  the  Government 
to  resort  to  measures  which  would  make  it  unprofitable  to  banks  to  continue 
the  violation  of  their  contracts,  and  advantageous  to  return  to  the  observation 
of  them.  The  leading  measure  of  this  character  would  be  to  strip  the  banks 
refusing  to  pay  specie  of  all  the  profits  arising  from  the  business  of  the  Go- 
vernment— to  prohibit  deposited  with  them,  and  to  refuse  to  receive  their 
notes  in  payment  of  dues  to  the  Government.  How  far  such  measures  would 
be  efficacious,  in  producing  a  return  to  specie  payments,  he  was  unable  to  say; 
but  it  was  as  far  as  he  would  be  willing  to  go  at  the  present  session.  If  they 
persisted  in  refusing  to  resume  paymentsln  specie,  Congress  must  resort  to 
measures  of  a  deeper  tone,  which  they  had  in  their  power. 

The  restoration  of  specie  payments,  Mr.  C.  argued,  would  remove  the  em- 
barrassments on  the  industry  of  the  country,  and  the  stains  from  its  public 
and  private  faith.  It  remained  to  see  whether  this  House,  without  whose 
aid  it  was  in  vain  to  expect  success  in  this  object,  would  have  the  fortitude  to 
apply  the  remedy.  If  this  was  not  the  proper  remedy,  he  hoped  it  would  be 
shown  by  the  proposition  of  a  prtper  substitute,  and  not  opposed  by  vague 
80 


(534  BANK  OF  THE  UNITED  STATES. 

and  general  declamation  against  banks.  The  disease,  he  said,  was  dee  p;  it 
affected  public  opinion;  arid,  whatever  affects  public  opinion,  touches  the 
vitals  of  the  Government.  Hereafter,  he  said,  Congress  would  never  stand 
in  the  same  relation  to  this  measure  in  which  they  now  did.  The  disease 
arose  in  time  of  war  —  the  war  had  subsided,  but  left  the  disease,  which  it  was 
now  in  the  power  of  Congress  to  eradicate  ;  but,  if  they  did  not  now  exercise 
the  power,  they  would  become  abettors  of  a  state  of  things  which  was  of  vital 
consequence  to  public  morality,  as  he  showed  by  various  illustrations.  He 
called  upon  the  House,  as  guardians  of  the  public  weal,  of  the  health  of  the 
body  politic,  which  depended  on  the  public  morals,  to  interpose  against  a  state 
of  things  which  was  inconsistent  with  either.  He  appealed  to  the  House,  too, 


greatly  depreciated;  in  paper,  depreciated  from  five  to  twenty  per  cent,  be- 
low the  currency  in  which  the  Government  had  contracted  to  pay,  &c.  He 
added  another  argument;  the  inequality  of  taxation,  in  consequence  of  the 
state  of  the  circulating  medium,  which,  notwithstanding  the  taxes  were  laid 
with  strict  regard  to  the  constitutional  provision  for  their  equality,  made  the 
People  in  one  section  of  the  Union  pay  perhaps  one-fifth  more  of  the  same 
tax,  than  those  in  another.  The  constitution  having  given  Congress  the  power 
to  remedy  these  evils,  they  were,  he  contended,  deeply  responsible  for  their 
continuance. 

The  evil  he  desired  to  remedy,  Mr.  C,  said,  was  a  deep  one;  almost  incura- 
ble; because  connected  with  public  opinion,  over  which  banks  have  a  great 
control  —  they  have,  in  a  great  measure,  a  control  over  the  press:  for  proof  of 
which  he  referred  to  the  fact,  that  the  present  wretched  state  of  the  circulat- 
ing medium  had  scarcely  been  denounced  by  a  single  paper  within  the  United 
States.  The  derangement  of  a  circulating  medium,  he  said,  was  a  Joint 
thrown  out  of  its  socket;  let  it  remain  for  a  short  time  in  that  state,  and  the 
sinevys  will  be  so  knit,  that  it  cannot  be  replaced  —  apply  the  remedy  soon, 
and  it  is  an  operation  easy,  though  painful.  The  evil  grows,  whilst  the  resist- 
ance to  it  becomes  weak;  and,  unless  checked  at  once,  will  become  irresisti- 
ble. Mr.  C.  concluded  the  speech,  of  which  the  above  is  a  mere  outline. 
which  the  imagination  of  the  reader  must  fill  up,  by  observing,  that  he  could 
have  said  much  more  on  this  important  'subject,  but  he  knew  how  difficult  it 
was  to  gain  the  attention  of  the  House  to  long  addresses. 

Mr.  RANDOLPH,  in  explaining  an  allusion  which  Mr.  Calhoun  had  made  to 
a  remark  of  his,  on  a  former  occasion,  took  occasion  to  say,  that  he  had  lis- 
tened to  the  honorable  gentleman  with  pleasure.  He  was  glad  to  see  a  cause 
so  important  in  hands  so  able.  He  promised  the  honorable  gentleman,  though 
he  might  not  agree  in  his  mode  ot  remedying  the  evil,  he  would  go  with  him 
in  the  application  of  any  adequate  remedy,  to  an  evil  which  he  regarded  as 
most  enormous,  &c. 

Mr.  WARD,  ol  Massachusetts,  made  some  remarks,  not  very  distinctly 
heard  at  the  time  He  acknowledged  the  correctness  of  the  representation  of 
the  existing  evil,  for  which  he  appeared  to  think  the  remedy  was  near  at  hand, 
and  more  simple  in  its  application  than  the  establishment  of  a  national  bank, 
viz:  by  refusing  to  receive  the  notes  of  those  banks  which  do  not  pay  specie 
in  dues  to  the  Government.  But  for  an  alliance,  which  he  considered  clis- 

¥aceful  to  the  country,  and  unjust  to  individuals,  between  the  Secretary  of  the 
reasury  and  the  banks  which  refused  to  pay  specie,  the  evil  never  would 
have  existed.  If  Congre&s  adopted  the  measure  which  he  (Mr-  W.)  pro 
posed,  those  banks  must  go  down,  and  public  credit  rise.  Why  not  resort  at 
hrst  to  the  obvious  expedient  and  then  proceed  to  the  consideration  of  the  less 
urgent  question  of  establishing  a  national  bank?  The  banks,  who,  it  was  now 
agreed,  had  engaged  in  a  business  for  which  they  were  not  calculated,  having 
received  a  sufficient  bonus  for  the  loans  they  made  to  Government,  and  made 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.  635 

handsome  profits  by  it,  had  no  claim  on  Government  to  protect  them  in  their 


a  o  u 

medy  were  not  immediately  applied,  on  them  would  be  the  responsibility  and 

the  blame. 

Mr.  SERGEANT  moved  to  amend  the  first  section  of  the  bill  by  striking  put 
the  words  "  thirty  Jive ;"  and  inserting  twenty,  as  the  amount  of  the  capital 
of  the  bank.  He  did  not  intend,  he  said,  to  go  into  a  general  consideration 
of  the  principle  of  the  bill,  or  of  the  motion  now  submitted  by  him.  He  made 
the  motion  on  the  ground  of  the  facts  and  arguments  just  delivered  by  the 
gentleman  from  South  Carolina,  (Mr.  CALHOUN.)  From  the  quantity  of  pa- 
per stated  to  be  in  circulation,  he  thought  the  calculation  fair  that  the  amount 
proposed  to  be  added  to  the  existing  bank  capital  was  larger  than  necessary, 
and  entered  into  some  caculations,  not  distinctly  hearu,  to  support  the  pro- 
priety of  his  motion. 

Mr.  CALHOUN  hoped  the  motion  would  not  prevail,  and  replied  briefly  to 
the  calculations  of  Mr.  SERGEANT.  The  necessity  o  fa  larger  capital  consist- 
ed, he  said,  in  the  important  functions  to  be  performed  by  the  national  bank. 
The  desirable  point  was  to  fix  the  capital  so  large  as  to  prevent  undue  profit, 
and  so  as  to  prevent  a  loss  to  the  stockholders.  Perhaps  a  bank  of  twenty 
millions  might  afford  a  fair  profit;  but  the  great  business  it  would  have  to  per- 
form made  a  larger  capital  necessary,  &c. 

Mr.  PITKIN  supported  the  motion  to  reduce  the  capital.  He  thought  the 
banking  capital  of  the  country  already  too  great,  and  offered  a  tew  calcula- 
tions to  prove  the  position.  In  1805.  1806,  and  1807,  said  he,  when  the  com- 
merce of  the  country  was  very  great,  our  banking  capital  did  not  exceed  fifty 
or  sixty  millions;  and  yet,  in  those  times,  no  complaint  was  heard  of  the  de- 
ficiency of  capital.  If  not  more  than  that  amount  was  wanted  then,  is  it 
possible  that  one  hundred  and  thirty  or  one  hundred  and  forty  millions  can 
be  necessary  at  this  time?  Mr.  P.  declared  himself  in  favor  of  a  national 
bank,  if  it  could  be  established  on  good  principles,  such  as  would  restore  the 
old  state  of  things,  when  bank  notes  were  paid  with  specie.  If,  however,  the 
bill  passed  with  its  present  capital,  it  would,  in  his  opinion,  increase  the  evil 
instead  of  proving  a  remedy.  Such  a  capital  was  not  necessary,  either,  for 
the  purposes  wanted.  As  to  loans,  no  bank  could  make  long  loans  without 
stopping  the  payment  of  specie,  and  destroying  the  circulating  medium;  and, 
to  support  the  assertion,  he  quoted  the  fate  of  various  banks  in  Europe.  A 
large  capital  for  that  purpose,  therefore,  was  unnecessary.  Loans,  he  said, 
must  be  made  by  individuals;  it  cannot  be  done  by  banks,  without  ruin;  and 
a  large  capital  was  not  necessary,  therefore,  to  enable  the  Government  to  ob- 
lain  from  the  bank  all  the  aid  it  could,  or  ought  properly  to  receive.  Nor 
would  a  large  capital,  he  said,  restore  the  old  state  of  things;  that  must  be 
done  by  the  co-operation  of  the  large  banks  in  the  cities;  the  specie  has  got 
into  those  banks,  and  there  it  will  remain  until  they  resume  the  payment  of 
it.  Mr.  P.  said,  likewise,  he  was  unwilling  to  place  fifty  millions  of  money 
in  the  hands  of  any  set  of  men  in  this  country.  They  would  use  it  oppres- 
sively; the  old  Bank  of  the  United  States  had  done  so,  and  so  would  this. 
Such  a  power  would  enable  them  to  wield  the  destinies  of  this  nation.  For 
this  strong  reason,  Mr.  P.  said,  as  well  as  the  others  he  had  stated,  he  was  in 
favor  of  reducing  the  capital;  and,  to  allow  more  time  to  reflect  on  this  im- 
portant feature  of  the  bill,  he  moved  that  the  committee  rise. 

After  a  few  remarks  by  Mr.  CALHOUN,  on  what  had  fallen  from  Mr.  PITKW 
The  committee  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

FEBRUARY  27,  1816. 

In  committee  of  the  whole,  Mr.  SERGEANT'S  motion  to  reduce  the  pro- 
posed capital  from  thirty-Jive  to  twenty  millions,  being  under  consideration— 


636  BANK  OF  THE  UNITED  STATES.   " 

Mr.  SMITH,  of  Maryland,  rose  to  express  his  views  of  the  subject  generally, 
as  well  as  on  the  particular  point  under  consideration.  He  appeared  to  coin- 
cide in  opinion  with  Mr.  CALHOUN.  that  the  establishment  of  a  Bank  of  the 
United  States  would  contribute,  better  than  any  other  measure,  to  the  resto- 
ration of  a  general  medium  of  circulation  of  uniform  value:  he  was  afraid,  he 
said,  that  it  was  the  only  remedy.  Perhaps,  he  said,  he  should  not  agree 
with  the  gentleman  in  some  of  his  positions,  particularly  as  respected  the 
conduct  and  state,  of  the  banks.  It  might  be  prudent  on  the  part  of  Congress, 
he  remarked,  to  let  down  these  institutions  as  gently  as  they  could,  and  do 
every  thing  to  enable  them  to  meet  their  enagements'by  specie  payments,  on 
some  future  day.  With  some  modification  of  the  plan  proposed  by  this  bill, 
he  thought  the  establishment  of  a  national  bank  would  effectually  contribute 
to  that  object.  The  banks,  pending  the  war,  were  the.  pillars  of  the  nation, 
on  which,  and  through  whose  instrumentality,  the  Government  was  enabled 
to  raise  money  and  men  to  carry  on  the  war,  not  only  by  their  direct  loans, 
but  by  enabling  individuals  to  make  loans  to  the  Government.  Now,  that 
we  could  do  without  them,  they  had  been  called  caterpillars.  He  would  not 
call  those  caterpillars  now,  who  in  war  had  been  the  pillars  of  the  Govern- 
ment. The  information  of  the  gentleman  in  relation  to  the  state  of  the  banks 
might  be  very  good,  but  it  did  not  coincide  with  the  in  formation  or  impression 
of  Mr.  S.  who  took  a  different  view  of  it.  He  thought  that,  as  far  as  he  had 
information,  the  banks  had  not  issued  more  notes  than,  from  the  amount  of 
their  capitals,  they  had  a  fair  right  to  do.  Adverting  to  Mr.  C's  statement 
of  the  number  of  the  banks,  (he  wished  there  were  not  so  many)  and  of  their 
capital,  he  differed  from  the  view  which  estimated  the  amount  on  which  thej" 
draw  interest,  at  an  hundred  and  seventy  millions.  But,  deducting  from  this 
amount  the  loans,  &c.  estimated  at  forty  millions,  a  hundred  and  thirty  mil- 
lions \yould  remain,  as  the  estimated  amount  on  which  the  banks  draw  inter- 
est, with  a  capital  of  eighty -two  millions.  Was  this  too  much?  With  much 
less,  could  the  banks  pay  bank  expenses,  and  make  a  reasonable  dividend? 
But,  might  not  the  gentleman  have  been  mistaken,  even  in  this  estimate?  Mr. 
S.  thought  he  was,  and  supported  this  impression  by  a  reference  to  such  docu- 
ments on  the  subject  as  were  within  his  reach.  He  referred  to  the  document 
on  the  table,  showing  the  state  of  the  chartered  banks  within  the  District  of 
Columbia.  He  was  rather  inclined  to  believe,  he  said,  that  these  banks  had 
gone  a  little  further  than  most  of  the  banks  of  the  United  States  in  their  issues, 
the  cause  of  which  might  be  traced  to  the  large  loans  to  the  Government. 
The  amount  of  the  capital  paid  in  by  all  these  banks  was  3,321,600  dollars; 
the  bills  and  notes  discounted  4,830.031  dollars.  Was  this  too  large  a  business 
on  their  capital?  These  banks,  than  which,  perhaps,  no  banks  in  the  Union 
had  done  larger  business,  had  not  discounted  more  than  fifty  per  cent,  beyond 
the  amount  of  their  capital  paid  in.  As  to  the  amount  of  paper  which  the 
gentleman  estimated  to  be  in  circulation,  Mr.  S.  differed  widely  from  him. 
Instead  of  two  hundred  millions  of  dollars  of  paper  being  in  circulation  on  a 
capital  of  eighty-two  millions,  he  doubted  whether  the  amount  was  half  that 
of  the  capital  of  the  banks,  say  forty-one  millions  of  dollars.  He  had  some 
acquaintance  with  the  operations  of  banks,  from  his  practice  in  them.  Some 
banks  could  put  out  more  paper  than  others,  from  their  particular  situation: 
but,  in  general,  banks  did  not  issue  paper  to  more  than  half  the  amount  of 
their  capital.  The  notes  of  the  banks  of  this  district  were  more  depreciated 
than  any  others;  and  if  the  depreciation  was  in  fact  owing  to  excessive  issues, 
it  might  be  presumed  they  had  issued  more  largely  than  banks  generally. 
These  banks  had  notes  in  circulation  to  the  amount  of  2,094,000  dollars — a 
greater  proportion  of  notes  to  their  capital,  than  banks  generally  have  in  cir- 
culation; but  only  three-fifths  of  the  amount  of  the  capital  paid  in.  There 
were  not  now  in  circulation,  Mr.  S.  said,  he  verily  believed,  as  many  bank 
notes,  properly  so  called,  as  there  were  prior  to  the  stoppage  of  specie  pay- 
ments. Banks  every  where  were  endeavoring  to  draw  in  their  notes.  Mr. 
S.  concluded  on  this  point,  that,  as  the  banks  had  demonstrably  not  been  prodi- 
gal in  the  issue  of  their  paper,  its  depreciation  was  not  owing  to  the  excess  of 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

issue.  This  brought  Mr.  S.  to  another  point  of  Mr.  CALHOUN'S  speech,  in 
which  they  concurrred  in  opinion.  To  the  long  loans  he  agreed,  in  a  great 
measure  might  be  attributed  the  depreciation  of  the  paper  of  this  city,  of  Bal- 
timore, Philadelphia,  and  of  New  York.  But  he  was  not  disposed  to  censure 
the  oanks  for  having  made  those  loans.  On  the  contrary,  said  he,  they  aided 
you  in  times  of  need;,.!  give  them  credit  for  it.  I  would  nurse  them,  and  bring 
them  back  to  the  same  healthy  state  as  before  they  reduced  themselves  to 
serve  you.  At  the  same  time  Mr.  S.  said  he  agreed,  that  it  was  the  duty  of 
the  banks  to  resume  specie  payments,  so  soon  as  it  was  possible  to  do  it  with 
out  loss.  If  they  did  not  do  it,  they  ought  to  be  compelled  to  do  it;  and  through 
the  instrumentality  of  a  Bank  of  the  United  States,  the  Government  might 
be  able  to  coerce  them.  The  loans  made  to  the  Government,  he  said,  had 
been  principally  confined  to  the  country  between  the  Hudson  and  the  Poto- 
mac; a  small  amount  only  had  been  obtained  North  and  South  of  these  limits. 
The  notes  obtained  by  the  treasury  by  way  of  loan,  were  disbursed  in  other 
quarters  of  the  country  than  that  in  which  they  were  obtained;  they  had  been 
thrown  back  upon  the  banks,  and  specie  demanded  for  them,  with  which 
demand,  made  in  large  quantities,  the  banks  found  themselves  unable  to 
comply.  The  gentleman  had  given  his  opinion  how  the  evil  might  be  reme- 
died. This  remedy,  Mr.  S.  went  on  to  observe,  he  was  one  of  those  who 
had  pressed  on  the  directors  of  the  banks  of  the  city  he  had  the  honor  to 
represent.  All  the  banks  had  to  do,  he  said,  was  to  send  their  millions  of 
stock  to  the  Eastward  and  Southward,  sell  their  stock,  and  thus  change  the 
balance  of  exchange  and  trade  in  their  favor.  When  they  should  do  that,  the 
cause  of  the  depreciation  of  their  paper  being  removed,  Mr.  S.  said  we  should 
hear  no  more  of  it:  in  less  than  three  months,  those  States  which  now  had 
the  advantage  of  the  exchange,  would  be  the  debtor  States.  The  difference 
in  exchange  was  little  more"  than  nominal — very  little  specie  being  paid  in 
any  part  of  the  country;  where  bank  notes  were  nominally  at  par,  the  banks 
did  very  little  or  no  business,  and  had  comparatively  no  notes  out.  If  mer- 
chants negotiated  with  those  banks,  they  did  not  receive  or  pay  them  specie, 
but  paper.  Mr.  S.  coincided  in  Mr.  C's  view,  that,  if  all  the  banks  agreed 
to  resume  specie  payment*,  they  might  do  it;  but  he  would  use  no  coercion 
now  to  hasten  the  period,  but  suffer  them  to  do  it  peaceably  and  quietly,  and, 
therefore,  safely. 

Adverting  to  the  observation  in  debate  yesterday,  respecting  an  alliance 
between  the  Secretary  of  the  Treasury  and  the  banks,  which  had  prevented 
treasury  notes  from  becoming  a  circulating  medium.  &ic.  Mr.  SMITH  vindicated 
the  conduct  of  the  treasury.  Could  the  Secretary  do  otherwise,  he  asked, 
than  receive  the  public  dues  in  the  currency  of  the  country  where  they  were 
collected?  The  Secretary  had  further  undertaken  (Mr.  S.  doubted  whether 
that  officer  had  not  in  this  gone  too  far)  to  say,  that  the  paper  of  those  banks 
which  did  not  receive  treasury  notes  and  issue  them  again,  should  not  be 
received  in  payment  of  debts  due  to  the  Government.  Gentlemen  were  mis- 
taken, Mr.  S.  contended,  if  they  supposed  that  they  could  make  treasury  notes 
a  circulating  medium;  experience  had  proved  it  Referring  to  the  value  of 
treasury  notes,  depreciated  gradually  in  their  progress  from  this  district  to 
Boston,  he  remarked,  that  although  they  were  six  per  cent,  above  par  at  Bal- 
timore, they  were  riot  there  as  valuable  as  the  note  of  a  merchant  at  New 
York.  It  would,  it  was  true,  be  a  great  convenience,  it  Government  could 
issue  a  paper  of  this  sort  which  would  serve  as  a  circulating  medium;  but  it 
could  not;  whatever  paper  was  put  out,  of  that  sort,  would  become  an  article  of 
merchandise,  to  be  bought  and  sold.  The  community  was  now  accustomed 
to  bank  notes,  and  partial  to  them;  and  their  place  could  not  be  supplied  by 
Government  paper. 

As  to  the  motion  now  under  consideration,  to  reduce  the  capital,  Mr.  S. 
said  he  had  not  expected  it  from  a  gentleman  from  Pennsylvania,  and  particu- 
larly not  from  the  gentleman  who  made  it.  Reverting  to  the  period  of  the 
establishment  of  the  Bank  of  the  United  States,  he  said,  ten  millions  bore  a 
larger  proportion  to  the  uses  and  demands  of  that  day,  than  thirty-five  mil- 


(338  BANK   OF  THE    UNITED    STATES. 

lions  did  to  those,  of  this.  The  price  of  every  thing  was  then  very  low,  com- 
merce in  its  infancy,  the  shipping  of  the  United  States  extremely  and  almost 
incredibly  limited,  &c.  It  was  impossible  that  any  man  could  suppose  that 
a  bank  of  the  same  amount  could  now  perform  the  functions  which  the  Bank 
of  the  United  States  then  performed,  particularly  since  the  Government  had 
spread  taxes  over  the  whole  surface  of  the  country,  and  made  the  aid  of  this 
institution  more  extensively  necessary.  With  a  reduced  capital,  Mr.  S.  said, 
the  operations  of  the  bank  would  be  so  circumscribed,  that  it  would  afford 
but  little  aid  to  merchants.  He  was  not,  indeed,  very  tenacious,  he  said, 
about  four  or  live  millions  of  capital, -more  or  less;  but  he  did  not  think  thirty - 
five  millions  at  all  too  much. 

Mr.  S.  said  he  was  not  entirely  satisfied  with  the  plan  of  the  bank,  proposed 
by  the  committee;  but  might  not  the  plan  be  so  modified  as  to  meet  the  views  of 
a  large  majority  of  the  House?  He  could  find  but  few  gentlemen,  he  said,  who, 
in  conversation,  did  not  appear  favorable  to  the  establishment  of  a  bank. 
Some  preferred  a  plan  less  complex  than  the  present:  some  were  hostile  to 
the  control  of  the  Government  in  it,  in  which,  perhaps,  they  were  right. 
Others  were  hostile  to  treasury  notes  forming  any  part  of  the  capital;  in  which, 
Mr.  S.  said,  he  concurred.  Where  was  the  difficulty  in  yielding  those  minor 
points,  for  the  sake  of  obtaining  a  general  concurrence  in  favor  of  the  bill? 
Other  features  were  objected  to:  the  power  to  authorize  suspension  of  pay- 
ments in  specie,  &c.;  these  he  would  also  give  up,  rather  than  that  they 
should  defeat  the  bill  altogether.  As  to  the  question,  when  the  specie  pay- 
ments of  the  bank  should  commence,  Mr.  S.  said,  according  to  the  proposed 
mode  of  payment,  it  would  not  be  very  soon,  &c.  To  remedy  this  objection, 
he  proposed  that,  for  the  seven  millions  of  treasury  notes  to  be  paid  in  on 
account  of  the  United  States,  there  should  be  substituted  a  stock  to  be  created 
for  the  purpose,  bearing  an  interest  of  5  per  cent,  per  annum,  which  would 
leave  a  gain  to  the  United  States  (the  bank  dividing  eight  per  cent.)  of  three 
per  cent,  per  annum  on  that  amount;  which  would,  by  its  accumulation  and 
proper  application,  in  the  course  of  twenty  years,  absorb  the  whole  of  that 
stock,  and  operate  as  a  bonus  to  the  United  States  to  that  amount.  He  also 
showed,  by  calculation,  that'the  United  States,  in  this  mode,  by  merely  ad- 
vancing their  credit,  might  absorb  twelve  millions  of  the  war  debt;  which  he 
believed  would  be  no  unpalatable  thing  to  the  People,  nor  unwise  in  the  Go- 
vernment. Further,  Mr.  S.  said,  he  wished  to  see  the  bank  go  immediately 
into  operation;  that,  while  he  lived,  he  might  derive  some  advantage  from  it. 
He  would,  therefore,  wish  to  see  the  whole  of  the  specie  part  of  the  stock  paid 
in  within  a  given  number  of  months.  With  seven  millions  of  dollars  in  its 
vaults,  the  bank  would  have  neither  fear  nor  trembling  in  commencing  specie 
operations;  they  would  have  time  to  send  their  stock  to  Europe  for  sale,  or 
make  such  other  arrangements  as,  in  their  opinion,  might  be  proper.  The 
specie  thus  to  be  paid  in,  would  not  drain  the  State  banks,  but  would  be 
imported  for  the  purpose,  from  Europe  and  elsewhere,  &c.  In  the  mean  time, 
he  said,  until  all  the  specie  payments  were  made  to  the  bank,  he  did  not 
think  it  would  do  any  harm  if  the  bank  were  to  commence  its  operations 
without  specie,  but  with  an  assurance  in  its  charter,  of  payment  of  specie  at 
a  particular  day.  Such  an  assurance  would  make  the  bank  notes  equally  good, 
in  his  eyes  at  least,  as  gold  and  silver.  With  these  views  of  the  subject,  Mr. 
S.  concluded  his  practical  speech. 

Mr.  SERGEANT  next  addresssed  the  Chair,  in  support  of  his  motion  to  reduce 
the  proposed  capital  of  the  bank.  In  reply  to  Mr.  SMITH'S  expression  of  sur- 
prise at  his  having  made  this  motion,  he  said,  it  was  no  reason  why  a  repre- 
sentative from  one  part  of  the  country  should  not  move  an  amendment  to  a 
bill,  that  the  bill  in  its  present  shape  was  more  agreeable  to  another  section. 
Mr.  SERGEANT  said,  he  had  made  the  motion  for  two  reasons;  first,  because, 
from  the  showing  of  the  gentleman  from  South  Carolina,  the  banking  capital 
of  the  country  was  already  large  enough;  and,  secondly,  that  he  might  have 
an  opportunity  of  hearing  gentlemen  explain  their  views  on  this  subject,  which 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         639 

he  believed  was  the  correct  mode  of  procedure,  when   members  could  not 
see  their  way  very  clearly  on  any  subject,  particularly  when  it  was  proposed 
to  legislate  without  the  power  of  repeal  for  twenty  years  to  come,  and  when 
that  legislation  was  to  create  a  vast  machine,  the  direction  of  whose  momentum 
is  to  be  put  into  the  hands  of  we  knovy  not  whom.     A  similar  question,  less 
extensive  in  its  nature,  on  the  proposition  to  renew  the  charter  of  the  Bank 
of  the  United  States,  had  agitated  the  country  from  one  extreme  of  the  con- 
tinent to  the  other,  and  Congress  particularly.     This  agitation   had  been  so 
recent,  that  the  proposition  of  a  similar  character  ought  to  give  rise,  at  this 
time,  to  serious  reflection,  at  least,  if  half  that  had  been  then  said  on  the  sub- 
ject was  true.     The  present  measure,  Mr.  8.  said,  presented  itself  to  him  in 
an  infinitely  worse  aspect  than  that  to  which  he  had  referred,  and  the   two 
gentlemen  who  had  discussed  the  question,  had  shown,  that  the  best  inform- 
ed and  most  zealous  in  favor  of  the  measure,  did  not  understand  its  bearings, 
or  agree  in  its  effects  or  principles,  &c.     The  question  was  yet  to  be  decided 
between  those  gentlemen,  he  said,  whether  this  was  to  be  a  specie,  or  a  paper 
bauk;  but,  for  his  part,  he  protested  against  the   establishment  of  any  bank 
which  was  not,  from  the  beginning,  a  specie  bank.     He  saw  u  wide  distinc- 
tion between  the  bank  now  proposed  to  be  established,  and  the   old  Bank  of 
tl.e  United  States;  the  object  ot  the  latter  was  to  increase  the  active  capital  ot 
the  country,  and  to  facilitate  the  operations  of  the  Government  in  the  collec 
tion  of  the  taxes,  whilst  the  motive  of  this  bank   was  directly  the  reverse^  it 
wa-  not  to  increase,  but  to  diminish  the  paper  medium  of  the  country.     The 
surcharged  circulation  of  paper,  Mr.  S.    then  argued,  would  not  be  removed 
by  throwing  in  the  additional  quantity  of  paper  to  be  issued  by  this  bank.  The 
great  extent  of  the  proposed  capital  of  the  bank,  three  and  an  half  times  that 
of  the  late  Bank  of  the  United  States,  (with  the  privilege  to  increase  it  to  five 
times  the  amount)  imposed  it  as  a  duty  on   those  who  advocated  it,  to  show 
the  use  of  so  large  a  capital,     in  answer  to  the  argument  that  our  commercial 
transactions  had  increa^-d  -nee  17'J1,  in  the  proportion  of  five  to  one,  Mr.  S. 
said  gentlemen  appeared  to  have  entirely  lost  sight  of  a  consideration  which 
was  essential  in  the  discussion  ot  this  subject;  that,  in  1791,  we  had  but  three 
banks,  and  now,  we  had  two  hundred  and  sixty,  supplying  a  capital  of  more 
than  twenty  times  the  amount  then  in  existence.   This  additional  capital  was, 
therefore,  he  argued,  not  necessary  to   the  purposes  of  commerce.     As  the 
means  of  establishing  an  uniform  medium  of  circulation,  Mr.  S.  contended, 
that  a  capital  of  twenty  millions    would  be   large  enough  for  any  useful  pur- 
pose, and  would  be  able  to  throw  into  circulation  a  larger  amount  than  that 
of  depreciated  paper,   which  the  gentleman  from  South  Carolina  proposed   to 
withdraw  from  circulation,  in  order  to  appreciate  the  notes  of  existing  banks. 
This  bank,  established  on  true  commercial  principles,  (and  such  he  wished  it 
to  have)  would  be  guided  by   that  instinct  of  gain  which  the  gentleman  had 
ascribed  to  banking  institutions,  and,  with  a  capital  of  twenty  millions,  would 
do  a  business  quite  extensive  enough  to  answer  any  useful  purposes. 

Mr.  S.  further  objected  to  the  plan  of  the  bunk  embraced  in  this  bill,  that 
there  was  nothing  in  it  which  would  save  this  national  bank  from  the  same 
extremity  of  difficulty,  bankruptcy  if  gentlemen  chose  to  call  it  so,  in  which 
other  banks  had  been  involved;  it  had  no  other  liability  or  responsibility  for 
its  engagements  than  those  which  are  common  to  every  other  bank.  Mr.  S. 
did  not  join  in  the  censure  of  banks  for  that  which  was  said  to  have  been  the 
cause  of  suspension  of  specie  payments,  viz.  the  loans  to  Government,  which 
the  pressure  of  Government  and  public  sentiment  had  urged  them  to  make  to 
the  Government  in  a  greater  extent  than  they  ought  to  have  done.  He  was 
willing  to  coerce  the  banks  to  pay  specie,  if  they  were  not  disposed  to  do  it 
when  they  could;  but,  he  intimated,  he  was  unwilling  to  try  an  experiment, 
which,  if  it  did  not  operate  as  he  wished,  would  only  have  a  tendency  to  ag- 
gravate the  evil. 

If  the  State  banks  had  violated  their  laith,  how,  he  asked,  did  the  Govern- 
ment stand  in  that  respect?  Let  the  Government  set  the  example  of  redeem- 
ing its  plighted  faith.  How  was  the  public  creditor  paid  at  Philadelphia  du- 


640  BANK    OF  THE    UNITED    STATES. 

ring  the  war?  Instead  of  being  paid  in  gold  and  silver,  or  their  equivalent, 
they  were  paid  in  notes  of  the  banks  of  Baltimore,  which  had  depreciated  five 
or  six  per  cent,  at  that  very  time.  This  mischievous  example  having  been  set 
by  the  Government  to  the  banks,  ought  fault  to  be  found  with  them  that  they 
did  not  pay  their  notes,  when  Government  had  given  them  the  example? 
With  regard  to  the  present  time,  he  said  he  should  be  glad  to  know  why  the 
treasury  of  the  United  States  had  not  now  the  command  of  the  specie  pay- 
ments and  rate  of  exchange  in  its  own  hands?  How  much  better,  if  the  Go- 
vernment had  this  power,  as  he  believed  they  had,  that  they  should  exercise 
it  to  compel  the  resumption  of  specie  payments? 

Mr.  S.  then  proceeded  to  examine  the  composition  of  the  thirty-live  mil  lions  of 
capital  of  this  bank.  Referring  to  the  report  of  the  state  of  the  banks  ot  Penn- 
sylvania, he  said  the  Philadelphia  banks,  confessedly  not  specie  banks,  were 
in  very  nearly  the  same  situation  as  this  bank  would  be  when  it  commenc- 
ed operations.  The  Bank  of  Pennsylvania,  for  instance,  with  a  capital  of 
2,500,000  dollars,  had  1,800,000  ot"  public  stock,  400,000  ot  specie,  &c.  How 
was  that  bank  worse  oft'  than  this  bank  of  the  United  States  would  be,  with 
three-fourths  of  its  stock  public  debt  and  treasury  notes,  and  one-fourth  spe- 
cie? &c. 

In  every  view  this  was  a  measure  of  doubtful  expediency,  and  it  would  be 
sufficient  if  he  were  to  say  he  would  not  grope  in  the  dark,  on  a  measure  of 
so  doubtful  a  character;  especially  as  it  proposed  to  throw  into  circulation  a 
quantity  of  paper  on  principles  which  he  saw,  in  existing  establishments  pos- 
sessing the  same  materials,  could  not  be  redeemed  with  specie,  &c.  He  wish- 
ed explicitly  to  understand  whether  this  was  to  be  a  bank  for  commercial  pur- 
poses, or  a  Government  bank.  He  could  not  for  the  life  of  him  conceive,  he 
said,  why  the  Government  was  to  become  a  partner  to  a  scheme  of  this  sort  at 
all.  He  was  willing  to  have  a  bank  on  plain  intelligible  principles;  not  a  bank 
of  deposite  merely  :tor  at  this  time  of  day  people  could  not  be  found  who  would 
willingly  embark  their  funds  in  any  thing  so  limited:  but  he  would  not  au- 
thorize the  bank  to  issue  any  paper  beyond  the  amount  which  it  could  redeem 
with  specie.  The  notes  should  express  on  their  face  the  currency  or  paper 
with  which  they  should  be  redeemed,  specie,  treasury  notes,  or  stock:  tor, 
as  he  showed,  by  various  elucidations,  money  only  could  justly  redeem  a  note 
given  for  money  by  an  individual  or  by  a  government,  &c.  Prior  to  1814?  it 
had  not  been  supposed  that  the  banks  had  not  conducted  themselves  on  iair 
principles;  the  very  instant,  however,  a  state  of  things  arose  to  create  alarm, 
or  when,  from  whatever  cause,  their  notes  were  presented  for  payment,  that 
moment  the  banks  were  unable  to  proceed  in  specie  payments.  This  bank 
being  put  in  operation  on  the  same  principles,  how  would  it  succeed  better? 
Mr.  S.  concluded  the  speech,  of  which  the  preceding  is  a  mere  skeleton,  by 
saying  that  he  yet  remained  to  be  convinced  that  twenty  millions  were  not  a 
sufficient  capital  for  ail  the  purposes  for  which  the  bank  could  be  wanted. 

Note  by  the  editors  of  the  National  Intelligencer. 

[We  are  requested  by  Mr.  SERGEANT  to  give  the  following1  as  a  statement  of  what 
he  said,  or  meant,  on  one  point  of  his  remarks  on  the  bank  question.  It  is  scarcely 
necessary  to  say,  that  the  reporter,  in  the  hasty  sketch  of  that  debate,  does  not  aim 
at  any  thing1  like  verbal  accuracy  or  amplitude — the  limits  of  a  newspaper,  connected 
with  the  desire  to  place  the  substance  of  the  arguments  and  proceeding's  promptly 
before  the  readers  of  the  National  Intelligencer,  forbid  it.] 

Mr.  SERGEANT  said,  that  it  was  necessary  first  to  decide  whether  we  would 
have  a  specie  bank  or  a  paper  bank.  If  we  are  to  have  a  specie  bank,  I  can- 
not consent  to  any  bill  for  that  purpose,  unless  it  contains  such  provisions  as 
will  afford  a  reasonable  certainty  that  it  will  be  able  to  pay  specie.  If  it  should 
commence  its  operations  as  a  specie  bank,  and  afterwards  be  obliged  to  sus- 
pend specie  payments,  when  its  notes  shall  have  gone  extensively  into  circu- 
lation, it  will  produce  all  the  consequences,  so  strongly  described,  which  have 
followed  the  suspension  by  the  State  banks,  in  a  still  greater  degree.  I  should 


ON  THE  GRANT  OF  THE  CHAR  PER  OF  1816.  (341 

very  much  prefer  a  plan  more  simple  and  intelligible,  that  is,  to  allow  the 
bank  to  issue  no  more  notes  for  the  payment  of  money  than  you  are  sure  they 
can  pay.  If  more  paper  is  necessary,  let  it  be  paper  in  a  different  form,  import- 
ing, on  the  face  of  it,  no  engagement  to  pay  specie — certificates  of  credit,  for 
instance,  receivable  in  payments  to  the  bank  or  the  Government. 

Mr.  RANDOLPH  rose  to  ask  two  questions,  one  of  the  gentleman  from  South 
Carolina,  the  other  of  the  gentleman  from  Maryland:  first,  how  the  paper  to 
be  created  by  this  bank  will  correct  the  vitiated  state  of  our  currency?  And, 
secondly,  how  bank  notes  can  answer  the  purpose  of  a  circulating  medium 
better  than  treasury  notes?  Though  no  stickler  for  treasury  notes,  Mr.  R. 
intimated  his  opinion  that  they  were,  in  time  of  peace,  a  better  substitute  tor 
gold  and  silver,  than  any  paper  he  had  heard  yet  submitted.  Mr.  R.  added 
some  incidental  observations,  amongst  which  was  the  remark,  that  he  was 
sorry  to  see  the  apathy,  the  listlessness  on  this  subject;  on  a  question,  which, 
if  it  passed,  would,  perhaps,  be  the  most  important  decided  since  the  establish- 
ment of  the  constitution;  and  that,  though  he  agreed  fully  as  to  the  extent  of 
the  existing  evil,  the  remedy  had  been  totally  mistaken,  &c. 

Mr.  SMITH  said,  in  reply,  that  the  gentleman  from  Virginia,  and  himself, 
only  differed  in  premises,  not  in  their  conclusions;  and  then  answered  at 
some  length,  the  arguments  of  Mr.  SERGEANT.  Banks,  to  obtain  a  fair  profit, 
he  said,  must  discount  to  fifty  per  cent,  more  than  the  amount  of  their  capital: 
but  he  would  be  willing  they  should  not  be  allowed  to  issue  paper  to  an  amount 
beyond  one-half  their  capita!.  lie  had  stated  that  the  banks  of  Columbia,  at 
this  time,  had  not  more  than  two-fifths  of  their  capital  paid  out  in  nv.tes,  and 
the  old  Bank  of  the  United  States,  at  no  period,  had  out  more  than  ten  mil- 
lions of  notes;  and  this  bank,  unless  it  should  sell  its  stock,  could  only  do 
business  to  the  extent  of  the  cash  in  its  vaults.  Mr.  S.  protested  against  the 
attempt  at  dexterity,  which  was  imputed  to  him  by  Mr.  Randolph.  He  had 
distinctly  stated  his  opinions,  arid  argued  fairly;  he  had  asserted  that  the  notes 
of  this  bank  would  be  every  where  better  than  treasury  notes;  but  it  was  on 
the  presumption  that  the  bank  would  redeem  its  issues  with  specie;  and  he 
repeated,  that,  it  the  bank  be  compelled  to  pay  specie  in  a  short  time,  as  he 
was  sure  it  would,  then  its  notes  would  be  greatly  preferable  to  treasury  notes, 
whether  at  Boston  or  New  Orleans,  &c. 

Mr.  WARD,  of  Massachusetts,  hoped  the  amendment  vyoukl  prevail.  He 
acknowledged  that,  in  the  progressive  state  of  this  country,  it  was  not  very  im- 
portant whetherthe  capital  was  thirty -five  or  twenty  millions;  thelatteramount 
could  be  used  with  nearly  as  much  ett'ectforany  mischievous  purpose  as  the  former 
— that  sum  would  be  quite  sufficient  to  influence  the  destinies  of  this  nation. 
But  he  preferred  the  smaller  sum,  because  he  believed  that  amount  large 
enough  for  every  commercial  purpose.  During  the  existence  of  the  old  Bank 
of  the  United  States,  a  period  of  very  great  commercial  activity,  that  institu- 
tion answeiedall  the  demands  of  the  country;  and  he  was  confident  that  twenty 
millions  now,  in  addition  to  the  local  capital,  was  enough.  Mr.  VV  defended 
the  Boston  banks  from  the  charge  of  deception,  in  promising  to  pay  specie 
without  doing  so.  They  had  not,  he  said,  broken  their  faith  to  the  public,  and 
any  man  could  there  obtain  specie  whenever  he  presented  one  of  their  notes 
for  payment.  If  this  bank  is  to  pay  specie,  said  Mr.  \V.  I  admit  that  it  will 
be  very  useful;  but  if  it  does  not,  its  notes  will  be  much  below  the  value  of 
treasury  notes,  and  will  not  answer  any  °;ood  purpose.  He  quoted  the  price 
of  treasury  notes  at  different  places,  and  detailed  the  reasons  for  their  unequal 
value;  and  such  he  said  would  be  the  condition  of  the  notes  of  a  national  bank, 
unless  bottomed  and  conducted  on  a  specie  capital.  To  expect  a  paper  of 
unequal  value  to  answer  the  purposes  of  a  general  medium,  would  be  as  bad, 
he  said,  as  to  expect  pieces  of  cloth  of  different  lengths  to  cover  an  equal  space 
of  ground  in  every  part  of  the  country.  Mr.  W.  believed  that  nothing  but 
mismanagement  hud  caused  the  inequality  in  the  value  of  treasury  notes 
81 


BANK  OF  THE  UNITED  STATES. 

These  notes  were  a  common  paper,  emanating  from  the  trustees  of  the  people, 
to  whom  all  the  people  were  more  or  less  indebted;  and  this  paper  could  only 
have  been  depreciated  by  misconduct;  which  opinion  he  entered  into  some 
details  to  prove. 

This  bank,  it  was  asserted,  would  remedy  the  great  evil  now  existing  in  our 
depreciated  currency.  He  did  not  believe  it  would.  If  the  gentleman  from 
Maryland,  (Mr.  SMITH)  were  to  lay  down  before  him  a  machine,  and  tell  him 
it  would  fly,  the  gentleman  would  pardon  him  for  saying  he  could  not  credit 
it,  until  he  showed  some  means  which  would  enable  it  to  do  so.  So  it  was, 
he  said,  with  the  bank  now  under  consideration.  He  deprecated  the  present 
state  of  things  as  much  as  any  one,  and  hoped  an  adequate  remedy  would  be 
provided.  The  United  States,  he  said,  lost,  at  present,  by  the  depreciated 
currency,  more  per  annum  than  the  whole  amount  derived  from  the  direct  tax 
in  the  large  State  of  Maryland.  Such  an  evil  called  loudly  for  a  remedy, 
and  he  hoped  one  would  be  applied;  but  a  bank  on  the  plan  now  proposed 
would  disappoint  its  advocates,  and  fail  to  cure  the  evil.  That  this  cure 
would  be  complete  he  did  not  however  expect  from  any  plan— some  inconve- 
nience would  attend  any  remedy;  it  was  to  be  expected — like  the  amputation 
of  a  limb  to,  preserve  life.  In  reply  to  an  assertion  made  in  the  course  of 
the  debate,  Mr.  W.  denied  that  the  banks  had  loaned  to  the  Government  from 
any  other  motives  than  those  of  gain.  Their  turn  had  been  served,  he  said,  and 
in  devising  the  plan  of  a  national  bank  he  should  not  be  influenced  by  any 
strong  regard  for  their  interest.  But  the  present  question  was  on  reducing 
the  amount  of  capital;  and  he  concluded  by  saying  that,  as  the  larger  sum 
would  increase  the  means  of  doing  mischief,  and  the  smaller  would  be  suffi- 
cient for  every  useful  purpose,  he  should  vote  to  reduce  it  to  twenty  millions. 

Mr.  WRIGHT  made  a  few  remarks  against  the  amendment.  In  former 
times,  a  capital  often  millions  was  found  necessary;  and  the  increased  demands 
of  the  country  would  certainly  require  now  the  amount  proposed  by  the  bill. 
He  declined  giving,  at  present,  he  said,  any  opinion  on  the  measure  itself;  but 
it  a  bank  was  to  be  created,  it  ought  not  to  be  less  than  thirty-five  millions. 

MR.  TUCKJER  said  that,  before  the  question  was  taken,  he  would  offer  a  few 
remarks  on  the  propriety  of  rejecting  the  proposition  of  the  gentleman  from 
Pennsylvania,  and  of  retaining  the  amount  of  capital  which  formed  a  consti- 
tuent part  of  the  plan  of  the  committee  that  reported  the  bill.  He  would  not 
enter  into  the  general  question  at  this  time:  he  would  waive  all  inquiries,  for 
the  present,  into  the  constitutionality  of  the  scheme,  and  into  the  policy  of 
establishing  an  institution  such  as  was  in  contemplation.  By  the  amendment 
proposed,  he  considered  it  to  be  admitted  that  a  bank  was  necessary,  and  that 
a  considerable  capital  would  be  required  to  effect  the  important,  the  essential 
purposes  which  had  induced  the  Committee  of  Finance  to  submit  to  the  House 
a  measure  of  so  much  magnitude,  for  their  adoption.  The  question  immedi- 
ately before  the  House,  and  to  which  he  should,  therefore,  strictly  confine 
himself,  is  not  whether  this  institution  shall  be  erected,  but  whether  the  capi- 
tal proposed  be  too  great  to  accomplish  its  object. 

In  this  inquiry,  said  Mr.  TUCKER,  I  shall  not  dwell  upon  the  danger  of  the 
bank  as  a  great  political  engine,  because  I  am  inclined  to  agree  with  an  honora- 
ble gentleman  from  Virginia,  that,  in  this  point  of  view,  there  is  very  little 
difference  between  a  bank  with  a  capital  of  twenty  millions  and  one  with  a 
capital  of  thirty -five  millions.  If  the  bank  can  be  used,  and  shall  be  used  as 
an  engine  of  oppression,  the  smaller  sum  would  have  little  to  recommend  it  in 
preference  to  the  larger.  We  should  scarcely  discern  the  difference  between 
the  pressure  of  the  two,  distributed  as  the  capital  must  be,  through  all  the 
States  of  the  continent.  If,  then,  gentlemen  are  averse  to  a  bank  with  thirty- 
live  millions  of  capital,  because  they  conceive  it  dangerous  to  the  liberties  of 
the  country,  are  they  serious  in  declaring  that  they  are  in  favor  of  such  an 
institution,  with  a  capital  of  twenty  millions?  Have  they  shown  any  reason 
for  the  opinion  that  the  latter  will  not  be  injurious,  if  the  former  will  prove 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.       (J43 

destructive;  or  are  we  to  understand  the  proposition  as  indicative  of  a  dispo- 
sition hostile  to  the  institution  altogether,  and  not  merely  hostile  to  the  bill 
before  you,  because  of  the  exorbitant  capital  proposed?  I  hope  not.  Gentle- 
men assure  us  that  they  are  favorable  to  the  establishment  of  a  bank  with 
such  a  capital,  and  on  such  principles  as  are  consistent  with  the  general  wel- 
fare, and  1  am.willing  to  place  all  proper  confidence  in  their  sincerity.  I  must 
suppose,  therefore,  that  they  rest  their  objections  to  the  amount  ot  the  capital 
on  other  grounds  than  that  which  has  been  suggested,  since  that  would  be 
equally  fatal  to  every  such  institution,  whose  capital  was  at  all  calculated  to 
effect  the  ends  of  the  establishment. 

The  question  as  to  the  proper  extent  of  the  capital,  must  mainly  depend  on 
the  result  of  an  inquiry  as  to  the  probability  of  a  bank  of  thirty-five  millions 
carrying  on  its  business  profitably  to  the  stockholders.  If  the  proposed  bank 
can  readily  find  employment  for  the  whole  of  the  proposed  capital,  there  can 
be  no  reason  for  diminishing  it,  with  a  view  to  the  profits  of  those  concerned. 
That  such  will  be  the  case,  must  readily  be  admitted,  when  we  refer  to  ac- 
knowledged facts,  and  apply  them  to  the  situation  in  which  this  institution 
will  be  placed.  Of  the  amount  of  thirty-five  millions,  twenty-eight  millions 
will  consist  of  United  States' stock,  carrying  an  interest  of  six  per  cent.,  and 
thus,  of  itself,  affording  employment  for  so  much  of  the  capital.  The  residue, 
of  seven  millions,  distributed  through  the  Union,  cannot  fail  to  find  employ- 
ment. Facts  within  our  knowledge,  furnish  the  best  test  on  this  subject. 
We  have  been  told,  in  the  course  of  the  debate,  that  when  the  old  bank  of 
the  United  States  was  established,  there  was  only  one  other  bank  in  existence 
whose  capital  did  not  exceed  four  hundred  thousand  dollars.  Since  that  time, 
the  number  of  banks  has  increased  io  upwards  of  two  hundred  and  fifty,  and 
the  bank  capital  to  more  than  eighty-two  millions.  Does  not  this  fact  prove 
the  readiness  with  which  bank  capital  can  find  employment  among  us?  Does 
it  not  prove  that,  in  this  new  country,  which  is  every  day  opening  to  the  popu- 
lation, new  occupations  for  capital — in  agriculture,  commerce,  and  manufac- 
tures, there  is  no  difficulty  in  disposing  ot  real  or  fictitious  capital  in  stimulat- 
ing the  active  industry  of  the  nation?  Is  it  not,  indeed,  in  strict  conformity 
with  the  doctrines  of  all  political  economists  and  with  the.  experience  of  every 
practical  man,  that  in  all  new  and  growing  countries,  the  great  difficulty 
is  not  to  find  employment  for  capital,  but  to  supply  the  demancffor  it?  Is  not 
our  comparatively  high  interest  itself  an  evidence  that,  notwithstanding  the 
immense  increase  of  capital,  the  demand  has  kept  pace  with  the  increase?  If, 
as  has  been  justly  contended,  the  rate  of  interest  is  governed  by  the  propor- 
tion between  the  demand  for  capital  and  the  supply,  the  rate  of  interest  here 
proves,  that  capital  has  not  yet  equalled  that  proportion  to  the  demand  which 
exists  in  other  countries.  The  argument,  then,  which  has  been  advanced  in 
debate,  that  \ve  cannot  require  so  large  a  capital,  because  that  of  Great  Bri- 
tain is  not  as  great,  is  not  entitled  to  much  consideration,  for  the  reasons  I 
have  mentioned.  New  countries  always  require  a  greater  capital,  in  propor- 
tion :o  their  actual  wealth  and  population,  than  old  ones,  because  the  held  for 
its  employment  is  always  more  extended  in  the  former  than  in  the  latter. 
And,  if  the  question  as  to  the  expediency  of  establishing  new  banks,  depended 
only  on  the  probability  of  their  finding  employment  tor  their  capital,  none 
could  doubt  of  the  propriety  of  the  measure.  We  have,  indeed,  on  this  sub- 
ject, a  test  which  rarely  errs.  Mercantile  men  are  aware  that  additional  capi- 
tal can  be  employed  in  banking,  >yith  great  advantage  to  the  bankers.  They 
form  a  class  of  our  population  which  is  proverbially  said  to  understand  its  pe- 
cuniary interests,  and  to  make  accurate  calculations  of  profit.  These  and 
others  are  every  were  engaged  in  the  effort  to  establish  new  banks.  In  New 
York,  as  I  have  understood,  it  is  contemplated  to  put  into  actitvity  an  addi- 
tional bank  capital  of  fourteen  millions.  In  the  State  which  I  have  the  honor 
to  represent,  efforts  have  been  lately  made  to  establish  fifteen  new  banks,  with 
a  capital,  I  presume,  of  about  seven  millions.  Do  not  these  things  prove  thai 
there  is  a  fair  prospect  of  profit;  and  that,  however  we  may  differ  as  to  the 
policy  of  increasing  those  establishments,  there  is  no  ground  for  supposing 


644  BANK  OP  THE  UNITED  STATES. 

they  will  find  difficulty  in  employing  their  capital?  If  so,  I  think  we  may; 
reasonably  suppose,  that  the  bank  of  the  United  States  (of  whose  capita! 
twenty-eight  millions  will  be  at  once  actively  employed)  can  readily  find  oc- 
cupation lor  the  residue. 

Another  important  subject  of  inquiry  in  relation  to  the  extent  of  the  capital 
of  the  proposed  bank,  is  connected  with  a  supposed  probable  increase  of 
the  circulating  medium  or  of  the  bank  notes  in  circulation.  It  has  been  con- 
tended by  the  gentleman  from  Pennsylvania,  (Mr.  SERGEANT)  that  the  esta- 
blishment of  this  bank  would  increase  instead  of  diminishing  the  evil  which 
the  chairman  of  the  Committee  of  Finance  has  so  ably  inveighed  against. 
That  evil  is  the  surcharged  state  of  the  circulation?  and  the  idea  seems  to  have 
been  entertained,  that  the  issue  of  the  United  States'  Bank  will  still  further 
"  surcharge  it." 

If  this  argument  be  correct,  it  would  be  fatal  to  a  bank  of  twenty  millions; 
nay,  to  every  bank  that  can  be  now  established.  Will  the  gentleman  then 
urge  it,  when  he  professes  his  friendly  disposition  to  the  establishment  of  a  bank 
with  a  smaller  capital?  It  is,  however,  I  conceive,  an  argument  at  variance 
with  acknowledged  facts,  it  is  not  true,  that  a  superabundant  paper  medium- 
can  be  forced  into  circulation,  so  long  as  specie  redemptions  are  preserved. 
Bank  notes  cannot  go  out,  unless  they  are  wanted,  so  long  as  the  banks  re- 
deem them  when  demanded.  It  is  an  aphorism  among  political  economists, 
that  it  is  impossible  to  surcharge  the  circulation,  whilst  specie  is  the  basis  of 
that  circulation.  The  truth  is  self-evident,  and  has  been  happily  illustrated 
bv  the  celebrated  author  of  the  Wealth  of  Nations,  who  has  remarked  that  the 
channel  of  circulation  can  only  contain  a  certain  quantity,  and  if  more  be 
attempted  to  be  poured  into  it,  it  will  flow  back  upon  its  source.  I  am  ready 
to  admit,  that  unlimited  and  blind  confidence  in  banking  institutions,  may 
sometimes  enable  them  to  over  deal;  but  I  need  not  stop  to  show  that  no  sucn 
blind  confidence  now  exists  or  is  likely  to  prevail. 

The  danger  of  a  surcharged  circulation  when  specie  redemption  shall  have 
been  resumed,  seems  then  to  be  visionary.  The  Bank  of  the  United  States 
will  either  be  unable  to  send  its  notes  into  circulation,  or  it  will  drive  in  a 
part  of  the  notes  of  the  State  banks.  That  the  former  will  not  be  difficult, 
every  day's  experience  demonstrates.  Every  ^!an^  tnat  !9  established,  soon 
finds  means  to  push  out  as  much  paper  as  its  business  requires.  Why,  there- 
fore, should  we  believe  for  a  moment,  that  the  Bank  of  the  United  States, 
•whose  paper  will  be  desirable  for  so  many  reasonsy  will  find  that  an  insuper- 
able barrier,  which  is  so  easily  surmounted  by  others?  If,  as  has  been  shown* 
it  can  lend  its  capital,  its  borrowers  will  circulate  its  paper,  and  the  natural 
effect  will  be  to  diminish,  in  proportion,  the  circulation  of  the  paper  of  the 
State  banks.  But  this  effect  will  be  produced  without  an  injury  to  them.  It 
is  an  error  to  suppose  that  the  business  of  a  bank  is  always  measured  by  the 
quantity  of  its  paper  in  circulation.  It  rarely  happens  that  any  bank  has  notes 
in  circulation  equal  to  the  amount  of  its  actual  capital,  and  it  is  notorious  that 
they  sometimes  draw  interest  upon  twice  the  amount  of  the  paper  which  they 
have  afloat.  Having  risen,  without  preparation,  merely  to  reply  to  some  of  the 
arguments  that  have  been  used  by  gentlemen,  I  am  unprovided  with  the 
estimate  lately  published  of  the  state  of  the  Philadelphia  banks.  If  I  am  not 
mistaken,  the  amount  of  notes  discounted,  Government  stock,  &c.  on  which 
they  drew  interest,  was  nearly  three  times  as  great  as  their  notes  in  circula- 
tion. I  have  before  me.  a  statement  of  the  banks  of  this  District,  whose 
issues  have  been  generally  deemed  more  excessive  than  those  of  any  other 
place.  From  this,  I  find  that,  whilst  their  actual  capital  somewhat  exceeds 
the  sum  of  three  millions  of  dollars,  their  notes  in  circulation  are  only  two 
millions  ninety-four  thousand;  and  whilst  the  same  institutions  have  lent  out 
in  discounted  notes  and  Government  stock  six  millions  two  hundred  and 
eighty  thousand  dollars,  their  notes  in  circulation  have  not  exceeded  two  mil- 
lions ninety-five  thousand  dollars,  which  is  about  one.  third  of  the  sum  on 
which  they  are  making  a  profit.  Here,  then,  we  have  decisive  evidence  of 
what  every  man,  at  all  acquainted  with  banking  transactions,  must  know,  that 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

the  profits  of  banks  cannot  fairly  be  measured  by  the  amount  of  their  notes 
in  circulation.  The  same  statement  furnishes  still  more  decisive  evidence. 
While  the  Bank  of  Columbia  has  lent  to  Government  and  to  individuals  much 
more  than  twice  the  amount  of  their  capital,  to  wit:  about  one  million  nine 
hundred  thousand  dollars,  it  has  in  circulation  only  three  hundred  thirty-six 
thousand  eight  hundred,  or  about  one  sixth  of  the  amount  of  its  loans.  Where- 
as, the  Union  Bank  (for  instance)  has  lent  to  Government  and  individuals, 
much  less  than  twice  the  amount  of  its  capital,  to  wit:  only  seven  hundred 
and  thirty-six  thousand  nine  hundred  dollars,  and  has  in  circulation  more 
than  four  hundred  and  twenty-seven  thousand  dollars,  largely  upwards  of  one 
half  the  amount  ofats  loans;  from  which  it  is  evident,  that  the  Bank  of  Colum- 
bia, whilst  it  has  the  smallest  amount  in  circulation,  has  proportionably  the 
largest  capital  at  interest,  and  is,  of  course,  making  the  largest  profit. 

These  statements  are  furnished,  not  as  affording  a  test  of  the  comparative 
merits  of  these  institutions,  but  merely  to  establish  what  I  think  they  une- 
quivocally prove,  that  the  profits  of  banks  bear  no  direct  ratio  to  the  amount 
of  their  notes  in  circulation,  and  that  it  is  not  fair  to  conclude  that  the  United 
States'  Bank  will  injure  the  State  banks  generally,  by  reducing  the  amount 
of  their  circulating  paper. 

I  must  not,  however,  be  understood  to  contend  that  the  establishment  of 
the  United  States'  Bank,  if  its  effects  are  to  re-establish  the  specie  basis  for 
our  circulation,  will  not  reduce  the  profits  of  any  of  the  banks.  It  doubtless 
will,  and  ought  to  reduce  the  profits  of  those  which  have  overdealt.  Those 
profits  liuve  been  too  large,  just  so  far  as  the  banks  have  been  guilty  of  over- 
dealing.  They  ought  to  be  corrected,  but  it  will  be  the  resuming  of  the  pay- 
ment of  specie  through  the  operation  of  the  United  States'  Bank,  which  will 
correct  them.  If  this  bank  were  to  go  into  operation  on  any  other  than  a 
specie  basis,  the  issue  of  its  notes  would  not  affect  the  profits  of  the  State 
banks.  It  is  not,  then,  the  competition  of  their  notes  for  the  circulation,  but 
the  necessity  of  specie  payments,  that  will  compel  them  to  curtail  their  dis- 
counts and  reduce  their  profits.  This  is  as  it  should  be;  the  effect  upon  the 
State  banks  will  be  wholesome  and  salutary.  Whilst  the  profits  of  some  are 
reduced,  those  of  others  will  be  increased  by  the  operation  of  a  national  bank 
upon  the  national  currency.  Whilst  some  must  curtail  their  business  to  meet 
the  demands  of  specie,  others,  which  are  now  restrained  because  specie  re- 
demption is  confined  to  themselves,  will  be  once  more  enabled  to  enlarge  their 
business  to  its  accustomed  extent.  Gentlemen  from  the  Eastern  States,  I 
should  imagine,  are,  therefore,  peculiarly  interested  in  the  measure,  because  it 
is  so  eminently  calculated  to  re-produce  that  equalization  of  profits  among 
the  banks  which  has,  for  some  time,  been  suspended,  so  much  to  their  disad- 
vantage. 

It  will  be  observed,  that  I  have,  throughout,  proceeded  upon  the  idea  that 
this  bank  is  always  to  redeem  its  paper  with  specie.  A  specie  basis  is  the  only 
true  foundation  of  all  banking.  Any  other  will  be  found  delusive  and  de- 
structive. The  committee,  therefore,  had  taken  a  precaution  which  seemed 
to  have  escaped  the  observation  of  the  gentleman  from  Pennsylvania,  (Mr. 
SERGEANT.)  That  gentleman  has  asked  what  greater  security  we  have  for 
the  payment  ot  specie  by  this  bank  than  by  others?  I  answer,  that  it  is  a 
condition  of  their  charter!  It  is  expressly  provided  by  that  charter,  that  they 
shall  not,  at  any  time,  suspend  specie  payments  without  authority  to  do  so. 
If  they  do,  their  charter  is  violated — it  is  void.  For  my  own  part,  as  a  mem- 
ber of  the  committee  who  reported  this  bill,  I  was  disposed  4*  to  make  assur- 
ance doubly  sure  arid  take  a  bond  of  fate,"  by  an  express  provision,  that  the 
charter  should  be  void  if  they  suspended  specie  payment.  Professional  gen- 
tlemen, however,  on  the  committee,  and  among  others,  if  I  mistake  not,  the 
able  gentleman  from  Pennsylvania,  (Mr.  HOPKINSON)  believed  such  a  clause 
unimportant,  because  it  was  necessarily  implied  in  the  condition  attached  to 
the  charter  by  the  provisions  of  the  bill.  It  is  then  an  essential  part  of  the  sys- 
tem, that  the  bank  should  redeem  its  notes  in  specie.  I  would  never  give  my 
vote  to  any  bank  of  another  character.  We  have,  then,  in  this  bank,  an  as- 


646  BANK  OF  THE  UNITED  STATES. 

surance  of  specie  payment,  not  afforded  by  others,  except,  perhaps,  by  those 
of  the  Eastern  States.  Of  this  much  we  are  assured,  that,  as  soon  as  it  ceases 
to  be  a  specie  bank,  it  ceases  to  exist,  so  that  we  are  in  no  danger  of  encoun- 
tering the  evil  which  the  gentleman  appears  to  apprehend. 

But,  the  same  gentleman  appears  to  suppose  that  the  contemplated  bank  will 
be  enabled  to  pay  specie,  because  the  Bank  of  Pennsylvania,  having  its  capi- 
tal in  specie  and 'United  States'  stock,  in  equal  proportions  with  those  propos- 
ed by  mis  bill,  finds  itself  without  the  power  of  meeting  its  engagements.  I 
cannot  admit  the  analogy  contended  for.  Though  the  proportion  of  specie  to 
stock  may  be  the  same,  yet  the  amount  of  specie  capital  in  this  bank  will  be 
so  much  greater  as  to  add  to  its  capacity  to  keep  its  notes  in  circulation.  But 
this  is  not  the  only  reason.  The  Bank  of  Pennsylania  has  already  in  circula- 
tion a  vast  deal  of  paper,  with  only  a  small  amount  of  specie  in  their  vaults. 
Were  they  to  commence  specie  payments,  their  notes  would  return  upon 
them  for  payment,  to  the  imminent  danger  of  the  bank,  unless  they  should  pre- 
viously adopt  the  precautionary  measures  in  their  power.  But  the  Bank  of 
the  United  States,  when  it  goes  into  operation,  will  have  its  one  million  four 
hundred  thousand  of  spece,  without  a  note  in  circulation.  In  issuing  their 
paper,  they  will  be  governed  by  circumstances,  and  should  it  return  upon  them 
too  rapidly  for  specie,  they  will,  at  once,  lessen  the  quantity  thrown  into  cir- 
culation. There  is,  then,  all  the  difference  between  the  situation  of  the  two 
banks,  that  may  reasonably  be  expected  between  two  concerns,  one  of  which 
is  just  commencing  business,  while  the  other  is  deeply  involved,  and  supposed 
to  be  unable  to  meet  the  just  demands  of  its  creditors.  Thus  we  see,  that, 
whilst  the  Bank  of  Pennsylvania  is  neither  bound  to  pay  specie  by  the  condi- 
tions of  its  charter,  nor  able,  at  once,  to  redeem  its  notes,  the  Bank  of  the 
United  States  will  be  able  and  obliged  to  make  gold  and  silver  the  basis  of 
its  circulation. 

Mr.  TUCKER  concluded  his  remarks  by  shortly  recapitulating  the  grounds 
which  he  had  attempted  to  maintain.  He  had  endeavored  to  show  that  a  capi- 
tal of  thirty -five  millions  would  readily  find  employment;  that  the  proposed 
bank  would  not  still  farther  surcharge  tne  circulation,  as  had  been  contended; 
that  the  establishment  of  the  Bank  of  the  United  States  would  not  injure  the 
State  banks,  though  he  admitted  the  resuming  of  specie  payments  would  ne- 
cessarily reduce  the  profits  of  some  of  them;  and  that  this  bank  would  be 
bound  by  its  charter,  and  enabled  by  its  funds,  to  rest  its  circulation  upon  the 
solid  foundation  of  a  specie  basis.  He  hoped, therefore,  the  amendment  pro- 
posed would  be  rejected. 

FEBRUARY  28th,  1816. 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NELSON, 
of  Virginia,  in  tne  chair,  on  the  bill — the  motion  to  reduce  the  capital,  being 
still  under  consideration. 

Messrs.  WEBSTER,  HOPKINSON,  SERGEANT,  and  PITKIN,  advocated  the  mo- 
tion, and  Messrs.  CUTHBERT,  SHARP,  and  CALHOUN,  opposed  it. 

Mr.  WEBSTER  first  addressed  the  House.  He  regretted  the  manner  in 
which  this  debate  had  been  commenced,  on  a  detached  feature  of  the  bill,  and 
not  a  question  affecting  the  principle;  and  expressed  his  fears  that  a  week  or 
two  would  be  lost  in  the  discussion  of  this  question,  to  no  purpose,  inasmuch 
as  it  might  ultimately  end  in  the  rejection  of  the  bill.  He  proceeded  to  reply 
to  the  arguments  of  the  advocates  of  the  bill.  It  was  a  mistaken  idea,  he  said, 
which  he  had  heard  uttered  on  this  subject,  that  we  were  about  to  reform  the 
national  currency.  No  nation  had  a  better  currency,  he  said,  than  the  United 
States — there  was  no  nation  which  had  guarded  its  currency  with  more  care; 
for  the  framers  of  the  constitution,  and  those  who  enacted  the  early  statutes 
on  this  subject,  were  hard-money  men;  they  had  felt,  and  therefore  duly  ap- 
preciated the  evils  of  a  paper  medium;  they,  therefore,  sedulously  guarded 
the  currency  of  the  United-States  from  debasement.  The  legal  currency  of 


ON  THE  GRANT  OF  THE  CHARTER  OF  181C.         647 

the  United  States  was  gold  and  silver  coin;  this  was  a  subject  in  regard  to 
which  Congress  had  run  into  no  folly. 

What,  then,  he  asked,  was  the  present  evil?  Having  a  perfectly  sound  na- 
tional currency,  and  the  Government  having  no  power  in  fact  to  make  any- 
thing else  current  but  gold  and  silver,  there  had  grown  up  in  different  States 
a  currency  of  paper  issued  by  banks,  setting  out  with  the  promise  to  pay  gold 
and  silver,  which  they  had  been  wholly  unable  to  redeem:  the  consequence 
was,  that  there  was  a  mass  of  paper  afloat,  of  perhaps  fifty  millions,  which  sus- 
tained no  immediate  relation  to  the  legal  currency  of  the  country — a  paper 
which  will  not  enable  any  man  to  pay  money  he  owes  to  his  neighbor,  or  his 
debts  to  the  Government.  The  banks  had  issued  more  money  than  they  could 
redeem,  and  the  evil  was  severely  felt,  &c.  Mr.  W.  declined  occupying  the 
time  of  the  House  to  prove  that  there  was  a  depreciation  of  the  paper  in  cir- 
culation: the  legal  standard  of  value  was  gold  and  silver:  the  relation  of  paper 
to  it  proved  its  state,  and  the  rate  of  its  depreciation.  Gold  and  silver  cur- 
rency, he  said,  was  the  law  of  the  land  at  home,  and  the  law  of  the  world 
abroad;  there  could,  in  the  present  state  of  the  world,  be  no  other  currency. 
In  consequence  of  the  immense  paper  issues  haying  banished  specie  from  cir- 
culation, the  Government  had  been  obliged,  in  direct  violation  of  existing 
statutes,  to  receive  the  amount  of  their  taxes  in  something  which  was  not  re- 
cognized by  law  as  the  money  of.  the  country,  and  which  was,  in  fact, 
greatly  depreciated,  &c.  This  was  the  evil. 

As  to  the  conduct  of  the  banks,  Mr.  W.  said  he  would  not  examine  whether 
the  great  advances  they  had  made  to  the  Government,  during  the  war,  were 
right  or  wrong  in  them,  or  whether  it  was  right  or  \vn>ii£  in  the  Government 
to  accept  them:  but,  since  the  peace,  he  contended,  their  conduct  had  been 
wholly  unjustifiable,  as  also  had  that  of  the  treasury  in  relation  to  them.  It 
had  been  supposed  the  banks  would  have  immediately  sold  out  the  stocks, 
with  which  they  had  no  business,  and  Have  fulfilled  their  engagements;  but 
public  expectation  had  in  this  respect  been  disappointed.  When  this  happen- 
ed, Mr.  W.  continued,  the  Government  ought,  by  the  use  of  the  means  in  its 
power,  to  have  compelled  the  banks  to  return  to  their  specie  payments.  In 
nis  opinion,  Mr.  W.  said,  any  remedy  now  to  be  applied  to  this  evil,  must  be 
applied  to  the  depreciated  mass  of  paper  itself;  it  must  be  some  measure  which 
would  give  heat  and  life  to  this  mortified  mass  of  the  body  politic.  The  evil 
was  not  to  be  remedied  by  introducing  a  new  paper  circulation;  there  could 
be  no  such  thing,  he  showed  by  a  variety  of  illustrations,  as  two  media  in  cir- 
culation, the  one  credited  and  the  other  discredited.  All  bank  paper,  he  ar- 
gued, derives  its  credit  solely  from  its  relation  to  gold  and  silver;  arid  there 
was  no  remedy  for  the  state  of  depreciation  of  the  paper  currency  but  the 
resumption  oi  specie  payments.  If  all  the  property  of  the  United  States  was 
pledged  for  the  redemption  of  these  tiity  millions  of  paper,  it  would  not  there- 
by be  brought  up  to  par;  or,  if  it  did,  that  would  happen  which  had  never  yet 
happened  in  any  other  country.  An  issue  of  treasury  notes,  he  added,  would 
have  no  better  effect  than  the  establishment  of  a  new  bank  paper.  He  illus- 
trated this  general  position  by  referring  to  a  period  anterior  to  the  time  of  the 
reformation  of  the  coin  of  England,  when  the  existing  coin  had  been  much  de- 
based by  clipping,  &.c.  which  had  created  much  alarm.  An  attempt  had  been 
made  to  correct  the  currency'  thus  vitiated,  by  throwing  a  quantity  of  sound 
coin  into  circulation  with  the  debased;  the  result  was,  that  the  sound  coin 
disappeared,  was  hoarded  up,  because  more  valuable  than  that  of  the  same 
nominal  value  which  was  in  general  circulation,  &c. 

The  establishment  of  a  national  bank  not  being  in  his  opinion  the  proper 
remedy,  he  proceeded  to  exame  what  was.  The  solvency  of  the  banks  was  not 
questioned:  there  could  be  no  doubt,  he  said,  if  the  banks  would  unite  in  the 
object,  they  might  in  three  weeks  resume  the  payment  of  specie,  and  render 
the  adoption  of  any  measure  by  this  House  wholly  unnecessary.  The  banks, 
he  said,  were  making  extravagant  profits  out  of  the  present  state  of  things, 
which  ought  to  be  curtailed.  He  referred,  for  illustration  of  this  point,  to  the 
state  of  the  Bank  of  Pennsylvania,  as  exhibited  in  the  return  to  the  Legisla- 


648  BANK  OF  THE  UNITED  STATES. 

ture  of  that  State,  which,  with  a  capital  of  2,500,000  dollars,  had  done  a  dis- 
count business  of  4,133,000  dollars,  at  the  same  time  that  it  held  1,811,000 
dollars  of  the  United  States  stock — so  that,  without  taking  into  account  a 
mass  of  treasury  notes,  real  estate,  &c.  that  bank  was  receiving  interest  on 
six  and  a  half  millions,  nearly  three  times  the  amount  of  its  capital.  This  he 
considered  an  extraordinary  fact.  That  bank  had  been  pronounced  by  the 
Legislature  to  be  in  "  a  flourishing  state";  it  was  so  to  the  stockholders  in 
the  bank,  he  doubted  not;  but  how  was  it  to  those  who  were  affected  by  the 
depreciation  of  it— to  the  man  who  comes  into  an  office  for  life,  and  relin- 
quishes all  his  prospects  and  profits  for  a  fixed  salary,  not  to  be  diminished 
during  his  continuance  in  office,*  to  the  poor  pensioner,  whose  wounds,  received 
in  his  country's  service,  are  yet  bleeding? 

These  banks  not  emanating  from  Congress,  what  engine  were  Congress  to 
use  for  remedying  the  existing  evil?  Their  only  legitimate  power,  he  said, 
was  to  interdict  the  paper  ot  such  banks  as  do  not  pay  specie,  from  being  re- 
ceived at  the  custom  house.  With  a  receipt  of  forty  millions  a  year,  Mr.  W. 
said,  if  the  Government  was  faithful  to  itself  and  to  the  interests  of  the  peo- 
ple, they  could  control  the  evil;  it  was  their  duty  to  make  the  effort.  They 
should  have  made  it  long  ago,  and  they  ought  now  to  make  it.  The  evil 
grows  every  day  worse  by  indulgence.  If  Congress  did  not  now  make  a  stand, 
and  stop  the  current  whilst  they  might,  would  they,  when  the  current  grew 
stronger  and  stronger,  hereafter  do  it?  If  this  Congress  should  adjourn  with- 
out attempting  a  remedy,  he  said,  it  would  desert  its  duty. 

If  this  bank  were  calculated  to  do  good  at  all,  Mr.  W.  contended  it  was 
only  as  an  agent  of  the  revenue  officers  of  the  Government.  As  a  bank  esta- 
blished for  ordinary  banking  purposes,  what  would  be  its  operation?  If  this 
were  to  be  a  specie  bank,  it  would  go  into  operation  at  Philadelphia;  would 
promise  but  little,  but  would  perform  all  its  promises:  independent  of  its  con- 
nexion with  the  Government,  it  would  not  be  able  to  get  its  notes  into  circu- 
lation— nobody  would  borrow  of  it;  it  would  operate  merely  as  a  bank  of  de- 
posite.  All  its  transactions  would  be  confined  to  the  negotiation  of  paper  for 
merchants,  to  enable  them  to  anticipate  for  a  short  time  so  much  of  their  in- 
come as  was  necessary  to  pay  their  bonds  for  duties  on  importations;  and  so 
far,  but  no  farther,  it  would  have  a  positive  good  operation.  But,  as  a  mea- 
sure to  supply  a  remedy  for  the  disorders  of  our  currency,  Mr.  W.  argued 
this  bank  would  be  of  no  efficacy;  because,  if  he  were  not  mistaken  in  his 
views,  its  bills  would  have  but  a  very  limited  circulation. 

As  to  the  evil  of  the  present  state  of  things,  Mr.  W.  admitted  it  in  its  ful- 
lest extent.  If  he  was  not  mistaken,  there  were  some  millions  in  the  treasury, 
ot  paper,  which  were  nearly  worthless  and  were  now  wholly  useless  to  the 
Government,  by  which  an  actual  loss  of  considerable  amount  must  certainly 
be  sustained  by  the  treasury.  This  was  an  evil  which,  he  said,  ought  to  be 
met  at  once;  because  it  would  grow  greater  by  indulgence.  In  the  end,  the 
taxes  must  be  paid  in  the  legal  money  of  the  country;  and  the  sooner  that 
was  brought  about  the  better.  Such  was  the  operation  of  the  present  state  of 
the  circulating  medium,  he  proceeded  to  show,  that  the  duties  laid  by  the 
United  States  were  at  a  rate  of  ten  per  cent,  higher  in  Boston  than  in  Balti- 
more, and  in  Baltimore  higher  than  in  Washington,  &c.  If  Congress  were  to 
pass  forty  statutes  on  the  subject,  he  said,  they  would  not  make  the  law  more 
conclusive  than  it  now  was,  that  nothing  should  be  received  in  payment  of 
duties  to  the  Government  but  specie;  and  yet,  no  regard  was  paid  to  the  im- 
perative injunctions  of  the  law  in  this  respect.  The  whole  strength  of  the 
Government,  he  was  of  opinion,  ought  to  be  put  forth  to  compel  the  payment 
of  the  duties  and  taxes  to  the  Government  in  the  legal  currency  of  the  country. 

In  regard  to  the  plan  of  this  proposed  bank,  Mr.  W.  said  he  would  consent 
to  no  bank  which,  to  all  intents  and  purposes,  was  not  a  specie  bank;  arid  in 
that  view  he  was  in  favor  of  the  proposed  amendment.  He  expressed  some 
alarm  at  the  stock  feature  of  the  bank;  which  would  enable  and  might  induce 
the  existing  bank  corporations  to  come  forward  and  take  up  the  whole  stock 
of  this  national  bank.  He  should  be  glad  to  see  a  bank  established,  he  ob- 


ON   TIIK   (.KANT   OF   THF,   CMARTKK   OF    1816.  649 

served,  in  the  course  of  his  remarks  on  this  point,  which  would  command  the 
solid  capital  of  the  country.  There  were  men,  he  said,  of  wealth  and  stand- 
ing, who  would  embark  their  funds  in  a  bank  constituted  on  commercial  specie, 
principles,  but  who  would  not  associate  in  such  an  institution  with  the  stock- 
holders in  the  country,  any  more  than  a  good  currency  would  associate  with 
a  bad  one.  A  national  bank,  he  said,  ought  to  be  regarded,  not  as  the  power 
to  rectify  the  present  state  of  (he  currency,  but  as  a  means  to  aid  the  Govern- 
ment in  the  exercise  of  its  power  in  tins  respect.  lie  concluded  his  remarks 
by  saying  that  the  power  ot  the  Government  must  be  exercised  in  some  way, 
and  that  speedily,  or  evils  would  result,  the  extent  of  which  he  would  not  at- 
tempt to  describe. 


Mr.  CUTHHERT  followed,  in  opposition  to  the  proposed  amendment;  though 


contrary  effect,  thus:  That,  to  be/;om',»  and  remain  a  specie  bank,  the  institu- 
tion must  be  slow  in  its  operations,  and  the  directors  and  stockholders  be. 
content  with  small  sains  on  their  capital:  that  the  interest  they  would  draw, 
of  six  per  cent,  on  the  stock  part  of  their  capita!,  would  aid  them  in  this 
<:ours«i,  and  induce  them  to  be  satisfied  with  less  gains  in  the  way  of  dis- 
counts, <$cc.  In  opposition  to  the  proposal  to  reduce  tin*  capital  of  tli:-  Lank, 
he  took,  for  his  ground  work,  two  facts,  which  would  not  be  questioned:  tirst, 
that  this  is  a  growing  nation,  in  population,  resources,  wealth,  and  comm 

;dly,  that  there  is,  from  the  natuiv  of  things,  an  absolute  uncertainty  as 
to  the  quantity  of  capital  which  may  be  required,  und  the  extent  of  tin;  busi- 
ness which  may  be  done  by  a  national  bank.  He  argued,  from  these  posi- 
rirns,  that  the  bank  ought  to  have  the  power  of  contracting  or  expanding  itself 
to  the  wants  of  the  country:  and.  if  (he  business  of  the  country  required  the 
use  ol'a  larger  amount  of  discounts  than  would  be  made  on  twenty  millions, 
that  the  operations  of  the  bank  ought  not  to  be  cramped.  In  this  nation, 
growing  in  population,  enterprise, and  wealth,  where  all  those  uses  of  society, 
which  require  active  capital  and  a  general  circulating  medium,  were  every 
day  rapidly  multiplying  and  extending,  he  would  not  place  narrow  limits  on 
the  useful  agency  of  this  bank — lie  compared  such  a  course,  to  placing  a  la-'- 
of  iron  on  the  swelling  muscles  and  growing  energies  of  a  vigorous  youth. 
It  was  much  better,  he  concluded,  to  have  a  capital  larger  than  necessary, 
than  one  much  too  small.  Mr.  ('.  n-xt  proceeded  to  examine  the  utility  ot  a 
national  bank,  as  compared  with  the  State  banks,  in  promoting  exchanges, 
remittances,  and  transfer?,  by  Government  and  individuals,  lie  stated  their 
various  operations,  in  a  plain  and  intelligible  manner:  and  from  his  facts  on 
this  subject,  drew  the  conclusion,  that  a  national  bank,  only,  could  effica- 
ciously promote  the  exchange  of  moneys  and  commodities — that  internal  com- 
merce, which  serves  to  knit  together  and  fertilize  every  section  of  the  country. 
A  national  bank  he  compared  to  the  ocean  of  commerce,  which  bears  on  its 
bosom  the  freights  of  all  regions  from  one  to  the  other:  the,  State  banks  to  the 
rivers,  which  are  the  channel  of  communication  within  their  particular  limited 
sphere.  In  reply  to  the  argument,  that  the  evil  of  the  redundancy  aiu.  de- 
preciation of  the  present  paper  circulation,  would  not  be  corrected  by  throw- 
ing other  paper  into  circulation,  he  said  that  the  national  bank,  instead  of 
increasing  the  quantum  of  paper,  would  substitute  other  paper  in  lieu  of  a 
portion  of  that  now-  in  circulation,  and,  by  this  operation,  the  remainder  would 
be  brought  to  a  specie  value.  A  further  argument  he  urged  in  favor  of  a  large 
capital,  was  this:  that  a  bank  of  twenty  millions  would  issue  as  mnch  paper 
as  a  bank  of  thirty-five  million.-,  as  the  issue  would  be  limited  by  the  demands 
of  society:  but,  with  a  large  capital,  there  would  be  greater  security  to  indi- 
viduals/ The  difference,  between  the  two  capitals,  would  be  the  difference 
between  two  merchants  carrying  on  the  same  commercial  speculations,  tin- 
one  with  a  large,  the  oilier  with  a  small  capital:  the  creditors  of  the  first 
82 


650  BANK  OF  THE  UNITED  STATES 

having,  undoubtedly,  better  security  than  those  of  the  last,  &c.     On  these 
and  other  grounds,  Mr.  C.  opposed  the  amendment. 

Mr.  HOPKINSON  took  the  other  side  of  the  question.     He  had  come  to  Con- 

fress,  lie  said,  with  a  decided  impression  in  favor  of  a  national  bank ;  not  that 
e  believed  its  agency  indispensable  in  reproducing  specie  payments,  but,  be- 
cause he  believed  it  would  be  useful  in  this  respect,  and  always  had  believed 
that  a  national  bank  was  an  useful  agent  in  managing  the  financial  concerns 
of  the  Government.  With  these  views,  he  said,  he  had  hoped  to  have  seen  a 
scheme  of  a  bank  proposed  to  this  House  for  consideration,  requiring  little  or 
no  discussion.  Referring  to  the  voluminous  discussions,  at  preceding  ses- 
sions, on  this  subject,  and  to  the  various  plans  of  a  bank  presented,  examin- 
ed, and  dismissed,  he  had  hoped  that  gentlemen,  laying  aside  their  visionary 
theories,  would  have  resorted  to  the  test  of  experience,  and  established  a 
bank  according  to  its  lessons.  Tn  this  remark  Mr.  H.  hsd  reference  to  the 
late  Bank  of  the  United  States,  to  the  management  and  winding  up  of  which, 
he  paid  a  high  compliment.  He  was  sorry,  he  said,  to  find  the  plan  now  pro- 
posed was  so  different  from  that  simple  character  he  approved,  as  to  deter- 
mine him  not  to  give  it  even  his  feeble  support.  He  cautioned  the  House  not 
to  be  too  hasty  in  acting  on  this  subject;  to  weigh  it  well,  and  coolly  consider 
it.  We  all  feel  the  present  evil,  said  he:  and  a  state  of  suffering  is  not  favor- 
able to  deliberation.  He  warned  the  House  not  inconsiderately  to  adopt 
this  expedient,  lest  they  should  act  like  an  unfortunate  debtor,  who  plunges 
on  in  expedient  after  expedient,  all  under  pretence  and  hope  of  a  remedy, 
until  he  is  involved  in  irretrievable  ruin;  when,  if  he  had  acted  with  a  patient 
prudence,  leaving  something  to  time,  and  much  to  caution,  he  might  have 
overcome  his  difficulties.  The  late  war,  Mr.  H.  said,  (in  speaking  of  the 
present  state  of  the  currency)  had  been  a  tremendous  shock  to  all  the  institu- 
tions of  the  country,  which  had  suffered  in  all  its  interests,  and  in  none  more 
than  in  its  financial  concerns.  Could  it,  he  asked,  have  been  reasonably  ex- 
pected, as  had  been  suggested,  that,  on  the  return  of  peace,  the  evil,  in  this 
respect,  would  have  been  immediately  remedied?  No,  he  said;  great  evils 
require  a  slow  remedy.  In  this  young  nation,  and  with  its  vast  resources  and 
solid  wealth,  the  remedies  would  come  of  themselves,  in  a  great  degree,  if  we 
have  patience  to  wait  a  little  for  them:  at  least,  he  said,  let  us  not,  by  our 
rashness,  destroy  all  hope  of  remedying  the  evil.  After  other  general  remarks 
of  this  character,  Mr.  H.  then  proceeded  to  discuss  the  question  immediately 
before  the  House. 

He  was  in  favor  of  a  reduction  of  the  capital,  though  there  were  in  the  sys- 
tem other  features  much  more  exceptionable  to  him  than  the  amount  of  the 
capital;  if  the  motion  to  reduce  the  capital,  therefore,  succeeded,  he  wished 
it  to  be  considered  that  he  should  not  feel  himself  thereby  pledged  to  accept 
the  bill.  Mr.  H.  urged  many  arguments  against  a  large  amount  of  capital, 
treating  as  wholly  ideal  the  notion  of  a  bank  of  thirty- five  millions  of  capital 
confining  its  operations  to  seven,  eight,  ten,  or  twenty  millions,  as  the  wants 
of  the  country  might  require;  the  bank,  he  said,  must  do  a  business  in  propor- 
tion to  its  capital,  and  such  a  business  it  would  always  do  as  to  secure  it  a 
competent  dividend  on  its  whole  capital.  Mr.  H.  said  he  was  not  one  of 
those  who  advocated  a  bank  beyond  the  principle  of  its  being  a  means  of  aid- 
ing the  Government  in  its  fiscal  administration.  He  advocated  not  such  an 
institution  as  an  engine  of  Government:  in  that  shape,  he  said,  they  should 
get  beyond  the  powers  of  Congress  to  establish  a  bank.  He,  therefore, 
argued,  that  the  Government  ought  to  have  no  concern  in  the  stock  of  this 
bank;  nor,  beyond  what  the  value  of  its  custom  or  business  gave  it,  ought  the 
Government  to  have  any  control  over  the  bank.  There  might  be  occasions 
when,  and  reasons  why,  a  Government  should  put  stock  into  a  bank;  but,  as 
an  engine  of  power  and  profit,  the  Government  ought  to  have  nothing  to  do 
with  it.  Mr.  H.  then  examined  the  arguments  in  favor  of  the  proposed  amount 
of  capital  of  the  bank,  and  replied  to  them,  contending  that  the  argument,  of 
increased  demand  for  bank  capital,  was  wholly  fallacious,  because  it  put  out 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

of  view  the  multiplication  of  private  banks  within  a  few  years  past;  and  illus- 
trating his  views  on  this  head  by  reference  to  the  history  of  banking  in  Eu- 
rope. By  every  test  to  which  he  could  resort,  the  amount  even  ot  twenty 
millions  was  much  too  large.  There  was  great  danger, he  then  argued,  in  es- 
tablishing an  institution  of  this  kind — no  such  engine  could  be  created,  much 
less  of  this  enormous  magnitude,  without  danger— as  the  most  beneficial 
agents,  ill  applied,  become  dangerous  and  destructive,  &.c.  He  defended  the 
State  banks  from  imputations  cast  on  them,  and  contended  that  they  had 
great  claims  on  the  attention  and  respect  of  even  the  General  Government, 
from  their  extensive  and  beneficial  influence.  Every  injury  to  them,  so  rami- 
fied were  they  into  all  the  relations  of  society,  must  be  a  deep  injury  to  the 
general  interest;  and  their  interests  ought,  therefore,  to  be  duly  regarded. 
He  excepted  from  this  encomium  the  litter  of  banks  lately  created  in  Penn- 
sylvania, which  he  considered  the  offspring  of  private  speculation  and  legis- 
lative fraud,  in  defiance  of  the  wise  interposition  of  the  constitutional  power 
of  the  Governor  of  that  State  against  them.  If  the  State  banks  in  our  cities 
had  yielded  to  the  threats  and  seductions  of  the  Government,  and,  in  a  de- 
gree, to  public  sentiment,  in  making  loans  to  the  Government  more  extensive 
than  prudent,  it  ought  to  be  here  no  ground  of  accusation  against  them;  every 
engine,  he  said,  had  been  put  in  motion  to  influence  them;  even  the  Secretary 
of  the  Treasury  had,  in  person,  implored  their  agency  in  relieving  the  trea- 
sury from  its  difficulties.  Mr.  H.,  in  the  course  of  his  argument,  denied  that 
the  excessive  issues  had  been  the  cause  of  the  stoppage  of  specie  payments; 
there  had  been  no  such  excessive  issues,  as  represented:  nor,  as  far  as  regard- 
ed the  banks  at  Philadelphia,  at  least,  was  there,  at  thi^  moment,  an  exces- 
sive issue  of  paper.  Referring  to  the  state  of  those  banks,  as  reported  to  the 
State  Legislature,  lie  said,  some  of  them  have  not  paper  in  circulation  to  the 
amount  of  one-third  of  their  capital:  and  this  was  not  as  far  as  they  might 
fairly  go.  The  depreciation  was  not  owing,  he  also  argued,  to  the  scarcity  of 
specie  in  the  country:  there  was  enough  specie  in  the  country  for  the  ordinary 
bank  transactions,  on  the  existing  bank  capital,  and  to  do  a  specie  business, ^too, 
Why,  then,  he  then  proceeded  to  examine,  do  not  the  banks  pay  specie?  The 
caustii)f  suspension  of  payment  in  specie,  he  said,  was  not  the  excessive  is- 
sues of  paper,  or  scarcity  of  specie,  but  that  loss  of  public  confidence  which 
attends,  at  all  times,  public  calamity  and  danger — those  periods  of  gloom  and 
dismay  in  which  all  men  are  disposed  to  obtain,  in  lieu  of  paper,  what  will  be 
of  value  to  them  in  any  and  every  state  of  things,  £c.  Had  the  banks  ot 
Philadelphia  continued  their  vault's  open  four  and  twenty  hours  longer  than 
they  had  done,  there  would  not,  probably,  have  been  a  doit  in  them;  in  one 
day,  it  was  said,  that  one  bank  in  that  city  had  distributed,  in  specie,  for  which 
a  general  run  was  made  on  it,  three  hundred  thousand  dollars.  The  banks 
had  been  compelled  to  close  their  vaults.  In  this  course,  he  showed,  by  va- 
rious facts  and  arguments,  they  had  been  supported  by  public  opinion.  To 
resume  payments  in  specie,  he  said,  was  a  work  of  time  and  caution.  To 
enable  them  to  do  it,  the  public  stock  the  banks  hold  must  be  sold,  but  gra- 
dually sold,  or  it  cannot  be  sold  without  a  heavy  loss.  The  banks,  he  said, 
were  no\y,  and  for  some  time  had  been,  taking  measures  with  due  prudence 
and  caution,  for  a  resumption  of  specie  payments.  It  was  a  strong  reason,  he 
concluded  his  argumentative  speech  by  saying,  with  him,  against  this  bank, 
that  it  would,  according  to  the  showing  of  its  advocates,  operate  coercively, 
and,  of  course,  injuriously,  on  the  State  banks. 

Mr.  SHARP  next  addressed  the  Chair  on  this  subject,  expressing,  in  the  out- 
set, his  regret  that  the  attack  on  this  bank  had  been  on  its  details,  instead  of 
its  principle.  Mr.  S.  explained  his  views  of  the  difference  between  the  as- 
pect of  this  question  at  this  time,  and  that  which  it  presented  at  the  last 
winter,  when  it  had  been  so  long  fruitlessly  agitated.  The  principal  object  of 
the  advocates  of  a  national  bank,  at  the  last  session,  was  to  afford  to  the  Go- 
vernment the  facility  of  obtaining  occasional  loans  to  carry  on  the  operations 
of  the  Government,  &c.  and  to  sustain  the  public  credit;  the  object  at  present 


G5t?  BANK  OF  THE  UNITED  STATES. 

was  of  a  different  character— to  remedy  the  evil  of  a  vitiated  currency,  which 
had  lately  been  much  exaggerated,  and  which  demanded  a  remedy.  Mr.  S. 
here  examined  the  operation  of  this  depreciation  on  the  revenues  of  Govern- 
ment, Which,  he  clearly  showed,  were  most  injuriously  affected  by  it.  The 
Government  sustained  a  clear  loss  of  large  amount — a  loss  which  must  be 
made  up  by  (axes  levied  on  the  industry  and  labor  of  the  community;  and 
who  gained  by  it?  Those  whose  duty  it  is  to  remedy  the  evil;  it  is  the  own- 
ers of  bank  stock  who  derive  the  benefit  from  the  depreciation  of  their  own 
paper.  All  acknowledged  the  extent  of  the  evil,  and  the  necessity  of  a  reme- 
dy, though  they  differed  as  to  the  nature  of  the  remedy. 

In  reply  to  the  argument  of  Mr.  WEBSTER,  that  the  remedy  for  the  evil  was 
in  the  power  of  the  Secretary  of  the  Treasury,  by  requiring  payment  of  the 
dues  to  Government  in  specie,  Mr.  S.  said  the'gentleman  had  not  demon- 
strated that  there-was  specie  enough  in  the  country  for  the  purposes  of  Ihe 
payment  of  the  revenue  to  the  treasury,  nor  that  the  banks  have  not  the  means, 
ultimately,  to  force  the  treasury  to  take  their  paper  in  payments  to  the  Go- 
vernment. The  disposition  was  not  wanting  in  the  officer  at  the  head  of 
that  Department,  to  apply  the  remedy,  if  it  were  in  his  power;  but,  Mr.  S. 
said,  an  act  of  Congress  only  could  apply  an  adequate  remedy.  If  that  now 
proposed  was  the  proper  measure,  let  it  be  adopted;  if  a  better  can  be  pro 
posed,  let  it  be  shown-  He  was  not,  he  added,  so  opiniated  as  to  assert  that 
this  was  the  only  remedy;  but  a  national  bank  was  a  measure  tried  and  un- 
derstood, and  he,  therefore,  preferred  it — if  it  should  not  succeed,  he  would 
support  any  other  measure  adequate  to  the  object  in  view. 

In  reply  to  Mr.  HOPKIXSOX'S  reference  to  the  old  Bank  of  the  United 
States-,  as  an  institution  whose  wisdom  had  been  tested  by  experience,  Mr. 
S.  said  he  could  not  see  the  force  of  the  wide  distinction  the  gentleman  had 
drawn,  between  the  plan  of  that  bank  and  of  this.  He  compared  these  fea- 
tures, and  showed  that  their  dissimilarity  was  not  such  as  to  change  their 
principle.  This,  he  said,  was  intended  to  be  a  specie  bank,  gradually  put  in 
operation,  and  by  it,  business  connected  with  the  measures  of  the  Govern- 
ment, to  introduce  a  general  resumption  of  specie  payments  and  circulation. 
In  regard  to  the  State  banking  institutions,  Mr.  S.  avowed  as  strong  an  attach- 
ment to  their  interest  and  prosperity,  as  the  gentleman  from  Pennsylvania: 
but  his  attachment  to  them  as  individuals,  must  be  regulated  by  the  correct- 
ness of  their  conduct.  If  they  abandoned  the  path  ot  probity  and  duty,  he 
must  renounce  his  attachment  to  them,  unless  they  showed  a  disposition  to  re- 
return  to  it.  In  regard  to  the  means  alleged  to  have  been  employed  to  obtain 
loans  from  these  banks,  when  they  yielded  to  the  solicitations  of  the  treasury, 
Mr.  S.  said  they  took  care  to  get  the  best  bargain  they  could  out  of  its  neces- 
sities; in  addition  to  the  just  interest  of  six  per  cent,  they  got  a  premium  of 
somewhere  about  twenty  per  cent,  for  their  friendly  loans  to  the  Government. 
To  prove  that  they  had  made  a  good  business  of  it,  he  said  that  there  was  not 
one  of  those  banks  but  could  sell  out  its  stock  for  specie,  and  make  a  hand- 
some profit  on  the  whole  transaction,  besides  the  advantages  they  have  already 
derived;  but,  he  said,  they  did  not  want  to  do  it— they  had  rather  keep  then- 
stock,  bearing  interest,  and  issue  paper  on  it,  &c. 

As  to  the  idea  of  danger  to  the  Government  from  a  bank  of  thirty-five  mil- 
lions, he  said  it  was  fanciful.  How  far  could  a  bank  be  dangerous  to  the  Go- 
vernment? When  banking  was  a  monopoly  in  the  hands  ot  a  Government,  or 
of  a  few  individuals;  and  then  only.  Competition,  he  said,  destroyed  mono- 
poly, and  destroyed  the  danger  from  such  an  institution;  and  it  could  not  be 
argued  that  there  was  not  now  competition  enough  to  deprive  such  an  institu- 
tion as  this  of  the  character  of  an  engine  dangerous  to  the  liberties  of  the  coun- 
try. A  bank,  he  said,  might  be  more  profitable  to  the  stockholders  with  a 
capital  of  twenty  millions;  but  it  would  be  more  useful  to  the  community  with 
a  larger  capital,  &c-  Having  offered  these  and  other  views  of  the  subject,  he 
concluded  by  expressing  his  hope  that  this  bill  would  pass  with  very  little 
alteration  of  its  present  provisions. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

Mr.  CALHOUX  then  rose,  and,  in  an  energetic  manner,  vindicated  the  bill, 
and  his  views  of  it,  from  the  attack  which  had  been  made  on  thetn.  He  said 
no  man  in  the  House  would  reprobate,  more  than  he,  the  establishment  of  a 
bank  which  was  not  a  specie  bank.  A  bank  not  to  pav  specie,  he  said,  would 
be  an  instrument  of  deception;  it  would  have  no  character  or  feature  of  a 
bank— he  should  regard  it  with  disgust  and  abhorrence.  This  bank,  he  as- 
serted, in  reply  to  contrary  assertions,  if  established,  would  be  a  specie  bank. 
He  professed  himself  ready  to  remedy  any  defects  which  should  be  pointed 
out;  but  he  hoped  the  committee  would  not  be  influenced  to  destroy  its  essen- 
tial features  by  such  vague  arguments  as  had  been  urged  against  them.  This 
was  to  be  a  specie  bank,  or  he  would  have  nothing  to  do  with  it.  He  called 
upon  gentlemen  not  to  give  way  to  objections  to  the  details  of  the  bill,  made 
by  those  who  were  altogether  inimical  to  the  establishment  of  any  bank;  their 
arguments,  he  intimated,  ought  to  be  received  with  suspicion,  because  their 
views  of  the  subject  might  be  supposed  to  be  warped  by  their  hostility  to  the 
project  altogether.  Mr.  C.  then  spoke  at  length  in  explanation  and  reply  to 
those  gentlemen  who  had  preceded  him  in  debate.  In  regard  to  the  estima- 
tion of  paper  in  circulation,  £c.  he  took  occasion  to  say,  that  he  and  General 
SMITH  had  not  widely  differed  in  opinion  on  that  head,  when  they  came  to 
understand  terms.  Mr.  C.  said  he  had  not  specified  the  particular  items  in 
his  estimate  of  the  amount  of  bank  issues  and  transactions— his  object  had  been 
merely  to  show,  without  descending  to  particulars,  that  the  banks  had  over- 
traded. He  referred,  for  illustration,  to  the  Hank  of  Washington,  reputed  a 
prudent  bank,  which,  on  a  capital  of  350,000  dollars,  \\hat  with  stock  and  dis- 
counts to  individuals,  drew  interest  on  800,000  dollars.  His  object,  he  said, 
when  up  before,  was  to  prove  that  the  banks  generally,  had  done  a  business 
which  would  authorize  them  to  divide  at  the  enormous  rate  of  fourteen  and  a 
half  per  cent,  on  their  capital  paid  in.  &c. 

Mr.  SERGEANT  spoke  at  some  length,  in  explanation  of  his  views. 

Mr.  PIIKIN  followed,  in  support  of  the  motion  to  reduce  the  capital  of  the 
bank,  declaring  himself  decidedly  friendly  to  the  incorporation  of  a  bank  of 
something  like  moderate  capital,  on  true  commercial  and  practical  principles, 
but  on  no  other.* 

The  question  was  then  taken  on  the  motion  to  reduce  the  capital  to  twenty 
millions,  and  decided  in  the  negative,  as  follows:  For  the  motion,  49. 
Against  it,  74. 

And  the  committee  then  rose. 

On  the  29th  of  February  ,^1816,  the  House  having  resolved  itself  into  a  com- 
mittee of  the  whole,  Mr.  NELSON,  of  Va.  in  the  chair, 

On  motion  of  Mr.  CADV,  with  the  assent  of  Mr.  CALHOUN,  the  bill  was 
amended,  by  striking  out  so  much  of  the  bill  as  gives  to  Congress  the  privi- 
lege, hereafter,  of  extending  the  capital  of  the  bank  from  thirty  Jive  to  fifty 
millions. 

Mr.  CADY  moved  to  strike  out  so  much  of  the  bill  as  authorizes  the  Govern- 
ment to  subscribe  a  certain  proportion  (seven  millions)  of  the  stock. 

The  motion  was  opposed  by  Mr.  CALHOUN  and  Mr.  SMITH,  of  Maryland, 
and  supported  by  Mr.  RANDOLPH,  Mr.  CADY,  and  Mr.  WARD,  of  Mass. 

The  following  is  a  sketch  of  the  debase  that  ensued  on  this  motion: 

Mr.  CADY  having  moved  to  amend  the  bill  by  striking  out  so  much  thereof 
as  authorizes  a  subscription  by  the  Government  of  seven  millions  to  the  capi- 

*  The  Reporter  regrets  that  his  necessary  absence  from  the  hall  at  the  time  Mr.  P. 
spoke,  prevents  him  from  presenting-  even  the  substance  of  his  argument, — Nat.  Int. 


654  BANK  OF  THE  UNITED  STATES. 

tal  stock  of  the  bank,  supported  his  motion  by  a  number  of  observations.  He 
contended  that  no  advantage  would  accrue  to  the  United  States  from  the 
possession  of  this  interest  in  the  bank.  The  money  to  pay  for  this  stock,  he 
said,  would  cost  the  United  States  more  than  any  profit  they  could  derive 
from  it,  (that  is,  by  the  expense  attending  its  collection,  all  the  funds  of  the 
Government  accruing  sooner  or  later  from  taxation  on  the  People)  and  would, 
besides,  render  necessary  the  imposition  of  additional  taxes  to  meet  it.  It 
would  be  like  an  individual's  taking  up  money  at  eighteen  per  cent,  (which  he 
estimated  as  the  cost  of  collection,  &c.)  to  put  into  this  bank.  The  seven  mil- 
lions of  money,  he  added,  would  contribute  more  to  the  wealth  and  improve- 
ment of  the  country,  would  produce  in  the  end  a  better  interest  to  the  United 
States,  by  suffering  it  to  remain  in  the  hands  of  the  people,  than  it  could  pos- 
sibly do  by  being  invested  in  the  stock  of  this  bank.  But  it  had  been  inti- 
mated that  a  stock  might  be  created,  bearing  five  or  six  per  cent,  interest,  for 
the  purpose  of  paying  the  proportion  of  the  United  States'  subscription  to  the 
bank,  the  bank  interest  on  which  would  redeem  it  in  time.  Though  this  idea 
was  plausible,  Mr.  C.  argued  it  was  not  solid;  the  United  States  must  ulti- 
mately pay  the  stock;  and,  as  to  the  income  of  profit  to  the  Government  from 
the  bank,  it  would  be  much  more  simple  to  compel  it  to  pay  such  a  sum  annu- 
ally to  the  treasury,  without  the  circuitous  process  of  taking  stock  in  if,  &c. 
He  suggested  other  modes  by  which  the  bank  could  be  made  to  contribute  to 
the  general  wealth,  without  the  Government's  becoming  a  stockholder,  &c. 

Mr.  CALHOUN  opposed  the  motion,  so  decidedly,  that  he  said  he  should  con- 
sider the  success  of  it  as  tantamount  to  a  decision  to  strike  out  the  first  sec- 
tion of  the  bill.  He  showed,  by  his  statement  of  the  operation  of  vesting  this 
stock  in  the  bank,  (which  by  the  bill  is  to  be  done  in  certain  annual  propor- 
tions) that  there  would  be  a  clear  gain  to  the  Government  of  at  least  two  per 
cent,  per  annum,  being  the  difference  between  the  interest  the  Government 
pays  on  the  stock,  and  the  interest  it  would  receive  on  its  bank  shares. 

Mr.  RANDOLPH  supported  the  motion,  and  availed  himself  of  the  occasion 
of  his  rising,  to  enter  largely  into  the  subject,  in  a  speech  of  considerable 
length.  His  general  views  follow.  He  said  he  should  vote  for  this  motion, 
because  one  of  his  chief  objections  (one  of  them,  he  repeated)  was  the  concern 
which  it  was  proposed  to  give  to  the  United  States  in  the  bank.  He  referred 
to  the  sale,  by  the  Secretary  of  the  Treasury,  some  years  ago,  of  the  shares  be- 
longing to  the  Bank  of  the  United  States,  and  stated  the  reasons  of  his  ap- 
proving that  step:  but,  he  added,  that  it  was  a  strong  argument  against  the 
feature  of  the  bank  bill  now  under  discussion,  that,  whenever  there  should  be 
in  this  country  a  necessitous  and  profligate  administration  of  the  Government, 
that  bank  stock  would  be  laid  hold  of  by  the  first  Squanderfield  at  the  head  of 
the  treasury,  as  the  means  of  filling  its  empty  coffers.  But,  if  there  was  no 
objection  to  this  feature  stronger  than  that  it  would  afford  provision  for  the 
first  rainy  day,  it  might  not  be  considered  so  very  important.  He  argued, 
however,  that  it  was  eternally  true,  that  nothing  but  the  precious  metals,  or 
paper  bottomed  on  them,  could  answer  as  the  currency  of  any  nation  or  any 
age,  notwithstanding  the  fanciful  theories  that  great  payments  could  only  be 
made  by  credits  and  paper.  How,  he  asked  on  this  point,  were  the  mighty 
armies  of  the  ancient  world  paid  off?  Certainly  not  in  paper  or  bank  credits. 
He  expressed  his  fears,  lest  gentlemen  had  got  some  of  their  ideas  on  these 
subjects  from  the  wretched  pamphlets  under  which  the  British  and  American 

Eress  had  groaned,  on  the  subject  of  a  circulating  medium.  He  said  he  had 
imself  once  turned  projector,  and  sketched  the  plan  of  a  bank,  of  which  it 
was  a  feature  that  the  Government  should  have  a  concern  in  it;  but  he  be- 
came convinced  of  the  fallacy  of  his  views — he  found  his  project  would  not 
answer.  His  objections  to  the  agency  of  the  Government  in  a  bank  was, 
therefore,  he  said,  of  no  recent  date,  but  one  long  formed — the  objection  was 
vital;  that  it  would  be  an  engine  of  irresistible  power,  in  the  hands  of  any  ad- 
ministration; that  it  would  be,  in  politics  and  finance,  what  the  celebrated 


ON  THE  GRANT  OF  THE  CHARTER  OF    1816.  £55 

proposition  of  Archimedes  was  in  phvsics — a  place,  the  fulcrum;  from  which, 
at  the  will  of  the  Executive,  the  whole  nation  could  be  hurled  to  destruction, 
or  managed  in  any  way,  at  his  will  and  discretion. 

This  bill,  in  the  view  of  Mr.  R.,  presented  two  distinct  questions:  the  one 
frigidly  and  rigorously  a  mere  matter  of  calculation;  the  other,  involving  some 
very  important  political  consderations.  In  regard  to  the  present  depreciation 
of  paper,  he  did  not  appear  to  agree  with  those  who  thought  the  establishment 
of  a  national  bank  would  not  aid  in  the  reformation  of  it.  If  he  were  to  go 
into  the  causes  which  produced  the  present  state  of  things,  he  said ,  he  should 
never  end.  As  to  the  share  the  banks  themselves  had  in  producing  it,  he  re- 
garded the  dividends  they  had  made,  since  its  commencement,  as  conclusive 
proof.  The  present  time,  Mr.  R.  went  on  to  remark,  was,  in  his  view,  one 
of  the  most  disastrous  he  had  ever  witnessed  in  the  republic,  and  this  bill 
proved  it.  The  proposal  to  establish  this  great  bank,  he  described  as  a  crutch, 
and,  as  far  as  he  understood  it,  it  was  a  broken  one:  it  would  tend,  instead  of 
remedying  the  evil,  to  aggravate  it.  The  evil  of  the  times,  ho  said,  was  a  spi- 
rit engendered  in  this  republic,  fatal  to  republican  principles — fatal  to 
republican  virtue;  a  spirit  to  live  by  any  means  but  those  of  honest  in- 
dustry; a  spirit  of  prolusion:  in  other  words,  the  spirit  of  Catiline  \\\m- 
sdf—aKeni  avidus  xiti  profusus — ;i  spirit  of  expediency,  not  only  in  pub- 
lic, but  in  private  life:  the  system  of  Diddler  i.i  the  farce— living  any 
way  and  well:  wearing  an  expensive  rout,  and  drinking  the  finest  wines, 
at  any  body's  expense.  This  bank,  he  imagined,  (he  was  far  from  as- 
cribing to  the  gentleman  from  South  Carolina  any  such  views)  was,  to  a  cer- 
tain extent,  a  modification  of  the  same  system.  Connected,  as  it  was  to  be, 
with  the  Go\ eminent,  whenever  it  went  into  operation,  a  scene  would  be 
exhibited  on  the  great  theatre  of  the  United  States,  at  the  contemplation  of 
which  he  shuddered.  If  we  mean  to  transmit  our  institutions,  unimpaired, 
to  posterity;  if  some,  now  Ihing,  wish  to  continue  to  live  under  the  same  in- 
stitutions by  which  they  are  now  ruled — and  with  all  its  evils,  real  or  imagi- 
nary, he  presumed  no  man  would  question  that  we  live  under  the  easiest  Go- 
vernment on  the  globe — we  must  put  bounds  to  the  spirit  which  seeks  wealth 
by  every  path  but  the  plain  arid  regular  path  of  honest  industry  and  honest 
fame.  This  was  one  of  the  grounds  on  which  he  was  hostile  to  this  bill. 

Alluding  to  Mr.  WEBSTER'S  observation  respecting  the  laws  fixing  the  cur- 
rency of  the  United  States,  he  said  it  was  very  true  they  were  clear  and  pe- 
remptory in  their  provisions;  if  the  existing  laws  did  not  compel  men  to  pay 
their  debts,  the  establishment  of  a  bank  would  not.  Let  us  not  disguise  the  fact, 
said  he,  pursuing  his  remarks  on  what'he  had  described  as  the  evil  of  the  times; 
we  think  we  are  living  in  the  better  times  of  the  republic:  we  deceive  our- 
selves—we are  almost ^in  the  days  of  Sylla  and  Marius:  yes,  we  have  almost 
got  down  to  the  time  of  Jugurtha.  It  was  unpleasant,  he  said,  to  put  one's 
self  in  array  against  a  great  leading  interest  in  a  community,  be  they  a  knot 
of  land  speculators,  paper-jobbers,  or  what  not;  but,  he  said,  every  man  you 
meet,  in  this  House  or  out  of  it,  with  some  rare  exceptions,  which  only  served 
to  prove  the  rule,  was  either  a  stockholder,  president,  cashier,  clerk,  or  door- 
keeper, runner,  engraver,  paper  maker,  or  mechanic,  in  some  way  or  other, 
to  a  bank.  The  gentleman  from  Pennsylvania,  he  said,  might  dismiss  his 
fears  for  the  State  banks,  with  their  one  hundred  and  seventy  millions  of  pa- 
per, on  eighty-two  millions  of  capital.  However  great  the  evil  of  their  con- 
duct might  be,  he  asked,  in  the  course  of  hisjllustrations,  who  was  to  bell  the 
cat?  who  was  to  take  the  bull  by  the  horns?  You  might  as  well  attack  Gi 
braltar  with  a  pocket  pistol,  as  to  attemptto  punish  them.  There  were  very 
few,  he  said,  who  dared  to  speak  tiutn  to  this  mammoth;  the  banks  were 
so  linked  together  with  the  business  of  the  world,  that  there  were  very  few- 
men  exempt  from  their  influence.  The  true  secret  is,  said  he,  the  banks  arc 
creditors  as  well  as  debtors;  and  if  we  were  merely  debtors  to  them  for  the 
paper  in  our  pockets,  they  would  soon,  like  Morris  and  Nicholson,  go  to  jail 
(figuratively  speaking)  for  having  issued  more  paper  than  they  were  able  to 
pay  when  presented  to  them.  A  man  had  their  note,  he  said,  for  fifty  dollars, 


656  BANK   OF  THE   UNITED   STATES. 

perhaps,  in  his  pocket,  for  which  he  wants  fifty  Spanish  milled  dollars;  but 
they  have  his  note  for  live  thousand  in  their  possession,  and  laugh  at  his  de- 
mand. We  are  tied  hand  and  foot,  Mr.  R.  said,  and  bound  to  conciliate  this 
great  mammoth,  which  is  set  up  to  worship  in  this  Christian  land:  we  are 
bound  to  propitiate  it,  &c.  Thus,  he  said,  whilst  our  Government  denounces 
hierarchy;  will  permit  no  privileged  order  for  conducting  the  service  of  the 
only  true  God;  whilst  it  denounces  nobility,  &c. — has  a  privileged  order  of  new 
men  grown  up,  the  pressure  of  whose  foot  he,  at  this  moment,  felt  on  his  neck. 
If  any  thing  could  reconcile  him  to  this  monstrous  alliance  between  the  bank 
and  the  Government,  he  could,  if  the  object  could  be  attained,  of  compelling 
these  banks  to  fulfil  their  engagements,  almost  find  in  his  heart  to  go  with  the 
gentleman  in  voting  for  it. 

Mr.  R.  proceeded  to  a  minute  examination  of  the  state  of  the  paper  cur- 
rency, and  its  various  phases,  recently  and  in  earlier  times.  The  stuff  utter- 
ed on  all  hands,  and  absolutely  got  by  rote  by  the  haberdasher's  boys  behind 
the  counters  in  the  shops,  that  the  paper  now  in  circulation  would  buy  any 
thing  you  want  as  well  as  gold  and  silver,  was  answered,  he  said,  by  say- 
ing, that  you  want  to  buy  silver  with  it.  He  examined  in  detail  the  present 
mode  of  banking,  which,  he  said,  goes  to  demoralise  society;  it  was  as  much 
swindling,  to  issue  notes,  with  the  intent  not  to  pay,  as  it  was  burglary  to  break 
open  a  house.  If  they  were  unable  to  pay,  the  banks  were  bankrupts;  if  able 
to  pay,  and  would  not,  they  were  fraudulent  bankrupts,  &c.  But.  he  said, 
a  man  might  as  well  go  to  Constantinople  to  preach  Christianity,  as  to  get  up 
here  and  preach  against  banks.  He  despaired,  he  said,  almost,  of  remedying 
the  evil  they  c!ause,  when  he  saw  so  many  men  of  respectability,  directors, 
stockholders,  debtors  of  the  banks.  To  pass  this  bill,  he  said,  would  be  like  get- 
ting rid  of  the  rats  by  setting  fire  to  the  house:  whether  any  other  remedy  could 
be  devised,  he  did  not  now  undertake  to  pronounce.  The  banks,  he  said,  had 
lost  all  shame,  and  exemplified  a  beautiful  and  very  just  observation  of  one 
of  the  finest  writers,  that  men,  banded  together  in  a  common  cause,  will 
collectively  do  that  at  which  every  individual  of  the  combination  would  spurn. 
This  observation  had  been  applied  to  the  enormities  committed  and  connived 
at  by  the  British  East  India  company;  and  would  equally  apply  to  the  mo- 
dern system  of  banking,  but  still  more  to  the  spirit  of  party,  &c.  on  which  Mr. 
R.  digressed  at  some  length. 

He  then  resumed  the  consideration  of  the  history  of  bank  paper  in  this 
country,  and  stated  the  fact  that,  not  many  years  ago,  the  New  England  paper 
had  been  at  almost  as  great  a  discount  here,  as  the  paper  of  this  part  of  the 
country  now  was  there;  and  that,  even  A  New  England,  the  notes  of  some  of 
the  banks  were  not  current  within  their  own  States,  except  at  a  discount.  As 
to  establishing  this  bank  to  prevent  a  variation  in  the  rate  of  exchange  of  bank 
paper,  he  said,  you  might  as  well  expect  it  to  prevent  the  variations  of  the  wind: 
you  might,  said  he,  as  well  pass  an  act  of  Congress  (for  which,  if  it  would  be 
of  any  effect,  he  should  certainly  vote)  to  prevent  the  northwest  wind  from 
blowing  in  our  teeth  as  we  go  from  the  House  to  our  lodgings.  After  <i  minute 
discussion  of  the  causes  and  dates  of  the  difference  of  exchange  in  the  paper 
of  various  banks,  Mr.  R.  concluded  his  remarks  by  pledging  himself  to  agree 
to  any  adequate  means  to  cure  the  great  evil,  that  were  consistent  with  the 
administration  of  the  Government,  in  such  a  manner  as  to  conduce  to  the  hap- 
piness of  the  people  and  the  reformation  of  the  public  morals. 

Mr.  WARD  defended  the  Massachusetts  banking  institutions  from  imputa- 
tions, which  he  thought  a  part  of  Mr.  R's  remarks  on  the  currency  calculat- 
ed to  cast  on  their  correct  management. 

Mr.  SMITH,  of  Maryland,  then  rose,  and  addressed  the  House  at  considera- 
ble length,  in  opposition  to  the  motion  before  it,  and  iu  reply  to  .Messrs.  CADV, 
RANDOLPH,  and  others.  He  explained,  by  ample  illustrations,  the  preference 
which  a  note  of  the  national  bank  would  have  over  the  notes  of  other  banks,  mid 
even  over  treasury  notes  bearing  interest,  and  the  manner  in  which  it  would 


ON  THE  GRANT  OF  THE  CHARTER  OF  1616.          557 

guard  itself  from  a  run  for  specie,  &c.  by  a  combination  of  individuals,  or  other 
banks.  In  regard  to  the  direction  and  management  of  fiscal  affairs,  he  said, 
the  late  Secretary  of  the  Treasury,  (meaning  Mr.  GallatinJ  who  went  into 
that  department  with  as  many  prejudices  as  any  man  could  well  entertain, 
thought  all  was  wrong  there,  and  he  was  the  very  person  to  set  all  right.  He 
had  examined  the  subject  day  and  night,  and,  after  all  his  examination,  he  had 
not  found  a  single  iota  of  Mr.  Hamilton's  system  which  it  was  necessary  to 
alter,  &c.  By  this  anecdote,  Mr.  S.  illustrated  the  advantage  of  practice  over 
theory.  He  made  many  remarks,  to  shew  the  operation  which  made  treasury 
notes  generally  more  valuable  than  the  notes  of  any  bank  not  paying  specie, 
and  less  valuable  than  the  notes  of  any  bank  which  does  pay  specie;  and  he 
said,  if  this  were  not  to  be  a  specie  bank,  he  should  not  have  been  found  in 
favor  of  it.  The  depreciation  of  paper,  he  said,  was  not  wholly  owing  to  the 
suspension  of  specie  payments,  as  he  proved  by  a  reference  to  the  difference 
of  exchange  between  Baltimore  and  New  York.,  in  both  of  which  places  spe- 
'  paid  by  the  banks,  and  yet  the  exchange  was  nine  and  a  half  per 
(ent.  against  Baltimore,  &c.  This  was  owing  to  the  balance  of  trade  being 
thrown  against  them  during  the  war,  the  Chesapeake  having  been  almost 
wholly  shut  up,  whilst  Baltimore  ve.-sels  put  into  the  port  of  New  York,  with 
their  cargoes  and  prizes,  &c.  He  did  not  wish  the  Government  to  pay  any 
money  into  this  bank,  but  stock  to  be  created,  &c.  respecting  which,  he  did 
not  know  but  he  should  move  an  amendment,  anil  also  to  expedite  the  pay- 
ment of  the  specie  portion  of  the  subscription  by  individuals  to  the  bank:  for, 
without  three-fourths  of  the  proposed  amount  of  specie  in  its  vaults,  the  bank 
would  not  dan-  t;t  is-ue  a  note,  &c. 

Mr.  CADY  again  spoke  in  support  of  his  motion,  arid  in  reply  to  the  objec- 
tions against  it.     \\hen  he  concluded, 
Tin*,  committee  rose. 

MARCH  1,  1816. 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NEL- 
SON, of  Virginia,  in  the  chair,  on  the  bill.  The  motion  to  strike  out  so  much 
of  the  first  section  as  allows  Government  to  subsribe  for  seventy  thousand 

.-hares  ol  the  stock,  being  still  under  consideration. 

Mr.  WRIUHT  opposed  the  amendment  at  some  length.  He  was  sorry  to  see 
a  plan  which  promised  such  great  benefit  to  the  country,  in  the  present  de- 
ranged state  of  its  currency,  endangered  by  the  present  motion.  If  the  mo- 
lion  prevailed,  he  should  be  compelled,  he  said,  to  vote  against  the  bill,  much 
as  he  was  in  favor  of  establishing  a  bank.  He  wished  to  see  the  bank  possess- 
vd  in  part  by  the  Government,  and  partly  by  the  citizens,  because  the  stock 
of  it  would  be  extremely  profitable.  The  Government  ought  to  have  an  in- 
terest in  the  bank,  as  they  would  thereby  be  informed  of  all  the  plans  which 
might  be  at  any  time  entertained  by  the  directors  of  so  powerful  an  institu- 
tion. He  was  not  afraid,  however,  to  trust  our  citizens,  nor  ought  they  to  be 
suspicious  of  the  Government;  and  the  participation  of  the  Government  could 
not,  he  conceived,  be  productive  of  injury  or  mischief.  Mr.  W.  adverted  to 
the  assertion,  that  such  an  institution  would  realize  the  imagined  lever  of 
Archimedes,  with  which  the  world  might  be  moved.  He  wished  it  did  possess 
iliat  mighty  power,  and  it  could  be  brought  to  bear  on  the  rotten  and  corrupt 
Governments  ot  Europe.  We  have,  he  said,  given  to  that  portion  of  the  world 
examples  of  liberty,  of  valor,  on  the  sea  and  on  the  land,  and  he  should  be 
glad  if,  by  any  power,  we  could  crush  the  despotisms  which  oppress  it,  &c. 
He  said  he  was  surprised  at  the  objections,  made  by  gentlemen  from  the  East, 
to  establishing  this  bank  on  so  large  a  proportion  of  the  public  stock,  as  the 
effect  would  be  to  raise  that  stock  immediately  to  par,  &c. 

Mr.  JEWETT,  in  reply,  said,  the  gentleman  who  has  just  sat  down,  had  ex- 
orcised the  House  in  the  outset,  ario!  had  threatened  it  with  voting  against  the 

83 


658  BANK  OF  THE  UNITED  STATED 

bill  if  it  did  not  suit  him.  He  would  not  follow  the  example  of  that  gentle- 
man; he  would  not  go  to  Europe  to  put  down  Governments,  to  light  flames, 
and  put  out  fires,  but  would  state  a  few  matters  of  fact.  This  question,  he 
said,  affected  the  interest  of  every  State  and  town  in  the  country;  it  was  of 
great  magnitude;  it  would  either  restore  the  credit  of  our  currency,  or  make 
it  worse  than  it  is  already;  and  to  illustrate  his  opinion  on  this  important  sub- 
ject, he  would  state  a  case  in  point.  Some  ten  or  fifteen  years  ago,  he  said, 
there  was  a  certain  State  (Vermont)  which  had  no  bank;  but  there  were  banks 
in  adjoining  States,  which  afforded  much  profit;  and  the  people  of  the  State 
thought  they  might  as  well  grow  rich  by  banking  as  their  neighbors.  They 
supposed,  if  the  limited  means  and  numbers  of  private  banks  could  make  mo- 
ney, that  the  extended  means  of  a  State  would  make  an  institution  still  more 
profitable;  that  it  would  drive  out  the  paper  of  other  banks,  facilitate  the  ope- 
rations of  the  State,  &c.,  as  had  been  argued  in  favor  of  the  bank  now  propos- 
ed. A  State  bank  was  accordingly  established,  on  a  small  specie  capital,  and 
naper  to  a  large  amount  issued,  which  they  thought  would  never  be  returned 
for  payment.  What  was  the  consequence?  The  paper  of  other  banks,  it  was 
true,  disappeared,  but  it  was  because  of  the  suspicion  which  attached  to  the 
State  paper.  The  machine,  if  it  might  be  called  so,  went  on  badly;  it  was  at- 
tributed to  bad  management  of  its  concerns;  and  attempts  were  made  to  re- 
medy the  defects,  but  in  vain.  The  paper  depreciated  from  six  to  ten,  and 
from  ten  to  fifteen  per  cent.;  and  finally,  by  the  juggle,  the  people  of  the  State 
lost— how  much  he  was  not  certain— but  a  great  amount  he  knew.  So  it 
would  be,  he  said,  with  the  plan  now  contemplated,  if  not  amended;  and,  if 
the  objections  to  it  were  not  obviated,  he  should  be  compelled  to  vote  against 
the  bill,  although  he  was  strongly  in  favor  of  a  bank  on  proper  principles.  If 
passed  in  its  present  shape,  it  would  entail  evils  on  the  country  which  money 
could  not  compensate,  &c. 

Mr.  Ross  advocated  the  motion  to  amend  the  bill.  He  did  not  believe,  as 
had  been  argued,  that  a  participation  in  the  bank  would  strengthen  the  arm  of 
the  Government,  or  be  very  profitable.  If,  however,  the  arm  of  the  Govern 
ment  was  to  be  strengthened  by  weakening  that  of  the  citizens,  and  uniting 
with  a  privileged  aristocracy,  he  was  decidedly  opposed  to  it.  He  did  not 
wish  the  Government  to  become  partners  in  such  a  privileged  order.  If  the 
reasons  for  retaining  the  principle  in  the  bill  were  correct,  he  thought  the  pro- 
portion allowed  too  small:  if  Government  was  to  derive  this  great  profit  Irom 
the  participation,  its  share  was  not  great  enough.  It  had  been  said  that  the 
influence  of  one  bank  (the  Manhattan)  could  have  prevented  the  election  of 
Mr.  Jefferson  to  the  presidency.  If  that  bank  had  been  under  Executive  con- 
trol, he  believed  its  power  would  have  been  exercised.  This  was  a  proof  of 
the  danger  of  giving  Government  a  great  influence  in  such  institutions.  He 
was  opposed  to  the  plan,  chiefly  from  his  objections  to  joining  a  moneyed  aris 
tocracy,  and  his  fears  that  it  might  operate  injuriously  to  the  liberties  of  the 
country,  &c. 

Mr.  GOLDSBOROUGH  made  a  few  remarks  on  the  motion.  If  the  provision 
was  inserted  as  an  apology  for  the  appointment  of  the  five  directors  by  the  Go- 
vernment, then  he  was  opposed  to  it;  but,  if  it  would  be  as  profitable  as  was. 
predicted,  and  would  enable  us  to  dispense  with  some  of  the  existing  internal 
taxes,  he  should  be  glad  to  vote  for  it.  A  good  bank.  Mr.  G.  said,  would  be 
very  serviceable;  and  he  should  vote  against  the  motion,  because  he  could  not 
see  that  any  harm  would  arise  from  the  nation  participating  in  a  pecuniary  es- 
tablishment, &c. 

The  question  was  then  taken  on  striking  out  the  provision,  and  decided  in 
the  negative,  as  follows:  For  the  amendment,  38.  Against  it,  61. 

The  committee  proceeded  with  the  consideration  of  the  rest  of  the  bill. 

t 

After  the  adoption  of  some  verbal  amendments — 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         559 


some  to  feel  a  delicacy  in  supporting  it,  from  constitutional  scruples,  he  thought 
it  better  to  fix  the  bank  where  there  could  be  no  objections  on  that  score,  and 
where,  also,  its  operations  would  be  facilitated.  Washington  is  the  seat  of 
Government  of  the  nation;  and  here,  he  said,  it  would  be  under  the  eye  of  the 
Government,  where  there  would  be  less  danger  from  so  great  a  moneyed  aris 
tocracy,  and  the  national  interests  would  be  better  guarded  than  at  any  other 
place.  Mr.  W.  said  it  was  not  his  purpose  to  anticipate  objections  to  his  mo- 
tion, but  the  principal  one  he  knew  to  be,  that  a  sufficient  number  of  persons 
could  not  be  found  at  Washington,  qualified  for  directors.  The  force  of  this 
objection  he  denied  in  the  extent  to  which  it  was  urged.  In  the  city  and 
neighboring  country,  he  was  convinced  there  could  be  found  abundant  talents 
for  managing  the  concerns  of  the  bank.  The  people  of  this  district,  moreover, 
deserved  highly  of  the  Government;  they  had,  in  time  of  need,  done  as  much, 
or  more,  in  proportion  to  numbers,  to  aid  the  country,  than  any  other  section 
of  the  Union.  Mr.  W.  adverted  to  the  source  whence  the  bill  originated,  and 
insinuated  that  much  of  the  ground  for  recommending  Philadelphia  must  be 
attributed  to  the  partiality  of  those  who  had  named  that  city  in  the  bill;  and 
concluded  by  saying,  that  the  motive  for  fixing  the  old  bank  of  the  United 
States  at  Philadelphia,  was  the  same  that  ought  now  to  place  the  present  bank 
here,  to  wit,  that  it  is  the  seat  of  Government. 

Mr.  ROBERTSON  said  he  coincided  with  the  gentleman  in  some  of  his  views. 
He  could  see  no  strong  reason  for  preferring  Philadelphia;  because,  if  the  ob- 
ject was  to  select  a  city  on  account  of  its  commerce.  Philadelphia  was  not  the 
most  commercial  place;  and  if  that  reason  carried  the  bank  from  the  seat  of 
Government,  the  same  reason  would  prevent  its  being  located  at  Philadelphia. 
But  Mr.  R.  said  he  had  another  reason  for  disapproving  the  place  mentioned 
in  the  bill — he  was  unwilling  to  impose  upon  Philadelphia  an  institution  so 
obnoxious  to  the  Representatives  from  that  city,  all  of  whom  were  so  decid- 
edly hostile  to  the  bank.  However,  he  said,  he  should  not  vote  for  the  motion, 
because,  as  a  place  of  greater  commerce,  he  preferred  Philadelphia  to  Wash- 
ington. 

At  the  suggestion  of  Mr.  CALHOTTX,  who  thought  the  motion  had  better  be 
offered  in  a  subsequent  stage  of  the  bill,  Mr.  WRIGHT  withdrew  his  amend- 
ment for  the  present. 

On  motion  of  Mr.  WEBSTER,  the  bill  was  amended  by  inserting  a  clause 
making  foreign  coins  receivable  for  subscriptions,  at  their  real  ascertained 
value,  and  not  according  to  the  rate  fixed  by  the  former  act  of  Congress,  which 
was  admitted  to  be  incorrect,  particularly  in  the  value  placed  on  Spanish  gold 
coins. 

Mr.  SMITH,  of  Maryland,  adverted  to  the  insinuation  which  had  been  thrown 
out,  that  the  bank  was  not  intended  to  be,  and  could  not  be,  a  specie  bank; 
and  repeating  that  he,  for  one,  had  in  view  a  bank  of  no  other  kind;  to  ensure 
to  it  that  character,  therefore,  and  remove  the  doubts  now  entertained  by 
others,  he  moved  to  strike  out  the  word  Jive,  (the  amount  of  the  first  payment 
required  in  specie)  with  the  intention  of  moving  to  substitute  a  larger  sum. 
He  thought  it  better  to  enable  the  bank  to  do,  as  soon  as  practicable,  a  liberal 
business,  and,  at  the  same  time,  lessen  the  chance  of  drawing  out,  by  any  run 
on  it,  the  specie  at  first  paid  in,  &c. 

Mr.  CALHOUN  had  not  much  objection  to  the  motion,  though  he  thought  the 
bank  could  certainly  do  safely  a  business  to  the  amount  of  the  first  specie  pay- 
ment, and,  if  a  greater  business  was  offered  to  them,  they  would  have  it  in  their 
power  to  increase  their  specie  at  pleasure.  His  only  objection  to  enlarging  the 
first  cash  instalment  was,  that  it  might  have  the  effect  to  draw  the  specie  out 
of  the  existing  banks. 


660  BANK  OF  THE  UNITED  STATES. 

Mr.  SMITH'S  motion  to  strike  out  the  word  ./we  was  carried;  and 
He  then  moved  to  fill  the  blank  with  the  word  fifteen;  which  was  also 
agreed  to— ayes  56,  noes  44. 

Mr.  ROOT  said  the  section  under  consideration  was  the  essential  part  of  the 
contemplated  institution,  as  it  contained  its  constituent  or  vital  parts;  and 
proceeded  to  enumerate  the  various  stocks  receivable  in  subscriptions;  the 
rates  fixed  for  them  by  the  bill;  the  price  paid  for  them  by  the  lenders  to  the 
Government,  and  the  profits  now  about  to  be  given  to  those  lenders,  by  rais- 
ing the  stocks  to  par;  thus  granting  a  bounty  to  those  men.  The  same  rea- 
sons did  not  exist,  he  said,  tor  such  a  measure,  at  present,  as  existed  at  the  last 
session.  Then,  the  credit  of  the  Government  was  weak,  now  it  is  strong. 
He  would  not  deny  that  the  lenders  to  the  Government  might  have  been  ac- 
tuated by  patriotic  motives,  but  that  was  no  reason  for  granting  to  them  any 
thing  more  than  was  bargained  for:  and  he  proceeded  to  show,  that,  by  allow- 
ing the  commissioners  of  the  sinking  fund  to  buy  up  this  stock,  instead  of  per- 
mitting it  to  be  subscribed  in  the  bank,  at  the  rates  prescribed  by  the  bill,  the 
Government  would  save  about  two  millions  of  dollars  in  its  redemption,  &c. 
For  these  and  other  reasons  adduced,  he  moved  to  amend  the  bill  by  fixing  the 
rate  at  which  the  six  per  cent,  stock  shall  be  received  in  subscription  to  the 
bank  at  ninety  per  cent,  instead  of  par. 

Mr.  CALHOUN  objected  to  the  motion.  Its  obvious  effect,  if  not  its  object, 
he  said,  was  to  increase  the  bonus.  If  the  stocks  are  depreciated,  said  Mr. 
C.,  it  is  not  the  fault  of  the  holders  of  it,  but  of  the  Government  itself,  and  it 
would  be  improper  in  the  Government  to  take  advantage  of  this  depreciation. 
The  measure  would  also  have  an  injurious  influence  on  the  subscriptions  to 
the  bank,  without  answering  any  good  purpose,  and  he,  therefore,  hoped  the 
motion  would  not  prevail. 

Mr.  ROOT  said,  in  reply,  that  those  who  boasted  so  much  of  having  loaned 
their  money  to  the  Government,  only  gave  their  depreciated  notes,  and  re- 
ceived, in  return,  the  note  of  the  Government,  by  which  they  made  a  great 
profit,  and  that  was  all  their  merit,  &c. 

Mr.  GOLDSBOROUGH  made  a  few  remarks  on  the  motion.  He  thought  it 
questionable  whether  a  Government  ought  to  fix  on  its  own  stock  a  manifest 
depreciation,  and,  in  this  instance,  it  would  be  an  act  of  very  great  injustice, 
and  a  violation  of  public  faith,  because,  in  the  next  clause,  it  was  provided 
that  the  stock  should  be  redeemed  and  liquidated  at  the  rates  at  which  it  was 
paid  into  the  bank,  &c. 

Mr.  Ross  thought  the  circumstance  deprecated  by  the  gentleman  last  up, ex- 
isted already;  which  opinion  he  supported  by  a  few  arguments.  The  whole 
system  of  this  bill,  he  said,  was  an  encouragement  to  stockjobbers,  and  was 
of  the  same  character  as  the  measure  which  once  benefitted  the  speculators,  at 
the  expense  of  the  Revolutionary  soldier,  by  funding  their  certificates,  &c. 

The  question  was  then  taken  on  the  motion  of  Mr.  ROOT,  and  negatived, 
only  seven  or  eight  gentlemen  rising  in  favor  of  it. 
The  committee  then  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

MARCH  4,  1816. 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NEL- 
SON in  the  chair,  on  the  bill. 

Mr.  SMITH,  of  Maryland,  moved  to  strike  out  of  the  6th  section  the  words 
"  treasury  notes,"  as  forming  a  constituent  part  of  the  Government  subscrip- 
tion to  the  bank,  the  ettect  of  which  amendment  would  be  to  limit  the  mode 
of  payment  of  the  subscriptions  to  stock  and  specie. 

The  motion  was  supported  by  Mr.  SMITH,  assented  to  by  Mr.  CALHOUN, 
and  opposed  by  Mr.  HOPKIXSON;  and  then  agreed  to  without  a  division. 


ON  THE  GRANT  OP  THE  CHARTER  OF  1816. 

Mr  SMITH  then  moved  further  to  amend  the  same  section,  by  making  the 
amount  of  the  shares  reserved  to  the  Government  receivable  in  stock,  bear- 
ing an  interest  of  five  instead  of  six  per  cent.,  with  the  view,  also,  of  providing 
subsequently,  that  the  whole,  subscription  of  the  Government  shall  be  made 
on  the  first  of  January,  1817,  instead  of  being  paid  in  instalments,  at  distant 

After  some  objection  on  the  part  of  Mr.  WEBSTER,  the  motion  \vas  agreed 
to;  ayes  G3,  noes  40. 

The  bill  was  subsequently  amended,  so  as  to  make  its  provisions  correspond 
with  the  preceding  amendments. 

After  the  adoption  of  some  other  amendments,  involving  no  principle, 
Mr.  PITKIN-  moved  to  strike  out  of  the  10th  section  so  much  as  gives  to  the 
President  and  Senate  the  power  of  appointing  five  directors  of  the  bank. 

This  motion  was  supported  by  Messrs.  PITKIX,  WARD,  HOPKIXSOX,  M'Kr.E, 
llrr.Kii,  SHKFFKY,  Ross,  and  GROSVEXOR;  and  opposed  by  Messrs.  SMITH,  of 
Maryland.  ('Ai.norx,  TUCKER,  and  ROBERTSOX. 

The  reporter  has  only  generalized  the  argument.  On  the  one  hand  it  was 
said,  this  control  over  the  bank  would  be  an  engine  in  the.  hands  of  the  Go- 
vernment, which  might  be  used  in  a  manner  dangerous  to  the  best  interests  of 
the  country;  that  this  feature  would  be  pernicious  to  the  interests  of  the  bank, 
which  would  be  best  managed  without  the  interference  of  the  Government; 
that  the  reservation  of  this  power  would  be  of  no  ad\an:ag.'  to  the  Govern- 
ment, (except  that  it  would  tend  to  increase  Executive  patronage,  already 
much  too  extensive)  as  every  necessary  investigation  could  be  made  into  the 
state  of  the  in>tituiion,  without  the  aid  of  this  power;  that  the  Government 
would  have  quite  as  much  influence  over  the  bank  as  it  ought  to  have,  without 
this  power  being  given  to  it;  that  the  principle  would  be  most  odious  to  mo- 
neyed men,  and  of  such  an  inquisitorial  character  as  would  deter  many  of  our 
most  respectable  citizens  from  embarking  in  the  institution,  &c.  On  the  other 
hand,  it  was  contended,  by  gentlemen  in  favor  of  retaining  the  provision,  that 
it  was  necessary,  as  well  to  guard  the  public  interest  as  to  secure  a  just  ad- 
ministration of  the  affairs  of  the  bank,  as  regarded  the  public,  that  a  propor- 
tion of  the  direction  should  be  appointed  by  the  Government;  that  it  was  cer- 
tainly not  unfair  that  the  Government  should  stand  on  a  footing  with  the  indi- 
vidual stockholders,  by  having  a  share  in  the  direction  of  the  bank;  that  such 
a  feature  existed  in  the  charters  of  many  State  banking  institutions,  and  was 
not  abused,  as  far  as  was  known;  that  this  power  could  not  be  dangerous 
either  to  the  bank  or  the  nation,  as  the  twenty  directors  appointed  by  the  indi- 
viduals would  always  be  competent  to  control  the  five  appointed  by  the  Go- 
vernment; some  State  banks  were  cited,  in  which  the  State  possessed  an 
entire  control,  from  which  no  disadvantage  had  been  realized;  and,  as  the  se- 
lection by  the  Government,  in  this  case,  would  certainly  be  made  with  a 
reference  to  the  wealth  and  respectability  of  the  persons  chosen,  no  abuse 
ought  to  be  anticipated,  any  more  than  it  could  succeed,  if  attempted. 

Before  deciding  the  question,  the  committee  rose,  and  obtained  leave  to  sit 
again. 

MARCH  5,  1816. 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NELSON 
in  the  chair,  on  the  bill;  the  question  to  strike  out  the  provision  giving  to  the 
President  and  Senate  the  power  of  appointing  five  of  the  directors,  being  still 
under  consideration. 

On  this  question  the  debate  was  resumed,  and  continued  to  a  late  hour  be- 
fore the  decision  took  place.  The  gentlemen  who  supported  the  amendment 
were  Messrs.  GASTOX  and  PICKERING;  and  those  who  opposed  it  were  Messrs. 
WILDE,  TELFAIR,  WRIGHT,  CLAY.  CALHOUX,  and  FORSYTH. 


662  BANK  OF  THE  UNITED  STATES. 

Mr.  FORSYTH  said  he  was  one  of  those  who  was  unfortunate  enough  to  at- 
tach great  importance  to  that  part  of  the  plan  of  the  bank  which  was  intended 
to  be  altered  by  the  motion  of  the  gentleman  from  Connecticut.    At  the  last 
session  of  Congress  he  had,   in  vain,  endeavored  to  convince  the  members 
composing  it,  of  the  necessity  of  retaining  such  an  influence  over  the  manage- 
ment of  the  institution.    The  honorable  gentleman  from  North  Carolina  (Mr. 
GASTON)  had  suggested,  that  the  opposition  to  the  amendment  proposed,  came 
from  the  Treasury  Department,  or  irom  the  Executive.     He  begged  leave  to 
assure  him,  that  the  recommendation  or  opinion,  of  the  Department  or  of  the 
President,  was  riot  the  foundation  of  his  belief  of  the  necessity  of  this  measure. 
Although  he  did  not  expect  to  satisfy  others  who  differed  with  him,  of  the  in- 
correctness of  their  views  of  the  subject,  he  did  hope  to  be  able  to  show,  at 
least,  plausible  reasons  in  favor  of  his  own.    At  the  last  session  of  Congress, 
he  had  the  honor  to  advocate,  with  a  zeal  arising  from  a  thorough  conviction 
of  the  necessity  of  the  measure,  the  establishment  of  a  bank  differing  from  the 
present,  only  because  it  imposed  an  obligation  to  make  a  large  loan  to   Go- 
vernment.    He  had  to  regret  that  the  ability  with  which  that  duty  was  dis- 
charged, was  not  equal  to  his  zeal,  and  still  more,  that  his  exertions  were  not 
crowned  with  success.    It  would  have  produced  at  least  one  good  effect — this 
discussion  would  have  been  avoided,  and  the  time  occupied  in  it  might  have 
been  usefully  employed  on  a  different  subject.     This  plan  failed  for  causes  it 
was  unnecessary  to  trace,  and  its  failure  was  rendered  comparatively  unim- 
portant by  the  restoration  of  peace.     He  did  not  believe,  with  some  gentle- 
men, that  this  measure  was  now  necessary.    The  necessity  for  it  had  ceased. 
It  was  no  longer  essential;  but  it  was  both  politic  and  prudent  to  adopt  it.    If 
it  fails,  no  dangerous  consequences  will  result  from  its  failure.     He  should 
survive  the  shock,  although  this  bill  should  follow  its  predecessor  to  the  tomb. 
The  body  politic  was  obstructed  by  a  diseased  circulation,  but  time  would 
furnish  a  healing  remedy,  although  the  application  of  this  panacea  should  be 
rejected  by  the  State  physicians.     Mr.  F.  said,  he  did  not  wish  to  be  under- 
stood as  recommending  the  establishment  of  any  bank  as  prudent  and  politic. 
It  was  not  a  bank,  but  a  bank  of  peculiar  character,  which  was  required.    We 
had  banks  enough  already;  they  rose  like  mushrooms,  from  every  hot  bed  in  the 
country.     It  was  not  a  moneyed  bank  only — a  bank  exclusively  regulated  by 
the  moneyed  interest,  and  governed  by  the  jealousy,  avarice,  or  factious  views 
of  moneyed  men,  capable  of  being  made  the  instrument  of  artful  and  design- 
ing combinations,  to  cramp  your  resources,  and  destroy  your  capacity  to  make 
either  permanent  or  temporary  loans.     It  must  be  a  bank  having  a  national 
character,  regulated  by  the  national  interest,  and  under  the  influence  of  the 
national  councils.    If  it  was  not  of  this  character,  its  failure  or  success  was 
indifferent  to  him.     It  seemed  to  be  admitted  on  all  hands,  that  we  ought  to 
have  an  interest  in  the  proposed  institution.     It  was  admitted,  too,  that  we 
ought  to  have  an  influence;  and  the  dispute  was,  between  a  direct  influence 
by  the  appointment  of  directors,  or  an  indirect  influence  by  the  operation  of 
the  revenue  system.     It  would  not  be  difficult  to  demonstrate,  that  an  indi- 
rect influence  would  be  altogether  insufficient.  Your  $7,000,000  of  interest  in 
the  capital  gives  you  no  power,  unless  it  is  coupled  with  the  authority  to  ap- 
point a  portion  of  the  directors.     This,  it  is  said,  must  not  be  given,  because 
you  have  ample  influence  by  means  of  your  revenue  system.    \V  hat  difference 
will  be  produced  by  the  establishment  of  this  new  plan?    Will  your  indirect 
inference  over  it  be  greater  than  over  the  State  institutions?    You  may  with- 
hold your  deposites;  so  you  may  from  the  State  banks.     You  may  refuse  to 
receive  its  paper  in  payment  of  taxes  or  imposts.     You  may  refuse  the  paper 
of  the  State  banks.     You  may  tax  either  at  your  pleasure.    After  this  plan  is 
perfected,  the  annulment  of  the  charter  is,  for  twenty  years,  as  completely  be- 
yond your  authority,  as  the  annihilation  of  the  State  banks.    The  sole  differ- 
ence is,  that,  at  the  end  of  twenty  years,  the  Bank  of  the  United  States  will 
be  dependent  on  you  for  a  renewal  of  its  charter,  while  the  State  banks  look 
only  to  the  State  Legislatures.     Your  power,  then,  over  the  present  banks,  is 
equally  great  with  your  power  over  the  one  proposed.     And  this  is  notorious- 


ON  THE  GRANT  OF  THE  CHARTER  OF    1816.  553 

ly  ineffectual.  An  honorable  gentleman  from  New  York  (Mr.  GROFVKNOR) 
has  told  you,  and  truly  told  you,  that  when  you  threaten  the  State  banks,  they 
laugh  at  your  threats;  when  you  menace  them,  they  menace  you  in  turn. 
If  a  mere  local  institution  cannot  be  beneficially  controlled  by  your  indirect 
influence,  how  can  you  expect  to  affect  an  institution  extending  through  the 
whole  community,  which  combines  the  great  moneyed  capital  of  all  the  states 
into  one  solid  column  of  power!  It  seems,  however,  to  be  imagined,  a  direct 
control  is  unnecessary.  The  keen  magnetic  sense  of  the  directors  will  al- 
ways induce  them  to  pursue  their  own  interest,  and  their  interest  will  always 
produce  a  compliance  with  the  reasonable  wishes  of  the  Government.  This 
sense  was  too  magnetic  for  Mr.  F's  taste;  it  pointed  with  unerring  polarity  to 
self;  and  the  general  interest,  when  in  conflict  with  self-interest,  did  not  pro- 
duce even  a  vibration  of  the  needle.  Besides,  there  was  such  a  thing  as  the 
sacrifice  of  pecuniary  to  political  interest  or  party  policy.  This  institution 
might,  in  the  course  of  time,  full  into  the  hands  of  men  who  would  think  it 
immoral  and  criminal  to  loan  their  money  for  the  necessary  purposes  of  Go- 
vernment. What  would  be  the  situation  of  the  country  in  such  an  event,  at 
a  time  when  th'.s  institution  furnished  the  great  mass  of  the  medium  of  circu- 
lation? It  was  to  guard  against  such  an  event  that  an  immediate  agency  in  the 
direction  was  necessary:  there  was  a  greater  probability  of  finding  eight  rea- 
sonable and  virtuous  men  out  of  twenty,  than  thirteen  out  of  twenty-five. — 
Mr.  F.  regretted  that  the  number  of  directors  to  be  appointed  by  Govern- 
ment was  not  greater;  and,  also,  the  amendment  which  prevented  the  Presi- 
dent from  appointing  more  than  three  at  the  seat  of  the  mother  bank;  but  he 
supposed  he  must  be  satisfied  with  it  as  it  stood,  as  there  was  little  hope  of  ob- 
taining more.  It  was  objected,  however,  that  moneyed  men  would  not  like 
the  introduction  of  this  direct  influence.  This  \\as  perfectly  natural.  Money- 
ed men  have  no  objection  to  manage  your  funds  for  their  benefit,  but  have  no 
desire  to  admit  your  influence  in  the  management  of  theirs.  But  will  the  in- 
troduction of  this  principle  prevent  the  subscription  of  the  capital  from  being 
filled?  No  gentleman  had,  or  would  venture  to  predict,  such  an  effect.  They 
will  no  doubt  make  wry  faces,  but  the  bitter  pill  would  be  swallowed  if  it 
was  well  gilded.  Arguments  had  been  urged  against  this  part  of  the  plan, 
founded  upon  the  supposition  that  improper  appointments  would  be  made. 
The  President  and  Senate  had  not  the  same  information  to  enable  them  to 
choose  proper  directors.  Stockholders  were  better  judges  of  the  necessary 
qualifications  of  directors.  Corrupt  men  would  solicit  and  procure  these  ap- 
pointments for  improper  purposes.  Great  injury  would  result  to  the  bank 
from  their  success.  They  would  procure  for  themselves  and  friends  accom- 
modations to  which  they  were  not  entitled. — A  slight  examination  of  these 
arguments  would  show  their  fallacy.  Intelligence  and  integrity  were  the 
qualifications  required  in  directors.  The  same  ability  existed  to  ascertain 
who  possessed  them,  for  this,  as  for  all  other  offices.  The  President  and  Se- 
nate can  command  or  procure  the  most  accurate  information  of  the  character  of 
persons  who  are  thought  of  for  these  appointments,  from  every  source  to  which 
it  may  be  necessary  to  apply.  Is  it  not  passing  strange,  that  a  mail  who  has 
raked  up  money  from  every  kennel  into  which  lie  may  nave  dipped  his  fingers, 
is,  from  that  circumstance,  a  better  judge  of  the  proper  person  for  a  director, 
than  the  President  and  Senate?  That  a  stupid  fellow,  who  had  blundered  into 
a  fortune  in  New  Orleans  or  Providence,  should  be  able  to  procure  better  in- 
formation of  the  character  and  circumstances  of  individuals,  than  the  Presi- 
dent, residing  at  Washington,  and  the  Senators,  coming  from  the  several 
States?  These  men,  however,  who  intend  to  swindle  the  bank,  will  worm 
themselves  into  the  good  graces  of  the  President,  and  receive  the  appoint- 
ment. After  their  appointment,  paper  will  be  discounted,  having  their  names 
upon  it,  which  ought  not  to  be  discounted;  because  the  extreme  delicacy  of  the 
other  directors  will  not  permit  them  to  object  to  it.  This  morbid  delicacy, 
too,  is  to  be  found  in  persons  chosen  by  the  keen-sighted  individual  stock- 
holders, who  are  the  best  judges  of  the  persons  competent  to  manage  their 
concerns.  Such  is  the  argument.  It  supposes  folly  in  the  President  and  Se- 


564  BANK  OF  THE   UNITED  STATES. 

nate,  who  make  the  appointments;  corruption  in  the  persons  seeking  to  be 
appointed;  and  stupidity  and  criminality  in  the  other  directors,  in  permitting 
this  folly  and  corruption  of  the  choosers  and  the  chosen,  to  injure  the  insti- 
tution. 

Mr.  F.  asked,  what  advantages  could  be  derived  from  this  institution,  if 
this  amendment  prevails,  which  could  not  be  produced  through  the  agency  of 
the  State  banks?  It  is  admitted,  that  the  great  object  of  this  bill,  the  restora- 
tion of  specie  payments,  might  be  effected  by  a  rigorous  system  of  measures 
against  the  State  institutions.  Mr.  F.  said,  he-did  not  feel  that  indignation 
against  the  State  banks,  for  stopping  the  payment  of  specie,  which  had  been 
expressed  by  others.  His  indignation  had  been  so  thoroughly  exhausted  upon 
the  smugglers  of  English  goods,  and  the  cash  dealers  in  British  Government 
bills,  for  the  use  of  the  Canadian  army,  that  he  had  none  left  for  the  banks 
who  had  loaned  their  notes  to  their  own  Government,  who,  in  consequence  of 
an  extraordinary  emission  of  their  paper,  hud  been  under  the  necessity  of  dis- 
honoring it.  He  was  not,  however,  the  apologist  of  the  banks  for  withhold- 
ing specie  payments  since  the  restoration  of  peace.  It  was,  however,  certain, 
that  no  one  bank  could,  without  ruin,  resume  the  payment  of  specie.  The 
resumption  must  be  simultaneous.  He  had  no  objection  to  any  system  which 
should  induce  the  banks  to  perform  their  obligations  in  this  regard  to  the  com- 
munity. But  he  protested  against  the  cruelty  and  injustice  of  any  rigorous 
measures  which  should  compel  them,  immediately,  either  to  sell  their  Govern- 
ment stock,  or  to  curtail  their  discounts.  It  wras  saying  to  these  banks,  you 
have  loaned  us  too  much  of  your  paper;  you  have  made  top  much  money  out 
of  the  General  Government;  your  paper  has,  indeed,  performed  the  trifling 
service  of  carrying  us  triumphantly  through  a  dangerous  conflict;  but  we  are 
not  now  in  want  of  a  further  accommodation;  you  must  take  in  your  paper; 
you  must  sell  your  stock;  you  must  disgorge  your  gains;  you  must  resume 
your  specie  payments.  And  what  will  be  the  consequence  of  all  this?  They 
are  forced  to  sell  their  stock — it  goes  into  market,  and  its  price  is  depressed. 
Are  you  in  a  situation  to  buy,  to  take  advantage  of  this  disgorging  of  their 
unrighteous  gains?  Far  from  it.  You  cannot  be  benefitted;  you  cannot  enter 
as  a  competitor  into  the  market.  And  who  are  the  gainers  by  this  system  of 
rigor?  The  hard  money  men,  who  withheld  their  money  in  the  hour  of  your 
necessity  and  peril — who  combined  together  for  the  purpose  of  defeating  your 
loans.  Mr.  F.  begged  the  House,  if  these  banks  were  to  be  punished,  to  wait 
until  the  Government,  who  had  been  the  sufferer,  should  be  prepared  to  take 
advantage  of  their  punishment.  At  all  events,  to  be  so  cautious  in  their  cas- 
tigation,  that,  in  punishing  puny,  petty  speculation,  they  do  not  reward  the 
vilest  of  all  gamblers:  those  who  staked  their  money  against  the  safety  of  your 
empire,  who  sought  to  destroy  you  by  cramping  your  resources,  who  sought  to 
beggar  the  country,  that  an  administration  might  be  ruined. 

Mr.  TELFAIR  observed  that  the  great  cause  of  difference  of  opinion  on  this 
question,  seemed  to  arise  from  a  misapprehension  of  those  who  advocated  the 
amendment,  as  to  the  primary  objects  for  which  this  institution  is  designed. 
Gentlemen  argue  as  though  the  moving  cause  for  the  establishment  of  a  na- 
tional bank  was  the  interest  of  the  individuals  who  may  become  subscribers, 
and  that  the  Government  has  but  one  interest,  and  that  is,  the  attainment  of 
the  highest  possible  bonus. 

In  this  view  of  the  subject,  I  must  be  permitted  totally  to  differ  from  those 
who  are  disposed  to  deprive  the  Government  of  all  participation  in  its  direc- 
tion. Did  I  deem  it  practicable  to  manage  such  an  institution  without  great 
liabilties  to  corruption  of  its  principles,  I  should  most  decidedly  prefer  one 
whose  stock  was  exclusively  the  property  of  the  nation.  But  it  requires  no 
great  political  sagacity,  and  but  ordinary  experience,  .to  ascertain  that  those 
institutions,  which  derive  their  principle  of  action  from  private  interest,  are 
more  active  in  pursuit  of  their  object,  more  vigilant  in  the  detection  of  error, 
and  more  likely  to  prosper,  than  those  which  derive  their  impulse  from  the 
spirit  of  patriotism,  and  have  in  contemplation  solely  the  public  good.  Private 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         555 

interest  is  ever  more  active — more  vigilant — more  pervading — more  alive  to 
its  object,  than  national,  which  is  more  sluggish,  because  its  direction  is  to- 
wards remote  or  general  good— less  quicksighted,  because  its  instinct  is  not  so 
strong. 

This  institution  is  designed  not  merely  to  fulfil  the  ordinary  purposes  of 
banks  of  discounts;  it  aspires  to  great  national  objects;  it  contemplates  a  res- 
toration of  the  legitimate  currency  of  the  country;  its  end  is  to  give  an  uni- 
form and  valuable  medium  to  the  whole  empire;  its  design  is  to  Facilitate  the 
fiscal  operations  of  the  Treasury  Department.  It  is,  in  one  word,  to  restore 
to  this  Government  the  rightful  and  constitutional  control  over  the  national 
medium,  which  is  vested  in  every  civilized  government,  and  which  was  in- 
tended to  be  vested  in  the  Congress  of  the  United  States,  when  to  it  was  assigned 
the  supervisoi  sh'.p  of  the  mint  establishment.  These  are  the  primary  and  es- 
sential objects  of  its  creation;  from  the  attainment  of  these  great  objects,  cer- 
tainly benefits  flow  to  every  class  o(  the  community;  but  exclusive  benefits 
are  designed  to  none,  save  so  much  as  may  be  deemed  necessary  to  the  ob- 
tention  of  these  ends,  and  conformable  to  thes:.;  results. 

According  to  these  views,  then,  the  interest  of  the  stockholders  is  not  to  be 
considered  as  holding  a  priority  of  station  to  that  of  the  Government;  on  the 
contrary,  the  institution  is  to  be  looked  upon  as  the  property  of  the  nation, 
and  that  of  individuals  for  political  considerations,  viz:  because  their  aid  will 
facilitate,  or,  if  you  please,  is  necessary  to  participate  in  its  immediate  profits — 
that  it  may  not  be  wanting  in  that  spirit  which  characterizes  the  schemes  of 
individual  pursuit;  that,  while  its  capacities  and  controlling  power  be  national, 
its  impulse,  its  life  and  animation,  shall  be  private  interest.  But  private  in- 
terest, unrestrained,  naturally  produces  much  mischief.  I  have  admitted  that 
a  bank,  exclusively  managed  by  the  Government,  would  be  exposed  to  a  cor- 
ruption of  its  principles;  and,  with  so  many  facts  to  support  me  while  casting 
an  eye  upon  the  numberless  banks  around,  1  certainly  shall  not  be  charged 
with  overweening  suspicion,  when  asserting  that  banks,  too  exclusively  man- 
aged by  stockholders,  are  liable  to  become  instruments  of  public  evil  from  the 
invitations  of  self-interest. 

The  true  policy,  in  the  creation  of  a  bank,  then,  is  to  give  it  a  double  cha- 
racter— to  combine  in  it  the  elements  of  public  and  private  interest;  but  to 
secure  to  the  former  a  control  over  the  latter:  for  the  Government,  which 
creates  this  institution,  is  responsible  for  its  fulfilment  of  the  great  objects  of 
its  creation,  and  it  is  wiser  to  use  means  of  precaution,  than  to  rest  upon  ul- 
timate means  of  severe  correction.  But  the  gentleman  from  North  Carolina, 
(Mr.  GASTON)  who  has  certainly  spoken  with  ability  on  this  subject,  is  satis- 
fied with  the  incidental  powers  and  benefits  which  the  Government  would 
derive  from  this  bank.  And  this  brings  me  to  two  objections  which  have 
been  urged:  first,  an  indescribable  dread  is  felt  of  the  influence  of  the  Go- 
vernment over  this  institution,  provided  it  participates  in  its  direction.  In 
what  way,  let  me  ask,  can  the  influence  of  me  Government  be  injurious?  Is 
it  presumable  that  the  influence  of  the  Government  would  induce  the  bank  to 
Joan  to  individuals  who  were  incapable  of  repaying  the  debt?  Can  it  be  believ- 
ed that  the  Government  would  ever  descend,  by  its  influence  over  the  bank, 
to  benefit  one  class  of  individuals  by  loans,  while  it  oppresses  another  by  re- 
fusing to  extend  these  benefits?  Or.  can  it  be  imagined  that  the  Government, 
which  is  so  deeply  interested  in  preserving  an  uniform  and  valuable  currency, 
would,  in  ordinary  circumstances,  induce  the  bank  to  make  over  issues,  and 
thereby  cause  a  depreciation  of  its  paper?  I  presume  not;  these  are  appre- 
hensions too  fantastical  to  be  ascribed  to  gentlemen  of  sense;  they  are  absur- 
dities too  great  for  them  to  ascribe  to  a  Government  as  enlightened  as  ours; 
but,  if  they  mean  that  the  Government,  under  the  pressure  of  trying  emer- 
gencies, may,  by  their  influence,  induce  loans  from  the  bank,  which  prudence, 
in  ordinary  times,  would  forbid  them  to  make,  I  shall  not  deny  the  proba- 
bility; but  must  be  permitted  to  answer,  there  are,  or  may  be,  periods,  during 
a  nation's  travail,  when  exertions  of  such  means  would  be  attended  with  less 
84 


666  BANK  OF  tHE  UNITED  STATES. 

evil  than  a  want  of  money;  and,  as  this  objection  has  reference  to  an  extr<?m€ 
case,  I  am  willing  to  await  the  crisis. 

But,  their  second  objection,  which  is  not  a  little  inconsistent  with  the  first,- 
is,  that  the  President  will  appoint  ignorant,  inefficient,  and  needy  directors* 
What  weight,  then,  could  these  directors  possess?  But,  let  us  approach  this 
objection  a  little  nearer,  and  look  it  in  the  face.  Why  is  the  presumption  in- 
dulged, that  the  President  will  be  thus  injudicious?  Has  he  not  the  same  re- 
spectable class  of  merchants  from  whom  to  make  his  selection  as  the  stock- 
holders have?  Is  it  reasonable  to  suppose  that  any  President  would  be  wil- 
ling thus  to  commit  his  fame  and  reputation;  and,  if  such  a  one  could  be 
found,  is  there  no  reliance  to  be  put  upon  the  vigilance  of  the  Senate?  But, 
the  gentleman  from  North  Carolina  thinks  that  the  Government  is  never  safe 
in  trusting  its  money  concerns  m  the  hands  of  an  individual.  How,  thenv 
Mr.  Chairman,  is  any  nation  to  transact  its  financial  concerns?  Does  our  Go- 
vernment not  daily  trust  individuals  with  its  money?  Is  Ft  not  obliged  to  do 
so?  And  if,  in  this  case,  it  did  not  trust  directors  appointed  by  kself,  would 
it  not  be  obliged,  exclusively,  to  trust  those  appointed  by  the  stockholders? 
If  the  gentleman's  argument  is  carried  a  little  further,  it  would  recommend 
the  system  of  farming  the  revenue,  as  pursued  in  France,  instead  of  appoint- 
ing our  own  officers  to  collect  it.  Our  policy,  in  collecting  the  dues  of  the 
Government,  has  been  to  couple  the  interest  of  the  officer  with  our  own;  he 
derives  a  profit  or  per  centage  upon  the  money  collected,  and  hence  the  stimu- 
lus superadded  to  that  of  a  sense  of  duty.  The  interest  of  this  bank  should 
be  made  subservient  to  the  interest  of  the  public — of  the  People;  and  hence  I 
wish  for  some  control  in  its  direction, 

In  the  course  of  the  day,  an  amendment  was  adopted,  on  motion  of  Mr- 
CONDICT,  to  confine  the  selection  of  directors,  to  be  made  by  the  President  and 
Senate,  to  persons  holding  stock  in  the  bank. 

On  motion  of  Mr.  SMITH,  of  Maryland,  an  amendment  was  also  adopted,, 
to  prevent  more  than  three  of  the  directors,  appointed  by  the  President  and 
Senate,  irom  being  taken  from  any  one  State. 

The  main  question  was  at  length  taken,  about  4  o'clock,  on  Mr.  PIT-KIN'S; 
motion,  to  exclude  the  Government  from  the  appointment  of  any  of  the  direc- 
tors, and  decided  in  the  negative. 

For  the  amendment, 64, 

Against  it, 79. 

The  committee  then  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

MARCH  6,  1816, 

The  House  again  resolved  itself  into  a  committee  of  the  whole,  Mr.  NEL- 
SON, of  Virginia,  in  the  chair,  on  the  bill. 

Mr.  SMITH,  of  Maryland,  moved  to  amend  the  10th  section,  so  as  to  allow 
the  choice  of  president  of  the  bank  to  be  made  from  any  of  the  directors,  and 
not  to  confine  the  selection  of  that  officer  to  one  of  the  directors  appointed 
by  the  president  and  Senate.  Mr.  S.  made  a  few  remarks  in  justification  of 
his  motion. 

Mr.  CALHOUN  had  no  objection  to  the  amendment.  He  thought  the  clause 
proposed  to  be  amended  not  necessary  to  give  the  Government  a  due  control 
over  the  concerns  of  the  bank;  and  that  it  would  still  retain  as  much  influ- 
ence, as  would  serve  every  beneficial  purpose. 

Mr.  ROBERTSON  condemned  the  motion.  He  thought  it  would  diminish 
too  greatly  the  power  which  it  was  necessary  the  Government  should  have 
over  the  bank.  He  did  not  want  merely  a  great  money  machine,  but  an  in- 
stitution of  a  national  character;  and  therefore  could  not  consent  to  part  with, 
one  after  another,  all  the  features  of  the  bill  which  gave  the  Government  a 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

proper  and  necessary  control  over  the  bank.  He  adverted  to  the  liberality 
which  had  been  manifested  by  the  chairman  who  reported  the  bill,  (Mr.  CAL- 
HOUX)  and  thought  the  principle  of  accommodation  might  be  carried  too  far — 
he  admonished  gentlemen  to  remember  the  painter,  who  flattered  every  body 
and  pleased  nobody.  His  fate  would  be  that  of  the  bill,  if  this  spirit  of  con- 
cession was  carried  too  far;  and  he  could  not,  for  one,  be  so  far  governed  by 
it,  as  to  give  up  those  powers  whicli  were  necessary  to  the  salutary  management 
of  the  bank,  and  without  which  it  would  not  be  worth  having. 

Mr.  Ross  could  see  no  reason  why  the  president  of  tlie  bank  should  not  be 
selected  from  the  whole  twenty-five  directors,  if  it  was  the  object  to  get  the 
best  man.  If  the  President  and  Senate  appoint  a  director  the  most  proper  for 
the  office,  he  would  doubtless  be  elected,  but  if  not,  why  exclude  the  fittest 
character?  It  would  have  been  just  as  well  to  confine  the  selection  of  Presi- 
dent of  the  United  States  to  one  State,  though  it  might  not  contain  a  person 
as  well  qualified  as  one  in  another  State.  Mr.  R.  called  the  attention  of  the 
House  to  the  importance  of  the  office  and  duties  of  the  president  of  the  bank, 
and  the  absolute  necessity  of  selecting  the  director  best  qualified.  Such  a 
course  was  congenial  with  our  politicalinstitutions,  although  he  believed  the 
bank  itself  was  by  no  means  congenial  with  the  constitution;  being,as  he  viewed 
it,  a  moneyed  aristocracy.  He  condemned  the  policy  of  giving  so  much  addi- 
tional strength  to  the  Executive  arm.  Alexander  Hamilton  himself,  in  the 
zenith  of  his  influence,  would  not  have  dared  to  propose  such  a  grant  of  power 
to  the  President,  as  the  control  and  regulation  of  a  great  moneyed  institution. 
Mr.  R.  concluded  by  saying  he  thought  it  would  be  much  safer  to  adopt  the 
amendment,  and  withhold  from  the  Executive  so  important  a  power,  &c. 

Mr.  CALHOUX  rose  to  make  a  remark  or  two  in  reply  to  his  friend  (Mr.  RO- 
BERTSON.) He  almost  despaired  of  the  passage  of  the  bill,  after  some  of  the 
indications  which  he  had  witnessed,  and  began  to  doubt  whether  any  bill 
would  pass  at  all  on  the  subject.  For  himself,  Mr.  C.  said,  his  anxiety  for 
the  measure  was  not  extreme;  but,  as  long  as  there  was  a  lingering  hope  of  its 
success,  lie  should  omit  no  effort  to  make  it  an  efficient  remedy  for  the  evils  of 
the  present  currency.  If,  after  making  it  suit,  as  far  as  possible,  the  taste  of 
every  one,  gentlemen  determined  to  oppose  it,  it  was  time  for  them  to  look 
out  tor  some  other  remedy.  Mr.  C.  said  he  felt  deeply  the  evil  of  the  disor- 
dered state  of  our  currency,  and  the  necessity  of  a  cure.  In  devising  that 
cure,  difficulties  were  to  be  expected.  The  direction  of  the  bank  he  knew 
had  been  made  a  sine  qua  non  by  some  gentlemen,  on  one  side  of  the  House, 
and  he  was  sorry  to  find  it  was  one  also  with  some  on  the  other.  It  was  a 
fate  peculiar  to  great  measures,  to  fall  in  their  details.  The  obstinacy  of  gen- 
tlemen in  matters  of  what  they  deemed  principle,  was  honorable  to  them,  but 
he  feared  it  would  be  fatal  to  the  bill.  He  lamented  it — the  disorders  were 
so  deep,  so  great,  that  justice  to  the  country  called  for  a  remedy  at  the  hands 
of  the  Government.  If  gentlemen  would  seriously  consider  the  character,  and 
power,  and  nature  of  the  evil— two  hundred  and  sixty  banks  issuing  almost  as 
many  millions  of  depreciated  paper — they  must  see  the  necessity  of  co-operat- 
ing in  the  measure  of  relief.  The  necessity  for  union  was  great  and  urgent, 
for  the  disease  was  almost  incurable — it  was  a  leprosy  on  the  body  politic,  &c. 

The  question  was  then  taken  on  Mr.  Smith's  motion,  and  carried:  ayes 80, 
nays  46. 

After  some  further  amendment,  affecting  no  principle, 

Mr.  RANDOLPH  moved  to  add  the  word  native  in  the  clause  which  limits 
the  choice  of  directors  to  citizens  of  the  United  States;  which  motion  was 
agreed  to  without  debate — ayes  G8. 

After  the  committee  had  proceeded  to  the  clause,  which  provides  for  the 
appointment  of  directors  for  the  branch  banks,  which  clause  likewise  re- 
stricted the  choice  to  citizens  of  the  United  States— 


BANK    OF  THE   UNITED    STATES. 

Mr.  JEWETT  moved  that  the  word  native  be  inserted  also  in  that  clause,  so 
as  to  limit  the  appointment  to  native  citizens. 

Mr.  CALHOUN  objected  to  the  amendment.  It  was  the  first  time,  Fie  said, 
that  any  attempt  had  been  made  in  this  country  to  discriminate  between  na- 
tive and  naturalized  citizens.  The  constitution  recognised  no  such  distinc- 
tion, except  in  the  eligibility  of  the  highest  office  in  the  Government,  and  he 
could  see  no  reason  for  introducing,  on  this  occasion,  so  odious  and  unprece- 
dented a  distinction. 

Mr.  RANI>OLPH?  in  reply,  spoke  at  considerable  length  in  support  of  the 
motion.  He  inveighed  with  much  acrimony  against  the  whole  class  of  natur- 
alized citizens,  attributing  to  them  the  declaration  of  war,  and  almost  all  other 
political  evils:  and  maintaining  that  they  ought  to  be  admitted  only  on  the 
looting  of  denizens,  without  any  participation  in  the  counsels  of  the  country, 
and  the  benefit  only  of  protection  during  good  behavior,  &c. 

Mr.  WRIGHT  replied  with  warmth  to  Mr.  RANDOLPH;  after  which 

The  question  was  taken  on  Mr.  JEWKTT'S  motion,  and  lost,  without  a  di- 
vision. 

Mr.  SMITH,  of  Maryland,  then  moved  to  strike  out  that  part  of  the  17th  sec- 
tion which  gives  the  President  of  the  United  States  power,  during  the  recess  of 
Congress,  on  the  application  of  the  stockholders,  to  authorize  the  bank  to  sus- 
pend the  payment  of  specie. 

Mr.  CALHOUN,  after  admitting  the  propriety  of  the  motion,  said  he  had  no 
objection  to  extend  it  to  the  whole  proviso  of  the  section,  so  as  to  deprive  Con- 
gress, as  well  as  the  President,  of  the  power  to  suspend  specie  payments. 

Mr.  FORSYTH  opposed  this  proposition,  and  Mr.  RANDOLPH  supported  it; 
after  which, 

The  committee  rose,  reported  progress,  and  obtained  leave  to  sit  again. 

MARCH  7,  181C. 

The  House  resolved  itself  into  a  committee  of  the  whole,  Mr.  NELSON,  of 
Virginia,  in  the  chair,  on  the  bill:  the  motion  to  strike  out  the  proviso  which 
gives  to  Congress  the  power  of  authorizing  the  bank,  on  application  of  the 
stockholders,  to  suspend  the  payment  of  specie,  being  still  under  consider- 
ation. 

The  discussion  of  this  motion  was  widely  debated  by  various  gentlemen. 

The  debate  was  resumed  on  this  question,  and  continued  about  two  hours. 

The  motion  to  strike  out  the  proviso  was  decided  in  the  affirmative,  by  a 
large  majority. 

Some  other  amendments  were  also  made  to  the  bill. 

The  committee  at  length  got  through  the  bill,  when  it  rose,  reported  pro- 
gress, and  obtained  leave  to  sit  again. 

MARCH  9,  1816. 

The  intervening  orders  of  the  day  were,  on  motion,  postponed,  and  the 
House  resolved  itself  into  a  Committee  of  the  Whole,  Mr.  BRACKENRIDGE,  of 
Virginia,  in  the  chair,  on  the  national  bank  bill. 

Mr.  CADY  offered  an  amendment  to  prevent  the  establishment  of  more  than 
one  branch  of  the  bank  in  any  one  State. 

The  motion  was  opposed  by  Messrs.  CALHOUN,  BRADBURY,  and  WRIGHT, 
and  supported  by  Messrs.  CADY,  and  CULPEPER,  and  then  negatived,  without 
a  division. 

After  some  unimportant  amendments,  and  the  bill  having  been  gone  through, 
the  question  was  stated:  "  Shall  the  committee  rise  and  report  the  bill  to  the 
House  ?"  when 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

Mr.  CLAY  rose,  and  delivered  at  length,  his  sentiments  in  favor  of  the  bill, 
its  principle,  and  details. 

[The  speech  delivered  on  this  occasion,  by  Mr.  CLAY,  appears  not  to  have  been  print- 
ed in  the  newspapers  of  the  day,  and,  of  course,  cannot  be  inserted  as  uttered  in  the 
House;  but,  after  the  return  of  Mr.  C,  to  Kentucky,  he  made  an  address  to  his  con- 
stituents, in  which  the  part  he  took  in  the  House,  in  regard  to  the  bank,  is  ex- 
plained. The  following1  is  what  he  then  said  upon  this  subject.] 

On  one  subject,  that  of  the  Bank  of  the  United  States,  to  which,  at  the 
late  session  of  Congress,  he  gave  his  humble  support,  Mr.  CLAY  felt  particu- 
larly anxious  to  explain  the  grounds  on  which  he  had  acted.  This  explana- 
tion, if  not  due  to  his  own  character,  the  State  and  the  district  to  which  he 
belonged  had  a  right  to  demand.  It  would  have  been  unnecessary,  if  his 
observations,  addressed  to  the  House  of  Representatives,  pending  the  mea- 
sure, had  been  published;  but  they  were  not  published,  and  why  they  were 
not  published  he  was  unadvised. 

When  he  was  a  member  of  the  Senate  of  the  United  States,  he  was  induced 
to  oppose  the  reneyval  of  the  charter  to  the  old  Bank  of  the  United  States,  by 
three  general  considerations:   The  lirst  was,  that  he  was  instructed  to  oppose 
it  by  the  Legislature  of  the  State.     What  were  the  reasons  that  operated  with 
the  Legislature,  in  giving  the  instruction,  he  did  not  know.     He  had  under- 
stood trom  members  of  that  body,  at  the  time  it  was  given,  that  a  clause,  de- 
claring that  Congress  had  no  power  to  grant  the  charter,  was  stricken  out; 
from  which  it  might  be  inferred,  either  that  the  Legislature  did  not  believe  a 
bank  to  be  unconstitutional,  or  that  it  had  formed  no  opinion  on  that  point. 
This  inference  derives  additional  strength  from  the  fact,  that,  although  the 
two  late  Senators  from  this  State,  as  well  as  the  present  Senators,  voted  for  a 
Rational  Bank,  the  Legislature,  which  must  have  been  well  apprised  that 
such  a  measure  was  in  contemplation,  did  not  again  interpose,  either  to  pro- 
test against  the  measure  itself,  or  to  censure  the  conduct  of  those  Senators. 
From  this  silence,  on  the  part  of  a  body  which  has  ever  fixed  a  watchful  eye 
upon  the  proceedings  of  the  General  Government,  he  had  a  right  to  believe 
that  the  Legislature  of  Kentucky  saw,  without  dissatisfaction,  the  proposal  to 
establish_a  National  Bank;  and  that  its  opposition  to  the  former  one  was  upon 
grounds  of  expediency,  applicable  to  that  corporation  alone,  or  no  longer  ex- 
isting.     But  when,  at  the  last  session,  the  question  came  up  as  to  the  esta- 
blishment of  a  National  Bank,  being  a  member  of  the  House  of  Representa- 
tives, the  point  of  inquiry  with  him  was,  not  so  much  what  was  the  opinion  of 
the  Legislature,  although,  undoubtedly,  the  opinion  of  a  body  so  respectable 
would  nave  great  weight  with  him  under  any  circumstances,  as  what  were 
the  sentiments  of  his  immediate  constituents.      These  he  believed  to  be  in 
favor  of  such  an  institution,  from  the  following  circumstances:    In  the  first 
place,  his  predecessor  (Mr.  HAWKINS)  voted  for  a  National  Bank,  without 
the  slightest  murmur  of  discontent.     Secondly,  during  the  last  Fall,  when  he 
was  in  his  district,  he  conversed  freely  with  many  of  his  constituents  upon 
that  subject,  then  the  most  common  topic  of  conversation,  and  all,  without  a 
single  exception,  as  far  as  he  recollected,  agreed  that  it  was  a  desirable,  if 
not  the  only  efficient  remedy  for  the  alarming  evils  in  the  currency  of  the 
country.     And,  lastly,  during  the  session/he  received  many  letters  from  his 
constituents,  prior  to  the  passage  of  the  bill,  all  of  which  concurred,  he  be- 
lieved, without  a  solitary  exception,  in  advising  the  measure.     So  far,  then, 
from  being  instructed  by  his  district  to  oppose  the  bank,  he  had  what  was  per- 
haps tantamount  to  an  instruction  to  support  it — the  acquiescence  of  his  con- 
stituents in  the  vote  of  their  former  representative,  and  the  communications, 
oral  and  written,  of  the  opinions  of  many  of  them  in  favor  of  a  bank. 

The  next  consideration  which  induced  him  to  oppose  the  renewal  of  the 
old  charter,  was,  that  he  believed  the  corporation  had,  during  a  portion  of  the 


670  BANK  OF  THE  UNITED  STATES. 

period  of  its  existence,  abused  its  powers,  and  had  sought  to  subserve  the 
views  of  a  political  party.  Instances  of  its  oppression,  for  that  purpose,  were 
asserted  to  have  occurred  at  Philadelphia,  and  at  Charleston;  and,  although 
denied  in  Congress,  by  the  friends  of  the  institution,  during  the  discussions 
on  the  application  for  the  renewal  of  the  charter,  they  were,  in  his  judgment, 
satisfactorily  made  out.  This  oppression,  indeed,  was  admitted  in  the  House 
of  Representatives,  in  the  debate  on  the  present  bank,  by  a  distinguished 
member  of  that  party  which  had  so  warmly  espoused  the  renewal  of  the  old 
charter.  It  may  be  said,  what  security  is  there  that  the  new  bank  will  not 
imitate  this  example  of  oppression?  He  answered,  the  fate  of  the  old  bank- 
warning  all  similar  institutions  to  shun  politics,  with  which  they  ought  riot  to 
have  any  concern;  the  existence  of  abundant  competition,  arising  from  the 
great  multiplication  of  banks,  and  the  precautions  which  are  to  be  found  in 
the  details  of  the  present  bill. 

A  third  consideration  upon  which  he  acted  in  1811  was,  that,  as  the  power 
to  create  a  corporation,  such  as  was  proposed  to  be  continued,  was  not  speci- 
fically granted  in  the  constitution,  and  did  not  then  appear  to  him  to  be  ne- 
cessary to  carry  into  effect  any  of  the  powers  which  were  specifically  granted, 
Congress  was  not  authorized  to  continue  the  bank.  The  constitution,  he 
said,  contained  powers  delegated,  and  prohibitory — powers  expressed  and  con- 
structive. It  vests  in  Congress  all  powers  necessary  to  give  effect  to  the  enu- 
merated powers;  all  that  may  be  necessary  to  put  into  motion  and  activity  the 
machine  of  government  which  it  constructs.  The  powers  that  may  be  so  ne- 
cessary, are  deducible  by  construction;  they  are  not  defined  in  the  constitu- 
tion; they  are,  from  their  nature,  indefinable.  When  the  question  is  in  rela- 
tion to  one  of  these  powers,  the  point  of  inquiry  should  be,  is  its  exertion  ne- 
cessary to  carry  into  effect  any  of  the  enumerated  powers  and  objects  of  the 
General  Government?  With  regard  to  the  degree  of  necessity,  various  rules 
have  been,  at  different  times,  laid  down;  but,  perhaps,  at  last,  there  is  no 
other  than  a  sound  and  honest  judgment  exercised,  under  the  checks  and  con- 
trol which  belong  to  the  constitution  and  the  people. 

The  constructive  powers  being  auxiliary  to  the  specifically  granted  powers, 
and  depending  for  their  sanction  and  existence  upon  a  necessity  to  give  effect 
to  the  latter,  which  necessity  is  to  be  sought  for  and  ascertained  by  a  sound 
and  honest  discretion,  it  is  manifest  that  this  necessity  may  not  be  perceived, 
at  one  time,  under  one  state  of  things,  when  it  is  perceived,  at  another  time, 
under  a  different  state  of  things.  The  constitution,  it  is  true,  never  changes; 
it  is  always  the  same;  but  the  force  of  circumstances,  and  the  lights  of  expe- 
rience, may  evolve  to  the  fallible  persons,  charged  with  its  administration,  the 
fitness  and  necessity  of  a  particular  exercise  of  constructive  power  to-day, 
which  they  did  not  see  at  a  former  period. 

Mr.  C.  proceeded  to  remark,  that,  when  the  application  was  made  to  renew 
the  old  charter  of  the  Bank  of  the  United  States,  such  an  institution  did  not 
appear  to  him  to  be  so  necessary  to  the  fulfilment  of  any  of  the  objects  speci- 
fically enumerated  in  the  constitution,  as  to  justify  Congress  in  assuming,  by 
construction,  a  power  to  establish  it;  it  was  supported  mainly  upon  the  ground 
that  it  was  indispensable  to  the  treasury  operations.  But  the  local  institutions 
in  the  several  States  were,  at  that  time,  in  prosperous  existence,  confided  in 
by  the  community,  having  a  confidence  in  each  other,  and  maintaining  an  in- 
tercourse and  connexion,  the  most  intimate.  Many  of  them  were  actually 
employed  by  the  treasury,  to  aid  that  department  in  a  part  of  its  fiscal  ar- 
rangements; and  they  appeared  to  him  to  be  fully  capable  of  affording  to  it 
all  the  facility  that  it  ought  to  desire  in  all  of  them.  They  superseded,  in  his 
judgment,  the  necessity  of  a  national  institution.  But  how  stood  the  case  in 
1816,  when  he  was  called  upon  again  to  examine  the  power  of  the  General 
Government  to  incorporate  a  National  Bank?  A  total  change  of  circumstances 
was  presented — events  of  the  utmost  magnitude  had  intervened. 

A  general  suspension  of  specie  payments  had  taken  place,  and  this  had  led 
to  a  train  of  consequences  of  the  most  alarming  nature.  He  beheld,  dispersed 
over  the  immense  extent  of  the  United  States,  about  three  hundred  banking 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.        57} 

institutions,  enjoying,  in  different  degrees,  the  confidence  of  the  public, 
shaken  as  to  them  an,  under  no  direct  control  of  the  General  Government, 
and  subject  to  no  actual  responsibility  to  the  State  authorities.  These  insti- 
tutions were  emitting  the  actual  currency  of  the  United  States—a  currency 
consisting  of  a  paper,  on  which  they  neither  paid  interest  nor  principal,  whilst 
it  was  exchanged  for  the  paper  of  the  community,  on  which  both  were  paid. 
He  saw  these  institutions,  in  fact,  exercising,  what  had  been  considered  at  all 
times,  and  in  all  countries,  one  of  the  highest  attributes  of  sovereignty — the 
regulation  of  the  current  medium  of  the  country.  They  were  no  longer  com- 
petent to  assist  the  treasury,  in  either  of  the  great  operations  of  ejection, 
deposite,  or  distribution  ot  the  public  revenues.  In  fact,  the  paper  which 
they  emitted,  and  which  the  treasury,  from  the  force  of  events,  found  itself 
constrained  to  receive,  was  constantly  obstructing  the  operations  of  that  de- 
partment; for  it  would  accumulate  where  it  was  not  wanted,  and  could  not  be 
used  where  it  was  wanted  for  the  purposes  of  Government,  without  a  ruinous 
and  arbitrary  brokerage.  Every  man  who  paid  or  received  from  the  Govern- 
ment, paid  or  received  as  much  less  than  he  ought  to  have  done,  as  was  the 
difference  between  the  medium  in  which  the  payment  was  effected  and  specie. 
Taxes  were  no  longer  uniform.  In  New  England,  where  specie  payments 
have  not  been  suspended,  the  people  were  called  upon  to  pay  larger  contribu- 
tions than  where  they  vvere  suspended.  In  Kentucky,  as  much  more  was 
paid  by  the  people  in  their  taxes,  than  was  paid,  for  example,  in  the  State  of 
Ohio,  as  Kentucky  paper  was  worth  more  than  Ohio  paper. 

It  appeared  to  Mr.  C.  that,  in  this  condition  of  things,  the  General  Go- 
vernment could  depend  no  longer  upon  these  local  institutions,  multiplied 
and  multiplying  daily;  coming  into  existence  by  the  breath  of  eighteen  State 
sovereignties,  some  of  which,  by  a  single  act  of  volition,  had  created  twenty 
or  thirty  at  a  time.  Even  if  the  resumption  of  specie  payments  could  have 
been  anticipated,  the  General  Government  remaining  passive,  it  did  not  seem 
to  him  that  the  General  Government  ought  longer  to  depend  upon  these  local 
institutions  exclusively  for  aid  in  its  operations;  but  he  did  not  believe  it 
could  be  justly  so  anticipated.  It  was  not  the  interest  of  all  of  them, that  the 
renewal  should  take  place  of  specie  payments;  and  yet,  without  concert  be- 
tween all,  or  most  of  them,  it  could  not  be  effected.  With  regard  to  those 
disposed  to  return  to  a  regular  state  of  things,  great  difficulties  might  arise 
as  to  the  time  of  its  commencement. 

Considering,  then,  that  the  state  of  the  currency  was  such,  that  no  thinking 
man  could  contemplate  it  without  the  most  serious  alarm;  that  it  threatened 
general  distress,  if  it  did  not  ultimately  lead  to  convulsion  and  subversion  of 
the  Government,  it  appeared  to  him  to  be  the  duty  of  Congress  to  apply  a 
remedy,  if  a  remedy  could  be  devised.  A  National  Bank,  with  other  auxili- 
ary measures,  was  proposed  as  that  remedy.  Mr.  C.  said  he  determined  to 
examine  the  question,  with  as  little  prejudice  as  possible  arising  from  his  for- 
mer opinion;  he  knew  that  the  safest  course  to  him,  if  he  pursued  a  cold  cal- 
culating prudence,  was  to  adhere  to  that  opinion,  right  or  wrong.  He  .was 
perfectly  aware,  that,  if  he  changed,  or  seemed  to  change  it,  he  should  ex- 
pose himself  to  some  censure;  but,  looking  at  the  subject,  with  the  light  shed 
upon  it  by  events  happening  since  the  commencement  of  the  war,  he  could 
no  longer  doubt.  A  bank  appeared  to  him  not  only  necessary,  but  indispen- 
sably necessary,  in  connexion  with  another  measure,  to  remedy  the  evils  of 
which  all  vvere  but  too  sensible.  He  preferred  to  the  suggestions  of  the  pride 
of  consistency,  the  evident  interests  of  the  community,  and  determined  to 
throw  himselt  upon  their  candor  and  justice.  That  which  appeared  to  him,  in 
1811,  under  the  state  of  things  then  existing,  not  to  be  necessary  to  the  Gene- 
ral Government,  seemed  now  to  be  necessary,  under  the  present  state  of 
things.  Had  he  then  foreseen  what  now  exists,  and  no  objection  had  laid 
against  the  renewal  of  the  charter,  other  than  that  derived  from  the  constitu- 
tion, he  should  have  voted  for  the  renewal. 

Other  provisions  of  the  constitution,  but  little  noticed,  if  noticed  at  all,  on 
the  discussions  in  Congress  in  1811,  would  seem  to  urge  that  body  to  exert 


672  BANK   OF  THE    UNITED    STATES. 

all  its  powers  to  restore  to  a  sound  state  the  money  of  the  country.  That  in- 
strument confers  upon  Congress  the  power  to  coin  money,  and  to  regulate  the 
value  of  foreign  coins;  and  the  States  are  prohibited  to  coin  money,  to  emit 
bills  of  credit,  or  to  make  any  thing  but  gold  and  silver  coin  a  tender  in  pay- 
ment of  debts.  The  plain  inference  is,  that  the  subject  of  the  general  cur- 
rency was  intended  to  be  submitted  exclusively  to  the  General  Government. 
In  point  of  fact,  however,  the  regulation  of  the  general  currency  is  in  the  hands 
of  the  State  Governments,  or,  which  is  the  same  thing,  of  the  banks  created 
by  them.  Their  paper  has  every  quality  of  money,  except  that  of  being  made 
a  tender,  and  even  this  is  imparted  to  it  by  some  States,  in  the  law,  by  which  a 
creditor  must  receive  it,  or  submit  to  a  ruinous  suspension  of  the  payment  of 
his  debt.  It  was  incumbent  upon  Congress  to  recover  the  control  which  it 
had  lost,  over  the  general  currency;  the  remedy  called  for,  was  one  of  cau- 
tion and  moderation,  but  of  firmness.  Whether  a  remedy  directly  acting 
upon  the  banks,  and  their  paper  thrown  into  circulation,  was  in  the  power  of 
the  General  Government,  or  not,  neither  Congress,  nor  the  community,  were 
prepared  for  the  application  of  such  a  remedy;  an  indirect  remedy,  of  a  milder 
character,  seemed  to  be  furnished  by  a  National  Bank.  Going  into  operation 
with  the  powerful  aid  of  the  treasury  of  the  United  States,  he  believed  it 
would  be  highly  instrumental  in  the  renewal  of  specie  payments.  Coupled 
with  the  other  measure  adopted  by  Congress,  for  that  object,  h'j  believed  the 
remedy  effectual.  The  local  banks  must  follow  the  example  which  the  Na- 
tional Bank  would  set  them,  of  redeeming  their  notes  by  the  payment  of 
specie,  or  their  notes  will  be  discredited  and  put  down. 

If  the  constitution  then  warranted  the  establishment  of  a  bank,  other  con- 
siderations besides  those  already  mentioned  strongly  urged  it.  The  want  of 
a  general  medium  is  every  where  felt;  exchange  varies  continually,  not  only 
between  different  parts  of  the  Union,  but  between  different  parts  of  the  same 
city.  If  the  paper  of  a  National  Bank  were  not  redeemed  in  specie,  it  would 
be  much  better  than  the.  current  paper;  since,  although  its  value,  in  compari- 
son with  specie,  might  fluctuate,  it  would  afford  an  uniform  standard. 

If  political  power  be  incidental  to  banking  corporations,  there  ought,  per- 
haps, to  be  in  the  General  Government  some  counterpoise  to  that  which  is 
exerted  by  the  States.  Such  a  counterpoise  might  not  indeed  be  so  necessary, 
if  the  States  exercised  the  povyer  to  incorporate  banks  equally,  or  in  propor- 
tion to  their  respective  populations.  But  that  is  not  the  case.  A  single  State 
has  a  banking  capital  equivalent,  or  nearly  so,  to  one-fifth  of  the  whole  banking 
capital  of  the  United  States.  Four  States  combined  have  the  major  part  of  the 
banking  capital  of  the  United  States.  In  the  event  of  any  convulsion,  in  which 
the  distribution  of  banking  institutions  might  be  important,  it  may  be  urged 
that  the  mischief  would  not  be  alleviated  by  the  creation  of  a  National  Bank, 
since  its  location  must  be  within  one  of  the  States.  But,  in  this  respect,  the 
location  of  the  bank  is  extremely  favorable,  being  in  one  of  the  middle  States, 
not  likely,  from  its  position,  as  well  as  its  loyalty,  to  concur  in  any  scheme 
for  subverting  the  Government;  and  a  sufficient  security  against  such  contin- 
gency is  to  be  found  in  the  distribution  of  branches  in  different  States,  acting 
and  reacting  upon  the  parent  institution,  and  upon  each  other. 

A  desultory  debate  followed,  between  Mr.  JACKSON,  Mr.  CLAY,  and  Mr. 
RANDOLPH,  on  one  or  two  points  of  Mr.  CLAY'S  arguments. 
After  which,   the  committee  rose,  and  reported  the  bill  and  amendments. 

MARCH  11,  1816. 

The  House  resumed  the  consideration  of  the  bill. 

The  House  successively  concurred  in  the  amendments  of  the  committee  of 
the  whole,  without  objection,  until  it  reached  that  which  substituted  the  sum 
ofjtfteen  dollars,  as  the  second  cash  instalment  to  the  bank,  instead  of  Jive. 

Mr.  CALHOUN  repeated  the  objections  that  he  made  in  the  committee,  to 
this  amendment,  and  moved  that  the  House  disagree  thereto,  with  the  view 
hereafter  of  making  the  sum  ten  dollars. 


ON  THE  GRANT  OI>  THE  CHARTER  OF   1816.  573 

After  a  few  remarks  from  Mr.  SMITH,  of  Maryland,  in  justification  of  the 
amendment, 

It  was  disagreed  to  by  the  House. 

The  House  then  proceeded  to  that  amendment  of  the  committee  which  re- 
strained the  Government  from  appointing  more  than  three  of  its  directors  from 
any  one  State. 

This  amendment  was  objected  to,  in  a  few  words,  by  Mr.  TELFAIR,  arid 
opposed,  also,  by  Mr.  ROBERTSON,  at  some  length,  who  wished  the  clause 
restored  to  its  original  state. 

After  a  few  remarks  from  Mr.  SMITH,  of  Maryland,  in  favor  of  the  amend- 
ment, it  was  concurred  in. 

The  next  amendment  considered,  was  that  which  added  the  word  *4  native" 
to  a  clause  of  the  bill,  and  thereby  excluded  from  the  direction  naturalized 
citizens. 

Mr.  CALHOUN  opposed  the  adoption  of  this  amendment,  on  the  ground  for- 
merly stated;  and  Mr.  RANDOLPH  again  advocated  it,  in  a  short  speech;  when 

The  decision  of  the  committee  was  reversed,  and  the  word  "  native"  reject- 
ed; ayes  44,  noes  67. 

On  motion  of  Mr.  WEBSTER,  the  bill  was  then  so  amended,  after  a  short 
discussion,  in  which  Mr.  SMITH,  of  Maryland,  opposed  the  motion,  as  to 
make  it  equally  compulsory  and  penal  on  the  bank  to  pay  its  deposites  in  spe- 
cie, as  its  notes  or  bills. 

When  the  House  arrived  at  the  amendment  providing  sanctions  for  com- 
pelling the  bank  to  perform  its  engagements, 

Mr.  WRIGHT  made  a  motion  substantially  to  strike  out  the  clause  which 
makes  the  charter  forfeitable,  in  case  of  the  non-payment  of  specie,  and 
thereby  leave  only  the  penalty  of  paying  ten  per  cent,  on  their  notes,  if  not 
so  paid. 

MARCH  12,  1816. 

The  House  proceeded  to  the  order  of  the  day,  being  the  report  of  the  com- 
mittee of  the  whole  House  on  the  bill;  the  motion  to  strike  out  that  part  of 
an  amendment  reported  by  the  committee  which  makes  the  charter  forfeitable 
for  non-payment  of  its  notes  in  specie,  being  still  under  consideration. 

Mr.  CALHOUN  supported  the  motion  to  amend  the  amendment.  It  was 
with  much  reluctance,  Mr.  C.  said,  that  he  opposed  any  provision  which  the 
House  had  deemed  necessary  to  perfect  the  bill,  but,  in  the  present  instance, 
he  was  compelled  to  make  an  objection.  The  fundamental  character  of  this 
bank  was,  that  it  should  pay  its  notes  in  gold  or  silver  coin;  and  a  sufficient 
penalty  was  provided  to  enect  that  end.  It  is  a  good  rule  in  law,  said  Mr. 
C.,  that,  where  you  attach  a  separate  penalty  to  a  particular  violation  of  a  law, 
you  weaken  the  general  penalty;  and,  as  he  thought  the  general  penalty  would 
attach  in  the  case,  without  tins  special  provision,  which  would,  therefore, 
weaken  the  general  sanctions  of  the  bill,  he  hoped  it  would  be  stricken  out. 

[The  amendment  under  consideration,  proposed  by  the  committee  of  the 
whole,  was  this:  to  add  to  the  18th  section,  4*  And,  in 'case  of  failure  of  the 
said  corporation  to  pay  and  discharge  the  notes  thereof,  in  gold  or  silver  coin, 
on  demand,  then,  and  in  that  case,  the  charter  hereby  granted  shall  be  void; 
and,  moreover,  the  holder  of  every  such  note,  the  payment  whereof,  in  gold  or 
silver,  shall  have  been  refused,  may  recover  of  the  said  corporation  the  amount 
thereof,  together  with  interest,  at  the  rate  often  per  centum  per  annum,  from 
the  time  at  which  the  same  shall  have  been  demanded  until  payment.  Mr. 
>V RIGHT'S  motion  was  to  strike  out  the  words  in  italic;  and  it  was  agreed  to, 
without  a  division.] 

Mr.  RANDOLPH  then  moved  to  amend  the  amendment  of  the  committee,  by 
making  the  interest  demandable  on  the  notes  of  the  bank,  in  case  of  refusal  to 
pay  specie,  twenty  per  cent,  instead  of  ten. 
85 


674  BANK    OF  THE  UNITED   STATES. 

Mr.  CALHOUN  repeated  the  reluctance  with  which  he  objected  to  any  mo- 
tion which,  in  the  opinion  of  the  gentleman  who  made  it,  would  improve  the 
bill 5  but,  he  had  thought  that  even  the  propriety  of  ten  per  cent,  contemplat- 
ed by  the  bill,  was  very  questionable,  as  he  doubted  whether  that  provision 
might  not  produce  combinations  against  the  bank,  which  were  so  anxiously 
guarded  against.  Every  man  acquainted  with  the  subject  knows,  that  no  bank 
can,  at  all  times,  possess  the  means  of  meeting  a  general  run  upon  it;  and 
he  submitted  it  to  the  House,  whether  such  a  provision  as  was  now  proposed, 
would  not  be  dangerous  to  the  institution,  by  inviting  a  run  on  it,  and  there- 
by producing  a  suspension  of  payment.  He  admitted  that  it  vyas  all  important 
to  the  benefit  anticipated  from  the  bank,  that  it  should  pay  its  notes,  at  all 
times,  in  specie;  and  he  thought  that  end  already  secured  by  other  sanctions 
sufficiently  guarded.  This  bank,  said  Mr.  C.  is  no  more  than  a  part  of  the 
commercial  community  in  which  it  is  established,  and  any  embarrassment  of 
the  bank  must  press,  also,  on  the  whole  commercial  community;  that  commu- 
nity would  be  the  first  to  give  way  in  such  a  case,  and  this  would  produce  a 
run  on  the  bank,  and  compel  the  stoppage  of  payment.  If  the  amendment 
would  produce  a  greater  certainty  of  specie  payments,  it  might  be  proper; 
but  believing  that  it  might  defeat  its  own  object,  and  produce  that  which  it 
was  intended  to  guard  against,  he  thought  it  dangerous,  &c. 

Mr.  WARD,  of  Massachusetts,  was  in  favor  of  the  amendment.  He  thought 
Mr.  CALHOUN  had  over-rated  the  mischiefs  which  might  possibly  ensue  from 
its  adoption.  Mr.  W.  believed  that  no  person  would  resort  to  the  penalty, 
unless  where  the  bank  might  exceed  a  temporary  refusal  to  pay  its  notes.  If 
the  bank  declined  payment  for  a  short  time  only,  there  was  no  person  who 
would  peremptorily  go  to  law  for  the  penalty;  and  there  was  no  danger  of  the 
combination  predicted.  It  was  his  opinion  that  the  provision  would  be  bene- 
ficial to  the  bank,  by  the  character  it  would  give  it  as  a  specie  bank,  the  su- 
perior confidence  which  it  would  of  course  possess  throughout  the  country, 
and  the  great  business  it  would  consequently  be  enabled  to  do,  &c. 

Mr.  RANDOLPH  said  the  argument  of  the  gentleman  from  South  Carolina 
(Mr.  CALHOUN)  was  a  very  powerful  objection  to  the  principle  of  the  bill,  but 
none  against  the  amendment;  it  was  an  argument  which  he  had  been  keeping 
in  reserve  by  himself,  for  another  stage  of  the  bill.  He  had  no  objection  to  take 
fifteen  per  cent,  as  the  penalty,  but  ne  preferred  twenty,  for  another  reason. 
The  flagitious  conduct  of  the  banks,  for  some  time  back,  had  proven  that  they 
could  make  ten  per  cent,  more  than  their  fair  profits:  and  his  object  vvas  to  make 
the  damages  surpass  any  profits  the  bank  could  make  by  refusing  to  pay 
specie.  We  ought?  he  said,  to  remember  certain  surplusses  which  the  banks, 
on  particular  occasions,  distributed,  in  addition  to  the  declared  dividends,  and 
it  was  proper  in  this  case  to  guard  against  speculation  of  this  kind.  All 
banking  institutions  were  alike  in  their  desire  to  swell  their  profits  to  the  great- 
est extent,  howsoever  correct  and  virtuous  the  directors  might  be  in  their  pri- 
vate characters;  and  he  would  guard  against  every  public  robber  of  every 
S-ade,  whether  he  be  a  governor  general  of  India  or  a  Bagshot  highwayman, 
e  would  put  it  out  of  the  power  of  this  bank  to  commit  frauds  on  the  communi- 
ty, without  ruin  to  itself.  Let  the  penalty  be  ample,  said  Mr.  R.  Make  the 
bank  a  good  one,  and  there  is  no  danger  of  their  being  unable  always  to  pay 
specie. 

The  question  on  making  the  penalty  twenty  instead  of  ten  per  cent,  was 
then  taken,  and  negatived:  ayes  52,  noes  70. 

The  House  then  proceeded  with  the  remaining  amendments  of  the  committee 
of  the  whole;  the  consideration  and  decision  on  which  having  been  completed, 

Mr.  CALHOUN  moved  to  amend  the  bill,  by  fixing  the  amount  of  the  second 
cash  payment  at  ten  dollars,  instead  of  five,  as  it  stood  in  the  bill.  This  being 
agreed  to,  and  some  other  minor  motions  being  disposed  of, 


ON  THE  GRANT  OF  THE  CHARTER  OF  18 

Mr.  WEBSTER  moved  to  amend  the  clause  which  declares  that  the 
may  sue  and  be  sued  "in  all  courts  whatsoever,"  by  designating  tn 
courts. 

Mr.  HALL  asked  if  it  would  not  be  better,  before  this  motion  was  acted  on, 
to  inquire  a  little  whether  Congress  have  the  power  to  grant  jurisdiction  to  the 
State  courts,  which,  in  some  cases,  they  had  refused  to  exercise,  he  thought 
properly,  and  the  constitutionality  of  which  was  very  doubtful. 

Mr.  WEBSTER  said  the  question  was  an  important  one;  but  this  was  not  the 
first  time  Congress  had  legislated  on  it,  though  the  courts  of  Virginia  had  re- 
sisted their  jurisdiction.  Without,  however,  discussing  the  question  at  present, 
Mr.  W.  said  the  bill  was  just  as  objectionable  as  it  stood,  because  it  gave  the 
bank  the  power  to  appear  in  "all  courts  whatsoever." 

After  some  further  discussion  between  Messrs.  CALHOUN,  WRIGHT,  WILDE, 
and  GROSVENOR,  on  the  propriety  of  granting  jurisdiction  to  the  State  courts, 
specifically, 

The  question  was  taken,  and  the  amendment  adopted. 

Mr.  ROOT  then  renewed  the  motion  he  had  unsuccessfully  made,  in  com- 
mittee of  the  whole,  to  reduce  the  rate  at  which  six  per  cent,  stock  is  to  be 
received  in  subscriptions  to  the  bank,  from  par  to  ninety  per  cent.  Mr.  R.  re- 
peated briefly  his  reasons  for  the  motion,  already  stated,  and  Mr.  CALHOUN, 
his  objections  to  it;  when,  after  some  remarks  in  support  of  it  by  Mr.  Ross, 

The  question  was  taken,  and  decided  in  the  negative:  yeas,  31;  nays,  IOC. 

Mr.  HALL,  of  Georgia,  then  mrwed  a  new  section  to  the  bill,  the  object  of 
which  was  to  apply  the  bonus  arising  to  the  Government  from  the  incorpora- 
tion of  the  bank,  to  the  internal  improvement  of  the  country;  and,  to  avoid 
any  contention  about  the  part  of  the  country  at  which  to  commence  the  work, 
Mr.  M.  said  he  would  leave  that  to  the  decision  of  a  future  Congress.  The 
bonus,  he  thought,  would  afford,  from  year  to  year,  as  much  as  could  be  easily 
employed,  and,  by  the  end  of  twenty  years,  when  the  charter  would  ex- 
pire, the  proceeds  would  have  accomplished  every  object  of  improvement 
which  would  be  proper  for  the  General  Government  to  attempt. 

Mr.  CALHOUN  declared  his  approbation  of  the  object,  but  feared  the  adop- 
tion of  the  amendment  might  drive  off* some  who  would  otherwise  support  the 
bill.  Unfortunately  for  us,  he  said,  there  was  not  a  unanimous  feeling  in  fa- 
vor of  internal  improvement,  some  believing  this  not  the  proper  time  to  com- 
mence that  work;  and  such  a  provision  might  deprive  the  bill  of  some  friends, 
which,  at  present,  was  the  main  object  of  nis  solicitude. 

Mr.  HALL  thought  this  the  most  proper  moment  for  commencing  the  great 
work  of  internal  improvement;  but,  if  ne  thought  this  amendment  would  draw 
oft'  any  support  from  the  bill,  he  would  not  urge  it.  He  believed,  however, 
it  would  produce  a  different  effect,  and  would  gain  friends  for  the  bill,  who, 
otherwise,  would  not  vote  for  it.  His  principal  reason  for  wishing  to  provide 
for  his  object  in  this  bill,  was,  that  it  would  then  be  sanctioned  by  a  charter, 
and  not  revocable,  &c. 

Mr.  GROSVENOR  had  no  objection  to  the  application  of  the  bonus  in  the  way 
proposed,  but  he  disapproved  of  providing  for  the  object  in  this  bill.  Govern- 
ment might  hereafter  wish,  for  various  reasons,  to  get  rid  of  its  stock  in  the 
bank,  but  it  would  be  precluded  from  doing  so,  if  this  amendment  \vasadopt- 
ed.  There  was  no  good  reason  for  attaching  it  to  this  bill,  because,  if  a  ma- 
jority of  the  House  were,  as  he  hoped  they  were,  friendly  to  internal  improve- 
ments, they  could  act  on  the  subject  separately. 

Mr.  WRIGHT  and  Mr.  WILDE  successively  offered  some  remarks  in  favor 
of  the  motion. 

The  amendment  was  rejected  by  a  considerable  majority. 

Mr.  CONDICT  proposed  to  amend  the  bill,  by  substituting  "New  York"  for 
"Philadelphia,"  in  the  clause  \vhich  fixed  the  location  of  the  bank.  It  was, 


(376  BANK  OF  THE  UNITED  STATES. 

Mr.  C.  remarked,  unnecessary  to  say  any  thing  as  to  the  considerations  which 
ought  to  prevail,  infixing  a  bank  for  commercial  purposes.  He  would  mere- 
ly remark,  that,  in  addition  to  the  superior  commerce  of  New  York,*the  bank, 
in  that  city,  would  serve  the  financial  purposes  of  the  Government  as  well  a» 
it  could  at  Philadelphia.  In  the  latter  city,  he  believed,  moreover,  there  was 
already  a  plenty  of  bank  capital,  &c. 

Mr.  CALHOUN  observed  that  this  was  a  question  on  which,  he  presumed, 
all- had  made  up  their  minds;  and  it  would  be  superfluous  to  say  any  thing  on 
it.  He  hoped,  however,  the  motion  would  not  prevail.  The  old  Bank  of  the 
United  States  was  established  at  Philadelphia,  and  he  would  prefer  that  city 
for  the  present  institution. 

Mr.  ROBERTSON  said  that  Mr.  CALHOUN'S  reason  for  preferring  Philadelphia, 
if  it  had  any  weight  at  all,  operated  against  himself;  for  the  old  bank  having 
been  fixed  in  Philadelphia  was  an  argument  for  placing  this  bank  in  some 
other  city,  that  the  benefits  might  not  be  given  to  one  place  alone;  besides,  if 
thejwnk  was  taken  from  the  seat  of  Government,  to  place  it  in  a  more  com- 
mercial situation,  it  ought  to  be  fixed  in  that  city  which  was  most  commercial. 
But  he  had  another  objection,  in  this  case,  to  Philadelphia,  and,  with  him,  the 
strongest  one;  this  was,  the  hostility  of  the  representatives  of  that  city  to  the 
bank  itself.  He  would  not  consent  to  impose  upon  a  place  an  institution  which 
was  so  odious  to  them,  &c. 

Mr.  WRIGHT  also  spoke  in  favor  of  the  motion,  and  incidentally  urged  the 
high  claims  otBaltimore  and  of  Washington  city. 

Mr.  COMSTOCK  argued  in  favor  of  New  York,  as  possessing  superior  com- 
mercial advantages,  and  the  propriety  of  selecting  that  city  for  a  bank  intend- 
ed to  aid  commercial  activity,  &c. 

The  motion  to  strike  out  Philadelphia,  and  insert  New  York,  was  then  de- 
cided in  the  affirmative: 

For  the  motion,     -  -        70, 

Against  it,     -  ...        64. 

Mr.  ATHERTON,  with  a  view  to  restrain  attempts  to  speculate  in  the  stock 
of  the  bank,  by  persons  subscribing  for  more  than  they  could  pay  for,  and  sell- 
ing it  afterwards  at  an  advanced  price,  and  to  make  all  the  subscriptions  bona 
fide  ones,  moved  substantially  to  amend  the  bill,  by  providing  that,  in  appor- 
tioning the  shares,  no  subscription  should  be  reduced  as  long  as  there  was  on 
the  list  a  larger  subscription. 

After  a  few  words  from  Mr.  SMITH,  of  Maryland,  who  thought  the  provision 
would  be  ineffectual  and  was  unnecessary,  the  amendment  was  adopted,  ayes 
67,  noes  43. 

Mr.  MAYRANT  offered  a  new  section  to  the  bill,  the  object  of  which  was  to 

allow  the  five  directors  appointed  by  the  Government,  each,  a  salary  of 

dollars;  and  to  prevent  their  obtaining  any  loan  or  accommodation  from  the 
bank. 

In  support  of  his  proposition,  Mr.  M.  spoke  at  some  length.  He  adverted 
to  the  immense  funds  of  the  Government  which  would  pass  through  this  bank, 
amounting  annually  to  the  sum  of  twenty-five  millions,  exclusive  of  the  stock 
owned  therein  by  the  Government.  We  were  Centering  into  partnership,  he 
said,  with  persons  unknown  to  us,  and  about  to  place  in  their  hands  the  im- 
mense revenues  of  the  country.  It  was  indispensable,  therefore,  that  the  Go- 
vernment should  not  only  have  a  strong  influence  in  the  bank,  but  its  direc- 
tors ought  to  be  made  independent,  and,  as  far  as  possible,  placed  beyond  the 
temptation  of  betraying  their  trusts— he  would  make  them,  indeed,  as  in- 
dependent as  the  judges.  Mr.  M.  quoted  examples  from  many  countries 
in  Europe  to  prove  the  necessity  of  giving  the  Government  greater  influence 
in  the  bank,  which,  in  none  of  the  instances  he  had  cited,  had  ever  been  in- 
jurious to  the  prosperity  of  those  institutions. 


ON^THE  GRANT  OF  THK  CHARTER  OF  1816.  577 

Mr.  CALHOUN  replied  that  his  colleague's  object  could  not  be  effected  by 
his  amendment;  because,  if  the  directors  were  precluded  from  borrowing  from 
the  bank,  directly,  they  could  borrow  in  the  name  and  through  the  medium 
of  some  friend.  Mr.  C.  remarked  further,  that  the  salary  ottered  must  be 
very  large  to  induce  a  commercial  man  of  any  standing  to  forego  the  benefits 
of  the  bank. 

Mr.  MAYRANT  thought  a  salary  of  3,000  d9llars  would  be  a  sufficient  in- 
ducement to  men,  well  qualified  for  the  direction,  to  relinquish  the  privilege  of 
borrowing  from  the  bank.  After  some  further  observations,  in  answer  to  Mr. 
CALHOUN, 

Mr.  MAYRAVTS  motion  to  amend  the  bill  was  negatived,  without  a  division. 

The  only  remaining  motion,  meriting  particular  notice,  was  by 

Mr.  ATHERTON,  who  moved  that  the  rate  at  which  the  three  per  cent,  stock 

shall  be  received  for  subscription,  shall  (DC  reduced  from  65  to  50  per  cent. 

Some  debate  ensued  on  this  motion,  which  had  not  concluded,  when 
The  House  adjourned. 

MARCH  13,  1816. 

Mr.  ATHERTON'S  motion,  to  make  the  rate  of  subscribing  the  three  per  cent, 
stock,  fifty  instead  of  sixty-five  per  cent,  being  still  under  consideration, 

This  motion  was  negatived;  and  Mr.  ATHERTON  subsequently  moved  to  re- 
ceive the  three  per  cent,  at  sixty,  instead  of  sixty-five  percent,  which  was  al- 
so negatived:  Yeas  53,  Nays  55. 

Mr.  CLENDENIX  moved  to  reconsider  the  vote  of  yesterday,  which  fixed  the 
principal  bank  at  the  city  of  New  York. 

This  motion  produced  a  debate  of  some  length,  and  considerable  animation. 

Messrs.  SMITH,  of  Maryland,  and  WRIGHT,  spoke  in  favor  of  the  re-consi- 
deration, and  incidentally  urged  the  claims  of  Baltimore  to  the  possession  of 
the  mother  bank.  Messrs.  HOPKINSON,  SERGEANT,  CALHOUN,  PICKERING, 
Ross,  and  INGHAM,  likewise  advocated  the  re-consideration,  and  the  claims  of 
Philadelphia.  Those  who  spoke  against  the  re-consideration,  and  of  course  in 
lavor  of  New  York,  were  Messrs,  CONDICT,  SOUTHARD,  ROOT,  TAYLOR,  of 
New  York,  ROBERTSON,  GROSVENOR,  GOLD,  and  HULBERT. 

The  question  was  finally  decided  in  the  affirmative,  as  follows: 

For  re-consideration, 81, 

Against  it, - 66. 

And  the  House  then  struck  out  "  New-York,"  and  replaced  Philadelphia. 

Mr.  WRIGHT  then  moved  to  strike  out  Philadelphia,  and  insert  Baltimore; 
which  was  decided  in  the  negative. 

Mr.  ROOT,  after  observing  that  the  State  of  New  York  possesssed  a  consi- 
derable portion  of  United  States'  three  per  cent,  stock,  and  wishing,  as  the 
Legislature  of  that  State  was  now  in  session,  if  so  disposed,  to  subscribe  that 
stock  in  the  bank,  moved  to  insert  the  word  "  States,"  in  the  clause  permit- 
ing  companies  or  corporations  to  subscribe;  which  motion  was  agreed  to. 

Mr.  WRIGHT  moved  to  restore  to  Congress  the  power  of  increasing  the 
capital  of  the  bank  to  forty-five  millions,  [the  clause  which  granted  to  Con- 
gress the  power  of  increasing  the  capital  to  fifty  millions,  was  stricken  out,  it 
will  be  recollected,  in  committee  of  the  whole.]  Mr.  W.  supported  his  motion 
with  a  variety  of  remarks  on  the  impropriety  of  tying  up  the  hands  of  the  Go- 
vernnient  for  twenty  years,  and  prohibiting  it  by  charter,  from  legislating  ac- 
cording to  the  growth  of  our  population,  the  wants  of  the  country,  &c.  He 
concluded  by  requiring  the  yeas  and  nays,  which  were  refused;  and  then  his 
proposition  to  amend  the  bill  was  rejected,  only  nine  or  ten  rising  in  its  favor. 

Mr.  WRIGHT,  also,  moved  to  strike  out  the  word  "  individual,"  in  the  se- 
cond line  of  the  third  section,  and  insert  the  word  "  citizen,"  as  descriptive 


678  BANK    OF  THE   UNITED    STATES. 

of  those  who  might  subscribe  for  stock,  but  the  question  on  the  motion  was 
determined  in  the  negative. 

Mr.  M'LEAN,  of  Ky.  rose  to  renew  a  motion  which  he  had  made  without 
success,  in  committee  of  the  whole,  and  which  he  should  not  again  have  offered, 
if  he  did  not  conceive  that  his  former  attempt  had  been  decided  under  an  incor- 
rect view  of  the  subject.  Mr.  M'LEAN  then  moved  the  following  clause  to  the 
bill. 

"Provided,  That  no  branch  shall  be  established  in  any  State,  unless  such 
State  shall  authorize  the  same  by  law. " 

Mr.  M'LEAN  supported  his  proposition  at  some  length;;  showing,  by  facts, 
the  injury  which  might  result  to  some  States,  extensively  interested  in  their 
own  banks,  by  forcing  a  branch  of  the  National  Bank  upon  them.  This  was 
the  case  in  Kentucky,  where  the  State  owned  a  great  portion  of  the  stock  of 
the  State  bank,  which  was  very  prosperous,  and  its  stocks  very  profitable;  and 
Mr.  M'L.  said  he  was  unwilling  to  put  it  in  the  power  of  any  twenty-five  men, 
to  impose  upon  that  State,  without  its  consent,  an  institution  which  might  be 
extremely  prejudicial  to  its  interests,  &c. 

Mr.  CALHOUN  replied  briefly,  that  this  motion  appeared  to  involve  an  inqui- 
ry into  the  constitutional  power  of  Congress  to  esablish  banks  in  the  States. 
This  was  a  question  which  he  had  wished  to  avoid  on  the  present  occasion,  and 
he  should  decline  saying  any  thing  on  it.  When  the  necessity  arose  for  dis- 
cussing the  question,  he  should  be  prepared  to  meet  it. 

Mr.  M'LEAN'S  motion  was  negatived,  without  a  division. 

Mr.  PITKIN  then  proposed  to  amend  the  bill,  by  ^striking  out  entirely,  the 
provision  which  gives  the  President  and  Senate  the  power  of  appointing  five  of 
the  directors,  and  thereby  leaving  the  whole  of  the  direction  to  be  chosen  by 
the  corporation. 

Mr.  P.  went  into  a  general  investigation  of  this  question,  the  arguments  on 
which  were  so  fully  given  when  before  the  committee.  In  support  of  his  mo- 
tion, he  said  that,  with  all  the  interest  of  the  Government  in  the  old  Bank  of 
the  United  States,  it  appointed  none  of  the  directors,  yet  there  was  no  com- 
plaint ever  heard  of  the  public  concerns  being  mismanaged  in  that  bank.  If 
there  was  no  necessity  for  exercising  the  power  in  that  bank,  he  argued  there 
was  none  for  it  in  the  present  one.  Neither  the  safe  keeping  of  its  deposites 
nor  the  care  of  its  interest  in  the  bank  required  the  Government  to  possess 
the  power,  because  there  would  necessarily  always  be  a  close  connexion  be- 
tween the  bank  and  the  Government,  produced  by  the  strongest  of  motives,  in- 
terest. If  the  power  was  not  necessary  for  any  useful  purpose,  he  would  not 
Avillingly  risk  any  danger  from  the  possibility  of  the  power  being  converted  in- 
to an  engine  of  oppression,  in  the  hands  of  the  Government.  He  argued  that 
it  was  probable  that  but  few  directors  would  be  appointed  in  Philadelphia  by 
the  stockholders;  that  seven  being  sufficient  to  dp  business,  and  the  Govern- 
ment directors  being  always  on  the  spot,  they  might  frequently  constitute  a 
majority  of  the  board,  and  be  able  to  \yield  the  bank  as  they  pleased.  No 
man,  he  was  confident,  would  embark  his  money  in  a  banking  concern,  when 
one  of  the  partners  had  the  absolute  appointment  of  one  fifth  of  the  directors. 
Mr.  P.  concluded  by  declaring  that,  if  the  provision  he  objected  to  was  not 
stricken  out,  he  should  be  compelled  to  vote  against  the  bill. 

Mr.  CALHOUN  rose,  not  to  argue  this  motion,  because  it  had  been  fully  dis- 
cussed in  committee;  but  only  to  express  his  regret  at  the  determina- 
tion declared  by  Mr.  PITKIN.  He  was  aware  that  great  difference  of 
opinion  existed  on  this  subject,  and  that  great  difficulties  must  be  encounter- 
ed in  maturing  its  details;  but  he  had  began  to  hope,  from  the  concessions 
which  had  been  made,  that  gentlemen  would  reconcile  their  various  views, 
and  that  the  bill  would  survive  the  conflicting  opinions  under  which  it  started. 
It  was  therefore  he  regretted  to  hear  Mr.  P.  declare  the  direction  a  sine  qua 
non  with  him. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         579 

After  a  few  words  by  Mr.  PITKIN,  stating  that  he  had  invariably  declared, 
in  conversation,  that  this  feature  was  with  him  a  sine  qua  non, 
The  question  was  decided  in  the  negative:    Yeas  54,  Nays  92. 

Those  who  voted  in  the  affirmative,  are, 
Messrs.  Atherton,  Messrs.  Hopkinson,  Messrs.  Pickering, 


Baer, 

Huger, 

Pitkin, 

Boss, 

Hulbert, 

Randolph, 

Bradbury, 

Jewett, 

Reed, 

Breckenridge, 

Kent, 

Ruggles, 

Brown, 

Langdon, 

Sergeant, 

Cady, 

Law, 

Smith,  of  Pa. 

Champion, 

Lewis, 

Stanford, 

Clayton, 

Lovett, 

Stearns, 

Cooper, 

Lyle, 

Strong, 

Culpeper, 

Lyon, 

Sturges, 

Davenport, 

Marsh, 

Taggart, 

Gaston, 

Mason, 

Tallmadge, 

Gold, 

M'Kee, 

Tate, 

Goldsborough, 
Grosvenor, 

Milnor, 
Moseley, 

Vose, 
Ward,  of  Mass. 

Hale, 

Nelson,  of  Mass. 

Wheaton, 

Hanson, 

Xoyes, 

Wilcox—  54. 

Herbert, 

I'arris, 

Those  who  voted 

in  the  negative,  are, 

Messrs.  Adgate, 

Messrs."  Goodwvn,                   Messrs. 

Robertson, 

Alexander, 

Griffin, 

Root, 

Baker, 

Hahn, 

Savage, 

Barbour, 

Hall, 

Sharp, 

Bassett, 

Hammond, 

Smith,  of  Md. 

Bateman, 

Hardin, 

Smith,  of  Va. 

Betts, 

Hawes, 

Southard, 

Birdsall, 

Henderson, 

Taul, 

Blount, 

Hungerford, 

Taylor,  N.  Y. 

Burnside, 

Ingham, 

Taylor,  S.  C. 

Caldwell, 

Irving,  N.  Y. 

Telfair, 

Calhoun, 

Jackson, 

Thomas, 

Cannon, 

Johnson,  of  Va. 

Throop, 

Chappell, 

Keir,  Va. 

Townsend, 

Clark,  N.  C. 

Love, 

Tucker, 

Clark,  Kentucky, 

Lowndes, 

Wallace, 

Clendenin, 

Lumpkin, 

Ward,  of  N.  Y. 

Clopton, 

Lyle, 

Ward,  of  N.  J. 

Comstock, 

Maclay, 

Wendover, 

Condict, 

Mayrant, 

Whiteside, 

Conner, 

M'Cor, 

Wilde, 

Crawford, 

M'Lean,  Kentucky, 

Wilkin, 

Creighton, 

M'Lean,  Ohio, 

Williams, 

Crocheron, 
Cuthbert, 

Middleton, 
Moore, 

Willoughby, 
Thomas  Wilson, 

Darlington, 

Murfree, 

William  Wilson, 

Desna, 

Newton, 

Woodward, 

Edwards, 

Ormsby, 

Wright, 

Forney, 

Pickens, 

Yancey, 

Forsyth, 

Pinkney, 

Yates—  91. 

Gholson, 

Piper,  * 

Mr.   PITKIN  then  made  a  motion  to  reduce  the  capital  of  the  bank  from 
thirty -five  to  twenty  millions  of  dollars. 
This  motion  was  decided,  without  debate,  in  the  negative. 


(580  BANK    OF    THE   UNITED    STATES. 

Mr.  GOLDSBOROUGH,  after  a  few  remarks,  moved  an  amendment,  to  pro- 
vide that,  if  the  Government  should  at  any  time  sell  or  relinquish  its  stock 
in  the  bank,  it  should  then  cease  to  have  the  appointment  of  any  part  of  the 
directors;  which  motion  was  also  negatived. 

After  rejecting  various  other  propositions  to  amend  the  bill,  amongst  which 
was  a  motion  of  Mr.  WEBSTER,  to  increase  the  value  of  the  shares  to  $400, 
and  diminish  the  number  to  37,500, 

The  question  was  taken  on  ordering  the  bill  to  be  engrossed  and  read  a  third 
time,  and  decided  in  the  affirmative,  as  follows: 

Those  who  voted  in  the  affirmative,  are. 


Messrs.  Adgate, 

Messrs.  Hawes, 

Messrs.  Piper, 

Alexander, 

Henderson, 

Robertson, 

Atherton, 

Huger, 

Sharp, 

Baer, 

Hulbert, 

Smith,  of  Md. 

Bateman, 

Hungerford, 

Smith,  of  Va. 

Betts, 

Ing-ham, 

Southard, 

Boss, 

Irving',  of  N.  Y. 

Sturges, 

Bradbury, 

Jackson, 

Taul, 

Brown, 

Jewett, 

Taylor,  of  N.  Y. 

Calhoun, 

Ken-,  of  Va. 

Taylor,  of  S.  C. 

Cannon, 

King-,  of  N.  C. 

Telfair, 

Champion, 

Langdon, 

Thomas, 

Chappell, 

Love, 

Throop, 

Cilley, 

Lowndes, 

Townsend, 

Clark,  of  N.  C. 

Lumpkin, 

Tucker, 

Clark,  of  Ken. 

Maclay, 

Ward,  of  N.  J. 

Clendenin, 

Mason, 

Wendover, 

Comstock, 

M'Coy, 

Wheaton, 

Condict, 

M'Kee, 

Wilde, 

Conner, 

Middleton, 

Wilkin, 

Creighton, 

Moore, 

Williams, 

Crocheron, 

Moseley, 

Willoughby, 

Cuthbert, 

Murfree, 

Wm.  Wilson, 

Edwards, 

Nelson,  of  Ms. 

Woodward, 

Forney, 

Noyes, 

Wright, 

Forsyth, 

Pickens, 

Yancey,  and 

Gholson, 

Pinkney, 

Yates.—  82. 

Grosvenor, 

Those  who  voted  in 

the  negative,  are, 

Messrs.  Baker, 

Messrs.  Hale, 

Messrs.  Pickering, 

Barbour, 

Hall, 

Pitkin, 

Bassett, 

Hanson, 

Randolph, 

Blount, 

Hardin, 

Reed, 

Breckenridgr  , 

Herbert, 

Root, 

Burnside, 

Hopkinson, 

Ross, 

Cady, 

Johnson,  of  V». 

Ruggles, 

Caldwell, 

Kent, 

Sergeant, 

Clayton, 

Law, 

Savage, 

Clopton, 

Lewis, 

Smith,  of  Pa. 

Cooper, 

Lovett, 

Stanford, 

Crawford, 

Lyle, 

Stearns. 

Culpeper, 

Lyon, 

Strong, 

Darlington, 

Marsh, 

Tallmadge, 

Davenport, 

Mayrant, 

Vose, 

Desha, 

M'Lean,  of  Ken. 

Wallace, 

Gaston, 

M'Lean,  of  Ohio, 

Ward,  of  Ms. 

Gold, 

Milnor, 

Webster, 

Goldsborough, 
Goodwyn, 

Newton, 
Ormsby, 

Whiteside,  and 
Wilcox.—  61. 

Hahn, 

ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 


681 


MARCH  14,  1816. 

The  bill  was  read  a  third  time,  and  the  question  stated  on  its  passage. 
Mr.  WEBSTER  and  Mr.  CADY  delivered  speeches  at  some  length  against 
*he  b-11,  and  Mr.  GROSVENOR  and  Mr.  HULBERT  in  favor  of  it. 

Mr.  STANFORD,  Mr.  C  LOFTON,  Mr.  HANSON,  and  Mr.  PICKERING,  also 
spoke  against  the  bill,  and  Mr.  CALHOUN  concluded  the  debate  by  a  few  re- 
marks in  favor  of  it. 

The  question  was  loudly  called  for,  during  the  latter  part  of  the  sitting; 
and,  being  taken  at  a  late  hour,  the  vote  was  as  follows: 

Those  who  voted  in  the  affirmative,  are, 
Messrs.  Adgate,  of  N.  Y. 
Alexander,  Ohio. 


Atherton,  N.  /£ 
Baer,  ML 
Betts,  N.  Y. 
Boss,  /?.  /. 
Bradbury,  Mass. 
Brown,  Mass. 
Calhoun,  S.  C. 
Cannon,  Tom. 
Champion,  Con. 
Chappell,  S.  C. 
Clark,  N.  C. 
Clark,  Ken. 
Clendenin,   Ohio. 
Com  stock.  A*.  «/. 
Condict,  N.  J. 
Conner,  Mass. 
Creighton,  Ohio. 
Crocheron,  .V.  Y. 
Cuthbert,  Geo. 
Edwards,  A'.  C. 
Forney,  N.  C. 
Forsyth,  Geo. 
Gholson,  Va. 
Griffin,  Penn. 
Grosvenor,  N.  Y. 
Hawes,  Va. 
Henderson,  Tenn. 
Huger,  S.  C. 
Hulbert,  Mass. 
Hungerford,  Va. 
Ingham,  Penn. 
Irving,  N.  Y. 
Jackson,  Va. 
Jewett,  Vermont. 
Kerr,   Va. 
King,  N.  C. 
Love,  A:  C. 
Lowndes,  S.  C. 


Messrs.  Lumpkin,  Geo. 
Maclay,  Penn. 


Mason.  R.  I. 
McCoy,  Va. 
McKee,  Ken. 
Middleton,  S.  C. 
Moore,  * 
Moseley,  Con. 
Mill-free,  N.  C. 
Nelson,  Mass. 
Parris,  Mass. 
Pickens,  N.  C. 
Pinkney,  Md. 
Piper,  Penn. 
Robertson,,  Louisiana. 
Sharpe,  Ken. 
Smith,  Md. 
Smith  Va. 
Southard,  N.  J. 
Taul,  Ken. 
Taylor,  N.  Y. 
Taylor,  S.  £. 
Telfair,  Geo. 
Thomas,  Tenn. 
Throop,  AT.  Y. 
Tovwisend,  N.  Y. 
Tucker,  Va. 
Ward,  N.  J. 
Wendover,  N.  Y. 
Wheaton.  Mass. 
Wilde,  Geo. 
Wilkin,  N.  Y. 
Williams,  N.  C. 
Willoughby,  N.  Y. 
Wilson,  Trios.  Penn. 
Wilson,  Wm.  Penn. 
Woodward,  S.  C. 
Wright,  Md. 
Yancey,  N.  C. 
Yates,  N.  Y.— 80. 


Those  who  voted  in  the  negative,  are, 
Messrs.  Baker,  of  New  Jersey.  Messrs.  Bassett,   Va. 

Barbour,  Va.  Bennett,  N.  J. 

*  Thomas  Moore  was  from  South  Carolina,  and  Nicholas  R.  Moore  from  Maryland, 
one  of  whom  only  voted  on  this  question;  but  which  it  was,  it  is  not  easy  to  discover, 
as  they  are  not  distinguished  in  the  Journals  by  their  Christian  names. 
86 


BANK  OF  THE    UNITED  STATES. 

Messrs.  Birdsall,  N-  Y.  Messrs.  Lyon,  Vermont. 

Bloimt,  Tenn.  Marsh.  Vt. 

Brackenridge,  Fa.  Mayrant,  S.  C. 

Burnside,  Penn.  McLean,  Ken. 

Bui-well,  Va.  McLean,  Ohio. 

Cady,  N.  Y.  Milnor,  Penn. 

Caldwellt  Ohio.  Newton,  Va. 

Cilley,  A.  H.  Noyes,  Vermont* 

Clayton,  Del.  Ormsby,  Ken. 

Ciopton,  Va.  Pickering,  Mass, 

Cooper,  Del.  Pitkin,  Con. 

Crawford,  Penn.  Randolph,  Va. 

Culpeper,  N.  C.  Reed,  Mass. 

Darlington,  Penn.  Root,  N.  Y. 

Davenport,  Con*  Ross,  Penn. 

Desha,  Ken.  Ruggles,  Mass* 

Gaston,  N.  C.  Savage.  N.  Y. 

Gold,  N.  Y.  Sergeant,  Penn. 

Goldsborough,  MiL  Sheffey,  Va. 

Goodwin,  Va.  Smith,  Penn. 

Hahn,  Penn.  Stanford,^.  C. 

Hale,  N.  H.  Stearns,  Mass. 

Hall,  Geo.  Strong,  Mass. 

Hanson,  Md.  Sturges,  Con. 

Hardin,  Ken.  Taggart,  Mass. 

Herbert,  Md.  Taflmadge,  Con. 

Hopkinson,  Penn.  Vose,  N.  H. 

Johnson,  Va.  Wallace,  Penn. 

Kent,  N.  Y.  Ward,  Mass. 

Langdon,  Vermont.  Ward,  N.  Y. 

Law,  Con.  Webster,  N.  H. 

Lewis,  Va.  Whiteside,  Penn. 

Lovett,  New  York.  Wilcox,  N.  #.— 71. 

Lyle,  Penn. 

So  the  bill  was  passed,  and  sent  to  the  Senate  for  concurrence. 
By  an  analytical  arrangement  of  the  vote,  the  sense  of  the  different  States, 
upon  the  passage  of  the  tjjpk  charter,  appears  to  have  been  expressed  as  fol- 
lows: 

For  its  passage .  Against  it. 

New  Hampshire,  1  vote.  5  votes. 

Massachusetts,  7  7 

Rhode  Island,     -  2  0 

Connecticut,       -  2  5 

Vermont,  1  4 

l^ew  York,  12  8 

New  Jersey,       -  4  2 

Pennsylvania,     -  6  12 

Delaware,  0 

Maryland,  4;  3 

Virginia,  8  11 

North  Carolina,  9  3 

South  Carolina,  l 

Georgia,  5  1 

Kentucky,  4  4 

Tennessee,  3  l 

Ohio,       -  3  2 

Louisiana                        -  l  0 


ON  THE  GRANT  OF  THE  CHARTER  OF   1816. 

JXSKNATE, 

MARCH  22,  1816. 

The  bill  from  the  House  of  Representatives,  to  incorporate  the  subscribers 
to  the  Bank  of  the  United  States,  was  taken  up  as  in  committee  of  the  whole. 
The  first  section  having  been  read-, 

Mr- CAMPBELL  stated,  as  chairman  of  the  Committee  of  Finance,  that,  whilst 
this  bill  was  before  that  committee,  amendments  had  been  proposed  to  it,  but, 
though  a  majority  of  the  committee  had  been  of  opinion  that  the  bill  required 
amendment,  as  they  did  riot  entirely  concur  as  to  the  nature  of  the  amend- 
ments, they  had  determined  to  report  the  bill  without  amendment.  He 
was  one,  he  said,  who  considerd  the  bill  defective.  It  had  been  his  intention 
to  have  this  day  submitted  his  views  of  the  bill,  and  to  have  moved  amendments 


VUVr     KJt-'llU.VA^     lil   OMVII      V»  ttjr      i«,O     VI  AW     ItJV'UHkW    •  ••iwn^     ni.ii.kJX     £»  Wkr%*t  •     *  v**jv*    » 

the  right  at  some  future  moment  to  give  his  views  of  the  bill,  &c. 


Mr.  MASON,  oi'N.  H.  then  moved  to  amend  the  bill  so  as  to  make  the  propor- 
tion of  the  first  specie  payment  on  each  share  ten  dollars  instead  of  five,  as  it 
now  stands. 

This  motion  gave  rise  to  a  wide  debate;  in  which  it  was  supported  by  the 
mover  and  by  Mr,  K.IXC;  and  Mr.  SANFORD,  and  opposed  by  Mr  BIBB,  Mr. 
HARBOUR,  Mr.  TAYLOR,  and  Mr.  DANA. 

The  two  first  of  these  gentlemen,  though  they  also  opposed  the  amendment 
on  principle,  took  the  broad  ground  that  it  would  be  unadvisable  to  amend  the 
detail  of  the  bill  in  unessential  particulars,  unless  it  might  appear  in  the  Se- 
nate exceptionable  in  principle,  which  it  did  not  to  them;  they  being  strongly  in 
favor  of  it.  The  debate,  therefore,  covered  the  whole  ground  of  the  motives 
and  the  details  of  the  bill.  The  debate  continued  till  4  o'clock. 

No  decision  took  place  on  the  motion  of  Mr.  MASON  before  adjournment- 

Mr.  MASON,  of  N.  H.  moved  to  strike  out^/tt'e,  the  proportion  of  specie  to 
be  paid  in  at  the  time  of  subscription,  and  in  lieulhereof  to  insert  ten:  the 
effect  of  which  motion  would  be  to  make  the  whole^unount  of  specie  paid  in 
at  the  time  of  subscription  2,800,000  dollars,  instead  of  1,400,000.  The  two 
great  objects  proposed  by  the  friends  of  this  bill,  he  said,  were,  1st,  to  release  the 
country  from  the  mass  of  spurious  paper  \yhich  was  said  to  be  the  circulating 
medium;  2dly,  to  aid  the  Government  in  its  finances.  To  eft'ect  the  first  ob- 
ject, the  bank  must  commence  its  operations  in  specie.  To  enable  it  to  do 
this,  he  proceeded  to  show,  that,  in  his  veiw,  a  larger  proportion  of  specie  was 
necessary  to  the  first  payment.  The  U.  States'  stock,  subscribable  and  payable 
at  the  same  time,to  the  amount  of  seven  millions, \yould,  he  said, be  no  more  aid 
to  the  bank  in  discounting,  with  a  view  to  redeeming  its  notes  with  specie,  than 
would  so  many  bank  bills.  The  amount  of  1,400,000  dollars  in  specie,  divided 
among  the  different  branches,  which  he  presumed  would  be  immediately  esta- 
blished, would,  he  argued,  be  insufficent  for  any  operation  whatever.  Let  the 
bank  issue  paper  sufficient  to  produce  any  effect,  and  the  specie  in  its  vaults 
would  be  instantly  withdrawn  from  them;  twenty -five  days  would  be  sufficient 
for  that  purpose.  In  Baltimore,  Philadelphia,  and  the  District  of  Columbia,  he 
said,  the  notes  of  the  bank  would  be  seized  on  by  every  individual  who  has 
any  occasion  for  specie,  &c.— the  bank,  then,  to  be  safe,  would  be  able  to  issue 
no  more  paper  than  to  the  amount  of  its  specie  paid  in.  Would  such  an  issue, 
he  asked,  serve  to  reform  the  currency,  or  give  the  Government  any  aid  in  its 
finances?  It  might  be  said,  the  bank  would  commence  operations  slowly  and 
with  caution:  but  Mr.  M.  said,  any  man  acquainted  with  the  institution  of 
banks  knows  that  the  sum  first  paid  in  is  nearly  all  that  the  stockholders  ever 


(386  BANK   OF   THK    UNITED    STATES. 

was  unnecessary,  lie  said,  to  recapitulate  the  causes  which  had  produced  this 
state  of  things,  but  he  did  verily  believe,  that,  unless  the  present  Congress  should 
take  some  efficient  measure  to  compel  the  resumption  of"  payment  of  specie,  it 
was  extremely  doubtful  whether  it  ever  would  be  done.  He  called  the  attention 
of  the  Senate  to  the  acts  of  the  State  Governments;  scarcely  a  session  passed 
in  which  bank  charters  were  not  granted  by  them,  to  the  amount  of  millions; 
and,  as  the  influence  of  these  State  banks  increased,  so  did  the  difficulty  of 
legislating  on  this  subject.  Mr.  B.  then  considered  the  subject  in  other  points 
of  view.  At  the  present  moment,  he  said,  the  People  in  the  Eastern  States 
pay  the  revenue  to  the  United  States  in  treasury  notes;  but  the  Secretary  of 
the  Treasury  was  making  a  great  effort  to  call  in  that  species  of  paper. 
When  that  object  was  accomplished,  what  would  be  the  situation  of  the  East- 
ern States?  Whilst  other  quarters  of  the  country  were  paying  their  taxes  in 
paper,  those  banks  must  either  pay  in  paper  as  valuable  as  specie,  or  in  specie 
itself;  the  inevitable  consequence  must  be,  that  the  banks  of  that  part  of  the 
country  must  follow  the  example  of  all  the  other  banks.  All  the  banks  in  the 
country  would  then  be  united  against  a  return  to  specie  payment.  So  far  as 
he  had  heard,  Mr.  B.  said  that  the  opinion  of  a  large  majority  of  the  Senate 
was,  that  some  course  of  measures  should  be  adopted  for  the  remedy  of  the 
evil;  the  only  question  was  as  to  the  mode.  He  had  heard  but  two  modes 
proposed;  the  one?  to  declare  by  law  that,  after  a  certain  day,  the  paper  of 
those  banks  refusing  to  pay  specie  should  not  be  receivable  in  dues  to  the 
Government;  the  other,  to  establish  a  national  bank.  The  first  plan,  he  said, 
was  impracticable;  the  People  cannot  pay  what  they  cannot  get;  besides,  that 
such  a  measure  would  cause  a  combination  of  the  banks,  too  strong  for  the 
Government  to  overpower.  Mr.  B.  said  he  would  go  further;  he  believed  a 
large  majority  of  the  Senate  had  declared  themselves  in  favor  of  a  national 
bank;  that  they  had  made  up  their  minds  that  it  was  the  best  possible  means 
of  restoring  the  country  to  the  old  state  of  things.  Now,  he  asked,  whether, 
on  a  question  of  mere  detail,  they  ought  to  risk  the  loss  of  an  object  so  impor- 
tant as  this  bill.  Mr.  B.  asserted  to  the  Senate,  and  he  said  he  would  justify 
the  ground,  that,  although  this  bill  might  not  be  perfect,  he  should  vote  against 
every  amendment  of  every  character;  justified  in  so  doing  by  the  importance 
of  the  passage  of  the  bill .  The  honorable  gentleman  from  New  Y  ork  had  strongly 
inveighed  against  such  a  course.  Mr.  B.  intimated  that  it  was  precisely  the 
course  the  gentleman  himself  had  taken  on  the  question  of  the  direct  tax,  at  a 
former  session.  It  had  been  then  admitted,  that  amendments  proposed 
would  make  the  bill  m&e  perfect;  but  their  rejection  was  justified  on  the 
ground  of  the  importance  of  the  bill,  and  the  probability  that  an  agreement  to 
the  amendments  might  occasion  the  rejection  of  the  bill  on  its  return  to  the 
other  House.  That  was  a  correct  course,  Mr.  B.  said,  and  that  course  he  should 
now  pursue.  He  also  referred  to  a  precedent  of  higher  authority — the  recom- 
mendation of  the  convention  who  framed  the  constitution,  to  the  People,  that, 
although  susceptible  of  amendment  to  advantage,  the  constitution  should  be 
accepted  as  it  stood,  lest,  by  the  collision  of  opinion  on  amendments,  it  should 
be  lost.  The  constitution  had  been  accordingly  so  accepted,  and  subsequently 
amended,  by  adding  to  it  new  sections.  Mr.  B.  was  against  all  amendments 
to  the  bill.  In  regard  to  this  particular  feature  of  the  bill,  it  could  not,  in  any 
view,  be  of  sufficient  importance  to  justify  endangering  the  bill.  He  denied 
the  justice  of  the  intimation  that  this  was  not  t9  be  a  specie  bank.  Substan- 
tially, he  said,  it  possessed  all  the  features  of  the  old  Bank  of  the  United 
States,  the  plan  of  which  gentlemen  had  so  highly  approved;  with  the  addi- 
tion of  several  important  checks  not  contained  in  the  plan  of  that  bank,  the 
nature  of  which  Mr.  B.  explained.  He  vindicated  some  of  the  principal  fea- 
tures of  this  bill,  to  which,  on  either  hand,  objections  had  been  made,  parti- 
cularly that  which  gave  the  appointment  of  five  of  the  directors  to  the  Go- 
vernment—which  was  due  to  the  interest  of  the  Government  in  the  bank,  as 
well  on  account  of  its  stock,  as  of  the  necessary  attention  to  the  security  of  its 
deposites.  As  to  its  not  being  a  specie  bank,  if  the  control  of  the  Government 
was  as  powerful  as  he  considered  it,  it  would  be  the  fault  of  the  Government 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

alone  if  it  were  not  a  specie  bank.  We  must  suppose  the  Government  and 
the  People  themselves  corrupted,  before  you  suppose  that  it  will  not  be  a  spe- 
cie bank.  With  the  aid  of  all  the  Eastern  banks,  being  besides  the  depository 
of  the  revenue  of  the  United  States,  and  thus  having  all  the  State  banks  cre- 
ditors to  it,  how  could  the  State  banks  destroy  it?  Congress  might  addition- 
ally provide  that,  at  some  distant  day,  the  notes  of  banks  not  paying  spe- 
cie should  cease  to  be  received  in  payment  of  dues  to  the  Government,  &c.; 
at  some  distant  day,  he  said,  for  he  was  not  for  destroying  or  injuring  the 
State  banks,  &c.  Mr.  B.  concluded  his  speech  by  expressing  his  hope  that 
the  Senate  would  not  agree  to  any  amendment  to  the  bill. 

Mr.  BARBOUR,  of  Virginia,  next  took  the  floor,  and  opposed  the  proposed 
amendment  in  a  speech  of  considerable  length,  of  which  what  follows  is  but 
an  outline.  He,  too,  like  the  gentleman  from  Georgia,  considered  the  question 
of  bank  or  no  bank,  as  the  most  important  that  could  be  presented  to  the 
National  Legislature  at  this  session.  The  rejection  of  this  bill,  be  believed, 
would  expose  us  to  a  continuation  of  all  the  inconveniences  experienced  in 
every  quarter  of  the  Union  from  the  present  State  of  the  circulating  medium, 
causing  a  fluctuation  and  uncertainty  in  the  value  of  property  and  products, 
greatly  to  be  deprecated:  and  bringing  with  it  a  train  of  evils  it  would  be  al- 
most imposible  to  enumerate.  On  the  other  hand,  he  said,  he  had  such  confi- 
dence in  the  efficacy  of  a  National  Bank,  in  correcting  the  evils  of  the  mass  of 
paper  afloat,  in  enabling  the  Government  and  individuals  to  fulfil  their  en- 
gagements, that  he  had  brought  his  mind  to  the  conclusion,  that  the  establish- 
ment ofa  National  Bank  would  be  an  epoch  in  the  affairs  of  the  nation;  that, 
instead  of  the  cloud  which  darkens  the  horizon,  it  will  usher  in  a  new  day  of 
prosperity,  replete  with  benefits  to  the  nation,  &c.  With  the  gentleman  from 
New  York  (Mr.  KINO)  Mr.  B.  said  he  entirely  coincided  in  sentiment,  as 
to  the  respect  due  to  public  opinion,  when  distinctly  expressed  and  well  under- 
stood: but  why  that  sentiment  was  recurred  to  at  the  present  time,  he  did  not 
precisely  understand:  for,  sure  he  was,  that,on  this  occcasion,  it  had  been  au- 
dibly and  distinctly  expressed,  from  everv  part  of  the  United  States,  as  well  as 
from  the  Executive  authority,  in  favor  of  this  measure:  and  above  all,  it  had 
been  recently  declared,  from  an  unequivocal  source — the  House  of  Representa- 
tives— who  are  the  mirror  in  which  the  sentiments  of  the  People  are  reflected, 
and  whose  decision  on  such  a  topic  is  a  pillar  of  light,  the  pursuit  of  which 
will  never  involve  us  in  difficulty.  Mr.  B.  agreed  also  with  the  gentleman  in 
his  views  of  the  independent  duty  of  this  House,  in  ^viewing  the  proceedings 
of  the  other  branch  of  the  Legislature,  so  far  as  regarded  the  absolute  right  of 
the  Senate  to  decide,  according  to  their  own  impressions  of  the  fitness  of 
things,  on  measures  presented  to  them  by  the  other  House;  but  if  the  gentle- 
man meant,  that  it  was  a  reason  for  jealousy  in  regard  to  any  measure  that 
liad  passed  that  House,  Mr.  B.  differed  from  him  toto  cselv.  On  the  contrary, 
he  said,  that  circumstance  would  be,  with  him,  a  persuasive  argument  in  favor 
of  any  measure:  for,  though  he  would  surrender  to  them  no  part  of  the  rights 
of  this  body,  he  should  perpetually  recur  to  that  body,  as  an  oracle  from  which 
true  responses  may  be  drawn  as  to  the  public  will,  it  may  err;  when  it  did, 
in  his  opinion,  he  should  not  feel  himself  bound  by  its  views,  &c. 

Mr.  B.  then  proceeded  to  the  consideration  of  the  great  subject  before  the 
House.  The  constitution,  he  said,  had  imparted  to  the  Congress,  among 
other  great  attributes,  the  power  of  regulating  the  coin  of  the  United  States. 
How  had  Congress  accquitted  themselves  of  this  duty?  Where  and  of  what 
effect  were  these  regulations?  Where  was  the  uniformity  of  currency?  Mr. 
B.  described  the  variety  and  fluctuation  of  value  of  the  paper  in  circulation,, 
not  only  in  various  States,  but  in  contiguous  towns,  counties,  &c.  This 
was  a  great  evil,  deprecated  on  all  hands.  The  power,  intended  by  the  con- 
stitution to  have  been  lodged  in  the  hands  of  the  General  Government,  was, 
by  the  failure  of  the  Government  to  make  use  of  it,  exercised  by  every  State 
in  the  Union,  frequently  by  individuals,  &c.  Hence  arose  an  excess  of  paper 
issues,  causing  depreciation  to  an  extent  which  could  scarcely  be  estimated — 


683  BANK  OF  THE  UNITED  STATES. 

an  evil  which  called  for  a  remedy,  in  a  language  not  to  be  misunderstood. 
Where  was  the  antidote,  which  the  Executive,  in  this,  only  the  organ  of  the 
public  sentiment,  had  called  on  Congress  to  interpose?  The  patient,  said 
Mr.  B.  is  sick,  from  the  crown  of  his  head  to  the  sole  of  his  foot;  he  asks  for 
oil  and  wine  to  be  poured  into  his  wounds,  which  would  be  otherwise  fatal. 
Where  is  the  man  who  will  propose  any  other  antidote  than  that  now  before  us? 
Where  is  the  adventurous  knight  who  will  suggest  another  remedy?  If  there 
be  a  Don  Quixotte  in  politics,  let  him  appear.  No,  Mr.  B.  said,  not  even  a 
nostrum  had  been  tendered  to  substitute  this  plan.  If  no  other  remedy  was 
offered,  ought  they, he  asked,  to  higgle  about  details,  to  split  hairs,  on  the  ques- 
tion? Mr.  B.  then  spoke  of  the  necessity  of  nrjtual  concession  among  legisla- 
tors, without  which,  he  said,  the  idea  of  legislation  was  the  most  vague  and 
illusory  that  ever  entered  the  human  mind.  It  was  necessary,  Mr.  B.  then 
argued,  for  the  present  diseased  paper  medium,  since  specie  had  fled  the  coun- 
try, or  was  scattered  in  the  bowels  of  the  earth,  to  substitute  a  medium  im- 
pressed with  the  seal  of  the  nation,  &c.  If  an  institution  were  established  to 
issue  a  paper  of  that  description,  we  should  have,  he  said,  in  lieu  of  a  medium, 
the  value  of  which  will  not  live  ten,  fifteen,  or  twenty  miles  from  the  spot 
where  we  receive  it,  a  paper  which  will  embrace  the  Union  in  its  grasp.  It 
would  also  be  a  great  financial  instrument,  necessary  to  the  fulfilment  of  the 
national  duties  in  this  respect.  On  this  head  the  experience  of  the  last  wrar 
spoke  a  language  which  incredulity  itself  could  not  doubt,  &c.  In  the  dark 
and  gloomy  period  of  the  last  winter,  when  this  subject  was  disscussed,  no 
doubt  had  been  entertained  that  this  was  the  only  means  of  remedying  an  evil 
from  which  so  much  was  apprehended.  That  time,  he  rejoiced,  had  passed 
by;  but  he  hoped  the  lessons  of  experience  would  not  be  permitted  to  pass  away 
with  the  urgency  ot  the  occasion,  &c. 

In  regard  to  the  details  of  this  bill,  he  said,  he  did  not  see  the  necessity  of 
amending  them.  It  had  been  slated  that  this  would  be  a  paper  bank,  and  in 
order  to  prevent  that,  an  increase  of  the  specie  payments  was  suggested.  Mr. 
B.  believed  such  an  amendment  was  unnecessary.  Being  not  necessary, 
what,  he  asked,  would  be  its  effect?  It  would  be  to  place  the  bank  wholly  in 
the  hands  of  a  few  fortunate  individuals  or  banks,  who  had  specie  in  their  pos- 
session. The  smaller  the  first  payment  in  specie  vyas  made,  within  the  lim- 
its of  necessity  to  the  object,  in  his  opinion,  the  wiser  would  be  the  plan. 
The  establishment  of  a  bank,  or  any  other  system,  could  not  be  expected  to  af- 
ford an  instant  remedy  to  the  existing  evil,  any  more  than  a  dose  of  medicine 
would  restore  to  instant  tea  1th  and  pristine  vigor  the  man  who  had  been  wast- 
ed by  long  sickness.  The  effect  of  this  amendment,  without  accelerating  the 
operations  of  the  bank,  would  be  to  favor  the  monopolists  of  specie,  &c — he 
who  had  the  caution  or  forecast  to  hoard  up  the  dollars  and  cents.  The  bulk  of 
the  specie  to  be  paid  into  this  bank,  Mr.  B.  had  no  doubt  ought  and  must  be 
drawn  from  abroad.  In  regard  to  the  argument  that  the  sum  was  too  small 
to  enable  the  bank  to  commence  its  operations  with  safety,  &c.  Mr.  B.  con- 
tended that  money  was  too  sharp  sighted,  too  lynx  eyed  in  its  vigilance  to  be 
(using  a  common  saying)  caught  napping.  There  was  no  fear,  he  said,  of  the 
banks  bein-g  ruined,  by  lending  money  to  men  pressed  from  other  quarters,-  the 
board  of  direction  of  a  bank  formed  a  barometer  in  which  the  responsibility  of 
every  man  passing  before  it  was  as  correctly  graduated  as  the  weather  is  by  the 
instrument  so  called;  they  would  take  care,  as  they  always  did,  not  to  part 
with  their  dollars  to  accommodate  an  unfortunate  debtor.  &c.  In  answer  to 
the  argument  of  Mr.  KING,  who,  he  said,  had  discovered  that  this  was  to  be 
a  paper  and  not  a  specie  bank,  and  was  to  aggravate  the  evils  it  was  intended 
to  cure,  Mr.  B.  referred  to  the  regulations  by  which  it  was  governed  to  show 
that  this  apprehension  was  unfounded.  Besides,  he  said,  the  bank  would  not 
disregard  its  interest,  which  required  it  to  continue  specie  payments.  You 
need  not  fence  in  the  interest  ot  this  institution,  said  he;  you  might  as  well 
pass  a  law  to  compel  your  Secretary  to  receive  his  salary;  interest  is  the 
strongest  security  which  man  can  give  to  man.  As  the  needle  acknowledges 
the  principle  of  polarity,  so  does  the  human  heart  always  point  to  its  interest 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.        539 

That  objection  against  this  bill,  therefore,  seemed  to  Mr.  B.  to  be  a  chimera 
from  which  nothing  was  to  be  apprehended. 

It  was  no  question  now,  he  said,  whether  banking  should  exist— that  being 
beyond  the  control  of  Congress;  but  whether  it  was  proper  that  a  portion  of 
it  should  be  placed  under  the  authority  of  the  General  Government,  instead  ot 
its  being  wholly  under  the  control  ot  the  States,  who  established  banks  not 
only  in  their  populous  towns,  but  even  in  the  dreary  wilderness.  I  his  being 
the  only  question,  he  solemnly  appealed  to  gentlemen  whether  there  could  be 
two  opinions  on  that  point.  "  Ought  this  great  attribute  ot  sovereignty  to  be 
surrendered  by  this  Government  to  the  authority  of  the  State  Legislatures? 
This  question  he  answered  in  the  negative.  The  existing  evil,  he  then  argued, 
would  be  remedied  by  the  establishment  of  a  bank,  whose  influence  was  ramm- 
ed into  every  part  ot  the  United  States.  The  State  banks  had  nothing  to  fear, 
if  they  would  conduct  themselves  properly,  from  such  an  institution,  If  any  of 
them,  on  the  other  hand,  should  violate  their  trust,  and  shew  a  centrifugal 
quality,  it  would  be  in  the  power  of  this  great  orb  to  restore  them  to  their 
proper  stations.  If  any  of  the  State  banks  do  not  fulfil  their  engagements, 
Mr.  B.  said,  if  they  do  not  meet  the  occasion,  their  paper  will  sink  into  dis- 
repute. This  bank  will  be  the  silent  and  efficient  remedy;  it  will  move  on 
almost  imperceptibly,  gradual  in  its  approach, but  certain  in  its  effects.  Mr. 
B.  took  this  occasion  to  vindicate  the  banks  in  the  commonwealth  of  Virginia 
from  the  charge  it  had  been  fashionable  to  make  against  the  State  banks,  oiim- 
providence  in  their  administration.  Those  banks  resisted  to  the  utmost  the 
attempts  to  procure  loans  from  them;  that  which  they  had,  with  great  reluct- 
ance, from  a  sense  of  duty  refused  to  the  Government,  their  patriotism  at 
length  induced  them  to  grant  to  the  wants  of  thousands  of  men  surrounding 
their  capital,  who,  but  for  their  relief,  would  have  greatly  suffered,  &c.  Where 
banks  had  wantonly  abused  their  privileges,  he  cared  not  what  was  said  of 
them;  but  he  felt  no  disposition  to  put  those  under  the  ban  of  tHe  empire  who 
had  acted  thus  correctly,  &c. 

In  regard  to  objections  he  had  heard  to  the  influence  of  the  Government 
over  this  bank,  Mr.  B.  said  his  objection  was,  that  it  had  not  interest  enough 
in  it;  but  in  this  respect,  as  in  others,  he  was  willing,  to  obtain  a  great  object, 
to  concede  some  part  of  his  views.  He  recurred  to  the  experience  of  his  own 
State  to  shew  that  no  evils  had  been  experienced  from  the  existence  of  such 
a  control  to  a  much  greater  extent  than  proposed  in  this  bill,  &c.  No  banks, 
he  believed,  had  been  better  conducted,  or  stood  higher  in  the  public  opinion, 
than  those  of  Virginia.  If  the  bank  were  a  faithful  one,  it  had  nothing  to  ap- 
prehend from  the  appointment,  by  the  Government,  of  one-fifth  of  its  direc- 
tors, to  which  proportion  the  Government  was  entitled  by  the  interest  it  would 
have  with  the  bank. 

Having  thus  briefly  touched  on  all  the  objections  he  had  heard  to  the  bank, 
Mr.  B.  concluded  by  recapitulating  his  arguments,  and  expressing  his  hope 
that  the  only  remedy,  as  he  believed,  for  a  great  evil,  would  be  agreed  to. 

Mr.  MASON,  of  New  Hampshire,  spoke  in  support  of  his  motion  to  amend 
the  bill.  He,  certainly,  hael  entertained  no  expectation,  he  said,  when  he 
submitted  the  motion,  that  it  would  have  drawn  the  bill  into  so  general  a  dis- 
cussion. Whenever  a  national  bank  had  been  proposed,  he  said,  he  had  al- 
ways supported  it,with  such  modifications  as  he  thought  correct.  He  did  believe 
a  well  regulated  institution  of  this  kind  would  be  useful  to  the  Government; 
and,  though  the  Government  had,  at  a  certain  period,  declined  the  exercise  of 
its  power  in  this  respect,  he  felt  no  inclination  to  prevent  them  from  again  oc- 
cupying the  ground  of  the  old  United  States'  Bank.  He  was.  he  said,  now 
willing  to  give  his  aid  in  establishing  a  bank  on  proper  principles;  but,  he  ne- 
ver could  assent  to  this,  or  any  other  measure,  on  the  ground  taken  by  the 
gentlemen  from  Georgia  and  Virginia.  The  bill  was,  according  to  the  forms 
of  the  Senate,  read  section  by  section,  for  the  purpose  of  amendment;  and 
yet  gentlemen  declared  they  would  not  listen  to  any  proposition  to  amend 
the  bill,  but  take  it  as  it  stood.  [Mr.  BIBB  explained  that  his  remark  was  con- 
87 


590  BANK   OF  THE    UNITED    STATES. 

fined  to  unessential  amendments.]  It  might,  Mi-.  M.  said,  be  difficult  to  de- 
fine what  makes  an  amendment  important:  for  him,  it  was  sufficient  reason 
for  an  amendment,  that  the  bill  would  be  better  with  than  without  it.  He 
could  not,  he  said,  seethe  force  of  the  objection  fo  sending  this  bill  back  to  the 
House  of  Representatives  better  than  it  came  from  them:  gentlemen  must 
certainly  conclude  that  that  House  was  greatly  in  love  with  a  bad  bill.  It  had 
always  been  held  irregular  to  suggest,  in  one  branch  of  the  Legislature,  what 
might  have  passed  in  debate  in  the  co-ordinate  branch;  it  was  certainly,  Mr. 
M.  said,  more  improper  to  go  into  a  wide  field  of  conjecture  to  find  out  what 
would  happen  there.  Although  there  might  be  good  reasons  for  concession 
and  accommodation  to  the  views  of  the  other  House,  Mr.  M.  said  they  had 
not  yet  arrived  at  that  stage  of  the  business  when  it  was  necessary;  which 
was  not  until  the  House  should  refuse  to  accept  the  amendments  of  the 
Senate.  It  was  a  dangerous  ground  to  assume,  Mr.  M.  added,  that  the  House 
of  Representatives  would  vary  their  ground  on  this  question.  Although  he 
had  as  much  respect  for  them  as  he  ought,  he  also  remarked,  he  should  not 
take  public  opinion  from  the  Representatives  of  the  People.  The  constitu- 
tion prescribed  to  the  Senate  no  such  practice.  The  course  of  taking  mea- 
sures from  the  popular  branch  of  the  Legislature,  believing  them  proper  be  - 
cause  it  has  adopted  them,  precludes  all  legislation,  &c.,  and  is,  therefore, 
inconsistent  with  the  principles  of  our  Government. 

Mr.  M.  agreed  that  the  public  suffered  much  inconvenience  from  what  was- 
termed  the  state  of  the  public  medium;  it  was  not  very  material  whether  it  was 
produced  by  what  the  gentleman  from  Georgia  had  termed  swindling,  or 
what  the  gentleman  from  Virginia  had  called  the  patriotic  conduct  of  the 
banks.  Mr.  M.  replied  to  other  arguments  used  by  the  gentlemen  who  had 
opposed  his  motion.  In  regard  to  the  operation  of  interest  on  moneyed  insti- 
tutions, he  said,  he  believed  that  principle  was  felt  as  much  by  the  State 
banks  as  by  that  which  it  was  now  proposed  to  incorporate.  Any  bank,  guid- 
ed by  other  motives,  would  depart  from  the  objects  ot  the  institution.  Mr.  M. 
attached  no  sort  of  consequence  to  the  idea  of  the  passage  of  this  bill,  in  order 
to  exercise  the  power  of  the  Government,  to  regulate  the  coin  of  the  country. 
The  laws  of  the  United  States,  he  said,  had  already  regulated  it:  he  knew  of 
no  law  which  authorized  any  officer  of  the  Government  to  receive  any  part 
of  this  spurious  money,  which  the  gentleman  said  was  in  circulation.  The 
laws  were  already  perfect  on  this  subject.  If  the  executive  officers  had  re- 
ceived other  moneys  in  payment  than  those  authorized  by  law,  Mr.  M.  said 
they  had  acted  without  law,  without  right.  What  necessity  there  might  have 
been  for  their  doing  so,  he  would  not  now  examine.  Cases  might  arise,  in 
which  the  officers  of  the  Government  may  take  upon  themselves  the  responsi- 
bility of  neglecting  the  execution  of  a  law,  &c.  That  an  evil  existed,  he  said, 
all  agree,  and  all  suppose  that  the  bank  to  be  incorporated  by  this  bill  will,  in  a 
greater  or  less  degree,  lessen  the  evil,  or  entirely  correct  it.  The  object  of  his 
motion  was  to  give  the  bank  the  greatest  possible  power,  to  effect  these  pur- 
poses. It  had  been  said,  that  the  bank  would  at  first  move  slowly.  But,  Mr. 
M.  said,  he  had  no  sanguine  anticipation  that  this  amendment,  or  any  other, 
or  the  prudence  of  the  directors,  would  be  able  wholly  to  cure  the  evil.  What 
had  been  the  cause  of  the  evil?  The  banks  themselves.  Banks  incorporated 
under  the  same  restrictions  as  this  bill  contained,  issue  now  the  very  rags 
which  had  been  described.  The  remedy  now  proposed,  was,  Mr.  M.  thought, 
something  like  Sangrado's  practice:  more  bank  paper  of  the  same  sort — more 
hot  water  for  the  same  evil.  In  regard  to  the  impossibility  of  this  bank's  do- 
ing any  thing  but  a  specie  business,  Mr.  M.  undertook  to  assert,  that  the 
charter,  in  its  present  shape,  gave  the  bank  the  power  to  issue  notes,  without 
even  promising  payment  of  specie.  The  clause  which  authorizes  the  bank  to 
issue  notes,  did,  in  fact,  for  the  want  of  due  restrictions,  authorize  the  bank  to 
issue  notes  payable  when  it  pleased;  none  but  notes  payable  on  demand  were 
indeed  receivable  in  payment  of  taxes  to  the  Government;  but  they^  might  be 
issued  payable  twc 
circulate  quite  as 


issued  payable  two  years  after  date  for  other  purposes,  and  would  probably 
.s  well  as  the  notes  of  New  York,  Philadelphia,  and  Balti- 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

more.  He  should  imagine,  he  said,  that,  as  the  bank  was  now  constituted, 
sensible  men  having  the  management  of  it,  would  not  attempt  to  do  business 
without  taking  that  course.  Mr.  M.  pointed  out  other  detects,  as  he  viewed 
them,  of  the  bill.  There  was  no  provision  fora  forfeiture  of  the  charter  ot 
the  bank,  or  for  annulment  on  failure  of  its  going  promptly  into  operation. 
However,  it  would  be  idle,  he  said,  to  discuss  thel>ill,  \i  the  opinions  of  the 
gentlemen  from  Georgia  and  Virginia  were  to  prevail  with  the  majority  of  the 
Senate,  that  it  would  be  dangerous  to  amend  the  bill,  lest  it  should  fail  there- 
by. If  this  was  the  opinion  of  the  Senate,  the  sooner  they  came  to  that  deter- 
mination the  better;  it  would  save  them  labor,  and  perhaps  character,  to  de- 
cide the  question  at  once.  The  same  argument  might  be  urged,  he  said,  with 
as  much  propriety  every  day,  and  on  every  subject,  as  had  been  principally 
urged  against  the  amendment. 

Mr.  DANA,  of  Connecticut,  said  he  did  not  expect  to  vote  for  the  bank  bill 
in  its  present  form;  but,  notwithstanding,  he  did  not  think  it  vyould  be  proper 
to  adopt  this  amendment.  One-twentieth  part  of  the  whole  capital  appeared  to 
him  to  be  as  large  a  proportion  as  ought  to  be  called  for  in  specie  at  the  time  ot 
subscription.  If  danger  were  anticipated  from  the  smallness  of  the  amount  of 
specie,  it  would  perhaps  be  better  to  introduce  into  the  bill  a  provision,  that 
the  bank  should  not  issue  paper  until  it  had  a  sufficient  quantity  of  coin  to  jus- 
tify it  in  so  doing.  Though  he  should  riot  vote  for  the  bank,  he  should  regret 
to  see  its  first  issues  to  individuals  who  were  connected  with  the  institution: 
indeed,  he  should  rather  suppose,  the  great  demand  for  discounts  from  the 
bank,  would  be  to  enable  the  merchants  to  pay  bonds,  constantly  falling  due 
to  the  Government  lor  customs.  These  merchants,  for  their  notes,  will  obtain 
credits  at  the  bank,  to  tin1  amount  of  perhaps  seven,  eight,  or  ten  millions,  in 
the  course  of  the  year.  The  United  States  will  be  the  only  power  that  can 
cull  for  it;  and  Mr.  U.  presumed  there  would  be  no  danger  of  a  run  on  the 
bank  from  the  Government,  &c. 

Mr.  TAYLOR,  of  South  Carolina,  said,  he  should  have  liked  to  have  heard 
(he  amendment  argued  on  its  own  merits,  because  the  force  of  the  argument 
against,  would  perhaps  be  weakened  by  connecting  it  with  other  considera- 
tions which  had  been  brought  into  debate.  If  he  approved  of  the  amendment, 
he  would  vote  for  it,  though  he  would  say,  that,  for  a  small  or  inconsiderable 
alteration,  lie  would  not  jeopardize  a  great  principle  or  a  great  measure,  such 
as  he  conceived  this  bill.  With  respect  to  the  proposed  amendment,  consi- 
dering the  state  of  the  currency  of  the  country,  and  the  known  fact  that  specie 
abounds  in  some  parts  of  the  country,  whilst  in  others  it  is  not  to  be  obtained 
at  all;  to  carry  the  gentleman's  atnendmentmore  directly  to  what  would  be  its 
absolute  result,  he  ought  first  to  have  provided  for  confining  the  opening  of  the 
books  of  subscription  to  that  part  of  country  where  specie  is  in  a  state  of  cir- 
culation. Without  designing  it,  for  he  would  not  certainly  impute  such  a  de- 
•*;ign  to  the  gentleman,  the  adoption  of  this  amendment  would  be  giving  a 
complete  monopoly  to  the  Eastern  country.  Believing  it  desirable  that  the 
benefits  of  this  institution  should  be  extended  to  every  part  of  the  country,  he 
was,  therefore,  opposed  to  the  amendment.  The  restoration  of  specie  pay- 
ments, Mr.  T.  said,  was  not  the  work  of  a  moment.  The  power  to  sell  two 
millions  of  its  stock  in  the  first  year,  of  which  the  bank  would  no  doubt  avail 
itself,  and  the  depositesof  the  Government,  together  with  the  specie  paid  in  en 
the  subscription,  would,  he  said,  enable  the  bank  to  operate  to  as  great  an  ex- 
tent as  was  advisable.  This  amendment,  besides  being  unnecessary,  would, 
he  believed,  produce  an  undue  monopoly  to  one  section  of  the  country,  and  to 
the  hoarders,  where  specie  was  not  current.  It  is  calculated  to  reward  those 
whose  conduct  has  had  a  tendency  to  bring  about  the  very  evil  now  proposed 
to  be  remedied.  The  amendment  would  also  throw  advantages  into  the  hands 
of  the  capitalists  of  Charleston,  &c.  which  it  would  deny  to  those  of  the  middle 
country;  for  it  so  happened,  in  the  course  of  trade,  that  specie  was  reduced  in 
there  value,  to  about  from  two  and  a  half  to  five  per  cent,  above  the  current 


592  BANK  OF  THE  UNITED  STATES. 

paper  of  that  State,  not  more  than  in  ordinary  times  used  to  be  given  for  specie 
in  quantities.  For  these  general  reasons,  Mr.  TAYLOR  was  opposed  to  the 
amendment,  &c. 

Mr.  MASON,  of  New  Hampshire,  remarked,  that  specie  was  not  confined  to 
the  Eastern  or  Southern  States;  the  banks  in  the  middle  States  still  retain  as 
much  specie  as  they  ever  had.  If  the  bank  might  sell  stock  for  specie,  why 
might  not  individuals  do  the  same,  in  the  first  instance,  and  pay  it  into  the 
bank?  United  States'  stock  would,  at  a  certain  price,  command  specie  any 
where,  &c. 

Mr.  SANFORD  spoke  in  support  of  the  proposed  amendment,  denying  the 
correctness  of  the  doctrine  on  which  opposition  was  made  to  any  amendment 
of  this  bill.  It  was  a  subject,  he  said,  which  particularly  required  caution 
and  circumspection  in  deciding  upon  it.  He  considered  the  amendment  be- 
fore the  Senate  as  presenting  this  question:  With  what  sum  shall  the  bank 
commence  its  operations?  This  being  intended  to  be  a  specie  bank,  Mr.  S. 
said,  every  proposition  tending  more  certainly  to  make  it  more  so,  was  wor- 
thy of  favorable  consideration.  The  bill,  as  it  stood,  contemplated  $1,400,000 
in  specie,  as  a  sufficient  basis  for  the  bank  to  begin  upon.  Mr.  S.  said  he 
could  not  but  think,  with  Mr.  MASON,  that  this  sum  was  too  small.  There 
was  nothing  in  the  bill  to  prevent  the  bank  from  issuing  thirty-five  millions  of 
dollars  on  this  amount  of  specie  paid  in,  if  they  thought  proper  to  do  so. 
Those  who  were  called  on  to  pay  the  second  instalment  in  specie,  would,  he 
said,  go  to  the  bank  with  its  bills,  and  drain  it  at  once  of  every  dollar.  The 
bill  was,  Mr.  S.  thought,  in  other  respects,  deficient  in  detail,  as  he  showed 
by  reference  to  its  provisions.  The  bank  would  get  no  specie  but  what  it  re- 
ceived in  the  first  payment,  unless  the  course  of  exchange  should  become 
more  favorable,  or  the  state  of  things  generally  should  essentially  vary.  The 
rational  and  prudent  course,  he  thought,  would  be,  to  require  as  much  specie 
as  possible  in  the  first  instance.  Without  amendments  to  regulate  the  paper 
issues  of  the  bank,  &c.  this  would  be  a  mere  paper  bank,  he  said,  like  those 
which  already  exist-  The  amendment  appeared  to  him  extremely  proper, 
and  therefore  he  should  vote  for  it. 

Mr.  TAYLOR  replied  to  Mr.  SANFORD,  and  quoted  the  provisions  of  the 
bill  to  show,  that  the  bank  dare  not  issue  one  dollar  more  paper  than  it  had 
a  reasonable  prospect  of  being  able  to  honor  with  gold  or  silver.  The  bank 
had  the  power  to  do  otherwise,  it  was  true;  and  so  have  we  power  to  cut  our 
own  throats — but  the  bank  is  no  more  likely  than  we  are,  to  commit  afelo  de 
se.  As  to  the  second  instalment  being  paid  with  the  specie  of  the  first,  Mr. 
T.  said,  it  was  impossible  to  pay  $2,800,000,  (the  amount  of  the  second  in- 
stalment) with  $1?400,000,  (the  amount  of  the  first)  and  at  the  worst,  there- 
fore, only  one  half  of  the  second  instalment  could  be  drawn  from  the  vaults 
of  the  bank,  &c. 

The  Senate  then  adjourned,  leaving  the  pending  question  undecided. 

MARCH  26,  1816. 

Mr-  MASON,  of  N.  H.,  withdrew  the  motion  he  had  yesterday  made,  with 
a  view  hereafter  to  renew  it;  and  moved  to  amend  the  bill  in  the  part  which 
authorizes  the  bank  to  issue  notes  payable,  by  adding  thereto  the  following 
proviso: 

"Provided,  That  all  bills  or  notes  so  to  be  issued  by  said  corporation,  shall 
be  made  payable  on  demand,  other  than  bills  or  notes  for  the  payment  of  a 

sum  not  less  than dollars  each,  and  payable  to  the  order  or  some  person 

or  persons,  which  bills  or  notes  it  shall  be  lawful  for  said  corporation  to  make 
payable  at  any  time  not  exceeding  —  days  from  the  date  thereof." 

This  motion  gave  rise  to  considerable  debate  between  those  who  thought 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         593 

such  a  restriction  necessary,  and  those  of  a  different  opinion.     It  was  at  length 
agreed  to,  by  yeas  and  nays,  20  to  14. 

This  decision  in  favor  of  one  amendment,  opened  the  door  to  the  proposi- 
tion of  a  great  number  of  amendments. 

The  discussion  of  one  or  two  that  were  proposed  to-day,  occupied  the  Senate 
until  the  hour  of  adjournment. 

MARCH  27,  1816. 

The  consideration  of  amendments  was  resumed.  An  amendment  was  adopt- 
ed, amomg  others,  to  postpone  the  opening  of  the  books  from  the  1st  day  of 
June  to  the  1st  day  of  July. 

Mr.  MASOX,  of  N.  II.,  then  moved  another  amendment,  by  way  of  a  new 
section,  to  declare  the  act  null  and  void  if  the  bank  is  not  put  into  operation 
within  one  year  after  its  date. 

Mr.  BIBB  moved  to  amend  this  amendment  so  as  to  make  it  reserve  to  Con- 
gress the  right  to  annul  the  charter,  at  any  time  within  twelve  months  after 
the  1st  day  of  February  next,  if  the  bank  be  not  put  in  operation  before  that 
day. 

These  motions  gave  rise  to  much  desultory  debate,  as  indeed  did  all  the 
amendments  proposed. 

Mr.  BIBB'S  motion  was  agreed  to;  and  Mr.  MASON'S  proposition,  so  modi- 
fied, was  also  agreed  to. 

Mr.  CAMPBELL  then  moved  to  amend  that  part  of  the  bill  which  directs  books 
to  be  opened  at  certain  places,  so  as  to  assign  to  each  State  a  certain  propor- 
tion of  the  stock  to  be  subscribed,  to  remain  there  for  a  certain  time,  to  allow 
it  to  be  subscribed  in  the  States,  respecti*dj,  in  proportion  to  their  represen- 
tation; intending  to  follow  up  this  amendment  by  a  motion  to  introduce  a  pro- 
vision that  the  bank  should  be  compelled,  on  the  request  of  the  Legislature  of 
any  State,  to  establish  a  branch  of  the  bank  therein. 

Jn  support  of  this  motion,  Mr.  C.  made  a  speech  of  some  length  on  the  gen- 
eral principles  of  the  bill. 

This  amendment  was,  in  the  end,  negatived,  by  a  vote  of  20  to  11. 

Late  in  the  day  the  consideration  of  the  bill  was  further  postponed  till  to- 
morrow. 

MARCH  29, 181  C. 

Mr.  MASON,  of  N.  II.  moved  to  insert,  at  the  end  of  the  17th  section  of  the 
bill,  the  following: 

"And  if  the  said  corporation  shall,  at  any  time,  suspend,  or  refuse  pay- 
ment, in  gold  or  silver,  of  its  notes,  bills,  obligations,  or  other  debts,  to  such 
an  amount,  and  for  such  length  of  time,  as  Congress  may  deem  injurious  to 
the  United  States,  in  such  case.  Congress  may  repeal  this  act,  and  abolish  the 
said  corporation,  and  make  such  regulations  and  provisions  tor  the  settlement 
of  the  affairs,  and  payment  of  the  debts  of  said  corporation,  and  for  distri- 
buting its  remaining  property  among  the  stockholders,  as  shall  be  deemed  just 
and  proper." 

It  was  determined  in  the  negative:  Yeas,  14,  Nays,  17. 

MARCH  30,  181  C. 

Mr.  KING  moved  to  strike  out  that  provision  in  the  bill  which  gives  to  the 
President  the  power  of  appointing  five  of  the  directors. 

On  this  motion  a  debate  ensued,  which  continued  until  about  three  o'clock, 
and  in  which  Mr.  KING  and  Mr.  GORE  advocated,  and  Mr.  BIBB,  Mr.  BAR- 
BOUR,  Mr.  ROBERTS,  and  Mr.  CAMPBELL  opposed  the  motion. 

The  amendment  was  finally  negatived— ayes  14,  noes  21. 

A  new  section  was  then  offered  by  Mr.  GOLDSBOROUGH,  in  the  following 
words: 


694  BANK   OF  THE   UNITED   STATES. 

"  And  be.  it  enacted,  That,  if  at  any  time  the  United  States  shall  cease  to  hold  stock 
in  this  bank,  the  five  directors,  on  the  part  of  the  United  States,  and  the- power  herein 
given  to  the  President,  by  and  with  the  advice  and  consent  of  the  Senate,  to  appoint 
directors,  shall  immediately  cease;  and  that,  for  every  million  four  hundred  thousand 
dollars  of  said  stock  which  the  United  States  may  part  with,  there  shall  be  an  abridg- 
ment of  the  power  of  appointing  one  out  of  the  five  directors  hereinbefore  provided 
for." 

On  this  amendment  a  debate  took  place,  in  which  Mr.  GOLDSBOROUGH,  Mr. 
KING,  Mr.  HARPER,  Mr.  MACON,  and  Mr.  FROMENTIN  supported,  and  Mr. 
BIBB,  Mr.  CAMPBELL,  Mr.  TAIT,  Mr.  TAYLOR,  and  Mr.  CHASE,  opposed  it. 

APRIL  1,  181 G. 

The  Senate  resumed  the  consideration,  in  committee,  of  the  bill.  The 
amendment  offered  by  Mr.  GOLDSBOROUGH,  on  Saturday,  still  before  the 
committee. 

Mr.  MASON,  of  Va.,  Mr.  BIBB,  and  Mr.  TAYLOR,  spoke  against  the  amend- 
ment; and  Mr.  GOLDSBOROUGH  in  its  favor.  When  the  question  was  taken, 
and  the  motion  negatived:  ayes  16,  noes  18. 

Mr.  HARPER  moved  an  amendment,  limiting  the  selection  of  directors  by 

the  President,  to  such  as  held  stock  to  the  amount  of dollars,  (10,000 

was  named  by  the  mover)  and  that,  they  should  cease  to  be  directors  when 
they  ceased  to  hold  stock  to  that  amount. 

This  motion  was  supported  by  Messrs.  HARPER,  DANA,  and  TAYLOR;  and 
opposed  by  Messrs.  ROBERTS,  BARBOUR,  MACON,  CAMPBELL,  and  FROMEN- 
TIN; and  negatived:  ayes  9,  noes  23. 

Mr.  KING  moved  an  amendment,  preventing  directors  appointed  by  (he 
Government,  from  acting  as  agents  or  proxies  of  any  stockholders. 

Mr.  KING  spoke  in  favor  of,  and  Messrs.  ROBERTS  nr.il  CAMPBELL  against, 
this  amendment;  which  was  negatived  without  a  division. 

On  motion  of  Mr.  BIBB,  an  amendment  was  adopted,  requiring  that  there 
should  not  be  more  than  thirteen,  nor  less  than  seven  directors,  to  each 
branch  bank. 

Mr.  TAYLOR  proposed  an  amendment,  making  the  stock  of  the  United 
States  unalienable.  Mr.  CAMPBELL  spoke  against  it.  Negatived:  ayes  10, 
noes  18. 

Mr.  BROWN  offered  an  amendment,  excluding  the  United  States,  as  a  stock- 
holder, from  being  represented  in  the  choice  ot  directors,  &c.  Agreed  to. 

Mr.  WELLS  moved  the  postponement  of  the  bill  to  the  next  session,  and 
prefaced  his  motion  with  the  following  speech: 

Mr.  PRESIDENT:  The  Senate  having  gone  through  the  different  amendments 
which  have  been  before  them,  and  it  not  being  probable  that  there  are  many 
more,  if  any  other,  intended  to  be  brought  forward,  the  proper  period  for  sub- 
mitting a  proposition,  which  will  fairly  bring  into  notice  the  general  views  of 
this  subject,  has,  perhaps,  now  arrived.  In  support,  then,  ot  the  proposition 
of  postponement  to  the  first  Monday  in  December  next,  of  the  further  con- 
sideration of  this  bill,  which  I  propose  to  move  you,  I  beg  the  indulgence  of 
the  Senate,  while  I  endeavor  to  show:  First,  that  it  trancends  the  constitu- 
tional power  of  Congress  to  pass  a  bill,  containing  the  provisions  which  this 
does:  Secondly,  the  inexpediency  of  enacting  such  a  law  as  this,  even  it  we 
possess  the  constitutional  power  to  do  it:  Arid,  thirdly,  that  our  true  policy  is 
to  avoid,  at  this  time,  legislating  upon  the  subject — to  pass  no  law,  at  the  pre- 
sent session,  incorporating  a  banking  compary. 

That  which  has  heretofore  been  the  occasion  of  so  much  heated  controversy, 
was  simply  a  question  relating  to  the  existence  or  non  existence  of  a  power 
in  Congress  to  incorporate  a  company  for  establishing  a  bank.  That  question 
is  nowr  at  rest — nor  do  I  purpose  to  disturb  it.  The  sole  inquiry  we  now  have. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.         (3Q5 

to  make,  is,  as  to  the  true  character  and  just  extent  of  this  authority,  that  we 
may  not,  in  the  exercise  of  it.  cany  it  beyond  its  proper  limits. 

The  power  that  is  granted,  is  a  power  to  establish  a  bank  for  a  particular 
end,  and  of  course,  constitutes  only  a  part  of  the  general  power,  in  relation  to 
the  establishment  of  banks,  that  previously  existed  in  the  States.  For  this 
i  it  is  a  power  of  a  minor  character  to  that  of  the  States,  and  is  to  be 
exercised,  always,  with  a  steady  and  distinct  view  to  the  end  for  which  it  is 
created.  So  far  as  it  goes,  it  is  a  lawful  power,  and  has  a  right  to  pursue  its 
prescribed  course.  It  may  keep  company  with  the  State  authority,  but  has  no 
right  to  quarrel,  and  slay  its  companion  on  the  road.  Every  application, 
then,  of  this  power,  by  the  United  States,  which  has  a  tendency  to  embarrass 
or  impair  the  free  exercise  of  the  power  reserved  to  the  States,  is  unwarrant- 
ed, and,  if  (lone  by  us,  with  a  view  to  such  a  purpose,  is  the  affair  of  arrogance 
and  usurpation. 

This  is  not  primary,  expressed,  original   power.     In  vain,  as  such,  do  we 
seek  for  it  in  the  constitution.     It  is  only  a  secondary,  an  implied,  derivative 
power,  if  such  may  be  properly  termed  the  mean  of  executing  an  expressly 
delegated  power.     Mere  it  may  fairly  be  asked,  why  was  this  power  left  to 
implication?     Did  it  escape   notice?     \Vasit  overlooked?     Was  it  too  unim- 
portant for  enumeration?     Kvery  view  of  this  subject,  and  every  relation  in 
which  it  can  be  placed,  to  the  other  authorities,  affords  an  inference  not  easily  re- 
sisted, that  a  grant  of  this  power  was  not  intended  to  be  applied.  If  the  express 
grant  of  such  a  power  was  moved,  the  silence  of  the  constitution,  as  to  that 
power,  proves  that  it  musth  ive  been  rejected.    I  understand  that  it  was  mov- 
ed in  that  body,  and  was  rejected.    If  this  was  actually  the  case,  (as  I  am  per- 
suaded it  was)  it  certainly  requires  the  utmost  effort  of  ingenuity  to  prove 
that  this  power  was  left  to   implication,  in  order  thai    the  subordinacy  of  its 
character  might  be  the  more  clearly  e>ta!>lished.  and  the  arrogance  of  its  pre- 
tensions the  more  easily  repressed.    This  is  all,  if  it  be  not  a  great  deal  more, 
than  any  fair  mode  of  interpreting  the  constitution,  as  we  have  it,  will  warrant. 
We  cannot,  for  a  moment,  suppose  that  the  great  men,  who  formed  this  frame 
of  Government,  were  unacquainted  with,  or  unmindful  of,  the  imposing  cha- 
racter of  this  power,  or  of  its  history  here  or  abroad.     Did  they  not  know  that 
a  proposition  to  incorporate  a  banking  company,  by  the  old  Congress,  had  been, 
by  that  body,  rejected?  And,  furthermore,  could  those  grave  and  learned  men 
have  been  unaware  (if  they  intended  this  power  to  he  inferred  as  a  mean  of  ex- 
ecuting another  power)  of  the  arduous,  perhaps  I  might  be  permitted  to  say,  the 
odious  character  of  the  task  they  devolved   upon  implication?     Did  not  that 
enlightened  body  know  that  grants  of  specially  enumerated  authorities  would 
not  warrant  the  exercise  of  a  power,  as  a  mean  for  carrying  into  effect  another 
power,  where  the  mean  itself  is,  in  character  and  importance,  entitled  to  rank 
with  some  one  of  the  enumerated  authorities?   That  such  is  the  real  character 
of  the  mean  in  question,  in  relation  to  some  of  those  authorities,  even  limited 
and  circumscribed  as  it  may  be,  I  am  obliged  to  admit,  there  is  too  much  rea- 
son for  insisting.     That  I  have  a  doubt,  therefore,  on  my  mind,  on  this  point, 
I  am  free   to  confess.     It  is   possible,  perhaps  it   is   probable,  if  the  vote   1 
am  to  give  upon  this  bill,  demanded  of  me,  in  respect  to  that  difficulty,  a  de- 
cision that   further  deliberation,  aided  by  the  authorities,  which,  I  am  told, 
support  the  opposite  opinion,  might  remove  that  doubt. 

Sir,  I  conhdently  rely  upon  the  cheerfulness  with  which  honorable  gentle- 
men, who  have  heretofore  so  strenuously  denied  the  exigence  of  the  power  in 
question,  in  this  Government,  will  accompany  me  in  the  inquiry  respecting  the 
extent  of  this  power.  It  is  agreed,  on  all  hands,  to  be  (not  an  original,  substan- 
tive) but  a  derivative,  incidental  power.  What,  then,  is  the  specially  enume- 
rated power  to  which  it  is  incident,  as  one  of  the  "  necessary  anil  proper" 
means  for  its  execution? 

Is  it  incident  to  the  power  to  "promote  the  general  welfare?"  The  capa- 
cious character  of  this  provision,  if  it  is  to  be  viewed  simply  as  a  grant  of 
power,  would  render  the  subsequent  enumeration  of  special  powers  a  matter 
of  supererogation.  The  terms  "general  welfare,"  when  used  in  the  consti- 


(596  BANK    OF   THE    UNITED    STATES. 

lution,  can  only  be  considered  as  having  themselves  reference  to  one  of  the 
great  objects  for  the  promotion  of  which  this  Government  was  established,  and 
for  the  accomplishment  of  which  the  special  powers,  contained  in  the  constitu- 
tion, have  been  delegated. 

Is  this  authority  to  establish  a  bank,  an  incident  to  the  power  of  Congress 
"  to  borrow  money  on  the  credit  of  the  United  States,"  by  reason  of  its  cor- 
relative tendency  in  procuring  a  faculty  to  lend?  If  this  be  the  source  from 
which  it  is  lawfully  derived,  we  need  look  no  further  for  the  origin  of  this  or 
of  any  other  authority.  If  this  be  its  fountain-head,  we  have  here  a  never-fail- 
ing spring  of  power,  abundantly  sufficient  for  all  the  purposes,  lawful  or  unlaw- 
ful, of  this  or  of  any  other  Government  upon  earth.  I  turn  away  from  it,  there- 
fore, without  further  investigation. 

Is  this  power  derived  from  that  of  coining  money,  regulating  its  value,  and 
that  of  foreign  coin?  Is  the  right  to  establish  a  national  bank,  on  account  of 
its  tendency,  in  our  hands,  to  operate  upon  what  is  called  the  currency  of  the 
country,  derived  from  this,  or  any  other  specially  delegated  authority?  There 
are  two  provisions  in  the  constitution,  which  have  some  bearing  upon  this  point. 
That  to  which  I  have  just  referred,  respecting  coin ;  and  that  which  prohibits  to 
the  States  the  issue  of  "  bills  of  credit,  and  the  declaring  of  any  thing  but  gold 
and  silver  a  lawful  tender  in  the  payment  of  debts."  It  cannot  be  necessa- 
ry to  argue  that  a  power  to  make  a  bank,  distinctly  with  a  view  to  its  putting 
into  circulation  promissory  notes,  that  shall  have  the  faculty  of  mixing  and 
keeping  company  with  the  currency  of  the  country,  and  of  becoming  some- 
thing like  paper  money,  is  not  a  necessary  and  proper  auxiliary  to  the  power 
in  this  Government  ot  making  a  metallic  medium;  that  a  power,  in  short,  to 
make  a  metallic  money  has  not  incident  to  it,  as  a  "  necessary  and  proper" 
mean  for  its  execution,  the  power  to  make  &  paper  money.  Nor  need  any  time 
be  spent  in  resisting  an  inference,  drawn  from  a  restraint  imposed  upon  a 
particular  power  in  the  State  Governments,  which  affects  to  communicate  to, 
and  to  set  up  in,  this  Government,  a  faculty  co-ordinate  with  another  power, 
which  is  left  in  those  Governments,  free  and  unshackled.  So  far  then  as 
honorable  gentlemen  say  this  measure  is  intended  or  calculated,  whether  with 
a  view  to  regulation,  or  improvement,  or  under  any  other  pretence,  to  operate 
upon  what  is  called  the  national  currency,  or,  in  other  words,  to  restrain  the 
States  from  establishing  similar  institutions,  and  impair  the  free  exercise  of  the 
franchises  of  those  they  have  already  incorporated,  it  is  warranted  by  no  part 
of  the  constitution. 

I  come  now,  sir,  to  that  part  of  the  constitution,  where  alone  can  be  found, 
if  any  where,  the  lawful  source  of  this  Government,  to  incorporate  a  banking 
company.  We  have  the  power  "  to  lay  and  collect  taxes,  duties,  imposts, 
and  excises,"  for  certain  great  national  purposes.  It  is  now  admitted,  by  most 
of  the  former  opponents  of  this  doctrine,  that  the  establishment  of  a  national 
bank  is  nothing  more  than  the  employment  of  a  "necessary  and  proper"  mean 
"for  carrying  into  execution"  the  power  to  which  I  have  just  referred.  The 
correctness  of  this  doctrine,  I  have  before  declared  it  not  to  be  my  purpose  to 
call  into  question.  This  part  of  my  argument  is  entirely  predicated  upon  its  ad- 
mission; and  is  designed  solely  to  be  confined  to  those  views  of  the  subject, 
which  will  show  the  true  character  and  just  extent  of  this  authority;  and  en- 
able us  to  determine  whether  we  are  not  carrying  it,  by  the  provisions  of  the 
bill  now  on  our  tables,  further  than  is  warranted  by  the  constitution.  This, 
then,  being  the  power,  to  which  the  authority  to  establish  a  bank  is  incident, 
as  a  *4  necessary  and  proper"  mean  for  its  execution,  we  cannot  have  much 
difficulty  in  the  definition  of  its  limits-  Its  effect  upon  this  power  must  be  in 
relation  to  the  collection,  the  safe  keeping,  and  transmission  of  the  public  re- 
venue. The  notes  which  a  bank  issues  may  (but,  by  the  by,  the  affairs  of  a 
bank  may  be  mismanaged  and  they  may  not)  provide  the  People  with  an  equal 
medium  for  the  payment  of  their  public  dues  to  this  Government.  This  is, 
to  a  certain  extent,  to  operate  upon  the  currency:  it  is  not  merely  to  afford 
the  People,  in  their  relations  with  the  Government,  something  more  portable 
and  convenient  to  procure,  and  keep,  and  pay,  than  metallic  money,  but  it  is 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.  (597 

to  provide  them  with  a  medium  of  contribution,  at  a  time  when  the  metallic 
medium  shall  disappear  from  circulation.  Here  provision  in  relation  to  the 
currency  generally*  would  seem,  at  first,  to  be  intended  for  an  event  like  that 
of  the  disappearence  of  the  metallic  medium;  but  we  must  always  remember 
that  our  power,  in  relation  to  the  medium  of  circulation,  refers  solely  to  a 
metallic  medium;  and  of  course  excludes  the  other— -expressio  unius  c.st  exclu- 
sio  aJ terms.  If  it  be  not  questioned  how  far,  in  this  point  of  view,  as  con- 
nected with  the  currency,  (a  subject,  as  before  mentioned,  expressly  legislated 
upon)  there  is  a  power  to  procure,  for  the  People,  these  kind  of  facilities,  for 
the  payment  of  their  taxes,  surely  the  power  must,  in  this  respect,  confine  it- 
self directly  to  this  end.  What  then  is  the  capital  necessary  for  constituting 
a  bank  to  answer  this  purpose?  This  ought  to  have  been  shown  us.  Those 
who  have  no  warrant  to  employ  this  power,  but  distinctly  with  a  view  to  the 
attainment  of  a  particular  end,  must  have  known  that  the  purposes  for  which 
alone  it  can  be  lawfully  used,  prescribe  the  limitations  to  its  exercise.  The 
moral  obligation  imposed  upon  them  not  to  exceed  those  limits,  requires, 
likewise,  that  they  should  ascertain  where  they  were  placed.  If  there  has 
been  an  inquiry  made  upon  this  head,  what  principles  have  guided  that  inquiry? 
and  which  of  them  have  been  presented  to  the  Senate?  What  calculations 
have  been  submitted  to  us,  to  shew  that,  in  respect  to  the  capital,  we  are  not 
exceeding  the  pale  of  our  authority?  The  hazard  of  excess  must  not  be  in- 
curred, while  there  are  any  means,  at  our  command,  ot  ascertaining  how  it 
may  be  avoided.  It  is  not  for  those  of  us  who  think  it,  at  this  time,  inexpedi- 
ent to  establish  a  bank,  to  show  where  the  excess  is.  It  is  incumbent  upon  the 
friends  of  this  bill,  who  call  upon  us  for  our  votes,  who  desire  that  we  should 
keep  them  company,  to  prove  to  us  that  they  are  going  no  further  than  they 
ought  to  go.  This  they  have  not  done.  It  has  not  been  affirmatively  proven  to 
us  that  a  capital  to  this  amount  is  necessary;  and  for  one,  I  think  it  can  be 
demonstrated  that  a  capital  of  thirty-five  millions  is  larger  than  is  required, 
for  the  purposes  for  which  we  are  to  establish  a  bank-  A  capital  much  lower 
than  even  twenty  millions,  would  be  adequate  to  the  establishment  of  a  bank, 
in  each  State  in  the  Union,  and  the  objects  of  safe  keeping,  and  easy  trans- 
mission of  the  public  revenue,  accomplished.  The  capital  of  this  bank,  with  a 
view  to  the  effect  of  its  notes,  in  affording  an  equal  medium  for  the  payment 
by  the  People,  and  the  receipt  bt  the  Government,  of  the  public  dues,  is  not 
to  be  inquired  into,  with  a  view  To  any  given  state  of  things.  The  charter  is 
to  last  for  twenty  years.  If  this  capital,  during  that  period,  should  be  likely 
to  become  too  small,  the  power  to  raise  it  by  our  own,  or  other  subscriptions, 
may  be  reserved.  If  we  have  a  view,  in  ascertaining  the  proper  extent  of  this 
capital,  to  periods  when  the  preservative  of  a  metallic  medium  shall  be  with- 
drawn from  the  paper  circulation,  then  this  capital,  (if  the  bank  is  to  be  what 
its  advocates  insist  upon  it  to  be  their  intention  to  render  it,  a  specie  paying 
bank)  is  unnecessarily  large.  Its  issues,  in  such  times,  must  be  limited,  not 
by  the  amount  of  the  public  revenue,  but,  by  that  of  the  specie  in  its  vaults. 
If  our  attention,  however,  is  principally  directed,  as  to  me  it  seems  it  ought 
to  be,  to  the  usual  and  natural  state  of  things,  when  the  presence  of  the  me- 
tallic medium  will  afford  to  the  paper  currency  a  free  and  uninterrnpted  cir- 
culation, then  a  much  smaller  capital  than  that  of  thirty -five  millions,  in  such 
a  state  ot  things,  would  enable  the  bank,  by  the  successive  issues  and  returns 
of  its  paper,  to  afford  to  the  People  and  to  the  Government  the  desired  facili- 
ties. The  process  between  the  Government  and  the  People  is  that  of  payment 
and  disbursement;  and  the  steady  and  uniform  succession  of  these  operations, 
which  can  never  be  disturbed,  communicates  to  a  paper  medium,  even  in  a 
higher  degree,  the  well  known  faculty  belonging  to  a  metallic  medium,  of  trans- 
acting a  large  amount  of  business  with  a  small  amount  of  money.  In  this 
view  of  the  subject,  can  there  be  a  question  whether  a  much  smaller  capital 
would  not  afford  every  lawful  facility  that  the  revenue  operations  of  this  Go- 
vernment require?  A  capital  of  ten  millions  successfully  accomplished  this 
object,  and  with  the  aid  of  three  or  four  millions  of  other  banking  capital,  con- 
jointly with  the  metallic  medium,  circulated  the  whole  business  of  the  Govern  - 
83 


(396  BANK    OF   THE    UNITED    STATES 

tution,  can  only  be  considered  as  having  themselves  reference  to  one  of  the 
great  objects  for  the  promotion  of  which  this  Government  was  established,  and 
lor  the  accomplishment  of  which  the  special  powers,  contained  in  the  constitu- 
tion, have  been  delegated. 

Is  this  authority  to  establish  a  bank,  an  incident  to  the  power  of  Congress 
"  to  borrow  money  on  the  credit  of  the  United  States,"  by  reason  of  its  cor- 
relative tendency  in  procuring  a  faculty  to  lend?  If  this  be  the  source  from 
which  it  is  lawfully  derived,  we  need  look  no  further  for  the  origin  of  this  or 
of  any  other  authority.  If  this  be  its  fountain-head,  we  have  here  a  never-fail- 
ing spring  of  power,  abundantly  sufficient  for  all  the  purposes,  lawful  or  unlaw- 
ful, of  this  or  of  any  other  Government  upon  earth.  I  turn  away  from  it,  there- 
fore, without  further  investigation. 

Is  this  power  derived  from  that  of  coining  money,  regulating  its  value,  and 
that  of  foreign  coin?  Is  the  right  to  establish  a  national  bank,  on  account  of 
its  tendency,  in  our  hands,  to  operate  upon  what  is  called  the  currency  of  the 
country,  derived  from  this,  or  any  other  specially  delegated  authority?  There 
are  two  provisions  in  the  constitution,  which  have  some  bearing  upon  this  point. 
That  to  which  I  have  just  referred,  respecting  coin ;  and  that  which  prohibits  to 
the  States  the  issue  of  "  bills  of  credit,  and  the  declaring  of  any  thing  but  gold 
and  silver  a  lawful  tender  in  the  payment  of  debts."  It  cannot  be  necessa- 
ry to  argue  that  a  power  to  make  a  bank,  distinctly  with  a  view  to  its  putting 
into  circulation  promissory  notes,  that  shall  have  the  faculty  of  mixing  and 
keeping  company  with  the  currency  of  the  country,  and  of  becoming  some- 
thing like  paper  money,  is  not  a  necessary  and  proper  auxiliary  to  the  power 
in  this  Government  ot  making  a  metallic  medium;  that  a  power,  in  short,  to 
make  a  metallic  money  has  not  incident  to  it,  as  a  "  necessary  and  proper" 
mean  for  its  execution,  the  power  to  make  a  paper  money.  Nor  need  any  time 
be  spent  in  resisting  an  inference,  drawn  from  a  restraint  imposed  upon  a 
particular  power  in  the  State  Governments,  which  affects  to  communicate  to, 
and  to  set  up  in,  this  Government,  a  faculty  co-ordinate  with  another  power, 
which  is  left  in  those  Governments,  free  and  unshackled.  So  far  then  as 
honorable  gentlemen  say  this  measure  is  intended  or  calculated,  whether  with 
a  view  to  regulation,  or  improvement,  or  under  any  other  pretence,  to  operate 
upon  what  is  called  the  national  currency,  or,  in  other  words,  to  restrain  the 
States  from  establishing  similar  institutions,  and  impair  the  free  exercise  of  the 
franchises  of  those  they  have  already  incorporated,  it  is  warranted  by  no  part 
of  the  constitution. 

I  come  now,  sir,  to  that  part  of  the  constitution,  where  alone  can  be  found, 
if  any  where,  the  lawful  source  of  this  Government,  to  incorporate  a  banking 
company.  We  have  the  power  "  to  lay  and  collect  taxes,  duties,  imposts, 
and  excises,"  for  certain  great  national  purposes.  It  is  now  admitted,  by  most 
of  the  former  opponents  of  this  doctrine,  that  the  establishment  of  a  national 
bank  is  nothing  more  than  (he  employment  of  a  ''necessary  and  proper"  mean 
"  for  carrying  into  execution"  the  power  to  which  I  have  just  referred.  The 
correctness  ot  this  doctrine,  I  have  before  declared  it  not  to  be  my  purpose  to 
call  into  question.  This  part  of  my  argument  is  entirely  predicated  upon  its  ad- 
mission; and  is  designed  solely  to  be  confined  to  those  views  of  the  subject, 
which  will  show  the  true  character  and  just  extent  of  this  authority;  and  en- 
able us  to  determine  whether  we  are  not  carrying  it,  by  the  provisions  of  the 
bill  now  on  our  tables,  further  than  is  warranted  by  the  constitution.  This, 
then,  being  the  power,  to  which  the  authority  to  establish  a  bank  is  incident, 
as  a  "  necessary  and  proper"  mean  for  its  execution,  we  cannot  have  much 
difficulty  in  the  definition  of  its  limits-  Its  effect  upon  this  power  must  be  in 
relation  to  the  collection,  the  safe  keeping,  and  transmission  of  the  public  re- 
venue. The  notes  which  a  bank  issues  may  (but,  by  the  by,  the  affairs  of  a 
bank  may  be  mismanaged  and  they  may  not)  provide  the  People  with  an  equal 
medium  for  the  payment  of  their  public  dues  to  this  Government.  This  is, 
to  a  certain  extent,  to  operate  upon  the  currency:  it  is  not  merely  to  afford 
the  People,  in  their  relations  with  the  Government,  something  more  portable 
and  convenient  to  procure,  and  keep,  and  pay,  than  metallic  money,  but  it  is 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.          (597 

to  provide  them  with  a  medium  of  contribution,  at  a  time  when  the  metallic 
medium  shall  disappear  from  circulation.  Here  provision  in  relation  to  the 
currency  generally*  would  seem,  at  first,  to  be  intended  for  an  event  like  that 
of  the  disappearence  of  the  metallic  medium;  but  we  must  always  remember 
that  our  power,  in  relation  to  the  medium  of  circulation,  refers  solely  to  a 
metallic  medium;  and  of  course  excludes  the  other— -expressio  unius  cst  exclu- 
sio  alterius.  If  it  be  not  questioned  how  far,  in  this  point  of  view,  as  con- 
nected with  the  currency,  (a  subject,  as  before  mentioned,  expressly  legislated 
upon)  there  is  a  power  to  procure,  for  the  People,  these  kind  of  facilities,  for 
the  payment  of  their  taxes,  surely  the  power  must,  in  this  respect,  confine  it- 
self directly  to  this  end.  What  then  is  the  capital  necessary  for  constituting 
a  bank  to  answer  this  purpose?  This  ought  to  have  been  shown  us.  Those 
who  have  no  warrant  to  employ  this  power,  but  distinctly  with  a  view  to  the 
attainment  of  a  particular  end,  must  have  known  that  the  purposes  for  which 
alone  it  can  be  lawfully  used,  prescribe  the  limitations  to  its  exercise.  The 
moral  obligation  imposed  upon  them  not  to  exceed  those  limits,  requires, 
likewise,  that  they  should  ascertain  where  they  were  placed.  It  there  has 
been  an  inquiry  made  upon  this  head,  what  principles  have  guided  that  inquiry? 
and  which  of  them  have  been  presented  to  the  Senate?  What  calculations 
have  been  submitted  to  us,  to  shew  that,  in  respect  to  the  capital,  we  are  not 
exceeding  the  pale  of  our  authority?  The  hazard  of  excess  must  not  be  in- 
curred, while  there  are  any  means,  at  our  command,  ot  ascertaining  how  it 
may  be  avoided.  It  is  not  for  those  of  us  who  think  it,  at  this  time,  inexpedi- 
ent to  establish  a  bank,  to  show  where  the  excess  is.  It  is  incumbent  upon  the 
friends  of  this  bill,  who  call  upon  us  for  our  votes,  who  desire  that  we  should 
keep  them  company,  to  prove  to  us  that  they  are  going  no  further  than  they 
ought  to  go.  This  they  have  not  done.  It  lias  not  been  affirmatively  proven  to 
us  that  a  capital  to  this  amount  is  necessary;  and  for  one,  I  think  it  can  be 
demonstrated  that  a  capital  of  thirty-five  millions  is  larger  than  is  required, 
fur  the  purposes  for  which  we  are  to  establish  a  bank-  A  capital  much  lower 
than  even  twenty  millions,  would  be  adequate  to  the  establishment  of  a  bank, 
in  each  State  in  the  Union,  and  th'i  objects  of  safe  keeping,  and  easy  trans- 
mission of  the  public  revenue,  accomplished.  The  capital  of  this  bank,  with  a 
view  to  the  effect  of  its  notes,  in  affording  an  equal  medium  for  the  payment 
by  the  People,  and  the  receipt  bt  the  Government,  of  the  public  dues,  is  not 
to  be  inquired  into,  with  a  view  to  any  given  state  of  things.  The  charter  is 
to  last  for  twenty  years.  If  this  capital,  during  that  period,  should  be  likely 
to  become  too  small,  the  power  to  raise  it  by  our  own,  or  other  subscriptions, 
may  be  reserved.  If  we  have  a  view,  in  ascertaining  the  proper  extent  of  this 
capital,  to  periods  when  the  preservative  of  a  metallic  medium  shall  be  with- 
drawn from  the  paper  circulation,  then  this  capital,  (if  the  bank  is  to  be  what 
its  advocates  insist  upon  it  to  be  their  intention  to  render  it,  a  specie  paying 
bank)  is  unnecessarily  large.  Its  issues,  in  such  times,  must  be  limited,  not 
by  the  amount  of  the  public  revenue,  but,  by  that  of  the  specie  in  its  vault?. 
If  our  attention,  however,  is  principally  directed,  as  to  me  it  seems  it  ought 
to  be,  to  the  usual  and  natural  state  of  things,  when  the  presence  of  the  me- 
tallic medium  will  afford  to  the  paper  currency  a  free  and  uninterrupted  cir- 
culation, then  a  much  smaller  capital  than  that  of  thirty -five  millions,  in  such 
a  state  of  things,  would  enable  the  bank,  by  the  successive  issues  and  returns 
of  its  paper,  to  afford  to  the  People  and  to  the  Government  the  desired  facili- 
ties. The  process  between  the  Government  and  the  People  is  that  of  payment 
and  disbursement;  and  the  steady  and  uniform  succession  of  these  operations, 
which  can  never  be  disturbed ?  communicates  to  a  paper  medium,  even  in  a 
higher  degree,  the  well  known  faculty  belonging  to  a  metal  lie  medium,  of  trans- 
acting a  large  amount  of  business  with  a  small  amount  of  money.  In  this 
view  of  the  subject,  can  there  be  a  question  whether  a  much  smaller  capital 
would  not  afford  every  lawful  facility  that  the  revenue  operations  of  this  Go- 
vernment require?  A  capital  of  ten  millions  successfully  accomplished  this 
object,  and  with  the  aid  of  three  or  four  millions  of  other  banking  capital,  con- 
jointly with  the  metallic  medium,  circulated  the  whole  business  of  the  Govern - 
83 


698  BANK  OF  THE  UNITED  STATES, 

inent  and  the  country.  Surely,  then,  a  national  banking  capital  of  twenty 
millions,  with  the  banking  capital  of"  the  States,  will  be  now  amply  sufficient 
lor  the  same  purposes;  however  high  maybe  our  estimate  of  the  increased  ac- 
tivity and  expansion  of  the  industry  and  enterprise  of  the  country.  If  I  am 
well  founded  in  these  remarks,  1  have  sustained  and  established  one  constitu- 
tional objection  to  this  bill;  by  showing  that  the  capital  of  this  bank  is  larger 
than  is  necessary  for  the  accomplishment  of  the  objects  we  are  required  to  keep 
in  view,  in  the  establishment  of  this  institution. 

There  is  another,  and  a  more  interesting  point  of  view,  which  it  remains  to 
notice,  and  which  goes  to  show  that  this  bill  does  not  merely,  in  respect  to 
capital,  exceed  our  constitutional  authority.  1  refer  to  that  provision  which 
authorizes  the  appointment  of  a  certain  proportion  of  the  directors  of  this  bank 
by  the  Government.  Every  control  and  authority  over  this  great  moneyed 
institution,  so  intimately  connected  as  it  is  with  the  great  interests  of  society, 
beyond  what  is  requisite  for  the  promotion  of  the  limited  objects  we  are  bound 
to  keep  in  view,  communicates  to  the  Government  an  influence  and  patronage 
which  it  has  no  right  to  possess.  It  is  proper  that  I  should  circumscribe,  within 
narrow  limits,  what  I  have  to  say  in  respect  to  the  just  character  of  that  in- 
fluence, after  the  able  view  of  it  which  must  have  been  presented  by  the  honor- 
able member  from  New  York,  (Mr.  KixoJ  in  support  of  his  motion  to  strike 
out  this  part  of  the  bill.  The  honorable  chairman  (Mr.  BIBB)  who  reported 
this  bill,  in  reply  to  that  ai-gument,  insisted  that  there  was  incident  to  the 
power  to  establish  a  bank,  that  of  prescribing  the  regulations  which  are  neces- 
sary to  guard  the  country  against  the  mischief  it  might  otherwise  do.  Sir,  I 
deny  not  the  truth  of  this  position;  but  still  it  equally  remains  to  be  shown 
that  the  regulation  in  question,  which  invests  the  Government  with  an  influ- 
ence of  such  magnitude,  is  "  necessary  and  proper/'  to  prevent  a  greater  mis- 
chief than  the  one  which  the  regulation  itself'  introduces.  The  honorable 
member  from  Virginia  (Mr.  BARBOUR)  contends  for  the  salutary  effect  of  this 
regulation,  and  insists  that  it  communicates  to  the  Government  an  influence 
too  unimportant  to  justify  any  serious  apprehension.  He  considers  these  di- 
rectors merely  as  sentinels  on  the  watch  tower,  and  that  the  smallness  of  their 
number  can  never  give  to  the  Government  a  dangerous  ascendancy  in  the 
management  of  this  institution.  Let  us  for  a  moment  inquire  into  the  cha- 
racter of  these  directors.  If  they  are  sentaiels  on  the  watch  tower,  if  they 
are  to  be  enlisted  into  our  service,  what  bounty  are  we  to  give  them,  what  pay 
are  they  to  receive  from  us?  They  are  to  perform  for  us  an  important  service, 
they  are  to  apprize  us  of  the  earliest  approaches  of  danger.  The  board  of  di- 
rectors will  be  daily  assembled,  and  these  our  sentinels  must  mount  guard 
as  often;  they  are  to  have  a  full  share  of  trouble  in  the  superintendence  of 
this  institution,  and  they  are  to  do  all  this,  not  for  the  good  of  the  concern  in 
which  they  have  no  participation,  but  for  our  advantage  solely — that  we  may 
know  in  time  to  take  care  of  ourselves,  when  this  company  is  likely  to  go 
astray  from  its  duty  to  the  stockholders,  the  country,  or  the  Government. 
These  are  services,  I  admit,  of  great  value,  and  to  be  performed,  no  doubt, 
by  able  and  virtuous  men;  and  yet,  for  all  this,  you  pay  nothing — and  why  so? 
Are  we  to  calculate  upon  a  degree  of  patriotism  arid  disinterestedness,  to 
which  we  make  no  claim  ourselves?  The  truth  is,  we  do  not  expect  these  ser- 
vices to  be  performed  for  us,  without  remuneration;  but  the  anomaly  consists 
in  our  not  paying  for  them  ourselves.  These  spies  are  to  be  in  our  service, 
and  to  laboi  lor  us,  on  account  of  the  pay  they  receive  from  others.  In  imi- 
tation of  the  Napoleon  model,  these  gentlemen  are  to  be  maintained  by  those 
whom  they  are  set  over  to  guard.  Their  posts  will  be  places  in  request  at  all 
times— -in  peace  as  well  as  in  war.  In  times  of  peace,  of  public  repose,  when 
the  business  of  the  country  is  undisturbed,  and  the  Government  in  no  need  of 
loans  from  the  bank,  these  directorships  will  be  entirely  useless,  for  any  law 
ful  purpose,  to  the  United  States.  During  this  period,  the  men  who  hold 
these  appointments,  and  their  numerous  friends,  will  be  but  as  vultures  fat- 
tening on  the  institution.  During  this  period,  you  obtain  a  patronage  for  the 
administration,  through  the  medium  of  these  directors,  and  their  retainers, 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

without  the  performance  of  any  lawful  service.  In  this  respect,  then,  the  pro- 
vision is  unconstitutional:  and  the  influence  for  which  you  oblige  others  to 
pay,  is  as  unjust  as  it  is  unconstitutional.  But  when  the  season  of  difficulty 
arrives;  when  war  shall  disturb  and  break  up  the  regular  course  of  business; 
when  public  and  private  credit  shall  be  shaken;  when  the  good  of  the  country 
shall  imperiously  require  the  attain?  of  this  institution  to  be  conducted  with 
even  more  than  the  usual  prudence  and  circumspection;  then  will  be  the  time 
that  the  pernicious  agency  of  this  directorship,  co-operating  with  other  active 
influences,  will  wield  this  great  moneyed  corporation,  at  the  will  and  pleasure 
of  the  Government.  It  is  no  answer/to  tell  us  of  the  smallness  of  the  number 
of  these  directors.  The  Hercules  is  in  the  system— in  the  poweMhat  the 
Government  possesses  of  continuing  or  withholding  its  deposites.  These  di- 
rectors are  but  the  club  with  which  you  arm  him.  The  smallness  of  their  num- 
ber is  no  security.  The  principle  upon  which  they  are  introduced  is  unsound, 
is  corrupt,  is  contagious,  and  its  natural  tendency  will  be  to  spread  itself. 
These  hve  directors,  (whom  the  Government  then  \yill  take  care  to  keep  in 
their  own  pay)  themselves  the  absolute  creatures  of  those  from  whom  they 
have  derived  their  authority,  will  be  sure  to  find  at  the  board,  when  the  spirit 
of  party  in  the  country  runs  high,  others  become  as  subservient  as  themselves; 
and  cannot  fail,  in  a  season  of  difficulty  and  embarrassment,  with  their  united 
influence,  to  accomplish,  through  the  fears  and  the  hopes  of  the  rest,  whatever 
shall  be  demanded  of  the  bank,  as  the  price  of  the  continuance  of  the  Govern- 
mental favor.  By  this  process,  will  loan  upon  loan  be  riveted  upon  the  bank, 
until  this  great  debtor  will  become  its  lord  and  master.  Surely  these  appre- 
hensions cannot  justly  be  called  the  offspring  of  distempered  imaginations. 
Honorable  gentlemen  certainly,  who,  themselves,  have  painted  in  such  glow- 
ing tints,  the  terrors  of  this  influence — not  of  the  influence  of  such  a  body 
politic  as  this,  in  which  it  is  organized,  and  directly  set  up  and  established, 
and  openly  avowed  to  the  world,  but  of  one  where  it  was  sedulously  guarded 
against — surely  such  will  not  insist  that  there  is  no  foundation  for  alarm. 
Formerly  it  was  said,  give  this  new  power  this  lever,  but  a  fulcrum — a  point 
to  rest  upon — and,  like  another  Archi  mid  eg,  it  will  move  the  political  world 
as  it  pleases.  Afford  it  but  an  opportunity  to  act  upon  the  States,  and  there 
will  be  nothing  in  their  sovereignties,  or  the  people,  beyond  its  purchase.  For- 
merly it  was  calculated,  in  its  mildest  form,  to  destroy  the  responsibility  be- 
tween the  Government  and  the  people;  and  leading  fo  extravagance,  to  cor- 
ruption, and  to  wicked  and  ruinous  wars,  to  overturn  the  liberties  of  this  na- 
tion. If  these  representations  of  danger  were  somewhat  surcharged  in  respect 
to  the  former  institution,  how  just  are  they  with  respect  to  the  present!  To 
me  it  seems,  that  now  is  the  time  that  we  ought  most  sedulously  to  guard 
against  a  power  of  this  kind  in  the  Government,  while  the  young,  the  enter- 
prising, the  ambitious,  and  <he  military  character  of  this  country  is  developing 
itself.  I  say  the  military  character  of  this  nation,  because  it  is  but  too  appa- 
rent, that  the  events  of  the  late  "glorious  war*'  (as  it  is  not  unfrequently 
triumphantly  termed)  have  had  no  tendency  to  increase  our  fondness  for  the, 
pursuits  of  peace.  That  there  was  glory  gained  in  that  war,  I  am  proud  to 
acknowledge;  but,  speaking  of  the  war  generally,  and  the  situation  of  the  coun- 
try during  its  continuance,  of  its  causes  and  its  termination,  I  may  be  per- 
mitted to  say,  if  there  was  glory— and  I  repeat  again,  I  am  proud  to  ackmnv- 
ledge  it— it  was  only  "  gloom  in  glory  dressed."  Much,  sir,  I  fear,  that  this 
happy  country,  once  so  fond  of  peace,  when  sufficiently  practised  upon,  is  to 
become  as  deeply  enamored  of  war  and  valorous  enterprise,  as  La  Mancha's 
Knight,  and  with  him,  is  to  be  made  to  exclaim,  "  armor  is  our  dress  and  bat- 
tles our  repose/'  I  shall  press  this  abjection  no  farther.  We  are  permitted, 
by  the  constitution,  to  incorporate  a  banking  company  to  facilitate  the  collec- 
tion and  disbursement  of  our  revenue.  It  has  been*  shown,  that  this  power 
must  be  exercised  with  a  view  to  its  proper  objects,  and  that  every  regulation 
that  looks  further  than  the  attainment  of  these  objects  is  unwarranted;  and 
in  relation  t )  this  directorship,  I  think  it  must  be  apparent  that  it  is  entirely 
foreign  to  these  objects;  or,  it  in  a  slight  degree  incidentally  connected  witli 


700  BANK  OF  THE  UNITED  STATES. 

them,  that  its  main  bearing  is  upon  other  points,  and  that  its  general  tendency, 
by  the  concurring  testimony  of  all  parties,  is  to  communicate  an  influence  to 
the  Government  of  the  United  States,  of  an  extremely  dangerous  character. 
The  bill,  therefore,  in  this  respect,  is  unconstitutional. 

The  remaining  constitutional  objection  to  this  bill  arises  from  its  interfer- 
ence with  the  concurrent  power  of  the  States.  It  is  to  operate  upon  the  State 
banks,  "  peaceably  if  it  can,  forcibly  if  it  must."  With  this  object  in  view, 
the  bill  no  doubt  has  been  formed  to  have  due  effect.  Indeed,  with  the  con- 
trolling influence  of  the  Government,  it  cannot  fail  to  accomplish  its  object, 
whenever  the  necessary  impulse  for  that  purpose  shall  be  given.  If  a  faculty 
is  communicated  to  a  power  in  this  Government  to  regulate  a  concurrent 
power  in  the  State  Governments,  there  is  an  end  at  once  of  the  co-ordinacy 
of  these  powers — one  of  them  instantly  becomes  only  the  humble  dependent 
upon  the  other,  and  must  even  cease  its  existence  whenever  the  will  and  plea- 
sure of  its  superior  shall  be  known.  How  extraordinary  has  been  the  course 
of  opinions  upon  this  subject!  The  friends  of  a  bank  formerly  required  for 
this  Government  the  exercise  only  of  an  equal  and  concurrent  power — even 
not  so  much;  they  are  now  obliged  to  argue  against  honorable  gentlemen  who 
refused  that  power,  and  who  now,  in  eftect,  contend  for  the  exercise  of  a  su- 
perior and  exclusive  power.  If  such,  then,  is  intended  to  be  the  eftect  of  this 
bill,  and  if  its  provisions  are  calculated  for  the  attainment  of  that  end,  it  is 
most  indubitably  unconstitutional.  If  what  is  termed  implication,  is  to  be- 
come the  lawful  proprietor  of  what  she  is  only  permitted  to  use  for  a  special 
purpose,  and  is  to  bear  off  too  what  she  has  no  pretence  for  asking  to  borrow, 
all  our  paper  regulations  are  idle.  With  an  encroaching  and  restless  agency 
of  this  kind  in  the  constitution,  there  is  no  limit  to  the  power  of  this  Govern- 
ment. I  shall  press  no  further  constitutional  objections  to  this  bill;  but  will 
now  proceed,  with  the  further  indulgence  of  the  Senate,  to  examine  the  gene- 
ral policy  of  this  measure. 

This  bill  came  out  of  the  hands  of  the  administration  ostensibly  for  the 
purpose  of  correcting  the  diseased  state  of  our  paper  currency,  by  restraining- 
and  curtailing  the  over  issue  of  banking  paper;  and  yet  it  came  prepared  to 
inflict  upon  us  the  same  evil,  being  itself  nothing  more  than  simply  a  paper- 
making  machine;  and  constituting,  in  this  respect,  a  scheme  of  policy  about 
as  wise,  in  point  of  precaution,  as  the  contrivance  of  one  of  Rabelais'  heroes, 
who  hid  himself  in  water  for  fear  of  rain.  The  disease,  it  is  said,  under  which 
the  people  labor,  is  the  banking  fever  of  the  States;  and  this  is  to  be  cured  by 
giving  them  the  banking  fever  of  the  United  States.  To  my  mind  the  real 
evil  consists  not  so  much  in  a  superabundance  of  paper,  as  in  a  scarcity  of 
specie.  The  paper  currency  does  not  exceed  what  is  required  to  circulate  the 
business  of  the  country;  it  only  wants  the  accrediting,  the  quickening,  the 
vivifying  principle  which  it  requires  a  certain  proportion  of  specie  to  commu- 
nicate to  it.  But  this  bill  is  to  supply  that  want;  it  is  to  be  our  alchymist, 
and  is  to  effect,  for  us,  even  the  transmutation  of  paper  into  gold.  How  this 
matter  is  to  be  conducted,  we  have  not  been  told.  It  is  admitted,  that  the 
great  desideratum  will  not  be  afforded  all  at  once.  The  process,  we  are  in- 
formed, requires  time;  but  we  are  assured  that,  in  the  end,  it  will  not  disap- 
point our  hopes.  For  one,  sir,  I  am  not  willing  to  trust  to  a  scheme  of  this 
sort-  Not  only  it  is  not  shown  how  its  professed  object  is  to  be  accomplished, 
but  the  fallacy  of  its  pretensions  is  susceptible  of  demonstration.  This  is  to 
be  a  specie,  or  a  paper-paying  bank.  Take  either  hypothesis— suppose  it 
the  former.  Will  it  increase  the  quantity  of  specie  in  the  country  P  will 
it  restore  to  circulation  that  which  is  in  the  country  P  or  will  it  put  into 
circulation  any  thing  that  will  answer  the  purpose  of  specie  P  That  it 
will  increase  the  quantity  of  specie,  powerful  as  may  be  its  alchymy,  none 
will  pretend.  WTill  it  emancipate  from  restraint  what  is  already  in  the  coun- 
try? That  the  quantity  of  specie  in  the  United  States  is  diminished,  is  ac 
knowledged,  and  it  will  not  be  denied  that  a  much  Larger  proportion  of  specie 
than  formerly  was  sufficient  to  maintain  the  free  circulation  of  bank  paper, 
will  be  required  to  revive  and  establish  public  confidence  in  that  currency,  as 


ON  THE  GKANT  OF  THE  CHARTER  OF  1816.        7Q1 

a  steady  and  certain  representative  of  gold  and  silver.  Those  banks,  there- 
fore, that  have  now  the  precious  metals  locked  up  in  their  vaults,  not  only 
will,  but  ought  to  keep  them  there,  until  the  necessary  addition  is  made,  by 
the  course  of  trade;  more  especially  ought  they  to  do  so  at  this  time,  when 
the  course  of  that  trade  has  thrown  the  exchange  so  much  against  us,  that 
every  dollar  they  paid  out  would  be  exported.  If  this  bank  is  to  be  a  specie 
bank,  will  it  put  into,  and  keep  in  circulation,  any  thing  that  will  answer  the 
purpose  of  specie?  Who  are  to  borrow  of  this  bank,  and  what  will  be  their 
inducements  to  borrow?  Those  who  obtain  discounts  will  receive  paper  equal 
in  value  to  gold  and  silver:  and  their  debts  must  be  paid  off  when  they  become 
due,  not  in  the  notes  of  other  banks,. but  in  the  notes  of  this  bank,  or  in  gold 
and  silver.  If  they  borrow  for  the  purpose  of  obtaining  a  more  equal  and  un- 
varying medium,  than  any  other  bank  paper  will  afford  them,  of  remittance  to 
any  part  of  the  United  States,  or  with  a  view  to  purchase  cheaper  any  thing 
they  may  want  to  buy,  their  object  is  accomplished.  But,  when  the  time 
arrives  for  them  to  pay  off  their  debts  to  the  bank,  they  must  purchase  up 
the  paper  of  this  bank,  or  gold  and  silver,  with  other  banking  paper,  and 
with  the  same  or  a  greater  loss.  What  will  they  then  have  gained  by 
the  transaction?  Pay  their  debts  they  must,  when  they  become  due;  and, 
cost  what  it  will,  they  must  procure  the  paper  of  the  same  bank,  or  gold  and 
silver.  They  have  gained,  say  ten  per  cent,  in  their  remittance,  or  their 
purchase,  and  they  must  give  it  up  again  to  obtain  the  means  of  paying  these 
debts;  and,  moreover,  run,  without  any  advantage,  the  risk  of  being  disap- 
pointed in  procuring  those  means.  There  will  be,  likewise,  accompanying 
this,  another  operation.  Those  who  borrow,  (if  any  under  such  circumstances 
will  borrow)  must  have  a  view  to  purchase,  or  remittance  to  some  other  part 
of  the  Union;  and  in  that  mode,  the  paper  of  this  bank  will  get  into  the  hands 
of  persons  who  have  no  debts  to  pay  to  the  bank.  What  will  th^y  do  with 
this  paper?  Will  it  come  into  their  possession  so  utterly  untainted  with  sus- 
picion, with  such  all -conspiring  confidence,  as  to  make  the  holders  of  it  pre- 
ler  it  to  gold  and  silver?  Certainly  not.  The  recollection  of  recent  events, 
the  infirm  condition  of  the  other  banking  paper,  will  prompt  the  holders  of  it 
to  demand  immediately  in  exchange,  that  which  they  know  is  immutable  in 
its  value.  And,  moreover,  there  may  be  a  sudden  fluctuation,  in  the  rate  of 
foreign  exchange,  which  may  communicate  to  gold  and  silver  a  temporary  ap- 
preciation over  the  paper  currency,  without  sensibly,  (if  at  all)  depressing 
cotemporaneously  itfl  value  in  relation  to  any  thing  else  it  may  command. 
When  this  takes  place,  the  holder  of  the  gold  and  silver  obtained  from  this 
bank  in  exchange  for  its  paper,  will  find  a  profit  between  the  value  at  which 
he  received  the  paper,  and  the  gold  which  he  has  obtained  for  it,  sufficient  to 
induce  him  to  part  with  it  for  the  currency  of  the  other  banks;  and  which  pro- 
fit he  can,  by  investment  and  purchase,  render  certain  before  the  impulse  of 
appreciation  can  be  communicated  to  what  he  finally  obtains.  While,  there- 
fore, the  exchange  against  the  country  is  progressing,  this  process  will  accom- 
pany it,  and  effect  the  removal  abroad  ot  our  specie.  To  emancipate  specie 
from  the  restraints  now  imposed  upon  it,  is  to  permit  it  to  pursue  its  own 
course;  and  that  course  (in  the  present  state  of  foreign  exchanges)  leads  it 
out  of  the  United  States;  and  thus  the  immediate  and  inevitable  effect  of  our 
legislation  for  restoring  specie  to  circulation,  is  to  send  what  we  have  remain- 
ing of  it  out  of  the  country.  If,  in  this  state  of  things,  then,  this  bank  is  to  be 
a  specie  bank,  it  can  issue  paper  only  to  the  amount  of  its  specie.  It  cannot 
issue  paper  even  to  that  amount,  because  there  will  be  no  inducement  to  bor- 
row, upon  the  terms  upon  which  a  specie  bank  can  now  alone  lend:  and  even 
if  it  could  lend  out,  on  these  terms,  paper  to  the  amountofits  specie,  it  would 
effect  nothing  in  value,  towards  the  great  object  of  this  policy.  It  would  be 
only  amusing  itself,  like  Diogenes,  who  set  himself  about  rolling  his  tub,  ra- 
ther than  be  idle,  while  all  others  were  employed.  Rut  allow  me  here,  sir, 
to  ask,  what  is  to  be  done,  if  this  bank,  in  which  we  as  stockholders  are  to 
have  so  deep  an  interest,  should,  as  it  probably  pretty  soon  will,  wade  out  of 
its  depth — should  exhaust  its  specie  (as  it  inevitably  must  do  if  it  issues  paper 


702  BANK  OF  THE  UNITED  STATES. 

to  an  amount  exceeding,  even  in  a  very  limited  degree,  its  specie  capital)  and 
becomes  unable  to  pay  its  paper?  When  that  happens,  as  happen  it  must  if 
there  is  not  a  considerable  addition  to  the  specie  capital  of  the  country,  the 
urgency  of  the  case  will  make  its  own  law;  and  it  will  either  be  the  law  of 
public  opinion,  of  public  necessity,  and  public  interest — the  same  law  under 
which  the  State  banks  now  operate — or  it  will  be  a  la\y  of  ourovyri  enactment, 
striking  oft' the  shackles  we  are  now  riveting  upon  this  institution.  No,  sir, 
this  bill  cannot  restore  the  specie  in  the  country  to  circulation,  nor  can  it  dis- 
solve the  povyerful  spell  which  fear,  and  suspicion,  and  even  prudence,  have 
placed  upon  it.  Of  our  capacity  to  increase  its  quantity  by  this  bill,  we  have 
about  as  good  evidence,  as  the  facetious  writer,  before  referred  to,  had  of  his 
royal  descent;  he  had,  he  tells  us,  4'  a  marvellous  desire  to  be  a  king  himself;" 
we  have  "a  marvellous  desire,"  I  admit,  to  increase  the  quantity  of  specie; 
and  we  have  no  other  better  way  of  showing  the  specie-making  tendency  of 
this  bill. 

I  beg  leave,  sir,  to  remark  upon  the  distinctly  avowed  coercive  policy  in 
which  this  bill  originated,^  with  a  view  to  considerations  that  are  foreign  to  the 
constitutional  question.  This  bank  has  an  immense  capital,  and  when  the 
state  of  things  in  this  country  shall  be  better  settled^  when  a  favorable  course 
of  trade  shall  have  brought  us  the  necessary  supplies  of  specie,  the  operations 
of  this,  and  other  banks,  will  be  conducted  as  formerly.  This,  then,  will 
become  a  paper  making  bank,  as  well  as  the  others;  but,  the  excess  of  all, 
will  be  guarded  against  by  the  necessity  which  will  be  imposed,  of  maintain- 
ing the  principle  of  convertibility.  This  new  bank  (with  its  branches)  will 
have  afforded  it,  by  Governmental  deposites,  and  the  receipt,  by  the  United 
States,  of  the  public  revenue,  in  its  paper,  the  means  of  extending  its  dis- 
counts, and  increasing  its  issues,  in  proportion  to  its  capital,  greatly  beyond 
what  the  other  banks  can  venture  to  do;  and,  particularly,  must  the  opera- 
tions of  the  State  banks  continue  very  limited  and  circumscribed,  until  the 
first  hostile  impulse  communicated  to  this  institution  has  ceased  to  operate, 
and  until  due  confidence  can  be  inspired,  that  the  same  vindictive  spirit  will 
not  again  be  aroused  and  inflamed.  In  this  state  of  things,  the  banking  cap- 
ital you  now  create,  will  firmly  establish  itself,  and,  eventually,  take  the 
place  of  so  much  of  the  capital  of  the  State  banks.  You  create  a  banking 
capital  beyond  what  is  requisite  for  the  attainment  of  the  lawful  ends  of  this 
Government;  no  one  having  disproved,  indeed  all  seeming  to  admit  the  ex- 
istence, already,  in  the  country,  of  a  sufficient  banking  capital.  Why,  then, 
is  this  injustice  done,  of  supplanting  one  species  of  banking  capital  with  ano- 
ther ?  Can  we  forget  that  a  large  proportion  of  the  State  banks  is  the  offspring 
of  our  own  policy  ?  We  refused  the  re-incorporation  of  the  old  Bank  of  the 
United  States;  we  declined,  altogether,  the  exercise  of  the  authority  to  esta- 
blish these  institutions,  and.  mainly,  upon  the  ground  xhat  the  povyer  to  or- 
ganize them  was,  exclusively,  vested  in  the  State  governments.  This  opinion 
was  adopted,  and  zealously,  and  perseveringly  asserted,  by  the  most  potent 
States  in  the  Union,  and  subscribed  to,  and  openly  maintained,  by  the  most 
enlightened,  the  most  intelligent,  and  infl'iential  supporters  of  the  present 
order  of  things.  Hence  the  origin  of  a  great  many  of  the  State  banks.  The 
subscribers  to  those  banks,  relying  upon  the  soundness,  or,  at  least,  the  per- 
manency of  this  opinion,  purchased  tneir  charters  of  the  States;  and  the  pub- 
lic money  of  those  governments  has  been  invested,  to  a  large  amount,  in  those 
banks.  "What,  then,  can  warrant,  in  a  renunciation  of  former  sentiments, 
the  extension  of  the  capital  of  this  bank,  beyond  the  proper  objects  of  such  a 
bank  ?  It  is  equally  forbidden  by  the  constitution,  and  by  the  plain  principle 
of  common  justice.  Let  the  conduct  of  these  institutions  (generally  speak- 
ing) be  examined,  let  it  be  exposed  to  the  severest  scrutiny,  and  there  will 
be  nothing  found  to  justify  the  severity  of  this  measure.  Even  if  it  be  admit- 
ted that  the  course  of  these  bodies,  set  free  from  the  restraints  which  usually 
oblige  them  to  revolve  in  their  proper  orbits,  has  been  somewhat  erratic. 
What  then  r  Has  their  course  been  that  of  public  calamity,  and  private  dis- 
tress? You  must  judge  of  them  by  the  good,  as  well  as  the  evil  they  have 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.        793 

done.  They  have  been  the  nerve  and  spring  of  your  industry;  they  have 
been  the  spirit  which  has  animated  your  enterprise;  and,  if  they  have  been  a 
fountain  which  has  sent  out  bitter  water?,  they  have  sent  out  sweet  waters 
too.  What  would  have  been  your  condition,  what  would  be  our  condition 
this  moment,  without  them  !  Have  they  banished  the  specie  from  the  coun- 
try ?  That  was  the  aftiiir  of  our  achievement.  This  useful  triend  we  lost 
ourselves;  and  they  have,  to  the  best  of  their  ability,  supplied  its  place.  Is  it 
for  us  to  bestow  upon  them  unqualified  censure;  tor  us,  whose  measures  an- 
nihilated the  restraint?,  and  withdrew  from  them  the  great  security  of  steadi- 
ness and  uniformity,  is  it  for  us  to  condemn  them,  in  mass:  who  were  the 
first  to  seize  with  avidity,  and  to  profit,  to  the  fullest  extent  of  our  influence 
over  them,  of  the  opportunity  made  by  ourselves  to  lead  them  astray  ?  Then, 
our  conduct  to  them  was  "  as  soft  as  the  tips  of  our  ears;"  but  now,  that  our 
purpose  is  served,  *"  our  gorge  rises"  at  them,  and  in  the  time  of  their  need, 
we  unhesitatingly  devote  them  to  destruction. 

I  have  said,  sir,  that  the  evil  was  not  in  a  superabundance  of  paper,  but  in 
a  scarcity  of  specie:  for,  I  think  every  view  taken  of  the  operations  of  the 
banks,  will  show,  with  but  few  exceptions,  that  they  have  not  exceeded  their 
proper  limits.  The  first  eftect  of  loosening  their  restraints,  was  not  to  send 
them  a  heedless,  headlong  course.  The  influence  of  habit  continued,  after  the 
necessity,  which  gave  it  birth,  had  ceased.  They  went  on  in  the  same  path, 
and  might  have  been  so  expected  to  do,  for  some  time,  by  their  own  momen- 
tum. These  banks  were,  generally,  under  the  direction  of  able  and  honest 
men;  not  of  such  as  were  incapable  of  appreciating  the  difficulty  and  delicacy 
of  their  situation,  but  of  men  whose  prudence,  foreseeing  the  embarrassments 
they  would  have  to  contend  with,  immediately  replaced  the  restraints  which 
necessity  had  imposed  and  maintained.  The  particular  instances  of  excess 
which  have  been  referred  to,  are  those  of  exception;  and,  even  in  those  cases, 
the  business  of  the  bank  has  fallen  below  what  specie  times  have  witnessed, 
and  will  warrant,  and,  still  further  below  what  this  bank,  with  its  paper  cir- 
culating capacity,  will  do  in  such  times.  What  course,  different  from  that 
which  they  have  taken,  would  we  have  had  them  to  pursue,  in  the  situation  in 
which  they  were  placed  ?  Ought  they,  in  a  time  of  public  and  private  calami- 
ty and  distress,  have  called  upon  their  debtors  ?  Ought  their  paper  to  have 
disappeared  in  the  proportion  that  specie  vyas  withdrawn  ?  And,  if  this  ought  to 
have  been  done,  how  was  the  business  of  the  country  to  have  been  transacted, 
in  the  absence  of  both  specie  and  paper?  If  these  banks  had  called  in  their 
paper  as  the  specie  disappeared,  and  as  the  necessary  demand  for  it  increased, 
at  a  time,  too,  when  public  confidence,  accompanied  by  public  necessity  and 
public  convenience,  tendered  herself  ready  to  perform,  for  this  circulation, 
every  office  of  specie;  to  reanimate  it:  to  breathe  into  it  a  new  and  efficient 
principle  of  vitality;  if  such,  under  such  circumstances,  had  been  the  conduct 
of  these  banks,  we  should  have  been,  ourselves,  among  the  loudest  to  com- 
plain. They  did,  then,  sir,  what  they  ought  to  have  done.  Like  wise  and 
prudent  men,  instead  of"  resisting  an  evil  they  could  not  avert,  they  did  all 
that  was  left  for  them  to  do;  they  applied  to  it  the  best  and  only  remedy  that 
remained,  one,  which,  if  it  has  not  cured  the  disease,  has,  at  least,  alleviated 
its  affliction. 

I  do  not  know  that  there  is  much  hope  of  effecting  the  postponement  of  this 
measure;  yet,  every  consideration  belonging  to  it,  everv  view  which  can  be 
taken  of  it,  seems,  to  me,  to  require  of  us  the  utmost  deliberation  and  circum- 
spection. 

1  know  that  there  is  a  loose  and  vague  notion  afloat  in  the  public  mind,  of 
one  great  uniform  national  currency.  I  will  not  dignify  this  notion  by  calling 
it  public  opinion.  I  know,  sir,  that  we  are  looked  to,  as  were,  in  other  times, 
•' the  baker  and  the  baker's  son;"  but,  surely,  the  cool,  and  intelligent,  and 
enlightened  men  of  our  country,  who  have  reflected  seriously  upon  the  exist- 
ing state  of  things,  do  not  expect  relief,  in  this  matter,  from  our  legislation. 
They  know,  full  well,  how  much  easier  it  is  to  legislate  a  country  into  diffi- 
culties, than  it  is  to  legislate  it  out  of  them.  They  understand  the  nature  of 


704  BANK.  OF  THE  UNITED  STATES. 

the  disease—its  cause,  and  its  remedy.  They  look  not  to  us  for  health,  who 
have  medicined  them  into  sickness.  All  they  ask  of  us,  is,  to  desist,  4fc  to 
leave  them  alone."  Time  is  their  physician.  They  want  time  to  recover 
from  us;  he  has  "  healing  upon  his  wings,"  we  have  none  upon  ours.  Those 
who  know  not  the  cause  of  our  disease;  who  have  been  blind  to  the  natural 
tendency  to  this  state  of  things,  of  the  measures  which  have  been  pursued  for 
several  years  back;  who  know  not  the  agencies  which  have  withdrawn  the 
specie  from  our  country,  and  who  cannot  comprehend  the  influences  which 
have  given  such  activity  and  effect  to  those  agencies,  may  have  a  notion 
that  we  can  relieve  them:  and  it  cannot  be  expected  that  the  deep  responsi- 
bility which  is  involved  by  the  measures  which  have  led  to  the  present  diffi- 
culties, should  take  much  pains  to  dissipate  the  delusion.  If  we  are  to  profit 
by  this  delusion,  which  conceals  the  past  from  public  view,  let  us  not  go  still 
further  into  error.  The  step  we  are  going  to  take,  we  should  remember, 
with  the  honorable  gentleman  from  New  York,  (Mr.  SANFORD)  is  not  one 
which  we  can  retrace.  In  common  cases,  if  we  commit  an  error,  subsequent 
legislation  can  remedy  it.  Not  so  here.  An  error  committed,  in  the  passage 
of  this  law,  is  beyond  our  power  to  correct.  And,  furthermore,  let  us  spe- 
cially remember  the  magnitude  of  the  power  which  we  propose  to  regulate. 
It  is  not  merely  the  banking  power  of  this  institution,  but  the  banking  power 
of  the  States.  What  is  to  be  the  bearing  of  our  legislation  upon  great  interests 
like  these,  so  closely  interwoven  as  they  are  with  the  pursuits  of  the  people, 
it  is  incumbent  upon  us  vyell  and  maturely  to  consider.  The  science  of  bank- 
ing, connected  as  it  is,  in  peace  and  in  war,  with  the  circulating  medium; 
with  the  various  operations  of  Government;  with  the  different  great  interests 
of  society  in  general;  with  the  individual  industry  and  enterprise  of  the  citi- 
zen; with  the  value  of  other  capital,  and  with  the  moral  character  of  the 
People;  is  a  science,  like  all  others,  of  progressive  improvement,  and  is,  per- 
haps, even  at  this  time,  but  very  imperfectly  understood  by  those  who  have 
devoted  most  time  to  its  study.  Could,  sir,  this  science  now  call  to  her 
aid,  him  who  wrote  upon  the  subject  "  as  with  a  sun  beam," — the  justly  cele  • 
brated  author  of  the  *'  Wealth  of  Nations" — even  this,  her  favorite  son, 
would  be  obliged  to  confess  that  much  of  his  theory,  which  the  world  has  so 
long  adopted,  was  but  like  "  the  clouds  that .gather  round  the  setting  sun, 
and  seeming  only  to  form  a  part  of  the  brightness  by  which  they  are  illu- 
mined." Who,  then,  among  us,  is  entitled  to  hold  the  "  Lamp  of  Truth" 
to  this  subject?  None  of  us,  it  is  true,  can  be  blind  to  the  causes  of  the  evil 
complained  of.  We  know,  now,  too  well,  the  effect  of  the  bold  experiments 
we  have  tried  upon  the  People.  Tremendous  as  they  were,  it  required  but 
little  skill  to  make  them.  But,  to  build  up  anew  what  we  have  broken  down, 
to  repair  what  we  have  wasted,  is  an  achievement  of  another  sort.  Peace, 
and  the  uninterrupted  pursuits  of  industry  and  enterprise,  spread  their  bles- 
sings around  us.  Restrictive  regulations,  and  war,  have  snatched  many  of 
them  from  us.  The  price  the  country  has  paid  for  our  experiments  is  gone. 
If  it  has  not  made  us  wiser,  we  have  nothing  in  return.  What  we  have  lost 
must  be  replaced  as  it  was  gained.  Legislation  is  the  medicament  which  has 
made  us  sick;  but  it  has  no  charm  to  restore  us  to  health.  One  great  interest 
in  our  country,  from  sad  experience  of  our  measures,  has  long  since  learned 
to  look  to  the  period  of  assembling  the  national  councils,  as  a  period  of  nation- 
al calamity.  What  Thucydides  says  of  the  speech  of  Alcibiades  turning 
against  his  own  country,  and  explaining  to  her  enemies  her  vulnerable  posi- 
tions, "  while  he  speaks  she  totters,"  may  justly  be  remarked  of  too  many  of 
our  measures — while  we  legislate  the  country  totters.  The  great  body  of  our 
merchants  have,  in  a  special  manner,  cause  to  tremble  at  our  legislation;  that 
great  body  of  men,  whom  the  sweeping  denunciation  of  an  honorable  mem- 
ber on  this  floor  lias,  this  day,  placed  in  the  most  degraded  and  the  most 
worthless  ranks  of  society.  That  honorable  member  makes  exceptions,  which 
serve,  however,  only  to  set  in  stronger  view  the  estimate  he  forms  of  the  rest. 
Sir,  when  honorable  members  of  this  House,  and  from  great  and  potent  States 
in  the  Union,  entertain  these  sentiments,  and  express  them  upon  this  floor, 


OK   THE    SHAN'T   OF   THE   CHARTKll   OF    1816.  7Q5 

u  manifests  a  hostility  to  commerce,  which  justifies  all  the  apprehensions  of 
her  friend-!.  It  is  lull  time  for  the  merchants—  the  Morrises  and  the  Fitzsim- 
monses  —  to  take  their  seats  among  us,  to  assert  their  own  character,  and  main- 
tain their  own  interests.  Were  they  here,  they  would  find  occasions  to  tell 
us  that  it  is  not  the  fanner,  or  the  country  gentleman,  the  fleeces  of  whose 
flocks  grow  too  slow  for  our  Wai  poles.  that  we  have  repaired  to  their  "  altars," 
not  to  worship  there,  but  to  shut  up  their  "  bible,"  and  bear  off  their  "Gtodf 
that  the  seat  of  commerce  is  not  to  be  found  "  in  the  midst  of  the  secret  and 
solitary  hill,  nor  her  voice  to  be  heard  in  the  murmur  of  the  mountain  stream." 

Upon  a  subject,  sir,  like  that  now  before  us*  of  a  complex  and  intricate 
character,  having  the  closest  relations  to  the  strongest  interests  in  society; 
with  no  special  illumination  ourselves;  in  the  absence  of  all  practical  informa- 
tions uninspired  with  much  of  confidence  in  our  own  skill,  by  the  success  of 
our  former  experiments  on  political  economy;  is  it.  wise  to  act  at  all  —  but, 
most  especially,  upon  a  subject  of  this  character,  is  it  possible,  in  the  nature 
of  things,  for  a  general  legislation,  which  commits  itself  to  the  strong  impulse 
of  one  given  pressure,  to  pursue  the  proper  course?  In  circumstances  like 
the  present,  it  is  circumspection,  it  is  deliberation  which  is  required,  and  not 
action.  There  are  situations  of  peril  in  which  the  soldier  halts.  There  are 
crises  of  difficulty  and  embarrassment,  in  which  the  statesman  pauses.  It 
is  folly,  it  is  rashness,  and  not  wisdom,  nor  courage,  that  marches  blindfold 
upon  danger.  "  It  is  no  inconsiderable  part  of  wisdom  to  understand  how 
much  of  an  evil  is  to  be  endured;-'  and  particularly  so  when  there  is  reason 
to  hope  that  the  evil  will  remedy  itself.  The  existing  laws,  which  authorize 
the  issue  of  treasury  notes,  will  remove  all  sectional  difficulties,  and  aftord  to 
>he  People  a  safe  and  equal  medium  for  the  payment  of  their  1; 

I  rely  upon  the  indulgence  of  the  Senate  to  excuse  my  having  so  long  tres- 
passed upon  their  time.  I  do  not  flatter  myself  with  the  expectation  that  my 
humble  views  of  this  subject  will  have  much  weight;  they  aiv  such  as  have 
presented  themselves  to  my  mind,  and,  imperfect  as  they  may  be,  I  have 
obeyed  only  the  sense  of  duty,  in  submitting  them  to  the  Senate.  It  remains. 
sir,  to  move  von,  which  I  now  do,  that  the  further  consideration  of  the  bill 
upon  your  table  should  be  postponed  to  the  first  Monday  in  December  next. 

Mr.  DANA  made  a  brief  reply;  alter  which,  the  question  was  taken  on  the 
motion,  and  negatived:  ayes  t5,  noes  2'J. 

On  motion  of  Mr.  CAMPBELL,  the  time  for  taking  the  subscriptions  was  OK- 
from  six  to  twenty  day-. 


On  motion  of  Mr.  CAMPHKLL,  another  amendment  was  adopted,  relative  to 
the  establishment  of  branches  in  the  several  States. 

Mr.  DAGGKTT  gave  notice  that  he  should,  hereafter,  submit  an  amendment 
to  the  Senate;  after  which, 

The  bill  was  reported  to  the  Senate-,  ami  the  amendments  were  ordered  to 
be  printed. 

APRIL  2,   1816. 

The  amendments  made  in  committee  of  the  whole  having  been  concurred 
in, 

Mr.  Mvso.v,  of  N.  II.  renewed  his  motion  to  add  to  the  17th  section,  the  fol- 
lowing proviso: 

'*  And  if  the  said  corporation  shall^at  any  time  suspend  or  refuse  payment,  in  gold 
or  silver,  of  its  notes,  bills,  or  obligations,  or  other  debts,  to  such  an  amount,  and  for 
such  length  of  time,  as  Congress  may  deem  injurious  to  the  United  States,  in  such 
case  Congress  may  repeal  this  act,  and  abolish  the  said  corporation,  and  make  such 
regulations  and  provisions  for  the  settlement  of  the  affairs,  and  payment  of  the  debts, 
of  said  corporation,  and  for  distributing  its  remaining  property  among  the  stockhold- 
ers, as  shall  be  deemed  just  and  proper." 

This  motion  was  determined  in  the  negative,  by  the  following  vote: 
YEAS.  —  Messrs.  Barbour,  Daggett,  Gaillard,  Goldsborough,  Gore,  Horsey,   King, 
Mason,  N.  H.,  Mason,  Va.,  Sanford,  Talbot,  Thompson,  Tichenor,  Turner.  —  14. 

89 


706  BANK  OF  THE  UNITED  STATES. 

NAYS. — Messrs.  Barry,  Bibb,  Brown,  Campbell,  Chase,  Condit,  Dana,  Fromentiit, 
Harper,  Howell,  Hunter,  Lacock,  Macon,  Morrow,  Roberts,  Ruggles,  Tait,  Taylor, 
Varnum,  Wells,  Williams,  Wilson. — 22. 

On  motion  of  Mr.  DAGGETT,  to  amend  the  bill,  by  adding  thereto  the  fol- 
lowing new  section,  viz: 

SEC  .'  23.  And  be  it  further  enacted,  That  it  shall,  at  all  times,  be  lawful  for  a  commit- 
tee of  either  House  of  Congress,  appointed  for  that  purpose,  to  inspect  the  books, 
and  to  examine  into  the  proceedings,  of  the  corporation  hereby  created,  and  to  report 
whether  the  provisions  of  this  charter  have  been  by  the  same  violated  or  not?  and, 
whenever  any  committee,  as  aforesaid,  shall  find  or  report,  or  the  President  of  the 
United  States  shall  have  reason  to  believe,  that  the  charter  has  been  violated,  it  may  be 
lawful  for  Congress  to  direct,  or  the  President  to  order,  a  sciere  facias  to  be  sued  out 
of  the  Circuit  Court  of  the  District  of  Pennsylvania,  in  the  name  of  the  United  States, 
(which  shall  be  executed  upon  the  President  of  the  said  corporation  for  the  time  be- 
ing, at  least  fifteen  days  before  the  commencement  of  the  term  of  said  court)  calling 
on  the  said  corporation  to  show  cause  why  the  charter  hereby  granted  shall  not  be  de- 
clared forfeited;  and  it  shall  be  lawful  for  the  said  court,  upon  the  return  of  the  said 
sciere  facias,  to  examine  into  the  truths  of  the  alleged  violation;  and  if  such  violation 
be  made  appear,  then  to  pronounce  and  adjudge  that  the  said  charter  is  forfeited  and 
annulled:  Provided,  hovicver,  Every  issue  of  fact  which  may  be  joined  between  the 
United  States  and  the  corporation  aforesaid,  shall  be  tried  by  jury.  And  it  shall  be 
lawful  for  the  court  aforesaid,  to  require  the  production  of  such  of  the  books  of  the 
said  corporation  as  it  may  deem  necessary  for  the  ascertainment  of  the  controverted 
facts;  and  the  final  judgment  of  the  court  aforesaid  shall  be  examinable  in  the  Supreme 
Court  of  the  United  States,  by  writ  of  error,  and  may  be  there  reversed  or  affirmed,  ac- 
co; ding  t3  the  usages  of  law. 

The  question  on  agreeing  to  said  amendment  was  determined  in  the  affirma- 
tive, by  the  following  vote: 

YEAS. — Messrs.  Barry,  Brown,  Chase,  Daggett,  Dana,  Fromentin,  Gaillard,  Golds- 
borough,  Gore,  Harper,  Horsey,  Howell,  Hunter,  King,  Macon,  Mason,  N.  H.,  Ma- 
son, Va.,  Sanford,  Talbot,  Tait,  Taylor,  Thompson,  Tichenor,  Turner,  Wells,  Wil- 
liams, Wilson. — 27, 

NAYS. — Messrs.  Harbour,  Bibb,  Campbell,  Condit,  Lacock,  Morrow,  Roberta, 
Varnum. — 8. 

On  motion  of  Mr.  HARPER,  to  strike  out  the  scale  of  vote*  at  elections,  &c, 
there  were  7  yeas,  23  nays.  So  the  motion  was  lost. 

The  bill  having  been  further  amended,  the  question  on  ordering  the  amend- 
ments to  be  engrossed,,  and  the  bill  to  be  read  a  third  time,  was  decided  in  the 
affirmative,  as  follows: 

YEAS.— Messrs.  Barbour,  Barry,  Bibb,  Brown,  Campbell,  Chase,  Condit,  Daggett, 
Fromentin,  Harper,  Horsey,  Howell,  Hunter,  Lacock,  Mason,  Va.,  Morrow,  Roberts, 
Talbot,  Tait,  Taylor,  Turner,  Varnum,  Williams. —23. 

NAYS. — Messrs.  Dana,  Gaillard,  Goldsborough,  Macon,  Mason,  N.  H.,  Sanford, 
Thompson,  Tichenor,  Wells,  W'ilson. — 10. 

APRIL  3, 1816. 

The  bill  was  read  a  third  time.  On  the  question,  "  Shall  the  bill  pass?" 
The  following  was  the  vote: 

;  YEAS.— Messrs.  Barbour,  Barry,  Brown,  Campbell,  Chase,  Condit,  Daggett,  Fro- 
mentin, Harper,  Horsey,  Howell,  Hunter,  Lacock,  Mason,  Va.,  Morrow,  Roberts, 
Talbot,  Tait,  Taylor,  Turner,  Varnum,  Williams.— 22. 

NAYS Messrs.  Dana,  Gaillard,  Goldsborough,  Gore,  King,  Macon,  Mason,  N.  H,, 

Ruggles,  Sanford,  Tichenor,  Wells,  Wilson 12. 

[Messrs.  Bibb  and  Thompson,  the  only  absentees,  are  understood  to  hare  been  de- 
tained from  the  Senate  by  ill  health.]— Eds.  of  Nat.  Int. 

So  the  bill  was  passed,  and  the  concurrence  of  the  House  of  Representa- 
tives ordered  to  be  requested  in  the  amendments  thereto. 


ON  THE  GRANT  OF  THE  CHARTER  OF  1816.          707 

HOUSE  OF  REPRESENTATIVES. 

APRIL  4,  1816. 

The  House  took  up  for  consideration  the  amendments  of  the  Senate  to  the 
bill  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States.  After 
the  amendments  had  been  read — 

Mi-.  CALHOUN  observed  that  he  had  examined  the  amend. nents;  that  they 
were  not  important;  and  hoped  the  question  would  be  put  on  them  generally. 

Mr.  RANDOLPH  objected  to  so  sudden  a  decision  on  the  amendments,  at  so 
early  an  hour,  too,  when  t^e  House  was  thin,  and  b?fore  they  had  bera  print; 
ed.  He  moved  that  the  consideration  of  the  amendments  be  postponed  until 
to-morrow. 

This  motion,  after  some  further  conversation  between  Mr.  CALHOUN  and 
Mr.  RANDOLPH,  was  agreed  to:  ayes  60,  noes  55. 

APRIL  5,  1816. 

Mr.  CALHOUN  moved  that  the  House  proceed  to  consider  the  amendments 
of  the  Senate  to  the  bill. 

Mr.  MILNOR,  because  of  the  thinness  of  the  House  and  the  importance  of  the 
subject,  and  further,  because  he  understood  that  the  committee  on  the  national 
currency  were  on  the  point  of  reporting  a  very  important  b'.ll,  which  might 
materially  affect  the  decision  on  the  bank  question,  &c.,  moved  that  the  con- 
sideration thereof  be  postponed  to  Monday  next. 

Mr.  CALHOLX  hoped  the  motion  would  not  prevail.  The  reasons  for  it  he 
did  not  think  sufficient.  The  House  was  as  full  as  usual;  and  the  bill  alluded 
to  as  on  the  eve  of  being  reported  by  the  committee,  presuppo-ed  the  existence 
of  a  national  bank,  and  the  committee  had  determined  not  to  report  it  pending 
the  passage  of  the  bank  bill. 

After  some  further  conversation  between  Messrs.  CALHOUN  and  MILNOR, 
in  which  the  latter  gentleman  insisted  on  the  propriety  of  tirst  beki|  in  pos- 
session of  the  report  referred  to,  the  motion  to  postpjne  the  subject  to  Monday 
was  negatived:  ayes  43,  noes  66. 

After  the  amendments  of  the  Senate  were  read — 

Mr.  RANDOLPH  moved,  for  the  purpose  of  destroying  the  bill,  that  the  whole 
subject  be  indefinitely  postponed;  and  supported  his  motion  by  adverting  to 
the  small  number  of  members  present,  and  the  impropriety  of  passing,  by  a 
screwed  up,  strained,  and  costive  majority,  so  important  a  measure,  at  the  end 
of  a  session,  when  the  members  were  worn  down  and  exhausted  by  a  daily  and 
lone  attention  to  business;  a  measure  which,  in  a  time  of  war,  and  of  great 
public  emergency,  could  not  be  forced  through  the  House;  a  measure  so  deep- 
ly involving  the  future  welfare,  and  which  was  to  give  a  color  and  character  to 
the  future  destiny  of  this  country:  a  measure  which,  if  it  and  another  (the 
tariff)  should  pass  into  laws,  the  present  session  would  be  looked  back  to  as 
the  most  disastrous  since  the  commencement  of  the  republic;  and  which,  much 
as  he  deprecated  war,  he  would  prefer  war  itself  to  either  of  them.  Mr.  R. 
then  proceeded  to  argue  against  the  bill  as  unconstitutional,  inexpedient,  and 
dangerous, 

Mr.  CALHOUN  said  it  certainly  could  not  be  expected  of  him  to  enter  into 
so  untimely  a:iil  unnecessary  a  discussion  of  the  general  question.  The  bill 
had  been  before  the  House  three  weeks,  when  it  was  maturely  considered;  it 
was  sent  to  the  Senate;  and  nowcomes  back  with  a  fewunimportant  amendments, 
on  which  the  House  had  to  pass.  It  was  unfair  to  say  that  the  bill  was  urged 
through  the  -House  improperly;  and  the  gentleman  was  mistaken,  also,  in 
stating  that  a  bank  bill  could  not  be  passed  at  the  last  session;  it  was  noto- 


708  HANK  OF  THK  UNITED  STATES. 

rious  that  a  bill  to  establish  a  national  bank  did  pass  at  the  last  session,  and 
was  rejected  by  the  President  of  the  United  States. 

Mr.  GROSVENOK  did  not  know  what  the  gentleman  meant  by  a  hard  screw- 
ed majority.  He  would  venture  to  say  that  the  House  had  advanced  on  this 
subject  with  as  much  deliberation  and  calmness  as  they  ever  did  on  any  pub- 
lic  matter  whatever;  the  bill  was  not  pressed  through  improperly.  The  pres- 
sure talked  of  by  the  gentleman,  was,  in  fact,  directly  the  other  way.  With 
two  hundred  State  institutions  bearing  down  on  the  members  of  this  House, 
it  required  something  more  than  common  firmness — it  required  boldness  to 
urge  the  bill.  This  influence  would  every  day  become  stronger,  and  if  the 
subject  was  deferred  to  the  next  session,  its  passage  would  be  impossible.  He 
had  never,  since  he  came  into  Congress,  known  a  bill  passed  with  more  am- 
ple discussion;  the  gentleman  from  Virginia  had  himself  taken  a  part— -an  able 
part  in  it.  It  was  not  smuggled  through  the  House;  a  fair  majority  had  passed 
it;  and  he  was  convinced,  from  information  he  had  received,  that  if  the  Peo- 
ole  themselves  could  be  consulted,  there  would  be  ten  to  one  in  favor  of  it. 
Mr.  G.  answered  some  of  Mr.  RANDOLPH'S  objections  to  the  principles  of  the 
bill,  declaring  his  difference  from  that  gentleman  on  the  constitutional  ques- 
tion, and  his  belief  of  its  necessity  to  the  safety  of  the  country.  The  consti- 
tutional question  had  been  long  since  put  to  sleep  by  the  repeated  decisions  of 
all  the  proper  authorities,  after  mature  reflection,  and  ought  never  again  to  be 
revived. 

Mr.  RANDOLPH  replied  to  Mr.  GHOSVENOR,  and  enforced  his  constitutional 
objections  to  the  bill,  in  which  he  was  borne  out  by  the  decision  of  Congress 
in  refusing  to  renew  the  charter  of  the  old  bank,  which  decision  was  grounded 
on  the  want  of  constitutional  power.  He  adverted,  also,  in  support  of  his 
opinion,  to  the  instructions  from  the  Legislatures  of  Virginia  and  Kentucky  to 
their  Senators  to  vote  against  the  old  bank;  which  instructions  were  given  on 
the  ground  of  that  institution  being  unconstitutional.  Mr.  R.  declared  him- 
self the  holder  of  no  stock  whatever,  except  live  stock,  and  had  determined 
never  to  own  any;  but,  if  this  bill  passed,  he  would  not  only  be  a  stockholder 
to  the  utmost  of  his  power,  but  would  advise  every  man,  over  whom  he  had 
any  influence,  to  do  the  same,  because  it  was  the  creation  of  a  great  privileged 
order  of  the  most  hateful  kind  to  his  feelings,  and  because  he  would  rather  be 
the  master  than  the  slave.  If  he  must  have  a  master,  let  him  be  one  with 
epaulettes — something  that  he  could  fear  and  respect,  something  that  he  could 
look  up  to — but  not  a  master  with  a  quill  behind  his  ear. 

Mr.  WEBSTER  said  this  was  a  subject  on  which  a  great  change  of  opinion 
had  taken  place  on  both  sides  of  the  House,  and  animadverted  on  what  he 
called  a  compromise  of  principle  on  a  great  moneyed  institution,  and  the  deser- 
tion, not  only  of  principles,  but  of  friends,  which  had  characterised  the  pro- 
ceedings on  this  bill.  He  then  spoke  some  time  against  the  bill,  which  he 
pointedly  condemned,  on  account  of  the  participation  of  the  Government  in  its 
direction  and  management.  If,  said  he,  instead  of  the  little  scraps  of  amend- 
ments, which  were  very  well  as  far  as  they  went,  but  very  trifling,  and  only 
served  to  cover  the  vice  and  deformity  of  the  scheme,  the  Senate  had  returned 
the  bill  healthy,  in  all  the  beauty  of  the  original  institution,  it  would  have 
passed  through  the  House  swifter  than  the  current  of  the  Potomac. 

Mr.  HUMBERT  replied  to  Mr.  WEBSTER,  in  defence  of  the  bill,  and  of  the 
course  he  had  pursued  in  relation  to  it.  He  disavowed  any  compromise  of 
opinion,  either  in  the  principle  or  the  details  of  the  bill.  He  had  sought  the 
best  lights  to  guide  him  in  deciding  on  this  bill.  He  had  listened  to  the  gen- 
tleman from  New  Hampshire,  as  one  who  would,  if  any  could,  point  out  its 
defects,  and  convince  him  of  its  danger;  but  the  only  objection  he  heard  from 
that  gentleman  was  the  Government  direction.  That  objection,  Mr.  H.  said, 
was  not  with  him  a  strong  one;  and  he  was  free  to  say.  that,  if  he  had  the 


ON  THE  GRANT  OF  THE  CHAKTEK  OF  1816.        7QQ 

power  of  legislating  at  his  will,  he  would  hesitate  before  he  gave  any  class  of 
men  the  control  ot  an  institution  of  thirty-five  millions  of  dollars,  without  re- 
serving to  the  Government  a  strong  check  on  them.  Mr.  H.  protested,  with 
warmth,  against  the  proscription  which  had  been  denounced  against  those  who 
did  not,  on  this  subject,  go  with  the  majority  of  that  party  in  the  House  op- 
posed to  the  Administration.  He  disclaimed  any  such  influence  over  his  pub- 
lic conduct;  he  came  here  to  act  according  to  his  own  sincere  convictions, 
and  should  despise  himself,  if  he  could  submit  to  act  as  this  or  that  side  of  the 
House  pointed  its  finger.  Mr.  H.  concluded  by  declaring  his  support  of  the 
bank  bill  to  be  disinterested:  he  expected  to  hold  not  a  cent's  worth  of  its 
stock,  as  he  was  not  able  to  do  so,  but  the  bank,  he  believed,  would  be  a  great 
benefit  to  the  country. 

Mr.  WRIGHT  said  he  was  one  of  those  who  had  aided  in  putting  down  the 
old  bank,  and  was  sure  that,  a  thousand  years  after  he  was  buried,  his  vote  on 
that  occasion  would  be  a  monumental  proof  of  his  worth,  and  his  regard  for 
the  best  interests  of  his  country.  He  opposed  it  on  the  ground  of  inexpedien- 
cy as  well  as  unconstitutionality;  but  the  supreme  judicial  tribunal  had  de- 
cided on  its  constitutionality,  by  often  recognising  it  as  a  party,  and  it  was 
now  too  late  to  insist  on  the  objection.  Mr.  W.  argued  some  time  in  favor  of 
the  bill;  and,  adverting  to  Mr.  RANDOLPH'S  epithet  that  the  bank  was  a  scheme 
of  public  robbery,  and  his  declared  intention  to  hold  as  much  of  its  stock  as  he 
could,  Mr.  W.  said  his  friend  from  Virginia  ought  to  recollect  that  the  re- 
ceiver was  always  considered  as  bad  as  the  thief,  &c. 

Mr.  HARDIX  next  delivered,  at  length,  his  views  of  the  question,  objecting 
to  the  plan  of  a  bank,  as  embraced  in  this  bill,  on  constitutional  grounds,  as 
well  as  from  a  belief  of  its  inexpediency.  He  was  a  member  of  the  Kentucky 
Legislature  at  the  time,  and  was  one  of  those  \\ho  had  instructed  its  Senators 
to  vote  against  the  old  bank  because  of  its  unconstitutionality;  and  his  opinions 
remained  unchanged,  though  he  perceived  some  of  those  who  had  acted  with 
him  in  the  case  alluded  to,  had  changed  their  opinions,  and  were  now  sup- 
porters of  (he  bank,  &c. 

Mr.  SHARP  spoke  in  reply  to  the  remarks  of  Mr.  HARDIX,  respecting  the  in- 
structions from  the  Kentucky  Legislature,  and  justified  his  opinions  on  the 
subject  of  the  bank. 

Mr.  SOUTHARD  made  a  lew  remarks,  principally  to  >how  that  it  was  not  on 
the  ground  of  unconstitutionalty  that  Congress  had  refused  to  renew  the  char- 
ter of  the  old  bank,  and  that  it  had  been  recognised  by  the  courts,  £c. 

Mr.  (i ROSV KNOR  replied  to  the  observations  of  Mr.  WF.HSTER,  in  a  decided 
manner.  He  denied  the  right  of  that  gentleman  to  lecture  other  members  of 
the  House  for  the  course  which  their  duty  prescribed  to  them.  As  to  the 
changes  ot  principle,  of  which  the  gentleman  had  spoken,  Mr.  G.  said  he  did 
not  mean  to  inquire  whether  the  gentlemen  on  the  other  side  of  the  House  had 
acted  consistently,  but  this  he  knew,  that  last  year  the  gentleman  had  been 
proud  to  shake  hands  with  them  in  relation  to  a  bank,  £c.  The  gentleman 
had  spoken  of  another  change  of  principle,  alluding  to  gentlemen  from  this  side 
of  the  House  who  voted  for^the  present  bill.  In  reply  to  this  remark.  Mr.  G. 
said,  in  the  first  place,  he  had  something  of  that  old  puritanical  principle  in 
him,  which  objected  to  being  drilled  in  to  vote  in  this  or  that  manner,  on  what- 
ever any  gentleman  chose  to  call  a  question  of  principle.  Why  did  the  gen- 
tleman call  the  power  of  appointment  of  five  directors,  given  to  the  Govern- 
ment, a  question  of  principle?  The  question  is,  whether  one-fifth  of  the  direc- 
tion gives  the  Government  a  control  over  the  bank?  I  say  no,  said  Mr.  G.:  the 
gentleman  says  yes,  and,  saying  so.  this  must  be  a  question  of  principle.  That, 
Mr.  G.  said,  appeared  to  be  the  course  of  the  gentleman's  argument,  the,  force 
of  which  he  denied.  He  showed,  that,  in  the  State  banks  in  New  York,  (not 
undertaking  to  say  how  it  might  be  in  New  Hampshire)  such  features  had 


710  BANK  OF  THE  UNITED  STATES. 

been  incorporated,  even  whilst  Gen.  Hamilton  was  in  the  full  vigor  of  his  life 
and  influence,  ana  it  was  done  by  his  party  too,  &c.  The  gentleman  has  said 
this  control  would  be  a  lever  in  the  hands  of  the  Government.  It  was  a  straw, 
Mr.  G.  said,  instead  of  a  lever,  and  could  not  move  an  eagle,  much  less  five 
and  thirty  millions  of  dollars.  When,  even  orithis  side  of  the  House,  did  this 
feature  become  a  question  of  principle?  M  r.  G.  went  on  to  show  that  he  had  ob- 
jected to  the  feature  in  question,  and  endeavored  to  procure  it  to  be  expunged; 
but  he  never  considered  it,  nor  had  it  been  debated,  but  as  a  question  of 
detail.  All  legislation,  he  proceeded  to  argue,  was  founded  in  the  idea  of  mu- 


jeci 

the  way  it  travelled,  and  where  it  became  a  principle — not  in  the  open  face  or 
day — he  would  not,  however,  here  relate  its  history.  It  had  not  been  a  prin- 
ciple with  him,  and  never  should  be.  Mr.  G.  went  on  to  say  that  he  had  never 
heard  a  wish  expressed  from  any  side  of  the  House,  that  the  Government  should 
have  an  absolute  control  over  the  operations  of  the  bank,  &c.  When  the  dis- 
cussion on  this  bill  had  been  first  opened,  Mr.  G.  said,  he  had  heard  an  able 
and  eloquent  speech  of  the  gentleman  from  New  Hampshire  on  the  subject} 
and  that  very  speech,  in  which  the  evils  of  the  present  system  were  fully  de- 
picted, had  convinced  him  of  the  expediency  of  the  establishment  ot  this 
bank,  as  better  calculated  than  any  thing  else  to  remedy  the  evil.  The  gentle- 
man had  concluded  that  address  with  saying,  that,  if  Congress  rose  without 
providing  a  proper  remedy,  they  would  deserve  the  execration  of  the  nation. 
Mr.  G.  said  he  believed  it,  and  believing,  as  he  had  fully  delivered  his  opinion 
the  other  day,  that  there  was  no  remedy  but  the  bill  on  the  table,  he  should 
certainly  vote  for  it.  Mr.  G.  made  other  remarks  to  show  the  correctness  of 
this  conclusion,  and  ended  by  saying  that, in  the  course  he  was  obliged  to  take, 
nothing  greived  him  so  much  as  the  necessity  of  differing,  on  an  important 
question,  from  men  whom  he  had  been  in  the  habit  of  respecting  as  oracles, 
and  with  whom  it  was  generally  his  pride  and  pleasure  to  act,  &c, 

Mr.  WEBSTER,  in  replying  to  Mr.  GROSVENOR,  disclaimed  any  intention  to 
dictate^  &c.     In  regard  to  the  feature  of  the  bill,  which  was  the  subject  of 
discussion,  Mr.  W.  said  he  considered  it  a  matter  of  principle;  but  attributed 
that  opinion  to  the  gentleman  from  New  York  no  further  than  he  had  assum- 
ed the  charge  of  a  departure  from  principle  to  apply  to  himself.     What  is  the 
matter  of  principle  in  this  case?    That  control  and  influence  over  a  great 
banking  institution  should  not,  be  possessed  by  the  Government.     The  degree 
of  that  influence  was  not  material,  the  principle  remaining  the  same,  be  the 
influence  more  or  less  extensive.     That  principle  was  violated  by  this  bill, 
which,  he  went  on  to  say,  could  not  be  fairly  compared  with  similar  features 
in  small  banks  in  the  State  Governments.    But,   he  added,  every  bank  so 
constructed  in  the  United  States  had  failed  to  answer  the  purposes  for  which 
it  was  instituted,  and  was,  at  this  moment,  in  the  daily,  habitual  violation 
of  its  engagements.   Could  it  be  doubted,  Mr.  W.  said,  that,  with  this  capital 
and  this  power  over  it,  the  Government  could  bring  any  man  into  terms,  and 
make  the  banks  act  as  they  pleased?    Gentlemen  had  done  him  honor  in 
quoting  his  opinions  in  support  of  part  of  the  bill;  but  he  asked  if  it  was  fail- 
to  quote  a  part,  of  his  opinions  as  authority,  and  abuse  him  for  the  rest?    Mr. 
W.  expressed  the  pleasure  he  had  enjoyed  in  travelling  with  his  friends  here. 
If,  in  journeying  with  a  friend,  on  a  road  pleasant  and  smooth,  through  ver- 
dant fields,  they  should  arrive  at  a  part  rough  and  disagreeable;  if  they  should 
encounter  gloom,  and  darkness  should  overtake  them;  if  then  his  friend  chose 
to  abandon  Turn,  and  seek  a  road  more  agreeable,  let  him  not,  said  he,  complain 
if  I  continue  on  the  old  one.     To  complain  pt  him,  Mr.  W.  said,  the  gentle- 
man might  as  well  complain  of  the  fifty-  nine  others  with  whom  he  acted. 
The  gentleman  reminded  him  of  the  anecdote  of  the  eleven  obstinate  jurors, 
and  related  a  case  in  which  one  juror  informed  the  judge  that  there  would  be 
no  difficulty  in  making  up  a  verdict  if  it  were  not  for  the  other  eleven,  who 


ON  THE  GRAM    OF  THE  CHARTER  OF  1816,  7J  J 

were  the  most  obstinate  fellows  he  ever  met  with,  and  that  he  himself  was  the 
only  candid  and  liberal  man  of  the  whole  twelve.  Mr.  W.  said  he  had 
shaken  hands  with  the  gentlemen  last  session  on  this  subject;  if  they  had 
changed  their  opinions,  they  had  not  made  the  world  the  wiser  tor  them.  Mr. 
W.  said,  though  young,  he  found  that  he  possessed  antiquated  notional  and 
that,  to  be  useful,  he  ought  to  have  been  with  generations  that  had  gone  by. 

Mr.  HULBERT  said,  until  the  gentleman  could  show  himself  divested  of  the 
frailties  of  human  nature,  he  ought  not  to  complain  that  part  only  of  his  opi- 
nions were  quoted.  Mr.  H.  reminded  the  gentleman  of  an  authority  with 
which  lie,  doubtless,  was  well  acquainted — the  learned  Coke — having  finish- 
ed his  great  and  elaborate  commentary  on  law,  a  work  which  would  be  the 
admiration  of  all  ages,  concludes  it  by  advising  his  reader  not  to  believe  that 
all  which  he  finds  in  that  book  to  be  law,  for  there  was  much  of  it  which  was 
not  law.  Mr.  H.  said,  if  he  had  had  any  doubts  on  this  bill,  his  friend  from 
New  York,  (Mr.  GROSVENOR)  had  made  a  speech  which  perfectly  satisfied 
him  of  the  excellence  of  the  bank.  The  gentleman  from  New  Hampshire, 
(Mr.  WEBSTER)  had  at  first  made  the  amount  of  capital  an  all -important,  a 
fatal  error;  soon  afterwards  he  came  into  the  House  and  declared  that  the 
Government  of  the  bank  was  a  sine  qua  non,  and  for  that  would  compromise 
his  other  objections.  [Mr.  WEBSTER  here  denied  that  he  had  said  so.]  1  do 
not,  said  Mr.  H.  pretend  to  repeat  the  gentleman's  words,  but  I  appeal  to 
this  honorable  House  if  the  gentleman  did  not  say  that  the  government  of  the 
bank  was  a  sine  qua  non  with  him,  and  if  that  was  given  up  he  would  support 
the  bill.  I  do  not  censure  that  declaration,  said  Mr.  H.  The  great  charter, 
under  which  we  sit  here,  is  the  work  of  compromise — the  South  suffered  itself 
to  be  taxed  by  the  North,  for  its  slave  population — the  spirit  of  compromise 
and  concession  pervades  the  whole  instrument.  What  the  gentleman  meant 
by  green  fields,  smooth  roads,  separation,  &.c.  Mr.  H.  said  he  could  not  tell; 
but  if  he  meant  to  attribute  to  him  any  improper  influence,  he  disdained  the 
insinuation;  while  he  lived,  he  would  act  on  solid  and  independent  principles. 
He  came  here  first  in  a  time  of  war,  and,  being  a  young  member,  expected  to 
find  the  party,  to  which  he  was  proud  to  belong,  as  the  saying  was,  sticking 
together;  but  he  was  surprised  >o  find  that  gentleman  often  voting  on  this  side 
and  the  other.  Mr.  H.  said  he  would  not  part  with  his  friends  unless  they 
thrust  him  oft";  but  he  would  prefer  parting  with  friends  to  parting  with  his 
conscience. 

Mr.  M'KEE  spoke  in  support  of  the  bill,  and  asked  the  gentleman  from 
New  Hampshire,  notwithstanding  he  would  to-morrow  oppose  the  suspension 
of  the  writ  of  habeas  corpus,  or  any  other  unconstitutional  measure,  yet,  if  a 
case  might  not  arise,  in  which  its  suspension  would  be  proper,  and  he  consent 
to  it?  Mr.  M'K.  argued  that  there  now  existed  a  similar  necessity  for  this 
bank.  The  constitution  had  made  it  the  duty  of  Congress  to  regulate  the  na- 
tional currency  and  remedy  evils  therein;  and  the  proper  inquiry  now  was, 
whether  this  bank  was  a  proper  measure  to  carry  the  constitutional  power 
into  eft'ect  in  this  emergency;  for  this  inquiry  there  was  the  most  rational 
ground.  No  treasury  regulation  would  remedy  the  evil;  the  banks  would 
laugh  at  any  such  regulation.  Mr.  M'K.  said  he  had  voted  for  the  old  bank; 
that  he  had  survived  the  storm  in  which  his  vote  had  involved  him;  experience 
had  justified  his  conduct:  and  he  hoped  still  to  survive,  should  another  storm 
succeed  his  present  course. 

Mr.  SHEFFEY  said  he  was  not  scrupulous  as  to  the  power  of  the  Govern- 
ment to  establish  this  bank;  but  he  diu  not  admit  that  what  was  unconstitu- 
tional to-dav  would  not  be  so  to-morrow;  that  instrument  was  fixed  and 
eternal,  and  could  not  be  got  over.  The  suspension  of  the  writ  of  habeas 
corpus  was  dependent  on  a  fact,  which,  if  it  occurred,  the  suspension  would 
be  proper;  but  if  not,  it  was  unauthorized.  Mr.  S.  said  he  had  voted  for  re- 
newing the  old  bank  because  he  thought  it  was  necessary;  and  if  he  could  be 


BANK  OF  THE  UNITED  STATES. 

convinced  that  this  bank  would  realize  the  expectation  of  its  friends,  he 
would  give  up  his  objections.  But,  without  any  disparagement  to  its  friends, 
and  notwithstanding  the  great  talents  of  the  gentleman,  (Mr.  CALHOUN)  who 
led  the  business,  Mr.  S.  said  the  question  had  not  been  properly  met  and  dis- 
cussed. When  they  came  to  show  how  the  promised  remedy  was  to  be  pro- 
duced, they  dealt  in  generals:  they  did  not  demonstrate  their  assertions;  it 
was  here  they  failed  and  would  fail.  Mr.  S.  then  argued  at  some  length  to 
show  that  the  bank  would  not  answer  the  purpose  of  correcting  the  evils  in 
the  currency,  and  that  the  expectation  was  visionary  and  delusive. 

The  motion  to  postpone  indefinitely  was  finally  decided  in  the  negative,  as 
follows: 

Those  who  voted  in  the  affirmative,  are, 


Messrs.  Baker, 

Messrs.  Hammond, 

Messrs.  Pitkin, 

Barb  our, 

Hanson, 

Randolph, 

Bassett, 

Hardin, 

Reed. 

Bennett, 

Heister, 

Roane, 

Birdsall, 

Herbert, 

Root, 

Breekenridge, 

Hopkinson, 

Ross, 

Burnside, 

Johnson,  ofVa. 

Ruggles, 

Cady, 

Johnson,  of  Ky. 

Sergeant, 

Caldwell, 

Kent, 

Savage, 

Cilley, 

Langdon, 

Sheftey, 

Clayton, 

Law, 

Smith,  of  Pa. 

Clopton, 

Lewis, 

Stearns, 

Cooper, 

Lovett, 

Strong 

Crawford, 

Lyle, 

Stuart, 

Culpeper, 

Lyon, 

Sturges, 

Darlington, 

Marsh, 

Taggart, 

Davenport, 

May  rant, 

Vose, 

Desha, 

M'Lean,  of  Ky. 

Wallace, 

Glasgow, 

Milnore, 

Ward,  of  Maw, 

Goldsborough, 

Newton, 

Webster, 

Goodwyn, 

Noyes, 

Whiteside, 

Hahn, 

Pickering, 

Wilcox.—  67 

Hale, 

Those  who  voted  in 

the  negative,  are, 

Messrs.  Adgate, 

Messrs.  Edwards, 

Messrs.  M'Kee, 

Alexander, 

Forney, 

Middleton, 

Archer, 

Forsyth, 

Moore, 

Atherton, 

Gaston, 

Moseley, 

Baer, 

Gholson, 

Murfrey, 

Bateman, 

Gold, 

Nelson,  of  Mas*. 

Betts, 

Griffin, 

Nelson,  of  Va. 

Boss, 

Grosvenor, 

Ormsby, 

Bradbury, 

Hawes, 

P  arris, 

Brooks, 

Henderson, 

Pickens, 

Brown, 

Huger, 

Piper, 

Bryan, 

Hulbert, 

Pleasants, 

Calhoun, 

Hungerford, 

Powell, 

Cannon, 

Ingham, 

Reynolds, 

Champion, 

Irwin,  of  Pa. 

Robertson, 

Chappell, 

Jackson, 

Schenck, 

Chipman, 
Clark,  ofN.  C. 

Jewett, 
Kerr,  of  Va. 

Sharp, 
Smith,  of  Md. 

Clendenin, 

King,  of  N.  C. 

Smith,  of  Vir. 

Comstock, 

Love, 

Southard, 

Condict, 

Lowndes, 

Tate, 

Conner, 

Lumpkin, 

Taul, 

Creighton, 

Maclay, 

Taylor,  S.  C. 

Crocneron, 

Mason, 

Telfair, 

Cuthbert, 

M'Coy, 

Thomas, 

ON  THE  GRANT  OF  THE  CHARTER  OF  1816. 

Messrs.    Throop,                       Messrs.  Wheaton,  Messrs.  Wm.  Wilson, 

Townsencl,                                Wilde,  Woodward, 

Tucker,                                     Wilkin,  Wright, 

Ward,  of  N.  Y,                        Willoug-hby,  Yancey, 

"Ward,  ofN.  J.                          Thos.  Wilson,  Yates— 91. 
Wendover, 
The  amendments  of  the  Senate  were  then,  after  some  ineffectual  attempts 

to  amend  them,  severally  concurred  in. 

The  bill  was  approved  by  the  President,  JAMES  MADISON,  on  the  10th  of 
April,  1816,  and  constitutes  the  present  charter  of  the  Bank  of  the  United 
States, 


CHAPTER  VI. 

PROCEEDINGS   AFTER  THE  BANK    WENT  INTO  OPERATION. 

HOUSE  OF  REPRESENTATIVES. 

Mr.  Spencer's  Resolution  and  Report. 

NOVEMBER  '25,  1818. 
Mr.  SPENCER,  of  N.  Y.,  ottered  the  following  resolution: 

'"Resolved,  That  a  committee  be  appointed  to  inspect  the  books  and  exam 
me  into  the  proceedings  of  the  Bank  of  the  United  States,  arid  to  report  whe- 
ther the  provisions  of  its  charter  have  been  violated  or  not;  and,  particularly, 
to  report  whether  the  instalments  of  the  capital  stock  of  the  said  bank  have 
been  paid  in  gold  and  silver  coin,  or  in  the  funded  debt  ot  the  United  States; 
or  whether  they  were,  in  any  instance,  and  to  what  amount,  paid  by  the  pro- 
ceeds of  the  notes  of  stockholders,  discounted  for  that  purpose;  and  also,  to  re- 
port the  names  of  those  persons  \vho  now  own,  or  who  have  owned,  any  part 
oi  the  capital  stock  of  the  said  bank,  and  the  amount  of  discounts,  if  any,  to 
such  persons,  respectively,  and  when  made;  and  also  to  report  whether  the  said 
bank,  or  any  of  its  offices  of  discount  and  deposite,  have  refused  to  pay  the 
notes  of  the  bank  in  specie,  on  demand,  and  have  refused  to  receive  in  pay- 
ment of  debts  due  to  tnem  or  either  of  tnem,  the  notes  of  the  bank,  and  whe- 
ther the  bank  or  any  of  its  offices  of  discount,  or  any  of  their  officers  or  agents, 
have  sold  drafts  upon  other  offices,  or  upon  the  bank,  at  an  advance,  arid 
have  received  a  premium  for  such  drafts;  also,  the  amount  of  the  notes  is- 
sued, payable  at  Philadelphia,  and  at  each  office  of  discount,  respectively,  and 
the  amount  of  capital  assigned  to  each  office,to£ether  with  the  amount  of  the  pub- 
lic deposites  made  at  the  bank  and  at  each  office,  and  an  account  of  the  trans- 
fers thereof;  and  the  total  amount  of  bills  and  notes  discounted  by  the  bank 
and  its  several  offices  since  its  organization.  That  the  said  committee  have 
leave  to  meet  in  the  city  of  Philadelphia,  and  to  remain  there  as  long  as  may 
be  necessary;  that  they  shall  have  power  to  send  for  persons  and  papers,  and 
to  employ  the  requisite  clerks;  the  expense  of  which  shall  be  audited  and  al- 
lowed by  the  Committee  of  Accounts,  and  paid  out  of  the  contingent  fund  of 
this  House." 

On  the  30th  of  November,  the  resolution  was  agreed  to  by  the  House,  and 
a  committee  appointed,  consisting  of  Mr.  Spencer,  Mr.  Lqwndes,  Mr.  Mc- 
Lane,  Mr.  Bryan,  and  Mr.  Tyler.  Mr.  Bryan  was,  at  his  request,  after- 
wards excused,  and  Mr.  Bur  well  substituted  in  his  place.  The  result  of  the 
investigations  of  this  committee  appears  in  the  following  report,  made  to  the 
House  by  Mr.  SPENCER,  on  the  16tn  January,  1819: 

The  committee  appointed  to  inspect  the  books,  and  to  examine  into  the  pro- 
ceedings of  the  Bank  of  the  United  States,  with  directions  to  report  thereon, 
and  to  report  whether  the  provisions  of  its  charter  have  been  violated  or 
not,  respectfully  report: 

That,  under  the  leave  granted  by  this  House,  the  committee  repaired  to 
Philadelphia,  and  there  personally  inspected  the  books  of  the  bank;  and  as  a 
further  means  of  examining  its  proceedings,  they  interrogated,  on  oath,  the  pre- 
sident, the  cashier,  all  the  directors  of  the  bank,  whose  attendance  could  be 
obtained,  and  several  of  its  clerks  and  officers.  Examinations  also  have  been 


REPORT  OF  COMMITTEE,    1819.  715 

made  at  the  offices  at  Baltimore,  at  Richmond,  and  at  the  City  of  Washing- 
Ion,  in  order  to  obtain  specific  information  upon  certain  subjects  on  which  the 
books  of  the  parent  bank  were  necessarily  deficient.  From  these  inquiries, 
conducted  with  great  labor,  and,  the  committee  trust,  with  great  care,  they 
have  collected  a  'mass  of  information  which  they  now  submit  to  the  House, 
and  which  will  be  referred  to  in  the  course  of  this  report.  This  information 
consists  of  tables,  statements,  and  extracts,  made  by  the  committee  from  the 
books  of  the  bank,  or  by  them  compared  with  those  books  and  verified;  and  oi 
the  testimony  of  witnesses,  and  of  letters  from  the  president  ol  the  institution. 

The  committee  are  aware  that,  from  these  sources  ol'  information,  various 
important  inferences  may  be  drawn,  and  upon  them  the  most  interesting  opi- 
nions may  be  predicated.  It  has  been  their  intention,  however,  to  go  no  far- 
ther than  was  required  by  the  resolution  of  the  House,  to  avoid  speculative 
opinions  upon  general  subjects,  and  to  confine  themselves  to  what  they  deem- 
ed practical  objects  ol' inquiry,  which  they  settled  among  themselves,  previous 
to  entering  upon  the  investigation. 

These  objects  seemed  to  divide  themselves  into  two  classes;  those  which 
related  to  the  general  management  of  the  bank  and  the  conduct  of  its  officers; 
and  those  which  were  connected  with  the  question  of  a  violation  of  its  charter. 

As  to  the  general  management  of  the  concerns  of  the  institution,  among  the 
points  of  inquiry  which  appeared  to  be  most  immediately  interesting,  were 
those  which  related  to  the  refusal  ol  the  bank  and  its  offices  to  pay  its  notes  in 
vperie,  at  any  other  place  than  that  where  they  were  made  payable,  and  1o  the 
j»r;.>  lice  of  selling  drafts  on  each  other. 

It  appears  that  the  directors  of  the  bank,  on  its  first  institution,  and  up  tr> 
tin-  -JHth  of  August,  Mis,  strenuously  endeavored  to  redeem  its  notes  at  all  its 
olfices,  indiscriminately,  north  of  the  city  of  Charleston.  On  the  7th  day  of 
January.  1*17.  it  commenced  operations  by  discounting  notes  on  pledged 
stock,  "and  to  stockholders  only,  and  by  the  issue  of  its  bills.  The  officer  then 
at  t!ie  head  of  the  Treasury  Department,  had  repeatedly  urged  the  commence- 
ment of  opera! ions,  with  the  laudable  view,  as  it  appears,  of  hastening  the  re- 
demption by  the  State  banks,  of  their  notes  in  specie.  Vide  letters  from  the 
Secretary  of  the  Treasury  to  the  president  of  the  Bank  of  the  United  States, 
of  the  15th  August  and  39th  November,  1816,  marked  1,  2.  Efforts  on  the 
part  of  the.  treasury  to  induce  tiie  local  banks  to  that  measure,  appear  to  have 
been  abortive,  until  th-  IJank  of  the  United  States  made  certain  propositions, 
which  induced  negotiations  between  it  ami  the  State  institutions,  which  finally 
resulted  in  a  compact  contained  in  the  resolutions  of  the  board  of  directors, 
of  the  31st  January,  1817,  herewith  submitted,  and  marked  3.  And  in  order 
10  exhibit  how  far  the  hank  complied  with  the  compact,  a  statement  of  the 
loans  made,  and  of  notes  issued,  up  to  the  20th  February,  1817,  is  submitted, 
marked  -1. 

It  can  be  necessary  only  to  refer  to  the  state  of  the  paper  currency  of  the 
country  at  this  period.  The  notes  of  the  State  banks  were  variously  depre- 
ciated: soMie  as  much  as  twenty  per  C2nt.,  while  others  were  at  a  premium. 
The  ex,  essive  issue  of  paper  by  the  local  banks,  had  caused  an  unnatural  and 
artificial  depreciation  of  such  paper,  which  required  only  time,  and  moderate, 
but  steady  reductions,  to  restore,  not  to  an  uniform  par.  but  to  its  true  value, 
ruder  these  circumstances,  tiie  Hank  of  the  United  Mates  had,  on  the  last  of 
February,  1817,  (vide  statement  marked  5")  $8,818,000  due  to  it  from  the  State 
banks  at  Philadelphia,  New  York,  and  Baltimore.  With  such  a  credit,  con- 
stantly accumulating  by  the  transfer  of  the  treasury  funds,  and  by  the  pay- 
ment of  its  second  instalment  in  the  notes  of  the  State  banks,  it  was  in  the 
power  of  the  Bank  of  the  United  States  to  have  coerced  the  local  institutions 
into  a  moderate  and  reasonable  reduction  of  their  circulating  notes.  An  at- 
tempt to  do  so  was  made  by  the  compact,  3,  and.  although  the  Bank  of  the 
United  States  appears  to  have  been  anxious  to  effect  the  object,  it  did  not  per- 
severe in  this  design.  By 'its  subsequent,  acts,  it  improvidently  afforded  a 
temptation,  to  the  Western  banks  particularly,  to  extend  their  circulation  of 
notes,  by  insisting  on  its  branches  paying  out  their  own  notes  in  preference  to 


716  BANK  OF  THE  UNITED  STATES. 

those  of  the  State  banks,  and  on  their  delivering  drafts  on  the  eastern  ci- 
ties, whenever  it  could  be  done,  to  prevent  the  remittance  of  their  own  notes. 
The  branch  noies  and  the  drafts  issued  in  consequence  of  these  instruc- 
tions, were  swept  away  by  the  facility  of  remittance  th*s  unwarily  given,  as 
well  as  by  the  ordinary  balance  of  trade.  A  vacuum  in  the  circulation  was 
thus  produced,  which  could  be  supplied  only  by  the  local  notes,  which  were 
readily  received  by  the  offices  of  the  Bank  ot  the  United  States,  and  wen* 
retained  ^by  them  as  a  fund  upon  which  interest  was  charged  to  the  State 
banks.  The  letter  of  the  president,  marked  6,  exhibits  the  course  pursued  by 
the  bank  in  this  respect. 

The  Bank  of  the  United  States  received  from  the  treasury  the  notes  of  the 
local  institutions,  in  many  cases,  as  special  deposites,  to  be  paid  out  in  similar 
bills.  From  April,  1817,  to  this  time,  the  amount  so  received,  appears  from 
statement  7,  to  be  $2,752,750,  of  which  87,341  continues  on  hand,  leaving 
$2,665,409  as  the  amount  voluntarily  assumed  by  the  Bank  of  the  United 
States.  The  committee  have  not  found  any  evidence  of  the  bank  having  at- 
tempted to  oppress  the  State  banks,  either  by  wanton  demands  of  specie,  or 
by  the  rejection  of  their  notes.  Much  complaint  has,  indeed,  existed,  but  in 
the  instances  which  have  come  to  the  knowledge  of  the  committee,  the  State 
banks  have  been  in  the  wrong,  and  some  of  them  at  the  westward  have  refused 
the  most  equitable  propositions  of  the  bank,  and  have  met  its  demands  for  its 
just  dues,  with  complaints  and  reproaches.  It  was  not  intended  to  trouble 
the  House  with  any  of  the  various  letters  which  have  passed  on  that  subject, 
but  as  the  president  of  the  bank  transmitted  a  letter  from  the  office  at. 
Charleston,  exhibiting  the  conduct  of  the  local  banks  at  that  place,  it  is  pre- 
sented to  the  House,  marked  8. 

The  committee  are  of  opinion  that,  instead  of  conducting  with  the  alleged 
rigor  towards  the  State  banks,  the  Bank  of  the  United  States  is  liable  to  the 
more  serious  charge  of  having  increased  the  amount  of  notes  in  circulation,  by 
its  acceptance  of  them  in  those  places  where  it  was  known  they  would  not  be 
redeemed  in  specie,  and  by  making  them,  in  the  manner  beforementioned,  the 
only  circulating  medium  in  that  part  of  the  country.  Its  forbearance  to  the 
State  banks  is  vindicated  0*1  the  ground  of  its  being  the  only  means  to  induce 
their  resumption  of  specie  payments.  This  effect,  if  really  owing  to  that 
cause,  has  been  proved  to  have  been  but  temporary,  and  experience  has  shown 
that,  at  the  same  time,  or  soon  after  the  refusal  of  the  Bank  of  the  United 
States  to  receive  the  notes  of  its  offices,  many  of  the  State  banks  began  to  sus- 
pend and  evade  their  specie  payments. 

So  long  as  the  notes  of  each  office  were  payable  at  all  the  others,  and  the 
office  issuing  them  was  not  exclusively  liable  for  their  redemption,  the  dis- 
counts at  those  places,  against  which  there  was  a  balance  of  trade,  became 
larger  in  proportion  to  their  indemnity  against  demands.  As  the  notes  of  the 
offices  were  rapidly  carried  off,  the  payment  of  these  discounts  was  necessa- 
rily made  in  the  notes  of  the  local  institutions.  And  thus  it  was  one  inevita- 
ble effect  of  the  old  system,  to  increase  the  debts  of  the  State  banks  to  the 
offices  of  the  Bank  of  the  United  States,  at  these  places.  The  demands  of  the 
bank  were  suffered  to  accumulate  improperly,  instead  of  being  gradually  re- 
duced, as  specie  was  required  at  other  offices,  and  in  small  quantities,  that 
would  not  have  been  felt.  Their  reduction  was  not  insisted  upon  sufficiently 
early;  and,  when  the  bank  began  to  call  for  specie,  its  demands  were  so  con- 
siderable as  not  only  to  expose  the  local  banks,  but  the  citizens  in  their  vicini- 
ty, generally,  to  very  severe  pressure. 

By  substituting  the  credit  of  individuals  for  the  payment  of  the  second  in- 
stalment, which  will  be  presently  stated,  instead  01  coin  or  the  notes  of  State 
banks,  the  Bank  of  the  United  States,  in  a  great  measure,  deprived  itself  of 
the  early  and  prompt  check  which  the  possession  of  those  notes  would  have 
afforded,  to  the  more  extensive  increase  of  local  paper.  In  July,  1817,  the 
debts  due  from  the  State  banks  are  reduced  to  $3,972,000,  while  the  notes  of 
the  Bank  of  the  United  States,  in  circulation,  amounted  to  $4,754,000,  by 
which  it  might  have  been  subjected  to  embarrassments  arising  from  the  calls 


REPORT   OF   COMMITTEE,    1819. 

of  the  local  institutions.  The  committee  think  it  evident,  from  this  result, 
that  the  bank  did  not  exercise,  with  sufficient  energy,  the  power  which  it  pos- 
sessed and  might  have  retained,  but  rather  afforded  inducements  to  the  State, 
banks  to  extend  the  amount  of  their  circulating  notes,  and  thus  increased  one 
of  the  evils  it  was  intended  to  correct. 

In  answer  to  an  inquiry,  addressed  by  the  committee,  on  this  subject,  to  the. 
president  of  the  bank,  they  were  furnished  with  his  views,  and  a  letter  from 
the  office  at  Boston,  marked  9,  and  were  referred  to  a  report  of  the  committee 
of  directors,  on  the  28th  August,  1818,  marked  10.  These  documents  exhibit 
the  reasons  of  the  bank  for  adopting  the  resolution  of  that  (late,  by  which  the 
notes  of  the  offices  were  refuged  acceptance.  In  the  letter  of  the  Boston  office, 
much  stress  i*  placed  upon  the  larg'i  accumulation  of  paper,  and  of  drafts  at 
Boston,  issued  by  the  southern  and  western  offices,  and  this  became  an  im- 
portant  object  of  inquiry.  The  books  of  the  parent  bank  do  not  furnish  infor- 
mation respecting  the  drafts  made  by  and  upon  the  offices,  excepting  those, 
which  were  made  on  it.  And  the  committee  have  not  ascertained  their  amount 
except  at  the  offices  in  Baltimore  and  this  city.  From  the  local  situation  of 
Baltimore,  the  statements  obtained  at  that  office,  marked  11,  12,  may  be  con- 
sidered as  furnishing  sufficient  proof  of  the  correctness  of  the  opinion  express- 
ed by  the  Boston  office.  To  the  office  at  Boston,  its  debt  fluctuated  between 
34,000  and  215,000  dollars,  until  May  last,  since  which  it  has  been  indebted 
to  Baltimore  from  500  to  57,000  dollars.  Its  debt  to  ihe  office  at  New  York 
has  varied  from  100,000  to  1,947,000  dollars,  and,  until  October  last,  it  ha- 
generally  owed  that  office  more  than  1,500,000  dollars.  At  that  time  the  New 
York  office  was  brought  in  debt  to  Baltimore  97,278  dollars;  its  deb!  in  No- 
vember last  was  10,948  dollars.  The  explanation  of  these  extraordinary  re- 
ductions of  the  Baltimore  debts  is  given  from  the  circumstances  of  treasury 
drafts  on  the  JVbr/A  being  delivered  directly  to  the  Baltimore  office,  or  sent  to 
it  through  the  office  at  this  city:  and,  by  a  check  on  New  York  for  more  than 
a  million,  given  by  the  parent  bank  in  payment  of  foreign  bills  of  exchange, 
hereinafter  mentioned.  The  Baltimore  debt  to  the  parent  bank  has  varied 
from  1,500,000  to  9,000,000  of  dollars,  and  h;i>  generally  exceeded  6,000,000. 
Notwithstanding  these  heavy  debts  to  New  York,  Boston,  and  Philadelphia, 
the  drafts  of  the  Baltimore  office  on  those  places  continued  uninterrupted  and 
excessive  in  amount.  That  office  was  originally  supplied  with  notes  to  the 
amount  of  872,000  dollars,  and  had  returned  to  it  from  Philadelphia  1,697,000 
dollars  in  its  notes,  and  yet  it  is  stated  by  the  teller,  that  it  never  had  a  suffi- 
cient quantity  of  notes  to  meet  its  demands;  that  they  did  not  remain  twenty- 
four  hours  in  the  office,  but  were  constantly  remitted  to  the  North,  with  the 
drafts  which  it  issued.  And  there  can  be  no  doubt,  on  a  comparison  of  the 
statements  referred  to,  connected  with  these  facts,  that  the  drafts  from  Balti- 
more, given  for  the  proceeds  of  notes  discounted,  were  unwarrantably  large, 
and  much  more  than  the  balance  of  trade  required.  In  a  letter  of  the  presi- 
dent, dated  June  27,  1817,  to  that  office,  he  observes,  "  the  directors,  consi- 
dering (among  other  things  mentioned)  the  low  state  of  the  specie  and  indi- 
vidual deposites  at  your  office,  and  the  magnitude  of  your  discounts,  and  those 
at  this  bank,  as  well  for  Baltimore  as  this  place,  and  the  very  inadequate  and 
disproportioned  amount  of  discounts  to  which  the  office  at  New  York  has  been 
restricted,  inconsequence  of  the  daily  and  excessive  drafts  from  your  office 
and  this  bank,  which  has  become  the  subject  of  just  animadversion,"  direct 
that  the  then  amount  of  discounts  should  not  be  exceeded.  The  same  lan- 
guage is  held  in  other  letters,  12,  14.  But  it  terminated  in  unavailing  remon- 
strances; the  Baltimore  office  continued  its  drafts  and  its  discounts,  and 
drained  the  specie  from  the  Northern  offices.  And  such  was  the  want  of 
firmness,  or  of  foresight,  in  the  parent  board,  that,  after  finding  its  repeated 
remonstrances  disregarded,  it  never  removed  one  of  the  offending  directors, 
and  took  no  effectual  step  to  control  them,  until  the  adoption  of  the  general 
resolutions  of  August  28,  1818,  forbidding  the  offices  to  draw  on  each  other. 

The  effect  of  these  excessive  drafts  on  the  northern  offices  was,  to  compel 
the  constant  remittance  of  specie  there;  to  cripple  them  in  all  their  operations: 


718  RANK  OF  THE  UNITED  STATES. 

to  limit  their  discounts  to  a  trifling  amount;  to  cause  the  revenue  paid  there, 
and  which  would  itself  have  been  a  capita!  far  business,  to  be  drawn  south- 
ward; thus  compelling  them  to  deny  to  the  debtors  of  the  Government  any 
indulgence  or  accommodation  in  their  payments;  to  bring  those  offices  into 
debt  with  the  State  banks;  to  produce  a»general  depression  of  credit,  and  a 
severe  pressure  for  money.  Those  places  were,  in  fact,  made  tributary  to 
Baltimore,  and  all  their  means  and  energies  were  required  to  supply  its  ex- 
travagant issues. 

A  sudden  reduction  of  the  Baltimore  debt  to  the  northern  offices,  appears 
to  have  taken  place  in  March  and  April  last,  and,  within  a  few  months  past, 
those  offices  have  been  brought  in  debt  to  it.  This  is  accounted  lor  by  the 
cashier  of  that  office,  by  saying,  that  it  arose  principally  from  treasury  drafts, 
and  by  the  sales  of  foreign  bills  of  exchange.  Drafts  were  given  by  the 
treasury,  ir  some  instances,  and  to  considerable  amounts,  directly  to  Balti- 
more, on  the  northern  offices,  and,  in  other  instances,  such  drafts  went  through 
the  office  in  this  citv.  It  is  not  to  be  presumed  that  those  drafts  were  given 
by  the  treasury  with  a  knowledge  of  all  the  circumstances,  or  with  a  view  to 
draw  the  revenue  collected  at  the  north  to  Baltimore,  merely  to  aid  that  office 
in  paying  its  debts.  Yet  such  was  the  effect;  and,  although  it  enabled  Balti- 
more to  continue  its  large  discounts,  it  impoverished  the  northern  offices,  and 
the  cities  where  they  were  established  were,  made  to  feel  the  pressure.  The 
Baltimore  debt  to  the  parent  bank  will  be  found  to  have  regularly  increased 
xvith  the  reduction  of  its  debts  to  the  other  offices,  until  it  remitted  1,007,000 
dollars  in  bills  of  exchange  on  London,  which  remittance  is  connected,  by  the 
testimony  of  .].  W.  McCulloch,  Esq.  with  the  negotiation  explained  in  the 
letter  of  the  President,  15.  The  loan  which  resulted  from  that  negotiation 
was  on  a  pledge  of  stock,  that  had  been  pledged  at  Baltimore.  The  bank  as- 
sumed it,  and  received  the  bills  of  exchange,  and  paid  for  them  by  giving  a 
check  on  the  New  York  office  for  the  amount,  at  the  time  the  Baltimore  office 
was  indebted  to  the  parent  bank  more  than  six  millions  of  dollars. 

It  might  have  been  supposed,  that  the  pressure  of  the  Baltimore  office  upon 
those  more  north,  was  owing  to  its  being  pressed  by  the  southern  and  western 
offices.  The  fact  will,  however,  appear  from  the  table  1 1,  that,  until  Septem- 
ber last,  it  was  indebted  to  the  office  at  Lexington;  that  the  debts  of  Cincin- 
nati, Chillicothe,and  Louisville  to  it,  were  small  in  amount,  and  that  the  only 
office  which  has  constantly  owed  it,  is  New  Orleans,  and  that  not  to  a  large 
amount  until  lately. 

From  these  facts  it  would  seem  to  result,  that  the  embarrassments  of  the 
Bank  of  the  United  States,  in  receiving  the  notes  of  all  its  offices,  did  not  arise 
so  much  from  the  fair  and  ordinary  balance  of  trade  which  might  have  been 
calculated  and  provided  for,  as  from  the  excessive  discounts  granted  at  some 
of  the  offices,  particularly  Baltimore  and  Philadelphia,  and  the  drafts  conse- 
quent upon  those  discounts  which  were  made  upon  the  other  offices.  From 
the  correspondence  of  the  bank  with  its  offices,  it  is  obvious  that  this  was  the 
opinion  of  the  directors  and  the  officers;  it  is  distinctly  assigned  as  one  of  the 
grounds  for  refusing  the  notes  of  the  offices,  in  the  report  of  the  committee,  10; 
and  it  is  more  strongly  urged  in  the  letter  of  the  Boston  office,  submitted  and 
adopted  by  the  president,  9,  and  is  eloquently  enforced  in  several  of  his  let- 
ters. 

This  committee  is  not  prepared  to  say  that  an  uniformly  equal  currency 
could  have  been  maintained  by  the  bank,  under  the  most  auspicious  circum- 
stances; they  are  inclined  to  the  opinion,  that  such  an  attempt  would  be  hope- 
less. But  they  consider  its  abandonment  at.  the  time,  as  having  been  produced 
by  the  causes  before  stated.  The  efforts  of  the  bank  to  meet  the  payment  of 
its  notes  at  all  its  offices,  north  of  Charleston,  were  certainly  great,  and  par- 
ticularly at  New  York  and  Boston,  as  will  appear  from  the  resolutions  mark- 
ed 1C,  and  the  account  of  specie  remitted,  17.  The  relinquishment  of  the 
attempt  was  involuntary  and  reluctant. 

From  the  testimony  of  the  cashier  and  tellers  of  the  bank,  of  the  teller  of 
the  Bank  of  North  America,  and  of  the  cashierand  teller  of  the  office  at  Bal- 


REPORT  OF  COMMITTEE,    1819. 

timoie.  it  \vill  appear  very  satisfactorily,  that  the.  conduct  of  (he  bank  and 
that  office,  in  adopting  the  new  system  of  refusing  the  notes  of  the.  branches, 
was  "perfectly  fair  and  equitable-  That  the  bank  and  the  Baltimore  office, 
promptly  paid  and  received  all  the  notes  of  the  other  offices  which  they  had 
paid  out  previous  to  the  change  of  system,  whenever  application  was  made  for 
the  purpose;  ami  thai,  in  no  instance,  have  they  refused  to  dp  so.  Injury  pro- 
bably was  suffered  by  those  who  had  received  the  depreciated  notes  in  the, 
usual  course  of  business,  but  the  committee  cannot  perceive  how  the  bank 
could  have  changed  its  system  in  any  mariner  less  injurious  to  itself,  and  less 
inconvenient  to  the  public,  than  that  which  was  adopted. 

From  this  change  of  system,  which  placed  the  notes  of  the  offices  on  the 
same  footing  with  those  of  the  local  banks  in  their  vicinities,  resulted  a  great- 
er difference  in  the  exchange  between  the  different  parts  of  the  Union.  The 
oflices  at  New  Orleans,  Savannah,  and  Charleston,  had  never  been  included 
in  the  plan  of  equali/.iim  the  currency.  They  had  always  been  left  to  their 
own  discretion  in  receiving  or  refining  the  notes  of  the  other  office*  In  May, 
1817,  the.  oflices  at  Charh-.-ton  and  Savannah  were  authorized  to  draw  on 
lhn*e  at  the  North,  at  a  premium.  In  April,  1S17.  those  at  Lexington  and 
Cincinnati  were  authorized  to  purchase  bills  on  the  Eastern  and  Northern 
cities.  In  December,  1HI7. the  Southern  offices  were  authorized  to  draw,  at  a 
premium,  on  those,  at  the.  North.  In  October  and  November,  1817,  the 
Western  offices  were  authorised  to  draw,  at  a  premium,  on  Philadelphia 
and  the  oflices  south  of  it.  And  it  appears  the  offices  at  Lexington  and 
Cincinnati  were,  before  February,  1818,  in  the  practice  of  drawing  on 
the  Kastern  cities.  These  facts  show,  that  the  bank  and  most  of  its  of- 
ficer- M>ld  drafts  upon  each  other,  long  before  the  adoption  of  the  resolu- 
tion of  asth  .Vugu-f,  181X.  refusing  the  notes  of  the  offices,  and  cslal>li>h 
that,  while  the  bank  was  attempting  to  equal'r/.e  the  currency  by  the  pay- 
ment of  it.-  notes  at  all  it*  oflices  north  of  Charleston,  it  was,  at  the  same 
time,  selling  drafts  between  those  offices  at  a  premium.  A  system  of  do- 
mestic exchange  was  adopted  by  the  bank  on  the  18th  July,  1817,  marked  1H. 
It  contains  some  provisions  which  appear  exceptionable,  but  as  the  plan  ncter 
\\as  acted  upon,  it  is  not  deemed  necessary  to  notice  them. 

It  has  been  impracticable  for  the  committee  to  asi  ertain  the  amount  or  the 
rates  of  drafts  sold  by,  and  upon,  the  oflices.  On  examination  of  the 
books  of  the  parent  bank,  it  appears  that  drafts  were  sold  by  it  on  Charles- 
ton, New  Orleans,  and  Savannah,  within  a  few  days  of  each  olher.  at  very 
different  rates:  on  one  day,  at  one  per  cent.,  and  on  another  day,  at  five  per 
cent.,  on  the  same  office.  It  would  be  in  vain  to  account  for  these  fluctua- 
tions. 

However  dangerous  to  the  community  may  be  the  power  of  selling  drafts 
in  the  hands  of  an  institution  whose  resources  maybe  adequate  to  the  control 
of  domestic  exchange,  according  to  its  interests  or  its  caprices,  yet  the 
committee  cannot  entertain  a  doubt  that  the  bank  possesses  the  power.  Kx- 
<  epting  the  fluctuations  before  noticed,  the  rate  of  premium  has  not  hitherto 
been  extortionate  in  any  instance  which  has  come  to  the  knowledge  of  the 
committee.  The  proceedings  of  the  bank  and  its  officers,  and  the  reasons  and 
views  entertained  by  them,  are  exhibited  in  the  report,  18,  in  the  letter  of  the 
president,  19,  and  in  extracts  from  his  correspondence,  20. 

Various  opinions  are  entertained  on  the  expediency  of  the  bank's  selling  its 
drafts.  While  many  suppose  that  it  would  consult  its  own  dignity  and  in- 
(nest,  in  refraining  from  the  practice,  and  would  receive  an  equivalent  for  the 
loss  of  premium,  in  the  confidence  and  support  of  the  commercial  commu- 
nity, by  delivering  its  drafts  gratuitously,  when  it  was  convenient  to  draw 
at  all;  others  contend  that  the  system  of  gratuitous  drafts  would  open  an 
avenue  to  favoritism,  and,  at  all  events,  would  expose  the  bank  to  the  charge 
in  a  greater  degree  than  if  it  sold  its  drafts.  Without  expressing  any  opin- 
ion on  these  subjects,  upon  which  the  commercial  community  is  much  divided, 
and  to  which  the  attention  of  the  committee  has  not  been  particularly  direct- 
ed, they  content  themselves  with  observing  that,  if  drafts  are  sold,  they 


720  BANK   OF  T11K    UMTK1)   STATES. 

ought  to  be  ai  fixed,  known,  and  permanent  prices,  not  exceeding  the  expense 
of  transportation  of  specie  or  the  fair  agio  of  business.  The  want  of  these 
fixed  prices,  in  the  bank  and  its  officers,  appears,  to  your  committee,  censurable- 
Connected  with  the  subject  of  exchange,  is  that  of  dealing  in  the  notes  of 
the  State  banks.  In  a  letter  of  the  president  to  the  Charleston  office,  which 
received  the  sanction  of  the  board  of  directors,  marked  21,  an  opinion 
in  favor  of  the  legality  and  propriety  of  such  purchases,  is  expressed.  No 
evidence,  however,  has  been  obtained,  that  they  have  actually  been  made. 
The  practice,  in  the  opinion  of  the  committee,  would  be  highly  improper  and 
dangerous,  and  contrary  to  the  spirit,  if  not  the  words,  of  the  ninth  funda- 
mental article. 

Among  the  resolutions  of  the  directors,  are  two  on  the  subject  of  dis- 
counts on  a  pledge  of  stock,  marked  22,  23,  passed  the  18th  and  27th 
December,  1816.  These  resolutions  obviously  contemplate  only  discounts 
to  stockholders,  and  one  avowed  object  was  to  facilitate  the  payment 
of  the  specie  part  of  the  second  instalment,  which  was  ten  dollars  on  a  share, 
and  to  be  paid  by  the  23d  January,  1817.  The  loans  were  to  be  confined  to 
the  proportion  ot  the  coin  part  of  the  second  instalment,  on  the  shares  which 
had  been  subscribed  at  the  places  where  offices  were  then  in  operation,  New 
York,  Boston,  and  Baltimore.  The  total  amount  of  these  loans,  to  pay  the 
specie  part  of  the  second  instalment  on  the  20th  of  February,  1817,  at  Phila- 
delphia, was  one  hundred  and  ninety-nine  thousand  nine  hundred  and  twenty- 
one  dollars  and  thirty-seven  cents,  and  at  Baltimore,  at  that  date, 'was  one 
hundred  and  thirty -eight  thousand  three  hundred  and  twenty  dollars. 

The  committee  have  not  obtained  information  of  the  amounts  at  New  York 
and  Boston,  but  they  are  informed  by  the  officers  of  the  bank,  that  the  discounts 
at  those  places  were  to  a  very  trifling  amount,  if  any.  The  committee  can 
see  no  reason  to  justify  these  premature  efforts  to  aid  the  payment  of  the 
second  instalment  before  it  fell  due,  and  before  the  experiment  war;  made  to 
ascertain  how  much  could  be  paid  in  specie.  Those  efforts  do  not  appear  to 
have  been  very  successful,  for  eight  hundred  and  thirty-nine  thousand  eighty- 
five  dollars,  only,  were  paid  during  the  month  of  January.  1817,  while  one 
million  seventy- eight  thousand  three  hundred  and  nineteen  dollars  were  paid 
after  that  period,  the  greatest  proportion  in  May  and  June,  as  will  appear  from 
an  abstract  prepared  by  the  committee,  and  now  submitted,  marked  21, 
The  amount  paid  by  checks  also  appears,  from  that  abstract,  the  most, 
if  not  the  whole  of  which,  were  to  draw  the  proceeds  of  notes  discounted  for 
the  purpose.  And  it  appears,  in  many  instances,  particularly  in  one  related 
in  Mr.  M'Euens'  testimony,  hereinafter  referred  to,  and  in  another  referred 
to  in  the  President's  letter  of  May  27th,  1817,  marked  25,  that  the 
directors  did  not  confine  themselves  to  the  amount  prescribed  in  the  resolu- 
tion of  the  27th  December,  that  is,  to  the  proportion  of  the  coin  part  of  the 
second  instalment,  but  discounted  to  the  full  par  value  of  the  stock  which 
was  paid  for  by  the  proceeds  of  the  same  discounts,  and  the  discount,  the  pay 
ment  of  the  second  instalment,  the  payment  of  the  price  to  the  owner,  the 
transfer,  and  the  pledge  of  the  stock,  were,  as  it  is  termed,  simultaneous  acts. 
All  the  discounts  on  stock,  after  the  20th  February,  1817,  were  made  at  the 
par  value  of  the  shares,  which  enabled  the  discounter  not  only  to  pay  the 
whole  of  his  instalments,  including  the  specie  part  and  the  funded  debt  part, 
but  also  to  draw  out  of  the  bank  the  amount  which  might  have  been  paid  in 
on  his  shares.  It  is  alleged,  in  justification  of  these  discounts,  that  specie 
bore  a  very  high  premium,  and  that  the  bank  could  not  have  commenced  busi- 
ness, unless  that  the  mode  of  obtaining  the  specie  payment  had  been  adopt- 
ed. With  respect  to  the  price  of  specie,  it  appears  to  have  been,  at  Philadel- 
phia, six  per  cent,  on  the  6th  January,  1817,  arid  about  the  same  price  in  Bal- 
timore, and  that  it  had  been  much  higher.  Admitting,  however,  that  the 
price  wrould  have  been  much  enhanced  in  consequence  ot  its  being  understood 
that  the  coin  payment  on  the  second  instalment  would  be  rigidly  exacted,  yet 
the  committee  cannot  perceive  the  justice  of  enabling  some  of  the  stockholders 
to  evade  that  payment,  and  the  consequent  loss  ot  the  premium  on  specie, 


REPORT  OF  COMMITTEE,    1819.  721 

while  the  majority  had  been  compelled  to  incur  the  same  loss,  in  order  strictly 
to  comply  with  tne  law  and  their  engagements;   particularly  unjust  was  it  to 
(nose  who  resided  at  such  a  distance  from  the  bank  that  they  could  not  avail 
themselves  of  the  privilege  granted.     And  the  injustice  appears  the  greater 
when  it  is  known,  that  the  expense  of  the  specie  afterwards  imported  by  the 
bank,  in  order  to  supply  the  deficiency  produced  by  the  evasion  it  had  autho- 
rized, was  assessed  equally  upon  those  stockholders  who  had  neglected  to  pay, 
upon  those  who  had  already,  at  a  considerable  loss,  furnished  their  quota  of 
coin,  and  upon  the  Government.    Seven  millions  was  the  whole  sum  required 
to  foe  paid  in  coin;  the  specie  part  of  the  first  instalment,  amounting  to  one 
million  lour  hundred  thousand  dollars,   was  paid;  of  the  two  millions  eight 
hundred  thousand  dollars  which  was  to  have  been  paid  at  the  second  instal- 
ment, it  is  impossible  4o  say  what  amount  was  actually  paid  in  coin.    The 
statement   before    referred    to,  marked   24,  will  show  the  payment  in  coin 
at   Philadelphia,   and   abstract,   marked  26,   will   exhibit  the  nominal  pay- 
ments on  all   the   instalments,  of  which   thirteen   millions  eight  hundred 
and  seventy-two  thousand  six  hundred  and  ten  dollars  was  paid  by  the  stock- 
holders in  funded  debt,  (exclusive  of  the  seven  millions  subscribed  by  the 
Government)  instead  of  twenty-one  millions  which  were  required  by  the  law; 
and  fourteen  millions  one  hundred  thousand  one  hundred  and  sixty-seven  dol- 
lars was  paid,  as  stated  in  the  abstract,  in  coin.     But,  in  that  abstract,  a  check 
on  the  bank,  or  on  other  banks  supposed  to  pay  specie,  is  deemed  a  payment  in 
coin.    And,  as  the  payments  on  the  second  instalment  continued  to  be  made 
and  received  for  six  months  and  more  after  it  was  due,  and  as,  during  that 
time,  large  discounts  on  stock  were  constantly  made,  it  is  obvious  that  the 
abstract  cannot  be  relied  on  as  exhibiting  the  actual  amount  paid  in  specie; 
nor,  on  the  other  hand,  could  the  whole  amount  of  the  discounts  on  stock  be 
considered  as  having  been  applied  to  the  payment  of  the  second  instalment- 
By  statement  marked  B,  referred  to  in  the  cashier's  answer,  ancl  by  this  com- 
mittee marked   27,  it  appears  that  the  discounts,   on  the  30th  July,    1817, 
on    pledged    stock,  amounted   to   eight  millions   forty-six    thousand    nine 
hundred  and  thirty-two  dollars;  of  this  amount,  a  part  was  applied  fo  the  pay- 
ment of  the  third  instalment,  and  a  pail  was  drawn  out  of  the  bank  by  the 
discounters.    A  large  portion  of  it,  is  believed,  however,  to  have  been  used  to 
pay  the  second  instalment. 

Of  the  $2,800,000  which  was  to  have  been  paid  at  the  third  instalment,  it 
is  believed  that  a  very  trifling  amount  was  paid  in  coin,  and  as  little  of  the 
funded  debt;  but  that  nearly  the  whole  of  both  were  paid  by  the  proceeds  of 
notes  discounted  on  the  pledge  of  stock. 

The  total  amount  of  specie  imported  from  Europe  by  the  bank,  since  its  in- 
stitution to  this  time,  appears,  by  statement  marked  28,  to  be  $7,311,750  53; 
the  expense  of  which,  including  interest,  premium,  and  $20,000  paid  to  the 
agent  for  going  to  London,  amounts  to  $525,297  38.  The  contract  made  for 
a  part  of  that  specie,  and  the  authority  to  Mr.  Sergeant,  the  agent,  are  submit- 
ted, marked  29,  30.  To  the  reason  urged  by  the  officers  of  the  bank,  that 
such  was  the  scarcity  of  specie  that  it  could  not  have  been  obtained,  and  that, 
without  facilitating  the  payments,  by  making  discounts,  the  bank  could  not 
have  gone  into  operation,  the  committee  observe  that  they  are  at  a  loss  to  per- 
ceivehow  the  simple  act  of  discounting  could  make  the  specie  more  plenty; 
that,  if  it  was  not  actually  in  the  bank  at  the  time  of  making  these  discounts, 
the  checks  of  the  discounters  could  not  be  considered  as  equivalent  to  specie. 

The  amount  of  specie  in  the  Bank  of  the  United  States,  in  February,  1817. 
was  $1,724,109;  $324,000  more  than  the  coin  part  of  the  first  instalment,  and 
which  may  fairly  be  presumed  to  have  been  received  for  the  second  instalment 
If,  then,  the  checks  of  stockholders,  founded  upon  discounts,  were  equivalent 
to  specie,  they  were  by  them  authorized  to  draw  out  of  the  bank  the  very 
coin  which  had  been  paid  in  by  other  stockholders,  in  order  to  pay  it  into  the 
bank  again,  for  their  own  benefit,  and  to  complete  the  payment  of  the  specie 
part  of  the  second  instalment — an  operation  of  more  potency  in  creating  spe- 
cie, than  was  ever  ascribed  to  the  fabled  finger  of  Midas.  The  general  state- 
91 


722  BANK  OF  THE  UNITED  STATES. 

ment,  in  February,  1817,  shows  that  the  total  amount  of  bills  discounted,  was 
$2,930,067,  making  an  excess  of  $1,205,958  of  discounts  over  the  specie  in 
the  bank;  from  which  it  would  result,  that  the  checks  for  the  proceeds  of  those 
discounts  were  not  in  all  cases  equivalent  to  specie. 

As  to  the  difficulty  of  the  bank  going  into  operation  without  those  discounts 
being  made  to  facilitate  the  payment  of  the  second  instalment,  it  is  not  per- 
ceived how  that  measure  removed  the  difficulty:  for  it  is  obvious  that  it  (lid 
not  add  a  single  cent  to  the  specie  in  the  vaults  of  the  institution.  What 
other  difficulty  than  the  want  of  specie,  the  bank  had  to  encounter,  is  not 
known,  as  all  other  obstructions  seem  to  have  yielded  almost  without  an  effort. 
The  eft'ect  of  those  discounts  was  very  obviously  to  enable  those  who  had 
made  large  purchases  to  retain  their  stock  without  paying  for  it,  and  to  derive 
a  benefit  from  its  probable  advancement  in  price.  Had  the  bank  rigidly  re- 
quired the  payment  of  the  instalments,  the  large  stockholders  must  have  sold 
that  portion  of  their  shares  which  their  real  means  did  not  enable  them  to 
hold.  Or,  if  the  bank  had  not  exacted  the  instalments,  and  had  not  afforded 
the  means  of  substituting  credit  for  payment,  the  stock  would  not  have  ad- 
vanced materially  in  price,  and  the  large  holders  of  it  would  have  had  no  in- 
ducement to  retain  it.  In  either  event,  a  more  equal  diffusion  of  the  shares 
would  have  been  the  consequence,  and  it  would  have  reached  the  hands  of 
solid  capitalists,  who  woulcl  have  held  only  what  they  could  pay  for.  It  is 
believed  that  the  loss  of  the  dividends,  and  the  liability  to  pay  interest  on  the 
instalments  due,  would  have  been  sufficient  to  compel  even  the  stockjobber 
to  sell.  Although,  if  those  discounts  had  not  been  made,  the  immediate  pro- 
fits of  the  bank  would  not  have  been  so  large,  yet  it  would  not  have  had  an 
unwieldy  capital  to  manage^  it  could  have  proceeded  gradually,  growing  with 
the  growth,  and  strengthening  with  the  strength  of  the  nation,  as  it  emerged 
from  the  evils  of  the  flood  of  paper  issued  by  the  local  institutions.  The  bank 
could  have  felt  its  way,  and  increased  its  means  with  the  increasing  demands 
of  the  country.  Such  a  cautious  proceeding  would  have  enabled  it  to  render 
invaluable  service  in  checking  the  issue  of  State  banks,  and  bringing  them  to 
the  alternative  of  avowed  bankruptcy,  or  to  the  permanent  resumption  of  spe- 
cie payments.  The  evil  of  the  country  was  the  immense  amount  of  bank 
notes  and  credits;  the  Bank  of  the  United  States  increased  it  by  its  credits 
to  stockholders.  That  course  did  indeed  enable  the  directors  to  declare  a 
lar^e  dividend;  but  that  the  apparent  prosperity  was  temporary  and  fallacious, 
is  demonstrated  by  the  recent  dividend  of  two  and  a  half  per  cent. 

It  might  have  been  supposed,  as  it  has  been  urged,  that  the  discounting  on 
stock  was  the  only  means,  in  the  power  of  the  bank,  to  enforce  the  payment 
of  the  second  instalment.  It  is  believed  that  the  engagement  on  the  part  of 
the  stockholders  could  have  been  enforced  without  difficulty  by  the  courts  of 
law.  Decisions  to  that  effect  have  been  made  in  the  courts  of  the  States  of 
Pennsylvania,  Massachusetts,  and  New  York;  and  when  the  stockholder's 
note  was  taken  without  an  endorser,  or  any  other  collateral  security,  but  the 
pledge  of  the  stock,  it  is  not  perceived  how  his  legal  liability  was  increased. 
In  the  sale  of  the  stock  pledged,  there  was  indeed  a  prospect  of  indemnity, 
which  depended,  however,  wholly  on  the  price  of  shares  in  the  market.  The 
same  circumstances  that  prevented  the  actual  payment  of  the  instalment 
would  have  interposed,  it  is  presumed,  to  obstruct  the  liquidation  of  the  note 
given  in  lieu  of  it;  and  in  the  emergency  which  would  have  compelled  the 
bank  to  reduce  its  discounts,  it  wouicf  most  require  a  good  price  for  the  stock; 
and  the  very  necessity  of  the  times  which  would  force  an  unusual  quantity  of 
it  into  the  market,  would  probably  defeat  the  object  of  security.  In  fact,  a 
large  part  of  the  amount  thus  discounted,  was  not  paid  at  the  maturity  of  the 
note,  vide  statement  27,  but  was  renewed.  Of  the  still  larger  proportion 
which  appears  from  that  statement  to  have  been  paid,  it  is  wholly  impossible 
to  determine  what  part  was  converted  into  notes  on  personal  security,  or  what 
part  assumed  the  new  shape  which  was  given  to  notes  discounted  on  pledged 
stock,  after  (he  20th  February,  1817.  It  ought  to  be  remarked,  that  many 
persons,  after  finding  the  disposition  of  the  board,  obtained  discounts,  who 


REPORT  OF  COMMITTEE,    1819.  723 

were  perfectly  prepared  to  pay,  and  would  have  paid  their  instalment?,  if  the 
inducements  to  credit  had  not  been  offered  them. 

Had  the  bank  resorted  to  its  remedy,  through  the  courts,  to  obtain  the  pay- 
ment of  the  second  instalment,  it  would  probably  have  obtained  something 
from  the  stockholder;  it  could  have  lost  nothing,  and  at  all  events,  it  would 
have  saved  the  dividends  upon  the  delinquent  stock.  But,  by  taking  the  note 
of  the  owner,  it  admitted  that  the  instalment  was  paid,  and  abandoned  the 
means  of  coercion  given  by  the  charter,  in  withholding  the  dividends,  and  ob- 
tained nothing;  it  did  not  increase  the  responsibility  of  the  stockholders,  while 
it  exposed  the  bank  to  the  certain  loss  of  the  dividends,  and  to  the  chance  of 
loss,  if  the  stock  should  be  forced  into  the  market  in  large  quantities. 

The  committee  are  of  opinion  that  the  resolutions,  and  the  practice  of  dis- 
counting before  mentioned,  were  incorrect.  That  they  were  particularly  ob- 
jectionable, from  their  partial  operation  in  affording  facilities  to  some  stock- 
holders, which  could  not  be  enjoyed  by  those  residing  at  a  distance;  even  at 
Richmond,  the  stockholders  made  their  payments,  for  the  second  dividend, 
in  funded  debt,  and  in  coin  which  probably  was  purchased  at  a  premium. 
The  committee  find  it  difficult  to  reconcile  these  resolutions  with  the  views 
proposed  in  their  adoption,  and  are  satisfied  that  they  were  connected  inti- 
mately with  the  measures  calculated  to  aft'ect  the  price  of  stock,  and  particu- 
larly with  discounts  of  a  similar  character,  soon  after  made. 

One  of  the  acts,  obviously  intended  to  give  the  bank  stock  a  high  price  in 
the  European  market,  was  the  establishment  of  an  agency  there,  to  pay  the 
dividends.  On  the  28th  November,  1816,  a  resolution  was  passed,  by  the  cast- 
ing vote  of  the  president,  and  against  the  report  of  a  committee,  who  had 
been  appointed  to  consider  the  subject,  authorizing  John  Sergeant,  Esq.  to 
make  arrangements  in  Europe  for  the  payment  of  the  bank  dividends  at  the 
par  of  exchange,  and  at  the  risk  and  expense  of  the  bank.  Such  an  arrange 
ment  was  made,  by  which  it  was  stipulated  to  make  the  payment  six  months 
after  the  dividends  were  declared.  The  papers  on  this  subject  are  marked 
39,  40,  41.  How  far  it  was  objectionable  thus  to  afford  inducements  to  fo- 
reigners to  become  interested  in  our  stock,  and,  serni-annually,  withdraw 
from  the  country  the  amount  of  the  dividends,  the  committee  do  not  under- 
take to  decide,  as  they  consider  it  one  of  those  general  and  abstract  subjects, 
to  which  the  resolution  of  the  House  does  not  direct  their  attention.  But, 
thus  to  compel  American  stockholders,  and  the  Government,  to  contribute  to 
the  possible  loss  of  paying  the  dividends  to  those  abroad,  appeai-s  to  be  un- 
just. The  nearly  equal  division  of  the  directors,  on  this  important  subject, 
and  the  able  reasons  assigned  in  the  report  of  the  committee  against  the  mea- 
sure, ought  at  least  to  have  prevented  the  precipitate  adoption  of  the  resolu- 
tion: and  when  the  committee  find  among  the  eleven  who  voted  in  the  affir- 
mative, the  names  of  some  directors  who  have  been  constantly  and  largely 
engaged  in  the  purchase  and  sale  of  stock,  and  that,  of  the  ten  who  voted  in 
the  negative,  not  one  has  been  ascertained  to  have  dealt  in  those  transactions, 
they  are  almost  irresistibly  impelled  to  the  conclusion,  that  the  measure  was 
adopted  more  with  a  view  to  enhance  the  price  of  shares,  than  for  the  perma- 
nent benefit  of  the  institution. 

The  practice  of  discounting  on  stock,  to  the  full  amount  paid  upon  the 
shares,  appears  to  have  commenced  early  at  the  parent  bank,  under  the  fourth 
by-law,  which  is  similar  to  the  fifteenth  regulation  for  the  government  of  the 
offices,  both  of  which  were  adopted  at  the  commencement  of  the  institution. 
They  authorize  discounts  without  an  endorser,  on  the  stock  of  the  bank,  on 
the  funded  debt  of  the  United  States,  or  such  other  property  as  shall  be  ap- 
proved, when  pledged  to  an  amount  sufficient  to  secure  the  payment  of  the 
note.  By  a  statement  referred  to  in  the  cashier's  examination,  27,  it  appears 
that  the  total  amount  of  discounts  on  pledged  stock,  up  to  the  30th  July,  1817, 
was  $8,046,932  64,  of  which  there  had  been  paid,  at  that  time,  $2,815,665  04. 
These  loans,  it  is  presumed,  were  made  chiefly  at  Philadelphia,  as  the  Balti- 
more loans  on  stock  had  not  commenced  to  a  large  extent  at  that  time.  On 
the  25th  of  July,  1817.  a  resolution,  marked  31,  was  adopted,  authorizing  the 


724  BANK  OF  THE  UNITED  STATES. 

offices  to  discount  notes  secured  by  a  pledge  of  bank  stock  or  funded  debt, 
with  a  recital  that  it  might  be  desirable  to  many  persons  to  obtain  temporary 
loans  on  such  pledges,  and  a  form  of  the  pledge  was  directed  to  be  transmit- 
ted; it  is  marked  32.  These  notes  had  no  endorser,  and  the  discount  was, 
in  tact,  made  upon  the  credit  of  the  stock:  for,  by  a  resolution  of  the  30th  of 
September,  1817,  marked  33,  the  President  and  cashier  were  authorized,  in 


the  note  and  hypothecation  of  the  person  to  whom  stock  might  lie  transferred, 
and  on  which  loans  at  par  had  been  made. 

By  the  resolution  of  26th  August,  1817,  marked  35,  discounts  to  stock- 
holders were  authorized  at  one  hundred  and  twenty-five  dollars  per  share, 
upon  presenting  collateral  security  for  the  twenty- five  dollars.  The  provision 
requiring  an  endorser  or  collateral  security  for  the  excess  above  the  par  value, 
was,  m  many  instances,  and  to  very  considerable  amounts,  effectually  evaded, 
by  some  of  the  largest  borrowers  becoming  endorsers  for  each  other.  The  al- 
leged reasons  for  the  resolution  are,  that  bank  shares  had  been  discounted  upon, 
at  one  hundred  and  twenty  dollars,  by  the  local  institutions  in  New  York; 
and  that  it  was  necessary,  in  order  to  employ  the  capital  which  had  been  in- 
creased beyond  the  ordinary  means  of  using  it  advantageously,  by  the  redemp- 
tion of  eleven  millions  of  the  public  debt.  The  practice  of  other  banks  would 
not,  in  the  opinion  of  your  committee,  afford  any  justification  of  the  measure; 
and  when  that  practice  was  to  be  urged  as  a  reason,  the  directors  ought  at 
least  to  have  been  correctly  informed  of  the  fact.  The  committee  addressed 
inquiries  to  the  several  banks  in  the  city  of  New  York,  and  from  their  answers 
it  appears,  that,  in  two  or  three  instances  only,  discounts  have  been  made  on 
the  bank  shares;  that  those  notes  never  were  renewed,  and  that,  in  no  instance, 
has  any  bank  there  discounted  on  the  shares  of  the  Bank  of  the  United  States 
above  their  par  value;  and,  although  pains  have  been  taken  to  ascertain  the 
fact,  no  evidence  has  been  discovered  of  any  other  bank  having  made  dis- 
counts on  stock  above  its  par  value. 

The  redemption  of  the  eleven  millions  of  public  debt  was  effected  by  the 
application  of  that  amount  of  deposites  to  the  credit  of  the  Government,  then 
in  the  vaults  of  the  bank.  Much  unfounded  and  unnecessary  complaint  ap- 
pears to  have  been  made  by  the  officers  of  the  bank  against  this  very  prudent 
measure.  That  it  disappointed  the  expectations  of  tho^e  who  calculated  on 
receiving  interest  from  the  Government,  while  they  discounted  on  its  money,  is 
very  probable  and  very  natural;  and  it  is  not  surprising  that  some  expedient 
should  have  been  resorted  to,  in  order  to  supply  another  equivalent  source  of 
profit.  But  there  were  other  resources  besides  the  stock  of  the  bank.  The 
Government  stock  was  better  security,  and  although  it  was  uniformly  above 
par,  the  directors  seem  never  to  have  thought  of  discounting  upon  it  above  its 
par  value.  They  began  by  rating  it  at  ninety  for  every  hundred  dollars,  while 
they  were  discounting  on  their  own  shares  at  par.  By  a  resolution,  passed 
20th  May,  1817,  marked  37,  the  Government  stock  was  rated  at  par,  and, 
soon  after,  bank  shares  were  discounted  upon  at  $125  for  every  $100,  with  an 
endorser  for  the  excess. 

The  committee  are  surprised  to  find  so  little  good  business  paper  done  at  the 
bank  and  its  offices,  where  it  was  to  have  been  reasonably  expected  that  the 
merchants  would  have  preferred  transacting  their  business.  The  directors, 
themselves,  avow,  that  they  uniformly  gave  a  preference  to  stock  notes  over 
bi  siness  paper;  their  reasons  are  contained  in  their  examinations.  But  when 
the  complaint  is,  that  the  bank  had  more  capital  than  it  could  employ,  it  is 
singular  that  any  business  paper  should  have  been  rejected.  In  July,  1817, 
that  kind  of  paper,  to  the  amount  of  $940,000,  and  in  August,  to  the  amount 
of  about  $493,500,  was  rejected  at  Philadelphia;  and  at  Baltimore,  in  July, 
about  $407,000,  and  in  August,  about  $183,000  were  rejected.  These  sums 
are  not  precisely  accurate,  but  are  sufficiently  so  for  general  views.  Whether 
this  paper  was  such  as  ought  to  have  been  rejected,  the  committee  have  no 


REPORT  OF  COMMITTEE,    1819. 

means  of  determining.  The  amounts  rejected  are  probably  not  more  than 
might  be  expected  from  a  bank  doing  business  on  such  an  extensive  scale,  at 
any  other  time  than  \vhen  it  was  anxious  to  employ  its  capital.  Not  an  in- 
stance has  occurred  of  a  note,  secured  by  the  pledge  of  stock,  being  rejected. 
On  the  9th  January,  1817,  the  board  resolved,  (paper  marked  36)  from  and 
after  the  20th  February  then  next,  and  to  the  1st  of  July,  to  discount  notes  to 
those  who  should  have  revenue  bonds  to  pay  during  that  period.  The  amount 
done  under  that  resolution  was  small,  and  it  does  not  appear  that  such  notes 
have  at  any  time  been  discounted  extensively. 

The  principal  business  of  the  bank  certain!/  has  been  to  discount  on  notes 
secured  by  a  pledge  of  stock,  under  the  various  resolutions  before  recited. 
Their  effect  was  to  abandon  all  personal  security,  and  to  rely  entirely  upon 
the  stock  pledged— a  system  which  your  committee  think  need  only  to  be 
stated  to  ensure  unqualified  reprehension.  Besides  the  objection  which  arisei 
from  these  loans  being  in  their  nature  perpetual  after  all  personal  security  was 
abandoned,  it  appears  to  have  been  an  act  of  self-immolation,  thus  to  place 
beyond  the  reach  of  the  institution,  in  the  event  of  an  emergency  to  which  it 
and  all  others  are  liable,  so  large  a  portion  of  its  loans.  On  the  20th  October 
last,  a  statement  was  made,  exhibiting  the  amounts  discounted  on  notes  se- 
cured by  a  pledge  of  the  bank  stock,  and  then  remaining  unpaid  at  the  follow- 
ing places:  at  Philadelphia,  $4,680,600,  of  which  $173,450  was  above  the  par 
value;  at  Baltimore,  $2,402,435,  of  which  it  cannot  be  ascertained  what  pro- 
portion was  above  the  par  value,  but  it  is  believed  to  have  exceeded  $500,000} 
at  Charleston,  $897,429,  of  which  $2,000  was  above  par;  at  Washington, 
$298,570,  of  which  but  a  small  amount  was  above  par;  at  Richmond,  $209,840, 
and  none  above  par.  There  are  no  accounts  from  the  other  offices,  the  di- 
rectors having  required  statements  only  from  those  whose  discounts  on  stock 
exceeded  $100,000.  A  statement  has  been  furnished  by  the  bank,  of  the 
amount  discounted  at  the  above  places,  and  remaining  unpaid  at  this  time, 
marked  42,  which  differs  somewhat,  but  not  materially,  from  the  statement* 
in  October  last.  By  that  statement,  the  total  amount  ot  discounts  at  the  bank, 
and  at  those  offices,  on  pledged  stock,  is  $8,022,954;  and  by  the  general  state- 
ment, on  the  1st  December  last,  the  total  amount  of  such  discounts  at  the  bank 
and  all  its  offices,  is  $8,934,712;  the  difference  between  which  sums  is  the 
amount  discounted  at  all  the  other  offices  not  above  enumerated.  The  com- 
mittee havj  compiled  a  statement,  43,  which  exhibits,  among  other  things, 
the  total  amount  of  discounts  at  the  bank  and  all  its  offices,  at  different  pe- 
riods, on  personal  security  and  on  pledged  stock;  from  which  it  will  appear 
that  the  largest  amount  discounted  on  bank  stock  was  in  January  and  Febru- 
ary, 1818,  when  it  was  $11,244,51 4. 

From  this  recital  it  will  be  apparent  how  large  a  portion  of  the  capital  of 
the  bank  was  thus  placed  beyond  its  control.  Although  there  have  been  some 
fluctuations  in  the  amounts  of  those  discounts,  at  different  periods,  yet  the 
greatest  part  of  them,  indeed  the  whole,  with  but  few  exceptions,  have  been 
constantly  renewed,  from  time  to  time,  as  the  notes  fell  due,  in  many  cases 
at  four  and  six  months.  Indeed,  every  subsequent  act  of  the  bank  has  been 
wholly  at  war  with  the  profession  of  these  loans  being  temporary,  held  out  in 
the  recital  of  the  resolution  of  25th  July,  1817,  marked  31.  And  in  order  to 
ensure  the  greatest  amount  of  such  loans,  and,  at  the  same  time,  afford  facili- 
ties to  the  prompt  purchase  and  sale  of  stock,  the  directors,  on  the  8th  of  Au- 
gust, 1817,  passed  a  general  resolution,  authorising  the  President  and  cashier 
to  discount  all  stock  notes  that  should  be  offered  between  discount  days,  to  a 
certain  amount,  and  by  various  resolutions,  adopted  at  different  meetings,  un- 
til 7th  September,  appropriated  two  millions  of  dollars  to  their  disposal  for 
that  purpose.  The  papers  referred  to,  are  marked  44;  and  on  the  30th  Sep- 
tember, 1817,  the  resolution  already  referred  to,  marked  33,  passed,  author- 
izing those  officers,  in  all  cases,  to  renew  the  stock  notes  as  they  fell  due, 
between  discount  days. 

Another,  and  probably  much  more  censurable  effect  of  these  various  reso- 
lutions and  proceedings,  was  to  keep  the  price  of  the  stock  constantly  ad- 


726  BANK  OF  THE  UNITED  STATES. 

vancing,  until  it  reached  a  point  where  it  exploded  and  fell.  From  various 
sources  of  information,  the  committee  have  compiled  a  table  of  the  prices  of 
stocks  at  the  different  periods  when  these  resolutions  were  adopted,  marked 
45,  from  which  their  effect  in  enhancing  the  price  of  shares  is  very  clear- 
ly exhibited.  It  will  appear  from  that  table,  that  the  price  of  shares  at 
Philadelphia,  on  the  20th  August,  1817,  was,  according  to  the  public  reports, 
$147  50;  according  to  the  testimony  of  Mr.  M'Euen,  a  broker,  it  was  $144; 
at  the  same  place  on  the  30th  of  the  same  month,  the  price  was  $156  50.  The 
resolution  authorizing  discounts  on  stock  at  $125,  was  passed  on  the  26th  of 
the  same  month,  vide  35.  These  facts  would,  in  the  opinion  of  your  com- 
mittee, be  sufficient  to  condemn  a  system  which  thus  enabled  a  stockjobber 
to  sport  with  the  property  of  others.  Stockjobbing,  to  an  immense  extent, 
and  wages  on  the  price  01  shares,  were  its  inevitable  consequences.  It  gave 
equal  facilities  to  the  bankrupt,  who  had  not  credit  enough  to  obtain  an  en- 
dorser, and  to  the  capitalist.  Stock  could  be,  and  was,  purchased  without 
the  advance  of  a  cent  by  the  purchaser,  who  had  only  to  apply  to  the  direc- 
tors, or  to  the  president  and  cashier,  between  discount  days,  for  a  loan  on  the 
shares  about  to  be  bought,  and,  by  what  is  termed  a  simultaneous  operation, 
he  obtained  his  discount,  and  with  it  paid  for  his  stock.  A  rise  in  the  market 
would  enable  him  to  sell  his  shares,  pocket  the  difference,  and  commence 
operations  anew.  And  the  committee  are  compelled  to  state,  that,  in  fact,  the 
largest  loans  on  pledged  stock  were  made  to  brokers,  and  to  individuals  who 
appear  to  have  been  constantly  in  the  market.  Loans  on  stock,  at  a  rate  be- 
low its  par  value,  may  unquestionably  be  useful  to  the  merchant,  who  would 
avoid  the  obligation  imposed  by  requesting  an  endorser,  and  would  be  highly 
beneficial  to  the  bank  when  restrained  within  moderate  limits  and  not  made 
permanent.  But  the  loans  actually  made,  were,  most  of  them,  unreasonable 
and  excessive  in  their  amount;  they  were  not  made  to  the  merchant  and 
trader,  but  to  a  few  persons,  consisting  of  directors,  brokers,  and  speculators; 
and  have  been  renewed  and  continued  almost  invariably,  at  the  option  of  the 
borrower.  And  when,  in  July  last,  the  board  directed  a  curtailment  of  its  dis- 
counts, it  fell,  in  almost  all  cases,  on  the  business  paper,  while  the  immense 
amounts  loaned  on  stock  pledges  were  but  little  affected,  excepting  at  the 
offices  at  Richmond  and  Washington,  where  the  curtailment  appears  to  have 
fallen  equally  on  all  the  notes.  But  the  discounts  at  those  places  on  stock 
were  very  small,  particularly  when  compared  with  Baltimore,  where  the 
loans  were  such  and  so  long  continued  as  to  receive  the  animadversions  of  the 
parent  board . 

An  unwillingness  to  injure  the  private  credit  of  those  engaged  in  the  above- 
mentioned  transactions,  where  no  public  good  is  perceived  to  be  probable 
from  the  disclosure,  induces  the  committee  to  withhold  the  mention  of  their 
names.  But,  in  respect  to  the  directors,  the  committee  consider  their  conduct 
intimately  connected  with  the  general  management  of  the  concerns  of  the 
bank.  And  under  a  sense  of  the  duty  devolved  upon  them,  they  state,  that 
many  of  the  directors,  as  well  those  appointed  by  the  Government,  as  those 
elected  by  the  stockholders,  appear  to  have  been  the  most  forward  and  the 
most  active  in  trafficking  in  stock.  The  mere  purchasing  shares,  with  an  in- 
tention to' retain  them,  would  not  be  improper,  even  in  a  director,  if  made  with- 
out any  view  to  intended  future  proceedings  of  the  board  of  which  he  was  a 
member.  But  the  practice  of  purchasing  at  one  time,  when  the  stock  was 
low,  and  selling  at  another,  after  its  price  had  been  enhanced  by  the  measures 
adopted  by  the  directors,  is  'certainly  unfair  and  censurable.  It  is  the  per- 
version of  a  public  and  honorable  trust,  to  the  purposes  of  self:aggrandizement, 
and  places  the  directors  in  a  situation  where  their  own  interests  afford  a 
strong  temptation  to  the  abuse  of  that  trust.  Still  more  reprehensible  is  the 
conduct  ot  those  directors  who  made  contracts  for  the  purchase  of  stock,  de- 
liverable and  payable  at  a  future  period,  at  a  low  rate,  and,  during  the  inter- 
mediate time,  by  their  own  official  acts,  raised  the  price  of  the  stock  to  its 
highest  point.  The  committee  do  not  deem  it  necessary  to  repeat  the  details 
which  will  be  found  in  the  examinations  of  the  directors  and  officers  herewith 


REPORT  OF  COMMITTEE,    1819.  727 

submitted,  marked  52,  53.  By  comparing  these  examinations  with  the  prices 
of  stock  hereinbefore  referred  to,  the  House  will  be  enabled  to  perceive  which 
of  the  directors  have  participated  in  this  business.  With  respect  to  the  pub- 
lic directors,  considering  them  public  officers,  responsible  to  the  Govern- 
ment, and  subject  to  the  constitutional  power  of  this  House,  the  committee 
deem  it  their  duty  to  state,  that  the  President,  William  Jones,  Esq.  and 
George  Williams,  Esq.  appear,  from  their  own  declarations,  and  from  the  tes- 
timony of  a  number  of  witnesses,  to  have  been  deeply  concerned  in  these 
speculations.  ,  Mr.  Jones  appears  to  have  purchased  one  thousand  five  hun- 
(fred  and  fifty  five  shares,  at  a  high  rate,  and  to  have  sold  a  large  part  of  them 
at  a  loss.  He  states  that,  in  the  summer  of  1817,  he  purchased  a  contract  of 
one  thousand  shares,  at  one  hundred  and  thirty-two  dollars  per  share,  deli- 
verable 2d  January,  1818,  and  soon  after,  another  contract  for  one  thousand 
shares,  deliverable  in  November  following,  at  one  hundred  and  thirty-five 
dollars  per  share,  both  of  which,  he  says,  were  sold  at  one  hundred  and  fifty 
dollars  per  share;  from  which  two  contracts,  it  would  appear,  he  realized 
$33,000.  There  is  much  ambiguity  resting  on  these  transactions,  arising  from 
the  incompatible  statements  ot  Mr.  Jones,  Mr.  George  Williams,  Mr.  Den- 
nis A.  Smith,  and  Mr.  James  W.  M'Culloch.  The  three  latter  gentlemen 
appear  to  speak  of  the  same  contracts  and  purchases,  but  give  accounts  of 
them  somewhat  variant  from  that  of  Mr.  Jones.  Particularly  Mr.  Dennis 
A.  Smith  and  James  W.  M'Culloch,  speak  of  one  of  those  contracts,  or  of 
some  other,  as  having  been  presented  to  Mr.  Jones,  gratuitously,  after  the 
stock  had  risen,  and  it  was  obvious  that  a  profit  would  be  realized,  of  which 
Mr.  Jones  makes  no  mention.  Mr.  Jones  states  that  he  sold  both  those  con- 
tracts to  D.  A.  Smith;  Mr.  Smith  says  he  was  one  of  the  persons  who  made 
one  of  the  contracts  a  present  to  Mr.  Jones;  that  the  stock  never  was  trans- 
ferred, and  that  the  profit,  amounting  to  $15,000,  was  paid  to  Mr.  Jones,  in 
money.  Although  the  precise  time  is  not  specified  by  Mr.  Jones,  yet  it  is  ob- 
vious, irom  the  rate  at  which  the  contracts  were  purchased,  that  it  must  have 
been  sometime  anterior  to  the  26th  August,  1817:  for,  at  no  time  after  that  pe- 
riod, during  the  year  1817,  was  stock  so  low  as  $135.  That  the  resolution  ot 
that  date,  authorizing  discounts  on  stock,  at  twenty- five  per  cent,  above  its 
par  value,  had  an  immediate  effect  on  its  price,  will  have  been  seen  from  a 
former  part  of  this  report. 

The  committee  do  not  hesitate  to  say,  that,  although  his  motives  may  have 
been  strictly  correct,  and  his  vote  given  without  any  reference  to  his  private 
interest,  yet,  his  situation  forbade  his  acting  on  a  question,  whose  result  was 
so  important  to  him;  or  rather,  that  he  ought  never  to  have  placed  himself  in 
that  situation.  The  high  trust  reposed  in  the  president  of  a  national  bank,  by 
the  Government,  and  by  the  representatives  of  the  stockholders,  required  that 
he  should  abstain  from  all  concerns  in  which  the  price  of  stock  was  material. 
Mr.  Jones  appears  to  consider  those  transactions  as  lawful  private  concerns; 
the  committee  deem  them  intimately  connected  with  the  public  management  of 
the  institution;  of  their  lawfulness  and  propriety  it  is  for  the  House  to  judge. 

Mr.  George  Williams,  another  public  director,  appears  to  have  been  deeply 
concerned  in  the  purchase  of  stocK,  and  in  the  making  and  purchase  of  con- 
tracts, for  the  delivery  of  stock,  to  a  large  amount.  Every  witness  that  has 
been  examined,  speaks  of  Mr.  Williams'  transactions  in  that  respect.  Mr. 
Williams  himselt  declined  statins,  the  amount  and  prices  at  which  he  pur- 
chased, and  the  committee  did  not  mink  proper  to  insist  upon  his  answers,  as 
they  had  already  obtained  satisfactory  information  respecting  his  conduct,  and 
examined  him  chiefly  to  give  him  the  opportunity  of  making  such  explanations 
as  he  thought  proper,  of  which  he  was  advised  at  the  time.  With  respect  to 
the  other  public  directors,  Messrs.  Pierce  Butler,  and  John  Connelly,  it  sa- 
tisfactorily appears  that  they  \vere  not  in  the  least  concerned  in  the  stock- 
jobbing transactions.  And,  with  respect  to  Walter  Bowne,  although  his  resi- 
dence in  New  York  did  not  give  the  committee  the  same  means  of  informa- 
tion, yet  no  evidence  has  been  discovered  to  implicate  him. 


728  BANK  OF  THE  UNITED  STATES. 

Jonathan  Smith,  Esq.  the  cashier  of  the  bank,  has  had  considerable  deal- 
ings in  the  purchase  and  sale  of  stock,  and  in  making  and  purchasing  contracts 
for  its  delivery  at  future  periods.  The  remark  is  applicable  to  J.  W.  M'Cul- 
loch,  Esq.  the  cashier  of  the  office  at  Baltimore,  to  a  much  greater  extent.  Al- 
though those  gentlemen  might  have  no  direct  agency  in  me  measures  which 
were  to  affect  the  price  of  stock,  yet  the  influence  of  their  stations  ought  to  be 
great,  and  it  is  to  be  lamented  that  they  should  have  placed  themselves  in  a 
situation  where  the  exercise  of  that  influence  might  be  ascribed  to  improper 
causes.  With  respect  to  the  other  directors,  their  examinations  will  enable 
the  House  to  determine  how  far  they  have  mingled  in  these  transactions. 

Besides  the  objection  which  has  already  been  urged  to  the  resolution  of  the 
8th  August,  1817,  authorizing  the  president  and  cashier  to  discount  notes,  as 
being  connected  with  a  series  of  proceedings,  evidently  calculated  to  enhance 
the  price  of  stock,  by  affording  facilities  to  the  making  prompt  purchases,  it  is 
still  more  objectionable  as  being  a  delegation  of  power,  which,  in  the  opinion  of 
your  committee,  the  directors  had  no  right  to  grant.  And  when  connected 
with  the  power  also  given  them  of  indefinite  and  unlimited  renewal  of  stock 
notes,  it  was  placing  the  great  bulk  of  the  capital  entirely  within  their  control. 
The  same  practice  appears  to  have  been  almost  universal  at  the  office  in  Balti- 
more, where  the  president  and  cashier,  as  appears  by  *heir  examinations,  have, 
under  the  authority  of  the  board  of  directors  at  that  place,  always  discounted 
notes  without  an  endorser,  secured  by  a  pledge  of  stock.  As  they  were  not 
restricted  by  the  board,  they  appear  accordingly  to  have  exercised  the  power 
to  a  very  considerable  extent.  Still  more  reprehensible,  in  the  opinion  of 
your  committee,  is  the  practice  at  that  office,  of  allowing  the  president  and 
cashier  to  purchase  or  discount  drafts  and  bills,  payable  from  sight  to  sixty 
days,  because,  in  such  discounts,  the  personal  security  is  the  most  important 
circumstance.  It  has  been  done  to  a  very  large  amount,  although  no  loss  ap- 
pears yet  to  have  accrued.  At  Richmond,  an  equally  improper  delegation  of 
power  to  the  cashier  appears  to  have  been  granted,  in  authorizing  him  to  dis- 
count notes  on  pledged  stock,  at  sixty  days,  and  afterwards,  a  similar  authori- 
ty to  discount  at  four  months.  After  an  experiment  of  three  weeks,  the  di- 
rectors of  that  office  had  the  wisdom  to  abandon  it,  vide  papers  46.  At  the 
office  in  this  city,  the  power  has  been  discreetly  limited,  and  as  discreetly  ex- 
ercised. 

Two  by-laws  of  the  bank  seem  to  your  committee  to  deserve  notice,  one 
of  them,  that  no  discounts  shall  be  made  without  the  consent  of  three  fourths 
of  the  directors  present,  and  another,  that  no  director  shall,  without  special 
authority,  be  permitted  to  inspect  the- cash  account  of  any  person  with  the 
bank.  These  by-laws  appear  to  render  nugatory  the  provisions  of  the  char- 
ter, authorizing  the  appointment,  by  the  Government,  of  one-fifth  of  the  whole 
number  of  directors?  and  are  different  from  the  provisions,  in  that  respect,  by 
the  former  Bank  ot  the  United  States,  although  most  of  the  local  banks  in 
Philadelphia  have  similar  regulations.  Should  a  state  of  things  exist,  in 
which  the  stockholders  should  deem  their  interest  hostile  to  that  of  the  nation, 
such  provisions  as  these  stated,  would  render  the  Government  directors 
mere  spectators  of  the  proceedings  of  the  board. 

The  committee  endeavored  to  obtain  a  statement  of  the  shares  upon  which 
the  instalments  had  not  been  paid,  and  of  the  persons  owning  them.  The  of- 
ficers of  the  bank  satisfied  them  that,  from  the  irregular  manner  in  which  the 
accounts  of  the  payments  had  been  made,  it  was  impossible  to  obtain  an  accu- 
rate statement.  But  the  fact  is  admitted,  that  the  dividends  have  been  paid 
to  some  delinquent  stockholders,  who  are  few,  and  to  whom  but  a  small  a- 
mount  of  stock  belongs.  The  dividends  have  been  uniformly  paid  to  those 
stockholders  whose  notes  were  discounted  to  the  full  par  value  of  the  stock, 
with  the  proceeds  of  which  they  paid  their  instalments,  including  the  funded 
debt  part  as  well  as  the  specie  part.  The  injustice  of  this  proceeding,  to- 
wards those  who  had  really  paid  their  instalments,  according  to  their  engage- 
ments, and  who  received  no  more  benefit  from  these  payments  than  those 
stockholders  who  substituted  their  stock  in  the  place  ot  specie  and  funded 


REPORT  OF  COMMITTEE,    1819.  729 

debt,  is  most  obvious.  The  stock  that  had  really  never  been  paid  for,  but 
which  remained  pledged  for  the  very  credit  given  it,  was  entitled  to  draw, 
ttnd  did  draw,  as  much  dividend,  as  that  which  had  been  fairly  and  punctually 
paid. 

The  root  and  source  of  all  these  instances  of  misconduct  was  the  illegal 
and  reprehensible  division  of  the  stock.  By  the  first  fundamental  article  of 
the  charter,  no  person,  co-partnership,  or  body  politic,  shall  be  entitled  to 
more  than  thirty  votes;  and  yet,  in  violation  of  this  provision,  it  will  appear, 
from  the  testimony  ot  Thomas  Leiper,  George  Williams,  Dennis  A.  Smith, 
;;nd  James  \V.  M'Culloch,  that  it  was  a  common  and  general  practice,  well 
known  to  the  judges  of  the  election  and  to  the  directors,  to  divide  shares  into 
small  parcels,  varying  from  one  to  twenty  shares  to  a  name,  held  in  the 
names  of  persons  who  had  iio  interest  in  them,  and  to  vote  upon  the  shares 
thus  held,  as  attorneys  lor  the  pretended  proprietors.  By  some  of  the  wit- 
nesses it  is  avowed,  that  the  object  was  to  influence  the  election.  Air.  Leiper, 
one  of  the  judges  of  the  first  election,  states  that  he  did  so  himself.  The  ef- 
fect was,  that  Baltimore,  which  had  about  one-seventh  of  the  shares  owned 
by  individuals,  gave  more  than  one-fourth  of  all  the  votes  that  could  be  given, 
in  that  place  there  were  1172  shares  taken  in  1172  names,  by  George  Wil- 
liams, as  attorney,  the  whole  of  which,  it  appears  from  his  examination, he  own- 
ed. At  Philadelphia  nearly  one,  third  of  the  shares  was  owned,  and  the 
votes  given  at  that  place  were  about  two-ninths  of  the  whole  authorized. 
Fora  more  particular  knowledge  of  these  divisions  of  shares,  the  committee 
refer  to  the  statement  herewith  submitted,  marked  47.  They  are  not  aware 
that  any  remarks  which  could  be  made  by  them,  could  present  the  subject  in 
a  stronger  light  than  the  above  statement  of  facts.  The  same  persons  who 
thus  held  the  power  of  appointing  directors,  are  found  to  have  the  greatest 
loans  on  stock.  It  is  alleged  that  they  have  now  consolidated  the  shares; 
but  when  occasion  shall  require  their  division,  former  practice  will  facilitate 
the  operation.  In  the  opinion  of  the  committee,  it  is  the  greatest  evil  in  the 
whole  system,  and  is  the  origin  of  all  others.  So  long  as  the  large  stockhold- 
ers can  control  the  choice  ot  directors,  so  long  can  they  hold  and  acquire  im- 
mense amounts  of  stock,  by  the  proceeds  of  notes  discounted  on  the  shares; 
and  so  long  as  they  can  obtain  such  discounts,  they  can  control  the  election  of 
directors.  The  system  places  the  property  of  the  other  stockholders,  and  of  the 
Government,  the  credit  of  the  bank  and  of  individuals,  and,  in  a  measure,  that 
of  the  nation,  at  the  mercy  of  a  few  large  stockholders,  who,  without  having  really 
contributed  to  the  wealth  or  the  value  of  the  institution,  have  the  control  of 
its  concerns.  It  requires  a  corrective,  and  the  committee  are  of  opinion  that 
it  is  in  the  power  ot  Congress  to  pas-,  a  supplementary  law,  not  contrary  to, 
but  in  support  of,  the  provisions  of  the,  charter,  and  to  give  it  the  true  and  real 
effect  originally  contemplated.  And  they  have  instructed  their  chairman  to 
ask  for  leave  to  report  a  bill  prepared  for  that  purpose. 

The  committee  deem  it  their  duty,  also,  to  submit  to  the  House  a  resolution, 
marked  48,  authorizing  a  discount  of  a  note  for  $20,000  at  sixty  days,  and  di- 
recting that  the  discount  should  be  paid  in  a  post  note  drawn  payable  at  sixty 
days  alter  date.  It  is  stated  by  the  cashier,  in  his  examination,  that  that  post 
note  was  made  payable  in  Philadelphia.  They  find  also  a  resolution  of  the 
30th  January,  1817,  marked  19,  expressly  authorizing  the  office  at  Baltimore 
to  grant  discounts  to  the  amount  of  $100,000,  to  be  paid  in  post  notes,  at  sixty 
days' date.  There  is  no  doubt  entertained  that  this  was  done  at  Baltimore,  from 
its  subsequently  asking  permission  to  do  more,  although,  from  the  manner  in 
which  the  books  of  that  office  are  kept,  it  would  be  difficult  to  ascertain  the  fact. 
The  only  circumstance  which  throws  any  doubt  on  these  transactions  bein°- 
deemed  usurious,  is,  that,  instead  of  exacting  more  than  lawful  interest,  the  bank 
has  charged  and  received  interest  on  money  that  it  never  loaned.  Not  being 
drafts  on  other  offices,  they  cannot  be  considered  as  exchange  operations. 
As  the  parties  have  a  remedy  in  the  courts  of  justice,  for  any  injury  they  may 
have  sustained,  the  committee  do  not  deem  it  necessary  to  recommend  any 
provision  on  the  subject. 
92 


730  BANK  OF  THE  UNITED  STATES. 

Under  the  resolutions  authorizing  discounts  on  pledged  stock,  a  form  of 
pledge  was  adopted,  marked  23  A,  and  under  the  resolution  of  July  25th, 
1817,  another  form  was  adopted. marked  32,  both  of  which  were  used  by  those 
obtaining  loans.  Although  the  latter  form  is  in  the  shape  of  a  mortgage  or  hy- 
pothecation, yet  the.  equitable  interest  in  the  stock  was  in  the  bank.  It  might 
be  questioned  whether  a  stockholder  could  vote  upon  his  shares,  which  had 
been  actually  transferred  in  that  form.  It  does  not  appear  that  any  objec- 
tions have  been, made  to  such  votes,  but  that  they  have  been  received  without 
scruple. 

It  will  be  found  difficult  to  reconcile  with  the  ninth  fundamental  article  of 
the  charter,  a  resolution  of  the  24th  June,  1817,  by  which  the  board  resolved 
to  purchase  two  millions  of  public  debt,  as  the  agent  of  the  commissioners  of  the 
sinking  fund,  and  to  deliver  it  to  them  at  par.  That  resolution,  and  a  letter  of 
the  president  of  the  bank,  announcing  its  purchase,  with  a  statement  of  its  cost, 
are  submitted,  marked  50,  a,  b,  c.  From  these  it  will  appear,  that  the  bank 
had  sold  two  millions  of  its  debt  in  England,  with  which  to  purchase  specie. 
The  Secretary  of  the  Treasury  claimed  the  right  to  redeem  it,  under  the 
provisions  of  the  charter;  and  after  some  negotiations,  a  compromise  was  ef- 
fected by  the  bank  undertaking  to  purchase  two  other  millions,  in  lieu  of  that 
sold,  and  to  deliver  it  at  par.  The  idea  of  its  purchasing  as  the  agent  of  the 
commissioners,  is  exploded,  when  it  is  discovered  that  the  stock  cost  it. 
$2,054,264  26,  which  it  was  bound  to  deliver  at  par,  by  which  a  loss  was 
produced  of  $54,254  26.  It  would  be  a  novel  idea,  that  a  mere  agent  was  to 
do  the  business  of  his  principal  solely  at  the  expense  of  the  agent.  And  it  is 
obvious,  from  the  whole  transaction,  that  the  purchase  was  really  on  account 
and  for  the  benefit  of  the  bank,  to  enable  it  to  maintain  its  faith  with  the  pur- 
chasers of  the  debt  sold  in  England.  The  apology  for  the  bank  is,  that  it  was 
done  under  the  sanction  of  a  high  officer  of  the  Government:  and  although  the 
committee  feel  bound  to  say  that  it  was  a  violation  of  the  article  before  quot- 
ed, yet,  under  all  the  circumstances,  considering  that  it  was  done  in  good 
faith,  they  do  not,  themselves,  think  it  such  a  violation  as  requires  the  interpo- 
sition of  Congress. 

On.  the  subject  of  the  facilities  furnished  by  the  bank  to  the  Government, 
in  the  transmission  and  collection  of  the  public  revenue,  and  its  fulfilment 
of  its  engagements,  in  discharging  the  duties  of  commissioners  of  loans,  and 
agent  for  military  pensions,  the  accompanying  letter  of  the  Secretary  of  the 
Treasury,  marked  51,  shows  that  its  conduct  has  been  satisfactory. 

There  appear  to  have  been  some  contentions  between  the  parent  board  and 
some  of  its  officers,  but  the  committee  have  not  deemed  them  sufficiently  con- 
nected with  any  practical  objects  of  inquiry  to  justify  their  going  into  the 
merits  of  those  controversies,  which  would  be  a  work  of  much  time  and  labor, 
arid  would  not  repay  the  trouble;  and  it  would  be  unjust  to  make,  any  state- 
ment respecting  them,  without  making  it  in  detail. 

In  order  to  give  to  this  House  full  information  of  the  state  of  the  bank  since 
its  institution,  a  statement,  exhibiting  its  condition  at  different  periods,  mark- 
ed 43,  and  various  tables  and  statements  compiled  by  the  committee,  or  by 
them  verified,  are  submitted;  among  them  will  be  found  statements  of  notes 
issued  payable  at  each  office,  and  of  notes  returned  to  the  offices,  respectively: 
reports  of  the  committee  of  directors,  previous  to  each  dividend;  a  complete 
list  of  the  stockholders  of  the  bank;  No.  1  exhibiting  the  names  of  those  who 
were  such  at  the  first  dividend,  with  their  places  of  residence,  and  the  num- 
ber of  shares  held  by  them,  respectively,  at  that  time,  and  at  each  subsequent 
dividend.  No.  2  exhibiting  the  names  of  those  who  became  stockholders 
after  the  first  dividend;  and  No.  3  exhibiting  those  who  became  stockholders 
after  the  second  dividend,  together  with  a  list  of  those  who  hold  shares  as  at- 
torneys for  others.  Other  letters  and  miscellaneous  documents,  not  specially 
referred  to  in  the  preceding  part  of  this  report,  but  elucidating  the  facts  stated, 
will  also  be  found. 

Statements,  obtained  from  the  offices  at  Richmond  and  this  city,  are  also 
submitted,  which  will  show  that  the  affairs  of  those  offices  have  generally 


REPORT   OF  COMMITTEE,    1819. 

V»een  conducted  with  prudence  and  ability,  and  that  every  effort  was  made  by 
them  to  execute  the  directions  of  the  parent  board,  in  a  manner  the  least  in- 
convenient to  their  customers. 

In  considering  the  question,  whether  the  charter  of  the  bank  has  been  vio- 
lated or  not.  the  committee  have  thought  that  the  expressions  used,  mean, 
whether,  in  any  instance,  the  provisions  of  the  charter  have  not  been  complied 
with,  There  may  be  many  violations  of  a  charter,  which  would  not  be  con- 
sidered, by  a  court  of  law,  as  producing  a  forfeiture.  The  principle  on  that 
subject  the  committee  believe  to  be  this:  those  acts  of  usurpation  of  powers 
not  granted,  of  mis  user  and  of  non  user  of  those  granted,  which  defeat  the 
very  objects  of  the  institution,  as  expressed  in  the  charter  itself,  would  pro- 
duce a  forfeiture;  and  that  all  other  instances  of  abuse  of  the  powers  granted, 
or  of  usurpation  of  powers,  must  be  punished  or  restrained,  either  by  the  or- 
dinary process  of  mandamus  and  quo  warranlo*  or  by  other  means  than  a  dis- 
solution of  the  corporation.  The  committee  think  they  are  required  by  the 
resolution  to  report  all  instances  of  a  violation  of  the  provisions  of  the  char- 
ter, which  have  come  to  their  knowledge;  but  they  do  not  consider  themselves 
<:alled  upon  to  slate  which  of  them  would,  in  their  opinion,  produce  a  for- 
feiture, or  any  olher  legal  consequences.  And  one  inducement  to  this  con- 
struction of  the  resolution  arises  from  the  consideration,  that,  if  they  were  to 
coniine  themselves  only  to  those  violations  which  would  produce  a  forfeiture, 
and  they  should  give  a  mistaken  or  incorrect  opinion,  that  the  charter  had  not 
been  violated  >o  as  to  induce  a  forfeiture,  the  House  might,  under  a  strict 
construction  of  the  act,  be  precluded  from  expressing  any  other  opinion, 
and  from  directing  the  proceedings  contemplated  by  it;  whereas,  by  reporting 
all  instances  of  violation  that  have  occurred,  without  reference  to  their  tech- 
nical character,  the  House  is  left  free  to  pursue  any  course  it  may  judge  pro- 
per. In  speaking,  therefore,  of  violations  of  the  provisions  of  the  charter,  the 
committee  wish  to  be  understood  as  not  expressing  any  opinion,  whether  such 
violations  would  enure  a  forfeiture  or  not.  They  present  the  facts,  and  the 
House  will  determine  whether,  under  those  facts,  it  be  or  be  not  expedient  to 
direct  the  issuing  a  scire  facias,  to  ascertain  whether  the  violations  are  such 
as  to  cause  a  dissolution  of  the  corporation. 

The  committee,  then,  are  of  the  opinion,  that  the  provisions  of  the  charter 
of  the  Bank  of  the  United  States  have  been  violated,  in  the  following  instances: 

L  In  purchasing  two  millions  of  public  debt,  in  order  to  substitute  them 
for  two  other  millions  of  similar  debt,  which  it  had  contracted  to  sell,  or  had 
sold,  in  England,  and  which  the  Secretary  of  the  Treasury  claimed  the  right 
of  redeeming.  The  facts  on  this  subject,  and  the  views  of  the  transaction  en- 
tertained by  the  committee,  have  been  already  given. 

2.  In  not  requiring  the  fulfilment  of  the  engagement  made  by  the  stock- 
holders, on  subscribing,  to  pay  the  second  and  third  instalments  on  the  stock 
in  coin  and  funded  debt.     The  facts  on  this  point  are  fully  before  the  House, 
and  they  establish,  beyond  all  doubt,   1st.  That  the  directors  of  the  bank 
agreed  to  receive,  and  did  receive,  what  they  deemed  an  equivalent  for  coin, 
in  checks  upon,  and  the  notes  of  the  bank,  and  other  banks  supposed  to  pay 
specie.    This  substitution  of  any  equivalent  whatever,  for  the  specific  things 
required  by  the  charter,  was,  in  itself,  a  departure  from  its  provisions;  but, 
2d.  The  notes  and  checks  thus  received  were  not,  in  all  cases,  equivalent  to 
coin,  because  there  was  not  specie  to  meet  them  in  the  bank.     3d.  That  notes 
of  individuals  were  discounted,  and  taken  in  lieu  of  the  coin  part  of  the  second 
instalment,  by  virtue  of  a  resolution  for  that  purpose,  passed  before  that  in- 
stalment became  due.  4th.  That  the  notes  of  individuals  were  taken,  in  many 
instances,  and  to  large  amounts,  in  lieu  of  the  whole  of  the  second  and  third 
instalments,  which  notes  are  yet  unpaid. 

3.  In  paying  dividends  to  stockholders  who  had  not  completed  their  instal- 
ments; the  provisions  of  the  charter,  in  that  respect,  were  violated. 

4.  By  the  judges  of  the  first  and  second  elections  allowing  many  persons 
to  give  more  than  thirty  votes  each,  under  the  pretence  of  their  being  attor- 
neys for  others,  in  whose  names  shares  then  stood;  when  those  judges,  the  di- 


732  BANK  OF  THE  UNITED  STATES. 

rectors  and  officers  of  the  bank,  perfectly  well  knew  (hat  these  shares  really 
belonged  to  the  persons  offering  to  vote  upon  them  as  attorneys.  The  facts,  in 
relation  to  this  violation,  are  in  the  possession  of  the  House,  and  establish  it 
beyond  the  reach  of  doubt. 

The  committee  are  of  opinion,  that  no  other  instance  of  a  violation  of  the 
charter  has  been  established. 

In  closing  this  report  of  a  most  laborious  investigation,  the  committee  ob- 
serve, that,  whatever  difference  of  opinion  can  exist  among  them,  as  to  the 
results  and  inferences  to  be  drawn  from  the  facts  stated,  they  unanimously 
concur  in  giving  to  the  preceding  statements  of  facts,  and  abstracts  of  docu- 
ments, their  sanction.  They  have  not  recommended  the  adoption  of  any  im- 
mediate measures  ta  correct  the  many  evils  and  mischiefs  they  have  depicted. 


the  institution,  they  shall  adopt  no  means  to  prevent  its  continuance,  or  the 
directors  themselves  shall  persist  in  a  course  of  conduct  requiring  correction, 
the  committee  cannot  entertain  a  doubt  that  the  salutary  power  lodged  in 
the  Treasury  Department  will  be  exerted,  as  occasion  may  require,  and  with 
reference  to  the  best  interests  of  the  United  States. 

It  is  due  to  the  officers  of  the  bank  at  Philadelphia  to  state,  that  every  fa- 
cility in  their  power  was  rendered  in  explaining  the  books,  and  assisting  the 
researches  of  the  committee. 

[This  report  was  accompanied  by  a  volume  of  documents,  vouchers,  and 
tabular  statements,  comprising  near  five  hundred  pages,  which  may  be  found 
among  the  reports  of  committees  made  in  the  House  of  Representatives,  at 
Ihe  second  session  of  the  fifteenth  Congress,  being  volume  marked  two  of  the 
Reports  of  Committees,] 

Mr.   TRIMBLE'S  RESOLUTION, 

JANUARY  19,  1819, 
Mr.  TRIMBLE,  of  Kentucky,  submitted  the  following  resolution: 

Resolved,  That  the  Attorney  General  of  the  United  States,  in  conjunction 
with  the  district  attorney  of  Pennsylvania,  shall  immediately  cause  a  scire 
facias  to  be  issued,  according  to  the  twenty-third  section  of  the  "Act  to  in- 
corporate the  subscribers  to  the  Bank  of  the  United  States,"  calling  on  the 
corporation,  created  by  said  act,  to  show  cause  wherefore  the  charter,  thereby 
granted,  should  not  be  declared  forfeited;  and  that  it  shall  be  the  duty  of  the 
said  officers  to  cause  such  proceedings  to  be  had  in  the  premises,  as  shall  be 
necessary  to  obtain  a  final  judgment  thereon,  for  the  expenses  ot  which  Con- 
gress will  hereafter  provide." 

Mr.  SPENCER'S  RESOLUTION  FOR  A  SCIRE  FACIAS,  &c. 

FEBRUARY  1, 1819. 
Mr.  SPENCER,  of  New  York,  submitted  the  following  resolution: 

Resolved  by  the  Senate  and  House  of  Representatives  of  the  United 
Stales  of  America  in  Congress  assembled,  That  the  Secretary  of  the  Trea- 
sury shall  cause  all  the  public  deposites  in  the  Bank  of  the  United  States  and 
its  several  offices  of  discount  and  deposite  to  be  withdrawn,  on  the  first  day 
of  July  next;  that,  after  the  said  day,  the  bills  or  notes  of  the  said  corpora- 
tion shall  no  longer  be  receivable  in  any  payments  to  the  United  States;  and 
the  Attorney  General  of  the  United  States  shall,  on  that  day,  or  as  soon  there- 
after as  may  be,  cause  a  scire  facias  to  be  sued  out,  in  contormity  to  the  pro- 


MH,   SPENCER'S   RESOLUTION,    1819.  733 

visions  of  the  "Act  to  incorporate  the  subscribers  to  the  Bank  of  the  United 
States,"  calling  upon  the  saitl  corporation  to  show  cause  why  its  charter  should 
not  be  declared  forfeited;  unless  the  said  corporation  shall,  by  a  legal  act,  to 
be  delivered  to,  and  approved  by,  the  Attorney  General,  and  to  be  by  him 
transmitted  to  Congress,  at  the  next  session  thereof,  declare  its  assent  to  the 
following  propositions,  on  or  before  the  said  first  day  of  July  next,  viz: 

1st.  That  Congress  may  by  law  provide  such  means  as  may  be  necessary 
to  enforce  the  first  fundamental  article  of  the  said  charter,  respecting  the  right 
of  voting  for  directors,  and,  particularly,  to  provide  that  transfers  of  stock 
shall  always  be  made  to  the  real  owners  thereof,  or  to  some  person  or  persons 
in  trust  for  the  owners,  who  shall  ^always  be  named  in  such  transfer;  that 
stock  shall  always  be  deemed  to  belong  to  the  person  or  persons  in  whose 
name  it  may  stand,  or  for  whose  use  it  may  be  declared  in  the  certificate  to- 
be  held,  and  that  no  evidence  whatever  shall  be  received  in  any  court  to  con- 
tradict or  explain  the  certificates  of  ownership. 

2d.  That  Congress  may  provide  for  the  reduction  of  the  capital  stock  of 
the  bank,  in  a  just  and  equal  proportion,  by  the  stockholders  thereof,  when 
convened  in  a  general  meeting. 

3d.  That  the  power  of  removing  any  director  lor  misconduct,  may  be  vest- 
ed in  the  President  of  the  United  States. 

4th.  That  the  Bank  may  purchase  not  exceeding  live  millions  of  dollars  of 
the  funded  debt  of  the  United  States,  and  may  hold  the  same,  without  being 
subject  to  redemption,  unless  consented  to  by  it,  until  the  time  or  times  spe- 
cified in  the  certificates  thereof. 

5th.  That  no  by-law  of  the  corporation  shall  exclude  the  directors,  appoint 
ed  by  the  Government,  from  a  full  knowledge  of  all  the  concerns  of  the  bank, 
and  of  the  accounts  of  every  person  dealing  with  it,  and  that  the  assent  of,  at 
least,  one  public  director  shall  be  necessary,  to  allow  any  discount,   and  to 
render  valid  every  act  of  the  board  of  directors. 

6th.  That  the  provision,  in  the  second  fundamental  article,  prohibiting  any 
director  from  holding  his  office  more  than  three  years,  out  of  four,  in  succs- 
sion,  may  be  modified  or  repealed  by  Congress. 

7th.  No  discount  shall,  in  any  case,  be  made  by  the  bank  at  Philadelphia, 
or  by  any  office,  without  the  consent  of,  at  least,  four  directors  of  the  bank, 
or  or  the  office,  as  the  case  may  be. 

8th.  Congress  may  authorize  the  bank  to  deal  and  trade  in  other  things 
than  those  enumerated  in  the  ninth  fundamental  article,  so  far  as  to  receive 
pledges  of  its  own  stock,  and  of  the  funded  debt  of  the  United  States,  in  se- 
curity for  loans,  and  to  sell  such  pledges  on  a  forfeiture  thereof. 

9th.  That  persons  holding  stock,  upon  which  any  instalment  shall  have 
been  paid  by  the  proceeds  of  notes  discounted,  shall  be  compelled  gradually, 
and  as  soon  as  circumstances  will  admit,  to  pay  the  full  amount  of  such  in- 
stalment in  coin,  or  in  coin  and  funded  debt,  according  to  the  provisions  of 
the  charter,  and  no  dividend  of  profits  shall  be  allowed  to  such  stock,  until 
the  said  payment  is  completed. 

10th.  That  the  Secretary  of  the  Treasury  shall  be  permitted,  at  any  time, 
either  in  person,  or  by  an  agent,  to  be  appointed  by  him,  to  inspect  all  the 
books,  papers,  correspondence,  minutes,  and  proceedings,  of  the  board  of  di- 
rectors of  the  bank,  and  of  all  its  offices,  and  of  all  their  officers. 

llth.  That  Congress  may  extend  the  time  for  the  payment  of  the  whole, 
or  any  part  of  the  sum  of  1,500,000  dollars,  required  to  be  paid  by  the  20th 
section  of  the  charter. 

12th.  That  a  scire  facias  maybe  issued  out  of  any  circuit  court  in  the 
United  States,  in  the  cases  stated  in  the  charter;  and,  whenever  it  shall  be 
issued  out  of  any  court  other  than  the  circuit  court  of  Pennsylvania,  sworn 
copies  of  the  books  and  papers  of  the  bank  shall  be  received  as  evidence  in- 
stead of  the  originals. 

The  foregoing  provisions,  or  any  of  them,  may,  at  any  time,  be  enacted 
into  a  law  or  laws  by  Congress,  and  shall,  thereupon,  become  a  part  of  the 
charter  of  the  bank. 


734  BANK  OF  THE  UNITED  STATES. 


MR.  JOHNSON'S  RESOLUTION  FOR  A  REPEAL  OF  THE  CHARTER 

FEBRUARY  9,  1819. 

Mr.  JOHNSON,  of  Virginia,  submitted  the  following  resolution: 
"  Resolved,  That  the  Committee  on  the  Judiciary  be  instructed  to  report  a 

bill  to  repeal  the  act,  entitled  '  An  act  to  incorporate  the  subscribers  to  the 

Bank  of  the  United  States,'  approved  April  10,  1816." 

The  several  preceding  resolutions  were  referred  to  the  Committee  of  the 
whole  House  on  the  state  of  the  Union;  but,  on  motion  of  Mr.  SPENCER,  the 
committee  were  discharged  from  the  consideration  of  that  presented  by  him, 
and  it  was  laid  on  the  table.  The  resolutions  of  Mr.  TRIMBLE  and  Mr.  JOHN- 
SON were  considered  and  debated  in  committee,  at  great  length,  on  the  24th 
of  February;  and  they  having  reported  to  the  House  their  disagreement  to 
them,  the  House,  on  the  25th,  affirmed  the  decisions  of  the  committee,  and 
thereby  rejected  the  resolutions.  The  vote  on  the  resolution  offered  by  Mr. 
JOHNSON  was  as  follows:  for  the  resolution,  30;  against  it,  121.  For  Mr. 
TRIMBLE'S  resolution,  39;  against  it,  116. 

The  debate  upon  Mr.  JOHNSON'S  resolution  is  of  an  interesting  character, 
but  far  too  voluminous  to  admit  of  insertion  in  these  pages,  which  already  ex- 
ceed greatly  the  bounds  originally  designed  tor  them.  It  may,  however,  be 
seen  in  the  files  of  the  National  Intelligencer,  of  the  following  dates: 

For  the.  speech  of  Mr.  Johnson,  of  Va.  see  Intelligencer,  of  23d  March,  1819. 

Do.  do.  Mr.  Pindall,of  Va.  fct  of  25th       "        *' 

Do.  do.  Mr.  Lowndes,  S.  C.  "  "             of  27th       " 

Do.  do.  Mr.  Tyler,  of  Va.  of   6th  April,     " 

Do.  do.  Mr.M'Lane,ofDel.  "  of   8th       " 

Do.  do.  Mr.  Sergeant,  of  Pa.    "  of  10th       " 

Do.  do.  Mr.  Pindall,  of  13th       "        " 

Do.  do.  Mr.  Walker,  of  Ky.  "  of  15th      " 


In  the  annual  message  of  the  President  of  the  United  States,  at  the  opening 
of  the  twenty-first  Congress,  the  following  6bservations  occur  respecting  the 
Bank  of  the  United  States: 

"  The  charter  of  the  Bank  of  the  United  States  expires  in  1836,  and  its 
stockholders  will,  most  probably,  apply  for  a  renewal  of  their  privileges.  In 
order  to  avoid  the  evils  resulting  from  precipitancy,  in  a  measure  involving 
such  important  principles,  and  such  deep  pecuniary  interests,  I  feel  that  I 
cannot,  in  justice  to  the  parties  interested,  too  soon  present  it  to  the  delibe- 
rate consideration  of  the  Legislature  and  the  People.  Both  the  constitution- 
ality and  the  expediency  of  the  law  creating  this  bank,  are  well  questioned, 
by  a  large  portion  of  our  fellow-citizens;  and  it  must  be  admitted  by  all,  that 
it  has  failed  in  the  great  end  of  establishing  a  uniform  and  sound  currency. 

**  Under  these  circumstances,  if  such  an  institution  is  deemed  essential  to  the 
fiscal  operations  of  the  Government,  I  submit  to  the  vyisdom  of  the  Legisla- 
ture whether  a  national  one,  founded  upon  the  credit  of  the  Government, 
anil  its  revenues,  might  not  be  devised,  which  would  avoid  all  constitutional 
difficulties,  and,  at  the  same  time,  secure  all  the  advantages  to  the  Govern- 
ment and  country  that  were  expected  to  result  from  the  present  bank." 

In  the  House  of  Representatives,  10th  December,  1829: 

"Resolved,  That  so  much  of  said  message  as  relates  to  the  revenue,  the 
public  debt,  and  the  Bank  of  the  United  States,  be  referred  to  the  Committee 
of  Ways  and  Means." 


REPORT  OF  COMMITTEE,    1830. 

This  committee  consisted  of  Mr.  McDuffie,  Mr.  Verplanck,  Mr.  D wight, 
Mr.  Smyth.  Mr.  Ingersoll,  Mr.  Gil  more,  and  Mr.  Ovorton. 

On  the  13th  of  April,  succeeding,  the  following  report  was  made: 

Mr.   M'DUFFIE,   from  the  Committee  of   Ways  and   Means,  to  which  the 
subject  had  been  referred,  made  the  following  report: 

The  Committee  of  Ways  and  Mean-,  to  whom  was  referred  so  much  of  the 
Message  of  the  President  as  relates  to  the  Bank  of  the  United  States,  beg 
leave  to  report: 

That .they  have  bestowed  upon  the  subject  all  the  attention  demanded  by 
its  intrinsic  importance,  and  now  respectfully  submit  the  result  of  their  de- 
liberations to  the  consideration  of  the  House.  There  are  few  subjects,  having 
reference  to  the  policy  of  an  established  Government,  so  vitally  connected 
with  the  health  of  the  body  politic,  or  in  which  the  pecuniary  interests  of  so- 
ciety are  so  extensively  and  deeply  involved.  No  one  of  the  attributes  of 
sovereignty  carries  with  it  a  more  solemn  responsibility,  or  calls  in  requisi- 
tion a  higher  degree  of  wisdom,  than  the  power  of  regulating  the  common 
currency,  and  thus  fixing  the  general  standard  of  value  for  a  great  commer- 
cial community,  composed  of  confederated  States. 

Such  being,  in  the  opinion  of  the  committee,  the  high  and  delicate  trust 
exclusively  committed  to  Congress  by  the  federal  constitution,  they  have  pro- 
ceeded to  discharge  the  duty  assigned  to  them,  with  a  corresponding  sense  of 
it.-  magnitude  and  difficulty. 

The  most  simple  and  obvious  analysis  of  the  subject,  as  it  is  presented  by 
the  message  of  the  President,  exhibits  the  following  questions  for  the  deci- 
sion of  the  National  Legislature: 

1.  Has  Congress  the  constitutional  power  to  incorporate  a   bank,  such  as 
that  of  the  United  States  ? 

2.  Is  it  expedient  to  establish  and  maintain  such  an  institution  ? 

3.  Is  it  expedient  to  establish  "a  national  bank,  founded  upon  the  credit  of 
the  Government  and  its  revenues?" 

1.  If  the  concurrence  of  all  the  departments  of  the  Government,  at  differ- 
ent periods  of  our  history,  under  every  administration,  and  during  the  ascen- 
dency of  both  the  great  political  parties,  into  which  the  country  was  divided, 
soon  after  the  adoption  of  the  present  constitution,  shall  be  regarded  as  having 
the  authority  ascribed  to  such  sanctions  by  thejcommon  consent  of  all  well 
regulated  communities,  the  constitutional  power  of  Congress  to  incorporate  a 
bank,  may  be  assumed  as  a  postulate  no  longer  open  to  controversy.  In  little 
more  than  two  years  after  the  Government  went  into  operation,  and,  at  a  pe- 
riod when  most  of  the  distinguished  members  of  the  federal  convention  were 
either  in  the  executive  or  legislative  councils,  the  act,  incorporating  the  first 
bank  of  the  United  States,  passed  both  branches  of  Congress  by  large  majori- 
ties, and  received  the  deliberate  sanction  of  President  Washington,  who  had 
then  recently  presided  over  the  deliberations  of  the  convention.  The  consti- 
tutional power  of  Congress  to  pass  the  act  of  incorporation  was  thoroughly 
investigated,  both  in  the  Executive  cabinet  and  in  Congress,  under  circum- 
stances, in  all  respects  propitious  to  a  dispassionate  decision.  There  was,  at 
that  time,  no  organization  of  political  parties,  and  the  question  was,  there- 
fore, decided  by  those  who,  from  their  knowledge  and  experience,  were  pecu- 
liarly qualified  to  decide  correctly,  and  who  were  entirely  free  from  the  influ- 
ence of  that  party  excitement  and  prejudice  which  would  justly  impair,  in  the 
estimation  of  posterity,  the  authority  of  a  legislative  interpretation  of  the  con- 
stitutional charter.  No  persons  can  be  more  competent  to  give  a  just  con- 
struction to  the  constitution,  than  those  who  had  a  principal  agency  in  fram- 
ing it;  and  no  administration  can  claim  a  more  perfect  exemption  from  all 
those  influences  which,  sometimes,  pervert  the  judgments,  even  of  the  most 
wise  and  patriotic,  than  that  of  the  Father  of  his  Country,  during  the  first 
term  of  his  service. 


/ 


736  BANK   OF  THE   UNITED    STATES. 

Such  were  the  circumstances  under  which  all  the  branches  of  the  National 
Legislature  solemnly  determined  that  the  power  of  creating  a  national  bank 
\yas  vested  in  Congress  by  the  constitution.  The  bank,  thus  created,  con- 
tinued its  operations  for  twenty  years — the  period  for  which  its  charter  was 
granted — during  which  time  public  and  private  credit  were  raised  from  a 
prostrate  to  a  very  elevated  condition,  and  the  finances  of  the  nation  were 
placed  upon  the  most  solid  foundation. 

When  the  charter  expired,  in  1811,  Congress  refused  to  renew  it,  princi- 
pally owing,  as  the  committee  believe,  to  the  then  existing  state  of  political 
parties.  Soon  after  the  bank  was  chartered,  the  two  great  parties  that  have 
since  divided  the  country,  began  to  assume  an  organized  existence.  Mr.  Jef- 
ferson and  Mr.  Madison",  the  former  in  the  Executive  cabinet,  and  the  latter 
in  Congress,  had  been  opposed  to  the  establishment  of  the  bank,  on  constitu- 
tional grounds,  and  being  placed  at  the  head  of  the  party  most  unfavorable  to 
the  extension  of  the  powers  of  the  Government,  by  implication  the  bank 
question  came  to  be  regarded  as,  in  some  degree,  the  test  of  political  prin- 
ciple. 

When  Mr.  Jefferson  came  into  povyer,  upon  the  strong  tide  of  a  great  po- 
litical revolution,  the  odium  of  the  alien  and  sedition  laws  was,  in  part,  com- 
municated to  the  Bank  of  the  United  States;  and,  although  he  gave  his  official 
sanction  to  an  act,  creating  a  new  branch  of  that  institution,  at  New  Orleans, 
and  to  another  to  punish  the  counterfeiting  of  its  bills,  yet,  when  the  question 


member  of  the  Senate,  were  decidedly  in  favor  of  the  renewal,  sustaining  the 
measure  by  able  arguments,  the  votes  in  both  branches  of  Congress  were  dis- 
tinctly marked  as  party  votes.  At  no  time,  since  the  commencement  of  the 
Government,  has  there  existed  a  more  violent  party  excitement,  than  that 
which  marked  the  period  under  review.  It  was  the  period  of  the  embargo, 
non-intercourse,  and  other  commercial  restrictions;  when  the  undiscriminat- 
ing  opposition  of  the  leaders  of  the  federal  party  to  the  measures  adopted  by 
the  administration,  to  vindicate  our  rights  against  British  aggression,  had 
caused  the  great  majority  of  the  American  People  to  view  these  Leaders  as  the 
apologists  pt  a  nation,  already  regarded  in  the  light  of  a  public  enemy.  When, 
to  these  circumstances,  we  add,  that  the  stock  of  the  bank  was  principally 
held  by  British  subjects,  and  Americans  of  the.  unpopular  parly,  the  House 
will  readily  perceive  how  great  were  the  national  and  party  prejudices  which 
must  have  been  arrayed  against  the  proposition  to  renew  its  charter.  It  was 
stated  bv  Mr.  Clay,  in  a  speech  delivered  in  the  Seriate,  that  seven -tenths  of 
the  stock  belonged  to  British  subjects,  and  that  certain  English  noblemen,  and 
a  late  lord  chancellor,  were  among  the  very  largest  of  the  stockholders.  With 
all  these  difficulties  to  encounter,  the  proposition  for  renewing  the  charter  was 
lost  only  by  the  casting  vote  of  the  President  of  the  Senate,  and  by  a  majority 
of  a  single  vote  in  the  House  of  Representatives. 

In  less  than  three  years  after  the  expiration  of  the  charter — the  war  with 
Great  Britain  having  taken  place  in  the  mean  time — the  circulating  medium 
became  so  disordered,  the  public  finances  so  deianged,  arid  the  public  credit 
so  impaired,  that  the  enlightened  patriot,  Mr.  Dallas,  who  then  presided  over 
the  Treasury  Department,  with  the  sanction  of  Mr.  Madison,  and,  as  it  is  be- 
lieved, every  member  of  the  cabinet,  recommended  to  Congress  the  establish- 
ment of  a  national  bank,  as  the  only  measure  by  which  the  public  credit  could 
be  revived,  and  the  fiscal  resources  of  the  Government  redeemed  from  a 
ruinous,  and  otherwise  incurable  embarrassment:  and,  such  had  been  the  im- 


pressive lesson  taught  by  a  very  brief,  but  fatal  experience,  that  the  very  in- 
stitution, which  had  been  so  recently  denounced,  and  rejected  by  the  repub- 
lican party,  being  now  recommended  by  a  republican  administration,  was 
carried  through  both  branches  of  Congress,  as  a  republican  measure,  by  an 
overwhelming  majority  of  the  republican  party.  It  is  true  that  Mr.  Madison 
ditl  not  approve  and  sign  the  bill  which  passed  the  two  Houses,  because  it  was 


REPORT    OF    COMMITTEE,    1830.  737 

Hot  such  a  bill  as  had  been  recommended  by  the  Secretary  of  the  Treasury, 
and  because  the  bank  it  proposed  to  create  was  not  calculated,  in  the  opinion 
ofthe  President,  to  relieve  the  necessities  of  the  country.  Hut  he  premised 
his  objections  to  the  measure,  by  k4  waiving  the  question  of  the  constitutional 
authority  of  the  Legislature  to  establish  an  incorporated  bank,  as  being  pre- 
cluded, in  his  opinion,  by  repeated  recognitions,  under  varied  circumstances, 
ofthe  validity  of  such  an  institution,  in  acts  ofthe  Legislative,  Executive,  and 
Judicial  branches  of  the  Government,  accompanied  by  indications,  in  differ- 
ent modes,  of  a  concurrence  of  the  general  will  of  the  nation."  Another 
bill  was  immediately  introduced,  and  would,  in  all  probability,  have  become 
a  law,  had  not  the  news  of  peace,  by  doing  away  the  pressure  of  the  emer- 
gency, induced  Congress  to  suspend 'further  proceedings  on  the  subject  until 
the  ensuing  session.  At  the  commencement  of  that  session.  Mr.  Madison 
invited  the  attention  of  Congress  to  the  subject,  and  Mr.  Dallas  again  urged 
the  necessity  of  establishing  a  bank,  to  restore  the  currency,  and  facilitate  the 
collection  and  disbursement  of  (he  public  revenue;  and  so  deep  and  solemn 
was  the  conviction,  upon  the  minds  of  the  public  functionaries,  that  such'an 
institution  was  t'ne  only  practicable  means  ot  restoring  the  circulating  medium 
to  a  state  of  soundness,  that,  notwithstanding  the  decided  opposition  of  all  the 
State  banks  and  their  debtors,  and,  indeed,  the  whole  debtor  class  of  the 
community,  the  act  incorporating  the  present  Bank  of  the  United  States 
was  passed  by  considerable  majorities  in  both  branches  of  Congress,  and  ap- 
proved by  Mr.  Madison. 

This  brief  history  of  the  former  and  present  bank  forcibly  suggests  a  few 
practical  reflections.  It  is  to  be  remarked,  in  the  first  place,  that,  since  tin- 
adoption  of  the  constitution,  a  bank  has  existed,  under  the  authority  of  tin- 
Federal  Government,  for  thirty  three  out  of  forty  years;  during  which  time, 
public  and  private  credit  have  been  maintained  at  an  elevation  fully  equal  to 
what  has  existed  in  any  nation  in  the.  world:  whereas,  in  the  two  short  inter- 
vals, during  which  no  national  bank  existed,  public  and  private  credit  were 
greatly  impaired,  and,  in  the  latter  instance,  the  fiscal  operations  of  the  Go- 
vernment were  almost  entirely  arrested.  In  the  second  place,  it  is  worthy  of 
special  notice,  that,  in  both  the  instances  in  which  Congress  has  created  a 
bank,  it  has  been  done  under  circumstances  calculated  to  give  the  highest 
authority  to  the  decision.  The  first  instance,  as  has  been  already  remarked, 
was  in  the  primitive  days  ofthe  republic,  when  the  patriots  ofthe  Revolution, 
and  the  sages  ofthe  Federal  Convention,  were  the  leading  members  both  of 
the  Executive  and  Legislative  councils;  and  when  General  Washington,  who, 
at  the  head  of  her  armies,  had  conducted  his  country  to  independence,  and, 
as  the  head  of  the  convention,  had  presided  over  those  deliberations  which  re- 
sulted in  the  establishment  ofthe  present  constitution,  was  the  acknowledged 
President  of  a  People,  undistracted  by  party  divisions.  The  second  instance 
was  under  circumstances  of  a  very  different  but  equally  decisive  character. 
We  find  the  very  party,  which  had  so  recently  defeated  the  proposition  to 
renew  the  charter  of  the  old  bank,  severely  schooled  both  by  adversity  and 
experience,  magnanimously  sacrificing  the  pride  of  consistency,  and  the  pre- 
judices of  party,  at  the  shrine  of  patriotism.  It  may  be  said,  without  dispa- 
ra§ement?  that  an  assembly  of  higher  talent  and  purer  patriotism  has  never 
existed,  smce^the  days  of  the  Re  volution,  than  the  Congress  by  which  the  pre- 
sent bank  was  incorporated.  If  ever  a  political  party  existed,  of  which  it 
might  be  truly  said,  that  "  all  the  ends  they  aimed  at  were  their  country's," 
it  was  the  republican  party  of  that  day.  They  had  just  conducted  the  country 
through  the  perils  of  a  war,  waged  in  defence  of  her  rights  and  honor,  and, 
elevating  their  views  far  above  the  narrow  and  miserable  ends  of  party  strife, 
sought  only  to  advance  the  permanent  happiness  of  the  People.  It  was  to 
this  great  end,  that  they  established  the  present  bank. 

In  this  review,  it  will  be  no  less  instructive  than  curious,  to  notice  some  of 

the  changes  made  in  the  opinions  of  prominent  men,  yielding  to  the  authority 

of  experience.     Mr.  Madison,  who  \vas  the  leading  opponent  of  the  bank 

created  in  171)1,  recommended  and  sanctioned  the  bank  created  in  1816;  and 

93 


738  RANK  OF  THE  UNITED  STATES. 

Mr.  (May,  who  strenuously  opposed  the  renewal  of  the  charter  in   1811,  a* 
strenuously  supported  the  proposition  to  grant  the  charter  in  1810. 

That  may  be  said  of  the  bank  charter,  winch  can  be  said  of  few  contested 
questions  of  constitutional  power.  Both  the  great  political  parties  that  have 
so  long  divided  the  country,  have  solemnly  pronounced  it  to  be  constitutional, 
and  there  are  but  very  few  of  the  prominent  men  of  either  party,  who  do  not 
stand  committed  in  its  favor.  When,  to  this  imposing  array  of  authorities, 
the  committee  add  the  solemn  and  unanimous  decision  of  the  Supreme  Court, 
in  a  case  which  fully  and  distinctly  submitted  the  constitutional  question  to 
their  cognizance,  may  they  not  ask,  in  the  language  of  Mr.  Dallas,  "  can  it 
be  deemed  a  violation  of  the  right  of  private  opinion  to  consider  the  constitu- 
tionality of  a  national  bank  as  a  question  forever  settled  and  at  rest?" 

And  here  the  committee  beg  to  be  distinctly  understood,  as  utterly  dis 
claiming  the  idea  of  ascribing  to  the  decision  of  any  or  of  all  the  departments 
of  the  Government,  upon  a  great  constitutional  question,  the  binding  authority 
which  belongs  to  judicial  precedents,  in  cases  of  mere  private  right,  depend- 
ing upon  the  construction  of  the  ordinary  acts  of  the  Legislature.  No  length 
of  prescription,  or  concurrence  of  authority,  can  consecrate  the  usurpation  of 
powers  subversive  of  public  liberty,  and  destructive  of  public  happiness.  But, 
where  the  povyer  exercised  is  clearly  conducive  to  the  public  welfare,  and  its 
constitutionality  is  merely  doubtful,  it  would  seem  to  be  one  of  the  most  ob- 
vious dictates  of  practical  wisdom,  to  regard  the  decision  of  those  who  had 
the  best  means  of  ascertaining  the  intention  of  the  constitution,  and  who  were 
actuated  by  the  most  undoubted  purity  and  disinterestedness  of  motive,  as  of 
sufficient  authority,  at  least,  to  overrule  theoretical  objections  and  silence 
individual  scruples. 

The  committee  will  now  submit  a  few  remarks,  with  the  design  of  showing, 
that,  vievying  the  constitutionality  of  the  bank  as  an  original  question,  the  ar- 
guments in  fts  favor  are,  at  least,  as  strong  as  those  against  it. 

The  earliest,  and  the  principal  objection  urged  against  the  constitutionality 
of  a  national  bank,  was,  that  Congress  had  not  the  power  to  create  corpora- 
tions. That  Congress  has  a  distinct  and  substantive  power  to  create  corpo- 
rations, without  reference  to  the  objects  entrusted  to  its  jurisdiction,  is  a 
proposition  which  never  has  been  maintained,  within  the  knowledge  of  the 
committee;  but,  that  any  one  of  the  powers,  expressly  conferred  upon  Con- 
gress, is  subject  to  the  limitation  that  it  shall  not  be  carried  into  effect  by  the 
agency  of  a  corporation,  is  a  proposition  which  cannot  be  maintained,  in  the 
opinion  of  the  committee. 

If  Congress,  under  the  authority  to  pass  all  laws  necessary  and  proper  for 
carrying  into  effect  the  powers  vested  in  all  or  any  of  the  departments  of  the 
Government,  may  rightfully  pass  a  law  inflicting  the  punishment  of  death. 
without  any  other  authority,  it  is  difficult  to  conceive  why  it  may  not  pass  a 
law,  under  the  same  authority,  for  the  more  humble  purpose  of  creating  a  cor- 
poration. The  power  of  creating  a  corporation  is  one  ot  the  lowest  attributes, 
or,  more  properly  speaking,  incidents,  of  sovereign  power.  The  chartering 
of  a  bank,  for  example,  does  not  authorize  the  corporation  to  do  any  thing 
which  the  individuals  composing  it  might  not  do  without  the  charter-  It  is 
the  right  of  every  individual  of  the  Union  to  give  credit  to  whom  he  chooses, 
and  to  obtain  credit  where  he  can  get  it.  It  is  not  the  policy  of  any  commer 
cial  country  to  restrict  the  free  circulation  of  credit,  whether  in  the  form  of 
promissory  notes,  bills  of  exchange,  or  bank  notes.  The  charter  of  the 
Bank  of  the  United  States,  therefore,  merely  enables  the  corporation  to  do, 
in  an  artificial  capacity,  and  with  more  convenience,  what  it  would  be  lawful 
for  the  individual  corporators  to  do  without  incorporation.  Mr.  Girard  es- 
tablished a  bank  in  Philadelphia,  without  a  charter,  which  was  in  very  high 
credit  within  the  sphere  of  its  circulation;  and  it  cannot  be  doubted  that  he 
might  have  formed  a  banking  co-partnership  with  the  principal  capitalists  in 
the  other  commercial  cities  of  the  Union,  of  which  the  bills  would  nave  had  a 
general  credit  in  every  part  of  the  country,  particularly  if  the  Federal  Govern- 
ment had  provided  that  these  bills  should  be  received  in  discharge  of  its  dues. 


RKPORT    OF    COMMITTEE,    1830.  759 

The  only  material  particular  in  which  the  charter  of  the  Bank  of  the  United 
States  confers  a  privilege  upon  the  corporation,  apparently  inconsistent  with 
the  State  laws,  is,  the  exemption  of  the  individual  property  of  the  corporators 
from  responsibility  for  the  debts  of  the  corporation.  But,  if  the  community 
deal  with  the  bank,  knowing  that  the  capital  subscribed  is  alone  liable  for  its 
debts,  no  one  can  complain  either  of  imposition  or  injury;  and,  in  point  of 
fact,  no  one  ever  has  complained  on  that  score,  or  ever  will.  The  real  com- 
plaint against  the  bank,  is  not  that  it  has  not  a  sufficient  basis  for  its  credit, 
but  that  its  credit  is  too  extensive.  The  objection  lies,  therefore,  not  against 
the  artificial  character  communicated  to  the  stockholders  by  the  charter,  but 
against  the  pecuniary  operations  of  the  bank  itself.  Now,  these  operations 
consist  in  the  use  ot  its  own  capital — a  faculty  not  surely  derived  from  the 
Government,  but,  in  the  exercise  of  which,  the  Government  imposes  many 
useful  restrictions  for  the  benefit  of  itself  and  of  the  community. 

The  committee  have  presented  this  brief  analysis  of  a  bank  corporation, 
with  the  view  of  showing  that  there  is  nothing,  m  the  nature  of  me  thing, 
which  renders  it  unfit  to  be  an  instrument  in  the  hands  of  a  Government,  ad- 
mitted to  be  sovereign  in  its  appropriate  sphere,  for  carrying  into  effect  powers 
expressly  delegated. 

It  now  remains  for  the  committee  to  show  that  the  Bank  of  the  United 
States  is  a  *fc  necessary  and  proper,"  or,  in  other  words,  a  natural  and  appro- 
priate means  of  executing  the  powers  vested  in  the  Federal  Government.  In 
the  discussion  of  1791,  and  also  in  that  before  the  Supreme  Court,  the  powers 
of  raising,  collecting,  and  disbursing  the  public  revenue,  of  borrowing  money 
on  the  credit  of  the  United  States,  and  paying  the  public,  debt,  were  those 
which  were  supposed  mosr.  dearly  to  carry  with  them  the  incidental  right  of 
incorporating  a  bank,  to  facilitate  the^e  operations.  There  can  be  no  doubt 
that  these  fiscal  operations  are  greatly  facilitated  by  a  bank,  and,  it  is  confi- 
dently believed,  that  no  person  has  presided  twelve  months  over  the  treasury, 
from  its  first  organization  to  the  present  time,  without  coming  to  the  conclu- 
sion that  such  an  institution  is  exceedingly  useful  to  the  public  finances  in 
time  of  peace,  but  indispensable  in  time  of  war.  But,  as  this  view  of  the 
question  has  been  fully  unfolded  in  former  discussions,  familiar  to  the  House, 
the  committee  will  proceed  to  examine  the  relation  which  the  Bank  of  the 
United  States  bears  to  another  of  the  powers  of  the  Federal  Government,  but 
slightly  adverted  to  in  former  discussions  of  the  subject. 

The  power  to  "  coin  money  and  fix  the  value  thereof,"  is  expressly  and 
exclusively  vested  in  Congress.  This  grant  was  evidently  intended  to  invest 
Congress  with  the  power  of  regulating  the  circulating  medium.  *4  Coin"  was 
regarded,  at  the  period  of  training  the  constitution,  as  synonymous  with 
'*  currency;"  as  it  was  then  generally  believed  that  bank  notes  could  only  be 
maintained  in  circulation  by  being  the  true  representative  of  the  precious  me- 
tals. The  word  "coin,"  therefore,  must  be  regarded  as  a  particular  term, 
standing  as  the  representative  of  a  general  idea.  No  principle  of  sound  con- 
struction will  justify  a  rigid  adherence  to  the  letter,  in  opposition  to  the  plain 
intention  of  the  clause.  If.  for  example,  the  gold  bars  ot  Ricardo  should  be 
substituted  for  our  present  coins,  by  the  general  consent  of  the  commercial 
world,  could  it  be  maintained  thai  Congress  would  not  have  the  power  to 
make  such  money,  and  fix  its  value,  because  it  is  not "  coined?"  This  would 
be  sacrificing  sense  to  sound,  and  substance  to  mere  form.  This  clause  of  the 
constitution  is  analogous  to  that  which  gives  Congress  the  power  4kto  establish 
post  roads."  Giving  to  the  word  "  establish"  its  restricted  interpretation,  as 
being  equivalent  to  *'  fix,"  or  "  prescribe,"  can  it  be  doubted  that  Congress 
has  the  power  to  establish  a  canal  or  a  river,  as  a  post  route,  as  well  as  a 
road?  Roads  were  the  ordinary  channels  of  conveyance,  and  the  term  was, 
therefore,  used  as  synonymous  with  " routes,"  vyhatever  might  be  the  chan- 
nel of  transportation;  and,  in  like,  manner,  fc<  coin,"  being  the  ordinary  and 
most  known  form  of  a  circulating  medium,  that  term  was  used  as  synonymous 
with  currency. 


740  BANK   OF   THK    UNITED    STATES. 

An  argument  in  I'avor  of  the  view  just  taken,  may  be  fairly  deduced  from 
the  fact,  that  the  States  are  expressly  prohibited  from  "  coining  money,  or 
emitting  bills  of  credit,"  and  from  "  making  any  thing  but  gold  and  silver  a 
lawful  tender  in  payment  of  debts."  This  strongly  confirms  the  idea,  that 
the  subject  of  regulating  the  circulating  medium,  whether  consisting  of  coin 
or  paper,  was,  at  the  same  time  that  it  was  taken  from  the  control  of  the 
States,  vested  in  the  only  depository  in  which  it  could  be  placed,  consistently 
with  the  obvious  design  of  having  a  common  measure  of  value  throughout  the 
Tn  ion. 

But,  even  if  it  should  be  conceded,  that  the  grant  of  power  to  "  coin  money 
and  fix  the  value  thereof,"  does  not,  in  its  terms,  give  Congress  the  power  of 
regulating  any  other  than  the  "  coined"  currency  of  the  Union,  may  not  the 
power  of  regulating  any  substituted  currency,  and  especially  one  which  is  the 
professed  representative  of  coin,  be  fairly  claimed  as  an  incidental  power — 
as  an  essential  means  of  carrying  into  effect  the  plain  intention  of  the  constitu- 
tion, in  clothing  Congress  with  the  principal  power?  This  power  was  granted 
in  the  same  clause  with  that  to  regulate  weights  arid  measures,  and  for  similar 
reasons.  The  one  was  designed  to  ensure  a  uniform  measure  of  value,  as  the 
other  was  designed  to  ensure  a  uniform  measure  of  quantity.  The  former  is 
decidedly  the  more  important,  and  belongs  essentially  to  the  General  Govern- 
ment, according  to  every  just  conception  of  our  system.  A  currency  of  uni- 
form value  is  essential  to  what  every  one  will  admit  to  be  of  cardinal  import- 
ance— the  equal  action  of  our  revenue  system  upon  the  different  parts  of  the 
Union.  The  state  of  things  which  existed  when  the  bank  was  incorporated, 
furnished  a  most  pregnant  commentary  on  this  clause  of  the  constitution. 
The  currency  of  the  country  consisted  of  the  paper  of  local  banks,  variously 
depreciated.  At  one  of  the  principal  sea  ports  the  local  currency  was  twenty 
per  cent,  below  par.  Now  it  was  in  vain  for  Congress  to  regulate  the  value  of 
coin,  when  the  actual  currency,  professing  to  be  its  equivalent,  bore  no  fixed 
relation  to  it.  This  great  and  essential  power  of  fixing  the  standard  of  value, 
was,  in  point  of  fact,  taken  from  Congress,  and  exercised  by  some  hundreds 
of  irresponsible  banking  corporations,  with  the  strongest  human  motives  to 
abuse  it,  because  their  enormous  profits  resulted  from  the  abuse.  The  power 
of  laying  and  collecting  imposts  and  excises  is  expressly  subject  to  the  con- 
dition, that  they  "  shall  be  uniform  throughout  the  United  States;"  and  it  is 
also  provided,  that  "  no  preference  shall  be  given,  by  any  regulation  of  com- 
merce or  revenue,  to  the  ports  of  one  State  over  those  of  another."  Now, 
when  it  is  known  that  the  circulating  medium  of  Baltimore  was  twenty  per 
cent,  below  the  value  of  the  circulating  medium  of  Boston,  is  it  not  apparent 
that  an  impost  duty,though  nominally  uniform,  would,  in  effect,  make  a  discri- 
mination in  favor  of  Baltimore,  proportioned  to  the  depreciation  of  the  local 
currency?  Congress,  therefore,  not  only  had  the  power,  but,  as  it  seems  to 
the  committee,  were  under  the  most  solemn  constitutional  obligations  to  re- 
store the  disordered  currency;  and  the  Bank  of  the  United  States  was  not  only 
an  appropriate  means  for  the  accomplishment  of  that  end,  but,  in  the  opinion 
of  the  committee,  the  only  safe  and  effectual  means  that  could  have  been  used. 
This  view  of  the  subject  is  in  full  accordance  with  the  opinion  of  Mr.  Madi- 
son, as  expressed  in  his  message  of  December,  1816:  "  But,"  says  he,  "  for 
the  interest  of  the  community  at  large,  as  well  as  for  the  purposes  of  the  trea- 
sury, it  is  essential  that  the  nation  should  possess  a  currency  of  equal  value, 
credit,  and  use,  wherever  it  may  circulate.  The  constitution  has  entrusted 
Congress,  exclusively,  with  the  power  of  creating  and  regulating  a  currency 
of  that  description,  and  the  measures  which  were  taken,  during  ^the  last  ses- 
sion, in  execution  of  the  power,  give  every  promise  of  success.  The  Bank  of 
the  United  States,  under  auspices  the  most  favorable,  cannot  fail  to  be  an  im- 
portant auxiliary." 

Such  are  the  authorities,  and  such  the  arguments,  which  have  brought  the 
committee  to  the  conclusion,  that  the  power  to  incorporate  a  bank  is  inciden- 
tal to  the  powers  of  collecting  and  disbursing  the  public  revenue;  of  borrow- 
ing money  on  the  credit  of  the  United  Statesj  of  paying  the  public  debt;  and. 


REPORT  OF  COMMITTEE,    1830.  741 

above  all,  of  fixing  and  regulating  the  standard  of  value,  and  thereby  ensuring, 
at  least  so  far  as  the  medium  of  payment  is  concerned,  the  uniformity  and 

Tality  of  taxation. 
.  The  next  question  proposed  for  consideration,  is  the  expediency  of  es- 
tablishing an  incorporated  bank,  with  a  view  to  promote  the  great  ends  al- 
ready indicated-  In  discussing  the  constitutionality  of  such  a  measure,  some 
of  the  considerations  which  render  it  expedient  have  been  slightly  unfolded. 
But  these  require  a  more  full  and  complete  development,  while  others  remain 
to  be  presented. 

It  must  be  assumed  as  the  basis  of  all  sound  reasoning  on  this  subject,  that 
the  existence  of  a  paper  currency,  issued  by  banks  deriving  their  charters  from 
I  he  State  Governments,  cannot  be  prohibited  by  Congress.  Indeed,  bank 
credit  and  bank  paper  are  so  extensively  interwoven  with  the  commercial 
operations  of  society,  that,  even  if  Congress  had  the  constitutional  power,  it 
would  be  utterly  impossible  to  produce  so  entire  a  change  in  the  monetary 
system  of  the  country,  as  to  abolish  the  agency  of  banks  of  discount,  without 
involving  the  community  in  ah  the  distressing  embarrassments  usually  attend- 
ant on  great  political  revolutions,  subverting  the  titles  to  private  property. 
The  sudden  withdrawal  of  some  hundred  millions  of  bank  credit,  would  be 
equivalent,  in  its  effects,  to  the  arbitrary  and  despotic  transfer  of  .the  property 
of  one  portion  of  the  community  to  another,  to  the  extent,  probably,  ot  half 
that  amount.  Whatever,  therefore,  may  be  the  advantages  of  a  purely  me- 
tallic currency,  and  whatever  the  objections  to  a  circulating  medium,  partly 
composed  of  bank  paper,  the  committee  consider  that  they  are  precluded,  by 
the  existing  state  of  things,  from  instituting  a  comparison  between  them,  with 
a  view  to  any  practical  result. 

If  they  were  not  thus  precluded,  and  it  were  submitted  to  thrin  as  an  ori- 
ginal question,  whether  the  acknowledged  and  manifold  facilities  of  bank  credit 
and  bank  paper  are  not  more  than  counterbalanced  by  the  distressing  vicissi- 
tudes in  trade  incident  to  their  use,  they  are  by  no  means  prepared  to  say, 
that  they  would  not  give  a  decided  preference  to  the  more  costly  and  cumber-- 
some me.  Hum. 

But  the  question  really  presented  for  their  determination,  is  not  between  a 
metallic  and  a  paper  currency,  but  between  a  paper  currency  of  uniform  value, 
and  subject  to  the  control  of  the  only  power  competent  to  its  regulation, 
and  a  paper  currency  of  varying  and  fluctuating  value,  and  subject  to  no 
common  or  adequate  control  whatever.  On  this  question,  it  would  seem 
that  there  could  scarcely  exist  a  difference  of  opinion;  and  that  this  is  sub- 
stantially the  question  involved  in  considering  the  expediency  of  a  national 
bank,  will  satisfactorily  appear  by  a  comparison  of  the  state  of  the  currency 
previous  to  the  establishment  of  the  present  bank,  and  its  condition  for  the 
last  ten  years. 

Soon  after  the  expiration  of  the  charter  of  the  first  Bank  of  the  United  States, 
an  immense  number  of  local  banks  sprung  up  under  the  pecuniary  exigencies 
produced  by  the  withdrawal  of  so  large  an  amount  of  bank  credit,  as  neces- 
sarily resulted  from  the  winding  up  of  its  concerns — an  amount  falling  very 
little  short  of  fifteen  millions  of  dollars.  These  banks  being  entirely  free  from 
the  salutary  control  which  the  Bank  of  the  United  States  jiad  recently  exer- 
cised over  the  local  institutions,  commenced  that  system  of  imprudent  trading 
and  excessive  issues,  which  speedily  involved  the  country  in  all  the  embar- 
rassments of  a  disordered  currency.  The  extraordinary  stimulus  of  a  heavy 
war  expenditure,  derived  principally  from  loans,  and  a  corresponding  multi- 
plication of  local  banks,  chartered  by  the  double  score  in  some  of  the  States, 
hastened  the  catastrophe  which  must  have  occurred,  at  no  distant  period, 
vyithout  these  extraordinary  causes.  The  last  year  of  the  war  presented  the 
singular  and  melancholy  spectacle  of  a  nation  abounding  in  resources,  a  peo- 
ple abounding  in  self-devoting  patriotism,  and  a  Government  reduced  to  the 
very  brink  of  avowed  bankruptcy,  solely  for  the  want  of  a  national  institu- 
tion, which,  at  the  same  time  that  it  would  have  facilitated  the  Government 
loans  and  other  treasury  operations,  would  have  furnished  a  circulating  me 


742  BANK   OF   THE    UNITED    STATES. 

ilium  of  general  credit  in  every  part  of  the  Union.  In  this  view  of  the  subject, 
the  committee  are  fully  sustained  by  the  opinion  of  Mr.  Dallas,  then  vSecretarv 
of  the  Treasury,  and  by  the  concurring;  and  almost  unanimous  opinion  of  all 
parties  in  Congress:  for,  whatever  diversity  of  opinion  prevailed,  as  to  the 
proper  basis  and  organization  of  a  bank,  almost  every  one  agreed  that  a  na- 
tional bank,  of  some  sort,  was  indispensably  necessary  to  rescue  the  country 
from  the  greatest  of  financial  calamities. 

The  committee  will  now  present  a  brief  exposition  of  the  state  of  currency  at 
the  close  of  the  war;  of  the  injury  which  resulted  from  it,  as  well  to  the  Go- 
vernment as  to  the.  community;  and  their  reasons  lor  believing  that  it  could 
not  have  been  restored  to  a  sound  condition,  and  cannot  now  be  preserved  in 
that  condition,  without  the  agency  of  such  an  institution  as  (he  Bank  of  the 
United  States. 

The  price,  current  appended  to  this  report  \yill  exhibit  a  scale  of  deprecia- 
tion in  the  local  currency,  ranging,  through  various  degrees,  to  twenty,  and 
even  to  twenty-five  per  cent.  Among  the.  principal  Eastern  cities,  Washing- 
ton and  Baltimore  were  the  points  at  which  the  depreciation  was  greatest. 
The  paper  of  the  banks  in  these  places  was  from  twenty  to  t\yenly-t\vo  per 
cent,  below  par.  At  Philadelphia  the  depreciation  was  considerably  less, 
though,  even  there,  it  was  from  seventeen  to  eighteen  per  cent.  In  New 
York  and  Charleston,  it  was  from  seven  to  ten  per  cent.  But,  in  the  interi- 
or of  the  country,  where  banks  were  established,  the  depreciation  was  even 
greater  than  at  Washington  and  Baltimore.  In  the  western  part  of  Pennsyl- 
vania, and  particularly  at  Pittsburgh,  it  was  twenty-live  per  cent.  These 
statements,  however,  of  the  relative  depreciation  of  bank  paper  at  various  pla- 
ces, as  compared  with  specie,  give  a  very  inadequate  idea  of  the  enormous 
evil  inflicted  upon  the  community  by  the  excessive  issues  of  bank  paper. 
No  proposition  is  better  established  than  that  the  value  of  money,  whether  it 
consists  of  specie  or  paper,  is  depreciated  in  exact  proportion  to  the  increase 
of  its  quantity,  in  any  given  state  of  the  demand  for  it.  If,  for  example,  the 
banks,  in  1816,  doubled  the  quantity  of  the  circulating  medium  by  their  ex- 
cessive issues,  they  produced  a  general  depredation  of  the  entire  mass  of  the 
currency,  including  gold  and  silver,  proportioned  to  the  redundancy  of  the  is- 
sues, and  wholly  independent  of  the  relative  depreciation  of  bank  paper  at  dif- 
ferent places,  as  compared  with  specie.  The  nominal  money  price  of  every 
article  was,  of*course,  one  hundred  per  cent,  higher  than  it  would  have  been, 
but  for  the  du plication  of  the  quantity  of  the  circulating  medium.  Money  is 
nothing  more  nor  less  than  the  measure  by  which  the  relative  value  of  all  arti- 
cles of  merchandise  is  ascertained.  If,  when  the  circulating  medium  is  fifty 
millions,  an  article  should  cost  one  dollar,  it  would  certainly  cost  two,  if, 
without  any  increase  of  the  uses  of  a  circulating  medium,  its  quantity  should 
be  increased  to  one  hundred  millions.  This  rise  in  the  price  of  commodities, 
or  depreciation  in  the  value  of  money,  as  compared  with  them,  would  not  be 
owing  to  the  want  of  credit  in  the  bank  bills,  of  which  the  currency  happened 
to  be  composed.  It  would  exist,  though  these  bills  were  of  undoubted  credit, 
and  convertible  into  specie  at  the  pleasure  of  the  holder,  and  would  result. 
simply  from  the  redundancy  of  their  quantity.  It  is  important  to  a  just  un- 
derstanding of  the  subject,  that  the  relative  depreciation  of  bank  paper  at  dif- 
ferent places,  as  compared  with  specie,  should  not  be  confounded  with  this 
general  depreciation  of  the  entire  mass  of  the  circulating  medium,  including 
specie.  Though  closely  allied,  both  in  their  causes  and  effects,  they  deserve 
to  be  separately  considered. 

The  evils  resulting  from  the  relative  depreciation  of  bank  paper  at  different 
places,  are  more  easily  traced  to  their  causes,  more  palpable  in  their  nature, 
and,  consequently,  more  generally  understood  by  the  community.  Though 
much  less  ruinous  than  the  evils  resulting  from  the  general  depreciation  of 
the  whole  currency,  they  are  yet  of  sufficient  magnitude  to  demand  a  full  ex- 
position. 

A  very  serious  evil,  already  hinted  at,  which  grew  out  of  the  relative  de- 
preciation of  bank  paper,  at  the  different  points  of  importation,  was  its  inevi- 


REPORT   OF  COMMITTEE,    1830  743 

fable  tendency  to  draw  all  the  importations  of  foreign  merchandise  to  the  ci- 
ties where  the  depreciation  was  greatest,  and  divert  them  from  those  where, 
the.  currency  was  comparatively  sound.  If  the  Bank  of  the  United  States 
had  not  been  established,  and  trie  Government  had  been  left  without  any  al- 
ternative but  to  receive  the  depreciated  local  currency,  it  is  difficult  to  ima- 
gine the  extent  to  which  the  evasion  of  the  revenue  laws  would  have  been  car- 
ried. Every  State  would  have  had  an  interest  to  encourage  the  excessive  is- 
sues of  its  banks,  and  increase  the  degradation  of  its  currency,  with  a  view  to 
attract  foreign  commerce.  Even  in  the  condition  which  the  currency  had 
reached  in  1816,  Boston,  and  New  York,  and  Charleston,  would  have  found 
it  advantageous  to  derive  the  supplies  of  foreign  merchandise  through  Balti- 
more; and  commerce  would,  undoubtedly,  have  taken  that  direction,  had  not 
the  currency  been  corrected.  To  avoid  this  injurious  diversion  of  foreign 
imports,  Massachusetts,  and  New  York,  and  South  Carolina,  would  have 
been  driven,  by  all  motives  of  self  defence  and  self  interest,  to  degrade  their 
respective  currencies  at  least  to  a  par  with  the  currency  of  Baltimore;  :ind 
thus  a  rivalry  in  the  career  of  depreciation  would  have  sprung  up,  to  which  no 
limit  can  be  assigned.  As  the  tendency  of  this  state  of  things  would  have  been 
to  cause  the  largest  portion  of  the  revenue  to  be  collected  at  a  few  places,  ami 
in  the  most  depreciated  of  the  local  currency,  it  would  have  follo\yed  that  a 
very  small  part  of  that  revenue  would  have  been  disbursed  at  the  points  where 
it  was  collected.  The  Government  would,  consequently,  have  been  compel- 
led to  sustain  a  heavy  loss  unon  the  transfer  of  its  funds  to  the  points  of  expen- 
diture. The  annual  loss  which  would  have  resulted  from  these  causes  alone, 
cannot  be  estimated  at  a  less  sum  than  two  millions  of  dollars. 

But  the  principal  loss  which  resulted  from  the  relative  depreciation  of  bank 
paper  at  different  places,  and  its  want  of  general  credit,  was  that  sustained 
by  the  community  in  the  great  operations  of  commercial  exchange-  'The  ex- 
tent of  these  operations  annually,  may  be  safely  estimated  at  sixty  millions  of 
dollars.  Upon  this  sum,  the  los\  sustained  by  the  merchants,  and  planters, 
and  Farmers,  and  manufacturers,  was  not  probably  less  than  an  average  of  ton 
per  cent.,  being  the  excess  of  the  rate  of  exchange  between  its  natural  rate  in 
a  sound  state  of  the  currency,  and  beyond  the  rate  to  which  it  has  been  actu- 
ally reduced  by  the  operations  of  the  Bank  of  the  United  States.  It  will  be 
thus  perceived,  that  an  annual  tax  of  six  millions  of  dollars  was  levied  from 
the  industrious  and  productive  classes,  by  the  large  moneyed  capitalists  in 
our  commercial  cities,  who  were  engaged  in  the  business  of  brokerage.  A  va- 
riously depreciated  currency,  and  a  fluctuating  state  of  the  exchanges,  open 
a  wide  and  abundant  harvest  to  the  money  brokers:  and  it  is  not,  therefore, 
surprising,  that  they  should  be  opposed  to  an  institution,  which,  at  the  same 
time  that  it  has  relieved  the  community  from  the  enormous  tax  just  stated,  has 
deprived  them  of  the  enormous  profits  which  they  derived  from  speculating  in 
the  business  of  exchange.  In  addition  to  the  losses  sustained  by  the  commu- 
nity, in  the  great  operations  of  exchange,  extensive  losses  were  suffered 
throughout  the  interior  of  the  country  in  all  the  smaller  operations  of  trade, 
as  well  as  by  the  failure  of  the  numerous  paper  banks,  puffed  into  a  factitious 
credit  by  fraudulent  artifices,  and  having  no  substantial  basis  of  capital  to  en- 
sure the  redemption  of  their  bills, 

But  no  adequate  conception  can  be  formed  of  the  evils  of  a  depreciated  cur- 
rency, without  looking  beyond  the  relative  depreciation,  at  different  places, 
to  the  general  depreciation  of  the  entire  mass.  It  appears  from  the  report  of 
Mr.  Crawford,  the  Secretary  of  the  Treasury,  in  1820,  that,  during  the  gen- 
eral suspension  of  specie  payments,  by  the  local  banks,  in  the  years  1815  and 
1816,  the  circulating  medium  of  the  United  States  had  reached  the  aggregate 
amount  of  one  hundred  and  ten  millions  of  dollars,  and  that,  in  the  year  1819, 
it  had  been  reduced  to  forty-five  millions  of  dollars,  being  a  reduction  of  fifty- 
nine  per  cent,  in  the  short  period  of  four  years.  The  committee  are  inclined 
to  the  opinion,  that  the  severe  and  distressing  operation  of  restoring  a  vicious 
currency  to  a  sound  state,  by  the  calling  in  of  bank  paper,  and  the  curtail- 
ment of  bank  discounts,  had  carried  the  reduction  of  the  currency,  in  1819, 


744  BANK  OF  THE   UNITED  STATES. 

to  a  point  somewhat  lower  than  was  consistent  with  the  just  requirements  of 
the  community  for  a  circulating  medium,  and  that  the  bank  discounts  have 
been  gradually  enlarged  since  that  time,  so  as  to  satisfy  those  requirements. 
It  will  be  assumed,  therefore,  that  the  circulating  medium  of  the  United  States 
has  been  fifty-five  millions  of  dollars  for  the  last  ten  years,  taking  the  average. 

Even  upon  this  assumption  it  will  follow,  that  the  national  currency  has 
been  one  hundred  per  cent,  more  valuable  for  the  last  ten  years,  than  it  was 
in  1816.  In  other  words,  two  dollars  would  purchase  no  more  of  any  com- 
modity, in  1816,  than  one) dollar  has  been  capable  of  purchasing  at  anyftime 
since  1819.  It  is  obvious,  therefore,  that  the  depreciation  of  the  paper  of  par- 
ticular banks,  at  any  particular  time,  as  compared  with  specie,  furnishes  no 
criterion  by  which  to  ascertain  the  general  depreciation  of  the  whole  currency, 
including  specie,  as  compared  with  the  value  of  that  currency  at  a  different 
period.  A  specie  dollar,  in  1816,  would  purchase  no  more  than  half  as  much 
as  a  paper  dollar  will  purchase  at  present. 

Having  endeavored  to  explain,  thus  briefly,  the  general  depreciation  result- 
ing from  a  redundant  currency,  the  committee  will  now  proceed  to  point  out 
some  of  the  injurious  consequences  which  have  resulted  from  those  great 
changes  in  the  standard  of  value,  which  have  been  unavoidably  produced  by 
the  correction  of  the  redundancy. 

An  individual  who  borrowed  a  sum  of  money  in  1816,  and  paid  it  in  1820, 
evidently  returned  to  the  lender  double  the  value  received  from  him;  and  one 
who  paid  a  debt  in  1820,  which  he  had  contracted  in  1816,  as  evidently  paid  clou  - 
ble  the  value  he  had  stipulated  to  pay,  though  nominally  the  same  amount  in 
money.  It  is  in  this  way  that  fluctuations  in  the  quantity  and  value  of  the 
currency  interfere,  in  the  most  unjust  and  injurious  manner,  between  debtor 
and  creditor. 

And  when  banks  have  the  power  of  suspending  specie  payments,  and  of  ar- 
bitrarily contracting  and  expanding  their  issues,  without  any  general  con- 
trol, they  exercise  a  more  dangerous  and  despotic  power  over  the  property 
of  the  community,  than  was  ever  exercised  by  the  most  absolute  Government. 
In  such  a  state  of  things,  every  man  in  the  community  holds  his  property  at 
the  mercy  of  money  making  corporations,  which  have  a  decided  interest  to 
abuse  their  power. 

By  a  course  of  liberal  discounts  and  excessive  issues  for  a  lew  years,  fol- 
lowed by  a,  sudden  calling  in  of  their  debts  and  contraction  of  their  issues, 
they  would  have  the  power  of  transferring  the  property  of  their  debtors  to 
themselves,  almost  without  limit.  Debts  contracted  when  their  discounts 
were  liberal,  and  the  currency,  of  course,  depreciated,  would  be  collected 
when  their  discounts  were  almost  suspended,  and  the  currency,  of  course, 
unnaturally  appreciated ;  and  in  this  way  the  property  of  the  community  might 
pass,  under  the  hammer,  from  its  rightful  owners  to  the  banks,  for  less  than 
one- half  its  intrinsic  value.  If  the  committee  have  not  greatly  mistaken  the 
matter,  there  is  more  of  history  than  of  speculation  in  what  they  have  here 
presented  to  the  consideration  of  the  House. 

It  is  impossible  to  form  any  thing  like  an  accurate  estimate  of  the  injuries 
and  losses  sustained  by  the  community,  in  various  ways,  by  the  disorders  and 
fluctuations  of  the  currency,  in  the  period  which  intervened  between  the  ex- 
piration of  the  old  bank  charter,  and  the  establishment  of  the  present  bank. 
But  some  tolerable  notion  may  be  formed  of  the  losses  sustained  by  the  Go- 
vernment, in  its  fiscal  operations,  during  the  war. 

The  committee  have  given  this  part  of  the  subject  an  attentive  and  careful 
examination,  and  they  cannot  estimate  the  pecuniary  losses  of  the  Govern- 
ment, sustained  exclusively  for  the  want  of  a  sound  currency,  and  an  effi- 
cient system  of  finance,  at  a  sum  less  than  forty-six  millions  of  dollars.  If  they 
shall  make  this  apparent,  the  House  will  have  something  like  a  standard  for 
estimating  the  individual  losses  of  the  community. 

The  Government  borrowed,  during  the  short  period  of  the  war,  eightv  mil- 
lions of  dollars,  at  an  average  discount  of  fifteen  per  cent,  giving  certificates 
of  stock,  amounting  to  eighty  millions  of  dollars,  in  exchange  for  sixty -eight 


REPORT  OF  COMMITTF.F.,    1*30.  745 

millions  of  dollars  in  Mich  bank  paper  as  could  be  obtained.  In  this  state- 
ment treasury  notes  are  considered  as  stock,  at  twenty  per  rent,  discount. 
Upon  the  very  (ace  of  the  transaction,  therefore,  there  was  a  loss  of  twelve 
millions  of  dollars,  which  would,  in  all  probability,  have  been  saved,  if  the 
treasury  had  been  aided  by  such  an  institution  as  the  Bank  of  the  United 
State?.  But  the  sum  of  sixty-eight  millions  of  dollars,  received  by  the  Go- 
vernment, was  in  a  depreciated  currency,  not  more  than  half  as  valuable  as 
that  in  which  the  stock  given  in  exchange  for  it,  has  been  and  will  be  redeem- 
ed. Here,  the.i,  is  another  loss  of  thirty-four  millions,  resulting,  incontesti- 
bly  and  exclusively,  from  the  depreciation  of  the  currency,  and  making,  with 
the  sum  lost  by  the  discount,  forty  six  millions  of  dollars.  While,  then,  the 
Government  sustained  this  great  pecuniary  loss  in  less  than  three  years  of 
war,  amounting,  annually,  to  more  than  the  current  expenses  of  the  Govern 
ment  in  time  of  peace,  it  is  worth  while  to  inquire  who  were  the  persons 
who  profited  to  this  enormous  amount  by  the  derangement  of  the  currency? 
Tt  will  be  found  that  the  whole  benefit  of  this  speculation  upon  the  necessities 
of  the  Government  was  realised  by  stockjobbers  and  money  brokers,  the  very 
same  class  of  persons  who  profited  so  largely  by  the  business  of  commercial 
exchanges,  in  consequence  of  the  disorders  of  the  currency,  and  who  have  the 
same  interest  in  the  recurrence  of  those  disorders  as  lawyers  have  in  litiga- 
tion, or  physicians  in  the  diseases  of  the  human  frame.  Having  presented 
these  general  views  of  the  evils  which  existed  previous  to  the  establishment  of 
the  Bank  of  the  United  States,  it  remains  for  the  committee  to  inquire  how 
far  this  institution  has  effected  a  remedy  of  those  evils. 

The  first  great  question  which  arises  under  this  branch  of  the  inquiry  is, 
whether  or  no  the  bank  has  corrected  the  disorders  of  the  circulating  medium, 
by  providing  a  paper  currency,  convertible  into  specie  at  the  pleasure  of  the 
holder,  and  of  equal  value  with  specie  at  all  points  of  the  Union? 

The  ('hief  Magistrate,  in  that  part  of  his  first  message  which  relates  to  the 
Bank  of  the  United  States,  expresses  the  opinion  that  "it  has  failed  in  the 
great  end  of  establishing  a  uniform  and  sound  currency."  After  giving  to  this 
opinion  all  the  consideration  to  which  it  is  so  justly  entitled,  from  the  eminent 
station  and  high  character  of  the  citi/.en  by  whom  it  is  entertained,  the  com- 
mittee aVe  constrained  to  express  their  respectful  but  decided  dissent  from  il. 
it  is  true  that  the  bank  does  not,  in  all  cases,  redeem  the  bills,  issued  by  any 
one  of  its  branches,  indiscriminately  at  all  the  other  branches;  and  it  is  in  re- 
ference to  this  fact,  as  the  committee  presume,  that  the  President  expresses 
the  opinion  that  the  institution  has  fatted  to  establish  "  a  uniform  and  sound 
currency."' 

It  is  confidently  believed,  that  no  one  of  the  persons  who  were  principally 
instrumental  in  establishing  the  bank,  ever  entertained  an  idea  that  it  would 
attempt  to  redeem  its  bills  at  any  of  its  offices,  other  than  those  by  which  they 
should  be  respectively  issued.  The  charter  certainly  contains  no  such  re- 
quirement, and  it  would  have  been  highly  inexpedient  if  it  had,  to  say  nothing 
of  its  obvious  injustice.  The  inevitable  effect  of  such  a  requirement  would 
have  been  to  compel  the  bank  to  perform  the  whole  of  the  commercial  ex- 
changes of  the  countrv,  without  any  compensation.  It  would  not  be  more 
unjust  to  require  a  mil  road  company  to  transport  all  the  productions  of  the 
country  without  compensation.  No  institution  could  stand  such  an  operation; 
and  it  was  the  injudicious  attempt  of  the  first  direction  of  the  bank  to  do  it,  that 
principally  contributed  to  the  embarrassments  of  1819.  A  committee  was  ap- 
pointed by  the  House  of  Representatives,  in  that  year,  to  investigate  the  man- 
agement of  the  bank;  and  in  the  report  of  that  committee,  as  well  as  in  the 
discussions  to  which  it  gave  rise  in  the  House,  this  attempt  of  the  direction  to 
redeem  the  bills  of  the  institution,  indiscriminately,  at  all  its  branches,  was 
indicated  as  one  of  the  causes  of  the  existing  embarrassment.  No  one  who 
participated  in  the  debate  pretended  to  allege  that  the  bank  was  bound  to  re 
deem  its  bills  indiscriminately,  or  that  it  was  expedient  that  it  should  do  so. 
The  most  that  any  one  did,  was  to  apologise  for  the  unwise  attempt. 
94 


746  BANK    OF   THE    UNITED    STATES. 

But  it  yet  remains  for  the  committee  to  show  that  this  indiscriminate  re- 
deemability  of  the  bills  of  all  the  branches  of  the  bank  is  not  necessary  to 
"  the  establishment  of  a  uniform  and  sound  currency." 

Human  wisdom  has  never  effected,  in  any  other  country,  a  nearer  approach 
to  uniformity  of  the  currency,  than  that  which  is  made  by  the  use  of  the  pre- 
cious metals.  If,  therefore,  it  can  be  shown  that  the  bills  of  the  United  States' 
Bank  are  of  equal  value  with  silver  at  all  points  of  the  Union,  it  would  seem 
that  the  proposition  is  clearly  made  out,  that  the  bank  has  accomplished  "  the 
great  end  of  establishing  a  uniform  and  sound  currency."  It  is  not  denied 
that  the  bills  of  the  mother  bank,  and  of  all  its  branches,  are  invariably  and 
promptly  redemed  in  specie,  whenever  presented  at  the  offices  by  which  they 
have  been  respectively  issued,  and  at  which,  upon  their  face,  they  purport  to 
be  payable.  Nor  is  it  denied  that  the  bills  of  the  bank,  and  of  all  the  branches, 
are  equal  tu  specie  in  their  respective  spheres  of  circulation.  Bills,  for  ex- 
ample, issued  by  the  mother  bank,  arc  admitted  to  be  equal  to  silver  in  Penn- 
sylvania, and  all  those  parts  of  the  adjacent  States  of  which  Philadelphia  is 
the  market.  But  it  is  contended  that  these  bills,  not  bein^  redeemable  at 
Charleston  and  New  Orleans,  are  not  of  equal  value  with  silver  to  the  mer- 
chant who  wishes  to  purchase  cotton  with  them,  in  those  cities.  Now,  if  the 
Philadelphia  merchant  had  silver,  instead  of  bank  bills,  he  certainly  could  not 
effect  his  purchases  with  it  in  Charleston  or  New  Orleans,  without  having  the 
silver  conveyed  to  those  places;  and  it  is  equally  certain  that  he  could  not 
have  it  conveyed  there,  without  paying  for  its  transportation  and  insurance. 
These  expenses  constitute  the  natural  rate  of  exchange  between  those  cities, 
and  indicate  the  exact  sum  which  the  merchant  would  give  as  a  premium  for 
a  bill  of  exchange,  to  avoid  the  trouble  and  delay  of  transporting  his  specie. 
It  is  obvious,  therefore,  that,  even  for  these  distant  operations  of  commerce, 
silver  would  be  no  more  valuable  than  the  bills  of  the  bank:  for  these  would 
purchase  a  bill  of  exchange  on  either  of  the  cities  mentioned,  precisely  as  well 
as  silver.  If  the  operation  should  be  reversed,  and  the  planter  of  Louisiana 
or  South  Carolina  should  desire  to  place  his  funds  in  Philadelphia  with  a  view 
to  purchase  merchandise,  he  would  find  the  bills  of  the  branch  bank,  in  either 
of  those  States,  entirely  equivalent  to  silver  in  effecting  his  object.  Even, 
therefore,  if  the  bank  had  not  reduced  the  rate  of  the  exchanges,  it  might  be 
safely  asserted  that  its  bills  would  be  of  equal  value  with  silver  at  every  point 
in  the  Union,  and  for  every  purpose,  whether  local  or  general. 

But  it  is  impossible  to  exhibit  any  thing  like  a  just  view  of  the  beneficial  ope- 
rations of  the  bank,  without  adverting  to  the  great  reduction  it  has  effected, 
and  the  steadiness  it  has  superinduced,  in  the  rate  of  the  commercial  exchang- 
es of  the  country.  Though  this  branch  of  the  business  of  the  bank  has  been 
the  subject  of  more  complaint,  perhaps,  than  any  other,  the  committee  have 
no  hesitation  in  saying,  it  has  been  productive  of  the  most  signal  benefits  to 
the  community,  and  deserves  the  highest  commendation.  It  has  been  already 
stated  that  it  has  saved  the  community  from  the  immense  losses  resulting  from 
a  high  and  fluctuating  state  of  the  exchanges.  It  now  remains  to  show  its 
effect  in  equalizing  the  currency.  In  this  respect,  it  has  been  productive  of 
results  more  salutary  than  were  anticipated  by  the  most  sanguine  advocates 
of  the  policy  of  establishing  the  bank.  //  has  actually  furnished  a  circulating- 
medium  more  uniform  than  specie.  This  proposition  is  susceptible  of  the 
clearest  demonstration.  If  me  whole  circulating  medium  were  specie,  a 
planter  of  Louisiana,  who  should  desire  to  purchase  merchandise  in  Philadel- 
phia, would  be  obliged  to  pay  one  per  cent,  either  for  a  bill  of  exchange  on 
this  latter  place,  or  for  the'.transportation  and  insurance  of  his  specie.  His  spe- 
cie at  New  Orleans,  where  he  had  no  present  use  for  it,  would  be  worth  one 
per  cent,  less  to  him  than  it  would  be  in  Philadelphia,  where  he  had  a  de- 
mand for  it.  But,  by  the  aid  of  the  Bank  of  the  United  States,  one-half  of 
the  expense  of  transporting  specie  is  now  saved  to  him.  The  bank,  for  one- 
half  of  one  per  cent.,  will  give  him  a  draft  upon  the  mother  bank  at  Phi- 
ladelphia, with  which  he  can  draw  either  the  bills  of  that  bank,  or  specie,  at 
his  pleasure.  In  like  manner,  the  bank  and  its  branches  will  give  drafts 
from  any  point  of  the  Union  to  any  other  where  offices  exist,  at  a  per  centage 


REPORT  OF  COMMITTEE,    1830.  747 

greatly  less  than  it  would  cost  to  transport  specie,  and,  in  many  instances,  at 
par.  It'  the  merchant  or  planter,  however,  does  not  choose  to  purchase  a 
draft  from  the  bank,  but  prefers  transmitting  the  bills  of  the  office  where 
hi»  resides  to  any  distant  point,  for  commercial  purposes,  although  these  bills 
are  not  strictly  redeemable  at  the  point  to  which  they  are  transmitted,  yet,  as 
they  are  receivable  in  payment  of  all  dues  10  the  Government,  persons  will  be 
generally  found  willing  to  take  them  at  par;  and  if  they  should  not,  the  bank 
will  receive  them  frequently  at  par,  and  always  at  a  discount  much  less  than 
would  pay  the  expense  of  transporting  specie.  The  fact  that  the  bills  of  the 
bank  and  its  branches  are  indiscriminately  receivable  at  the  custom  houses 
and  land  offices,  in  payment  of  duties,  and  for  the  public  lands,  has  an  effect 
in  giving  uniformity  to  the  value  of  these  bdls,  which  merits  a  more  full  and 
distinct  explanation. 

For  all  the  purposes  of  the  revenue,  it  gives  to  the  national  currency  that 
perfect  uniformity,  that  ideal  perfection,  to  which  a  currency  of  gold  and  sil- 
ver, in  so  extensive  a  country,  could  have  no  pretensions.  A  bill  issued  at 
Missouri  is  of  equal  value  with  specie  at  Boston,  in  payment  of  duties;  and 
the  same  is  true  of  all  other  places,  however  distant,  where  the  bank  issues 
bills,  and  the  Government  collects  its  revenue.  When  it  is,  moreover,  con- 
sidered, that  the  bank  performs,  with  the  most  scrupulous  punctuality,  the 
stipulation  to  transfer  the  funds  of  the  Government  to  any  point  where  they 
may  be  wanted,  free  of  expense,  it  must  be  apparent  that  the  committee  are 
correct,  to  the  very  letter,  m  stating  that  the  bank  has  furnished,  both  to  the 
Government  and  to  the  People,  a  currency  of  absolutely  uniform  value  in  all 
places,  for  all  the  purposes  of  paying  the  public  contributions,  and  disbursing 
the  public  revenue.  And  when  it  is  recollected  that  the  Government  annually 
collects  and  disburses  more  than  twenty-three  millions  of  dollars,  those  who 
are  at  all  familiar  with  the  subject  will  at  once  perceive  that  bills,  which  are 
of  absolutely  uniform  value  for  this  vast  operation,  must  be  very  nearly  so  for 
all  the  purposes  of  general  commerce. 

Upon  the  whole,  then,  it  may  be  confidently  asserted,  that  no  country  in 
the  world  has  a  circulating  medium  of  greater  uniformity  than  the  United 
States,  and  that  no  country,  of  any  thing  like  the  same  geographical  extent, 
has  a  currency  at  all  comparable  to  that  of  the  United  States,  on  the  score  of 
uniformity.  The  committee  have  seen  the  statement  of  an  intelligent  travel- 
ler, who  has  visited  almost  every  part  of  Europe,  exhibiting  the  great  varia- 
tions of  the  currency  in  different  parts  of  the  same  empire  or  kingdom.  In 
Russia,  the  bills  of  the  Bank  of  St.  Petersburg!!  have  a  very  limited  circula- 
tion. At  Riga,  and  throughout  Courland,  Livonia,  and  all  the  southern  parts 
of  the  empire,  the  currency  is  exclusively  of  silver  coins.  In  Denmark,  the 
notes  of  the  Bank  of  Copenhagen  are  current  only  in  Zealand,  the  other  islands, 
and  Jutland,  but  will  not  pass  at  all  in  Sleswic  and  Ilolstein,  which  consti- 
tute the  best  portion  of  the  kingdom.  Since  the  Congress  of  Vienna,  Ger- 
many is  divided  into  thirty-nine  separate  States,  each  having  a  distinct  cur- 
rency, though  represented  in  the  Diet  at  Frankfort.  Out  of  the  territory  in 
which  these  several  currencies  are  issued,  they  are  mere  articles  of  merchan- 
dise; which  circumstance  has  given  rise  in  every  town  to  a  numerous  and  dis- 
tinct class  of  tradesmen,  called  money  changers.  How  far  these  separate  and 
unconnected  currencies  have  a  tendency  to  embarrass  commerce,  may  be  in- 
ferred from  the  fact,  that  a  traveller  going  from  St.  Petersburgh  to  Calais 
will  lose,  upon  the  unavoidable  changes  of  money,  an  average  of  six  per  cent. 
In  France,  the  bills  of  the  bank  are  of  such  large  denominations  as  to  be 
adapted  only  to  the  greater  operations  of  commerce,  and  are  principally  con- 
fined to  the  bankers  and  extensive  traders  in  Paris.  The  general  currency  is 
silver;  and,  to  avoid  the  trouble  of  carrying  this  to  distant  parts  of  the  king- 
dom, gold  pieces,  or  bills  of  exchange,  which  are  preferable,  are  purchased  at 
a  premium  of  from  one  and  a  half  to  four  per  cent.  After  this  brief  review  of 
the  currencies  of  Europe,  the  committee  will  barely  state,  as  a  conclusive 
vindication  of  our  currency  from  the  imputation  of  unsoundness,  that  there  is 
no  point  in  the  Union  at  which  a  bill  of  ihe  United  States'  Bank,  issued  at  the 


743  BANK    OF  THE    UNITED    STATES. 

opposite  extremity  of  the  country,  is  at  a  discount  of  more  than  one-fourth  of 
one  per  cent. 

In  confirmation  of  the  views  here  presented,  as  to  the  comparative  uni- 
formity of  the  currency  furnished  by  the  bank,  and,  also,  as  to  the  obligation 
of  the  bank  to  redeem  its  bills,  indiscriminately,  at  all  the  offices,  the  com- 
mittee will  present  a  few  brief  extracts  from  the  speech  of  a  statesman,  whose 
opinions  have  every  title  to  authority  on  these  important  subjects-  Mr. 
Lowndes,  in  discussing  the  question,  how  far  the  bank  had  performed  the 
great  duty  for  which  it  was  created,  used  the  following  decided  language  in 
1819,  when  the  currency  had  not  reached  the  point  of  uniformity  it  has  now 
attained  by  half  of  one  per  cent. 

"The  great  object  ot  the  Government  in  chartering  the  bank,  vyas  to  pro- 
vide a  currency  which  should  have  that  degree  of  stability  and  uniformity  in 
its  value,  which  is  required  by  the  interests  both  of  our  commerce  and  re- 
venue. A  currency,  equally  valuable  at  every  place  and  every  time,  cannot 
be  provided  by  human  wisdom.  The  nearest  approach  to  this  object  has 
been  generally  supposed  to  be  afforded  by  the  employment  of  gold  and  silver 
as  the  measures  of  value.  The  fourteenth  Congress  did  not  aim  at  ideal  per- 
fection; they  wished  to  combine,  with  the  conveniencies  of  bank  circulation, 
an  uniformity  of  value  equal  to  that  which  was  possessed  by  the  precious  me- 
tals; and  the  means  which  they  employed  to  secure  this  uniformity  were  sim- 
ple and  effectual,  by  enjoining,  under  a  heavy  penalty,  the  payment  of  all  its 
notes  in  coin,  upon  demand.  In  the  report,  indeed,  the  notes  of  the  National 
Bank  are  said  to  be  now  'on  the  same  footing  with  those  of  local  banks.'  Of 
the  footing  on  which  local  banks  stood,  he  should  speak  hereafter;  but  the 
price  current  upon  his  table  informed  him,  that  the  greatest  discount  on  branch 
notes  of  the  United  States  was  three-fourths  of  one  per  cent.  This  was  a 
value  much  more  uniform  than  that  which  coin  could  be  expected  to  have  in 
so  extensive  a  country.  He  had  been  lately  looking  into  a  book  on  political 
economy,  which  had  been  published  here,  with  high,  and,  in  respect  to  its 
clearness  and  precision,  with  just  commendations? — the  work  of  Mr.  Tracy. 
He  inferred  from  one  of  his  chapters,  that'the  difference  of  exchange  between 
Marseilles  and  Paris  was  often  from  two  to  three  per  cent.  If,  with  all  the 
facilities  afforded  by  the  internal  improvements  in  which  France  is  so  rich, 
with  a  currency  consisting  almost  exclusively  of  gold  and  silver,  the  variation 
in  the  value  of  money  is  three  times  greater  in  her  territory  them  on  our  con- 
tinent, can  it  be  said  that,  in  this  respect,  the  bank  has  not  fulfilled  the  ob- 
jects of  its  institution?  Before  its  establishment,  the  value  of  bank  notes,  even 
in  the  commercial  States,  had  varied  twenty  per  cent,  from  each  other;  and, 
as  none  of  them  bore  a  fixed  proportion  to  the  precious  metals,  or  to  any  natu- 
ral standard,  it  was  impossible  to  assign  any  limit  to  their  depreciation.  You 
have  required  that  the  currency  furnished  by  the  National  Bank  should  be 
every  where  convertible  into  silver,  and  it  is  so.  You  have  expected  that  it 
should  be  as  uniform  as  coin,  and  it  is  more  so.  He  would  not  detain  the 
committee  by  reading  a  paper,  which  he  had  prepared  with  that  intention,  con- 
taining the  rate  of  exchange,  since  the  establishment  of  the  bank,  with  Eng- 
gland,  France,  and  Holland;  for  he  found  himself  occupying  much  more  of 
their  time  than  he  had  expected.  But  he  believed  that  any  member,  who 
should  turn  his  attention  to  the  subject,  would  remark  its  steadiness  during 
that  period.  He  thought  himself  justified  in  drawing  from  this  fact  a  conclu- 
sion highly  favorable  to  the  bank." 

In  reference  to  the  great  depreciation  of  the  paper  of  the  local  banks,  pre- 
vious to  the  establishment  of  that  of  the  United  States,  he  said: 

"Did  the  interests  or  duty  of  the  Government  of  the  United  States  permit 
that  this  currency  should  be  received  by  it?  Some  dissatisfaction  was  express- 
ed because  the  branch  notes  of  the  United  States'  Bank  were  at  a  discount  of 
three-fourths  of  one  per  cent.  He  read  from  a  price  current  the  state  of  the 
market  for  bank  notes,  by  which  it  appeared  that  notes,  which  were  insisted 
to  be  in  very  good  credit,  varied  from  a  discount  of  two  and  a  half  to  one  of 
seven,  fifteen,  twenty  five,  and  even  thirty  per  cent.  Was  our  revenue  to  be 


REPORT  OF  COMMITTEE,    183;>.  749 

received  in  these  notes?  How  were  they  to  be  employed?  They  might  be 
expended  in  the  district  in  which  they  were  issued.  But  was  the  expendi- 
ture of  every  district  to  be  exactly  limited  to  its  revenue?  What  became  of 
the  Union  it  it  were  so?  He  spoke  of  the  thing,  and  not  the  name.  Our  Union 
might  dissolve  in  imbecility,  as  well  as  be  destroyed  by  violence.  Did  not 
union  imply,  that  the  resources  of  one  State,  its  money,  as  well  as  its  men, 
might  be  employed  for  the  defence  of  another? 

"  But,  if  the  Government  were  willing  to  bear  the  loss  of  a  depreciated  and 
unequal  currency,  it  must  neglect  the  plainest  principle  of  the  constitution  in 
doing  so— equality  of  taxation.  The  committee  must  'well  remember,  that, 
before  the  establishment  of  the  National  Bank,  such  was  the  unequal  value  of 
currency  in  the  different  States,  that  the  merchants  paid  duties,  varying  fif- 
teen per  cent,  from  each  other,  on  the  same  articles.'  v 

On  the  question,  whether  the  bank  was  bound  to  redeem,  indiscriminately, 
the  bills  ot  all  its  branches,  he  said: 

"He  should  not  argue  that  the  bank  was  not  bound  to  pay  its  notes,  indis- 
criminately, at  all  its  offices.  He  believed  that  nobody  now  contended  that 
it  was."  *  *  "  It  was  no  unfair  account  of  the  practical  operation 

of  the  system  of  which  he  was  speaking,  to  say,  that  it  gave  to  the  brandies 
where  the  exchange  was  unfavorable,  the  entire  disposition  of  the  specie  ot 
those  branches  where  the  exchange  was  favorable.  Upwards  of  six  millions 
of  specie  have  been  sent  to  the  branch  of  New  York,  besides  the  amount  which 
has  been  paid  by  the  subscribers  of  the  bank  there:  but,  in  issuing  notes  which 
the  bank  of  New  York  has  been  obliged  to  redeem,  every  branch  throughout 
the  country  has  drawn  upon  a  fund,  with  whose  condition,  at  the  time,  it 
could  not  be  acquainted/'  *  *  *  *  "Such  a  system 

might  be  expected  to  produce  inconvenient  changes  in  the  distribution  ot  bank 
capital,  an  extreme  facility  of  obtaining  loans  at  one  time,  and  unexpected 
contractions  of  discount  at  another."  *  *  *  *  "Whenever  the  state 
of  exchange  is  unfavorable;  whenever  the  just  principles  of  banking  require  a 
reduction  of  discounts;  then,  under  this  system  of  indiscriminate  payment  of 
its  notes,  the  bank  has  nothing  to  fear  from  a  draught  of  specie,  arid  is  encou- 
raged to  lend  to  every  applicant.  Wherever  the  exchange  is  favorable,  and 
on  the  sound  principles  of  banking,  an  enlarged  accommodation  might  be  given 
to  the  community;  there  the  flow  of  notes  from  every  State,  whose  exchange 
is  unfavorable,  contracts  or  suspends  all  the  operations  of  the  bank.  Thus, 
wherever  discounts  should  be  enlarged,  the  tendency  of  this  system  is  to  re- 
duce them,  and  to  enlarge  them  wherever  they  should  be  reduced." 

Independently  of  the  gross  injustice  of  requiring  the  bank  to  perform  all  the 
exchanges  of  this  extensive  confederacy,  without  any  compensation,  these  en- 
lightened views  show  most  conclusively  its  inexpediency  and  injustice,  as  it. 
regards  the  different  sections  of  the  Union.  It  would  inevitably  render  those 
parts  of  the  Union,  where  the  bank  issues  \vere  prudent  and  moderate,  tribu- 
tary to  those  where  the  issues  were  injudicious  and  excessive.  In  this  way, 
the  very  inequality  in  the  currency,  which  the  bank  was  designed  to  correct, 
would  be  perpetuated,  by  the  vain  attempt  to  make  it  perform  impossibilities. 
The  power  ot  annihilating  space,  of  transporting  money,  or  any  other  article, 
to  the  most  distant  points,  without  the  loss  of  time,  or  the  application  of  labor, 
belongs  to  no  human  institution. 

But  the  salutary  agency  of  the  Bank  of  the  United  States,  in  furnishing  a 
sound  and  uniform  currency,  is  not  confined  to  that  portion  of  the  currency 
which  consists  of  its  own  bills.  One  of  the  most  important  purposes  which 
the  bank  was  designed  to  accomplish,  and  which,  it  is  confidently  believed, 
no  other  human  agency  could  have  effected,  under  our  federative  system  ot 
Government,  was  the  enforcement  of  specie  payments  on  the  part  of  nume- 
rous local  banks,  deriving  their  charters  from  the  several  States,  and  whose 
paper,  irredeemable  in  specie,  and  illimitable  in  its  quantity,  constituted  the 
almost  entire  currency  of  the  country.  Amidst  a  combination  of  the  greatest 
difficulties,  the  bank  has  almost  completely  succeeded  in  the  performance  of 
this  arduous,  delicate,  and  painful  duty.  With  exceptions,  too  inconsidera- 


750  BANK   OF  THE   UNITED   STATES. 

ble  to  merit  notice,  all  the  State  banks  in  the  Union  have  resumed  specie  pay- 
ments. Their  bills,  in  the  respective  spheres  of  their  circulation,  are  of  equal 
value  with  gold  and  silver;  while,  for  all  the  operations  of  commerce  beyond 
that  sphere,  the  bills  or  the  checks  of  the  Bank  of  the  United  States  are 
even  more  valuable  than  specie.  And  even  in  the  very  few  instances  in  which 
the  paper  of  State  banks  is  depreciated,  those  banks  are  winding  up  then- 
concerns;  and  it  may  be  safely  said,  that  no  citizen  of  the  Union  is  under  the 
necessity  of  taking  depreciated  paper,  because  a  sound  currency  cannot  be 
obtained.  North  Carolina  is  believed  to  be  the  only  State  where  paper  of  the 
local  banks  is  irredeemable  in  specie,  and,  consequently,  depreciated.  Even 
there,  the  depreciation  is  only  one  or  two  per  cent.,  and,  what  is  more  im- 
portant, the  paper  of  the  Bank  of  the  United  States  can  be  obtained  by  all 
those  who  desire  it,  and  have  an  equivalent  to  give  for  it. 

The  committee  are  aware  that  the  opinion  is  entertained  by  some,  that  the 
local  banks  would,  at  some  time  or  other,  either  voluntarily,  or  by  the  co- 
ercion of  the  State  Legislatures,  have  resumed  specie  payments.  In  the 
very  nature  of  things  this  would  seem  an  impossibility.  It  must  be  re- 
membered, that  no  banks  ever  made  such  large  dividends  as  were  realized 
by  the  local  institutions,  during  the  suspension  of  specie  payments.  A  rich 
and  abundant  harvest  of  profit  was  opened  to  them,  which  the  resumption  of 
specie  payments  must  inevitably  blast.  While  permitted  to  give  their  own 
notes,  bearing  no  interest,  and  not  redeemable  in  specie,  in  exchange  for  bet- 
ter notes,  bearing  interest,  it  is  obvious  that  the  more  paper  they  issued,  the 
higher  would  be  their  profits.  The  most  powerful  motive  that  can  operate 
upon  moneyed  corporations,  would  have  existed,  to  prevent  the  State  banks 
from  putting  an  end  to  the  very  state  of  things  from  which  their  excessive 
profits  proceeded.  Their  very  nature  must  have  been  changed,  therefore, 
before  they  could  have  been  induced  to  co  operate,  voluntarily,  in  the  resto- 
ration of  me  currency.  It  is  quite  as  improbable  that  the  State  Legislatures 
would  have  compelled  the  banks  to  do  their  duty.  It  has  already  been  stated, 
that  the  tendency  of  a  depreciated  currency  to  attract  importations  to  the 
points  of  greatest  depreciation,  and 'to  lighten  the  relative  burthens  of  federal 
taxation,  would  naturally  produce,  among  the  States,  a  rivalry  in  the  business 
of  excessive  bank  issues.  But  there  remains  to  be  stated,  a  cause  of  more 
general  operation,  which  would  have  prevented  the  interposition  of  the  State 
Legislatures  to  correct  those  issues. 

The  banks  were,  directly  and  indirectly,  the  creditors  of  the  whole  com- 
munity, and  the  resumption  of  specie  payments  necessarily  involved  a  gen- 
eral curtailment  of  discounts,  and  withdrawal  of  credit,  which  would  pro- 
duce a  general  and  distressing  pressure  upon  the  entire  class  of  debtors. 
These  constituted  the  largest  portion  of  the  population  of  all  the  States  where 
specie  payments  were  suspended,  and  bank  issues  excessive.  Those,  there- 
fore, who  controlled  public  opinion  in  the  States,  where  the  depreciation  of 
the  local  paper  was  greatest,  were  interested  in  the  perpetuation  of  the  evil. 
Deep  and  deleterious,  therefore,  as  the  disease  evidently  was,  in  many  of 
the  States,  their  Legislatures  could  not  have  been  expected  to  apply  a  remedy, 
so  painful  as  the  compulsion  of  specie  payments  would  have  been,  without 
the  aid  of  the  Bank  of  the  United  States.  And  here  it  is  worthy  of  special 
remark,  that,  while  that  bank  has  compelled  the  local  banks  to  resume  specie 
payments,  it  has  most  materially  contributed,  by  its  direct  aid  and  liberal 
arrangements,  to  enable  them  to  do  so,  and  that  with  the  least  possible  embar- 
rassment to  themselves  and  distress  to  the  community.  If  the  State  Legisla- 
tures had  been  ever  so  anxious  to  compel  the  banks  to  resume  specie  payments, 
and  the  banks  ever  so  willing  to  make  the  effort,  the  committee  are  decidedly 
of  the  opinion  that  they  could  not  have  done  it,  unaided  by  the  Bank  of  the 
United  States,  without  producing  a  degree  of  distress  incomparably  greater 
than  has  been  actually  experienced.  They  will  conclude  their  remarks  on 
this  branch  of  the  subject  by  the  obvious  reflection,  that,  if  Congress,  at  the 
close  of  the  war,  had  left  it  to  the  States  to  restore  the  disordered  currency, 
this  important  function  of  sovereignty  would  have  been  left  with  those  from 


REPORT    OF    COMMITTEE,    1830.  75  [ 

whom  the  constitution  had  expressly  taken  it,  and  by  whom  it  could  riot  be 
beneficially  or  effectually  exercised.  But  another  idea,  of  considerable  plausi- 
bility, is  not  without  its  advocates.  It  is  said  that  this  Government,  by  making 
the  resumption  and  continuance  of  specie  payments  the  condition  upon  which 
State  banks  should  receive  the  Government  deposites,  might  have  restored 
the  currency  to  a  state  of  uniformity.  Without  stopping  to  give  their  reasons 
for  believing  that  specie  payments  could  not  have  been  restored  in  this  way, 
and  that,  even  if  they  could,  a  uniform  currency  of  general  credit,  throughout 
the  Union,  would  not  have  been  provided,  the  committee  will  proceed  to  give 
their  reasons  for  thinking  that  such  a  connexion  between  the  Federal  Govern- 
ment and  the  State  banks  would  be  exceedingly  dangerous  to  the  purity  of 
both.  While  there  is  a  national  bank,  bound  by  its  charter  to  perform  certain 
stipulated  duties,  and  entitled  to  receive  the  Government  deposites  as  a  com- 
pensation, iixed  by  the  law  creating  the  charter,  and  only  to  be  forfeited  by 
the  failure  to  perform  those  duties,  there  is  nothing  in  the  connexion  at  all 
inconsistent  with  the  independence  of  the  bank,  and  the  purity  of  the  Govern- 
ment. The  country  has  a  deep  interest  that  the  bank  should  maintain  specie 
payments,  and  the  Government  an  additional  interest  that  it  should  keep  the 
public  funds  safely,  and  transfer  them,  fiee  of  expense,  wherever  they  may 
be  wanted.  The  Government,  therefore,  has  no  power  over  the  bank,  but  the 
salutary  power  of  enforcing  a  compliance  with  the  terms  of  its  charter.  Ev- 
ery thing  is  fixed  by  the  law,  and  nothing  left  to  arbitrary  discretion.  It  is 
true  that  the  Secretary  of  the  Treasury,  with  the  sanction  of  Congress,  would 
have  the  power  to  prevent  the  bank  from  using  its  power  unjustly  and  oppres- 
sively, and  to  punish  anv  attempt,  on  the  part  of  the  directors,  to  bring  the 
pecuniary  influence  of  the  institution  to  bear  upon  the  politics  of  the  country, 
oy  withdrawing  the  Government  deposites  from  the  offending  branches.  But 
this  power  would  not  be  lightly  exercised  by  the  treasury,  as  its  exercise  would 
necessarily  be  subject  to  be  reviewed  by  Congress;  it  is,  in  its  nature,  a  salu- 
tary corrective,  creating  no  undue  dependence  on  the  part  of  the  bank. 

But  the  state  of  things  would  be  widely  different,  if  there  was  no  national 
bank,  and  it  was  left  to  the  discretion  of  the  Secretary  of  the  Treasury  to  se- 
lect the  local  banks  in  \vhich  the  Government  deposites  should  be  made.  All  i 
the  State  banks  would,  in  that  case,  be  competitors  for  the  favor  of  the  trea- 
sury; and  no  one,  who  will  duly  consider  the  nature  of  this  sort  of  patronage, 
can  fail  to  perceive,  that,  in  the  hands  of  an  ambitious  man,  not  possessed  of 
perfect  purity  and  unbending  integrity,  it  would  be  imminently  dangerous  to 
the  public  liberty.  The  State  banks  would  enter  the  lists  of  political  contro- 
versy, with  a  view  to  obtain  this  patronage;  and  very  little  sagacity;  is  requir- 
ed to  forsee,  that,  if  there  should  ever  happen  to  be  an  administration  dispos- 
ed to  use  its  patronage  to  perpetuate  its  power,  the  public  funds  would  be 
put  in  jeopardy  by  being  deposited  in  banks  unworthy  of  confidence,  and  the 
most  extensive  corruption  brought  to  bear  upon  the  elections  throughout  the 
Union.  A  state  of  things  more  adverse  to  the  purity  of  the  Government — 
a  power  more  liable  to  be  abused — can  scarcely  be  imagined.  If  five  millions 
of  dollars  were  annually  placed  in  the  hands  of  the  Secretary  of  the  Treasury,  1 
to  be  distributed  at  his  discretion,  for  the  purposes  of  internal  improvement, 
it  would  not  invest  him  with  a  more  dangerous  and  corrupting  power.  ^ 

In  connexion  with  this  branch  of  the  subject,  the  committee  will  briefly  ex- 
amine the  grounds  of  a  complaint,  sometimes  made  against  the  Bank  of  the 
United  States.  It  is  alleged  that  this  bank,  availing  itself  of  the  Government 
deposites,  consisting  in  some  places  principally  of  local  paper,  makes  heavy 
and  oppressive  draughts  on  the  local  banks  for  specie,  and  thus  compels  them 
to  curtail  their  discounts,  to  the  great  injury  of  the  community.  In  the  first 
place,  it  is  to  be  remarked,  that  one  of  the  highest  duties  of  the  bank — the 
great  object  for  which  it  was  established — was  to  prevent  the  excessive  issues 
of  local  paper;  and  this  duty  can  only  be  performed,  by  enforcing  upon  the 
State  banks  the  payment  of  specie  for  any  excess  in  their  issues.  But  the 
committee  are  induced  to  believe,  that  this  complaint  is  principally  owing,  so 
far  as  it  now  exists,  to  the  fact,  that  the  operations  of  the  federal  treasury  are 
mistaken  for  the  operations  of  the  bank,  because  the  bank  is  the  agent  by 


752  BANK  OF  THE   UNITED   STATES. 

whom  those  operations  are  performed.  This  institution  receives  the  Govern- 
ment deposites  in  the  paper  of  the  local  banks,  certainly  in  no  spirit  of  hos- 
tility to  those  banks.  On  the  contrary,  it  tends  to  give  them  credit,  and  is 
designed  to  have  that  effect.  But  the  Bank  of  the  United  States  is  not  only 
bound  to  pay  in  specie,  or  its  own  bills,  what  it  receives  for  the  Government 
in  local  paper,  but  to  transfer  the  funds  to  any  part  of  the  Union  where  they 
mav  be  required  for  disbursement.  Let  it  be  assumed,  that  the  Government 
collects  annually,  at  the  custom  house  in  Charleston,  one  million  of  dollars 
in  local  bank  notes,  and  disburses  in  South  Carolina  only  one  hundred  thou- 
sand, it  would  result  from  this,  that  the  Government  would  have  nine  hun- 
dred thousand  dollars  of  local  bank  paper  deposited  in  the  Charleston  branch, 
which  the  batik  would  be  bound  by  its  charter,  and  for  the  national  benefit, 
to  transfers  perhaps  to  Washington  or  Norfolk  As  this  paper  would  not  answer 
the  purposes  of  the  Government  at  those  places,  the  bank  would  be,  of  course, 
compelled  to  provide  specie,  or  bills  that  will  command  specie  at  those  places. 
Jt  is  obvious,  then,  that  it  is  the  inequality  in  the  collection  and  disbursement 
of  the  revenue  that  produces  the  evil  in  question.  If  all  the  revenue  collect- 
ed in  Charleston  were  disbursed  in  the  State,  no  draughts  would  be  made 
upon  the  local  banks  for  specie.  The  Bank  of  the  United  States,  so  far  from 
being  justly  obnoxious  to  any  complaint  on  this  score,  has  greatly  mitigated 
the  action  of  the  treasury  upon  the  local  banks,  by  means  of  the  liberal  ar- 
rangements which  its  large  capital  and  numerous  branches  have  enabled  it  to 
make  with  them.  The  degree  in  which  that  institution  has  reduced  the  rate 
of  exchange,  may  be  fairly  assumed  as  that  in  which  it  has  mitigated  the  ac- 
tion ot  the  treasury  upon  the  State  banks.  If,  for  example,  there  existed  no 
national  bank,  and  the  deposites  of  the  revenue  collected  in  Charleston  were 
made  in  one  of  the  local  banks,  what  would  be  the  effect  of  transferring,  an- 
nually, nine  hundred  thousand  dollars  to  Washington  or  Norfolk?  The  local 
banks,  having  no  branches  at  either  ot  those  places,  instead  of  transmitting 
drafts,  as  is  now  generally  done,  wrould  be  compelled  to  transmit  specie. 
The  bank  in  which  the  Government  deposites  were  made,  would  consequent- 
ly be  under  the  necessity  of  demanding  specie  from  all  the  other  banks,  in  a 
manner,  and  to  an  extent,  much  more  oppressive  than  any  thing  that  can  be 
imputed  to  the  Bank  of  the  United  States.  If,  to  avoid  these  specie  drafts, 
the  local  banks  should  purchase  bills  on  AVashington  or  Norfolk,  they  would 
probably  cost  five  or  six  per  cent,  even  in  a  tolerable  state  of  the  currency, 
which  would  be  a  loss  to  the  banks  almost  to  the  full  extent  of  the  premium. 

Although  the  expediency  of  renewing  the  charter  of  the  present  bank  is 
not  a  question  now  submitted  for  the  decision  of  Congress,  the  committee 
consider  it  so  far  involved  in  the  matter  referred  to  them,  as  to  render  it  their 
duty  to  present  some  considerations  bearing  on  that  question,  in  addition  to 
what  they  have  said  on  the  general  expediency  of  maintaining  such  an  institu- 
tion. If  a  national  bank,  s-.imilar  to  the  present,  be  a  necessary  and  proper 
agent  for  the  accomplishment  of  the  great  purposes  heretofore  indicated,  the 
only  remaining  question  would  seem  to  be,  whether  the  charter  of  the  present 
stockholders  should  be  renewed,  or  a  new  set  of  stockholders  incorporated. 

In  considering  this  question,  Congress  will,  of  course,  be  governed  in  some- 
degree  by  the  terms  on  which  the  present  stockholders  will  agree  to  accept  a 
renewal  of  their  charter.  But,  as  the  committee  have  satisfactory  reasons  for 
believing  that  terms  eminently  advantageous  to  the  Government  can  be  ob- 
tained, they  will  proceed  to  some  other  inquiries.  What,  then,  would  be  the 
effect  of  refusing  to  renew  the  present  charter?  And,  in  the  first  place,  what 
are  the  inducements  for  pursuing  that  course? 

It  is  sometimes  alleged  that  the  present  stockholders  are  large  capitalists, 
and,  as  the  stock  of  the  bank  is  some  twenty  per  cent,  above  par,  that  a  re- 
newal of  the  charter  would  be  equivalent  to  a  «*rant  to  them  of  twenty  per 
cent,  upon  their  capital.  It  is  true,  that  a  small  proportion  of  the  capital  c*' 
the  company  belongs  to  very  wealthy  men.  Something  more  than  two  mil- 
lions of  that  owned  in  the  United  States  belongs  to  persons  holding  upwards 
of  one  hundred  thousand  dollars  each.  It  is  also  true,  that  foreigners  own 


REPORT  OF  COMMITTEE,    1830.  753 

seven  millions,  or  one-fifth  of  the  capital.  But,  on  the  other  hand,  it  is  to  be 
remarked  that  the  Government,  in  trust  for  the  People  of  the  United  States, 
holds  seven  millions;  that  persons  owning  less  than  five  thousand  dollars  each, 
hold  four  millions  six  hundred  and  eighty-two  thousand;  and  that  persons 
owning  between  five  and  ten  thousand  dollars  each,  hold  upwards  of  three 
millions.  It  is  also  worthy  of  remark,  that  a  very  considerable  portion  of  the 
stock,  very  nearly  six  millions,  is  held  by  trustees  and  guardians,  for  the  use 
of  females  and  orphan  children,  and  charitable  and  other  institutions.  Of  the 
twenty-eight  millions  of  the  stock  which  is  owned  by  individuals,  only  three 
millions  four  hundred  and  fifty-three  thousand  is  now  held  by  the  original 
subscribers.  All  the  rest  has  oeen  purchased  at  the  market  prices — a  large 
portion  of  it,  probably,  when  those  prices  were  higher  than  at  present.  Most 
of  the  investments  made  by  wills,  arid  deeds,  and  decrees  in  equity,  for  the 
use  of  females  and  minors,  are  believed  to  have  been  made  when  the  stock 
was  greatly  above  par.  From  this  brief  analysis,  it  will  appear  that  there  is 
nothing  in  the  character  or  situation  of  the  stockholders,  which  should  make 
it  desirable  to  deprive  them  of  the  advantage  which  they  have  fairly  gained, 
by  an  application  of  their  capital  to  purposes  highly  beneficial,  as  the  commit- 
tee have  attempted  to  show,  to  the  Government  and  People  of  the  United 
States.  If  foreigners  own  seven  millions  of  the  stock  of  the  bank,  our  own 
Government  owns  as  much;  if  wealthy  men  own  more  than  two  millions, 
men  in  moderate  circumstances  own  between  seven  and  eight  millions;  and 
widows,  orphans,  and  institutions  devoted  to  charitable  and  other  purposes, 
own  nearly  six  millions. 

But,  the  objection  that  the  stock  is  owned  by  men  of  large  capital,  would 
apply  with  equal,  if  not  greater  force,  to  any  bank  that  could  be  organized. 
In  the  very  nature  of  things,  men  who  have  large  surplus  capitals  are  the 
principal  subscribers  at  the  first  organization  of  a  bank.  Farmers  and  plan- 
ters, merchants  and  manufacturers,  having  an  active  employment  for  their 
capitals,  do  not  choose  to  be  the  first  adventurers  in  a  bank  project.  Accord- 
ingly, when  the  present  bank  went  into  operation,  it  is  believed  that  most  of 
the  capital  was  owned  by  large  capitalists,  and  under  a  much  more  unequal  dis- 
tribution than  exists  at  present.  The  large  amount  ot  stock  now  held  in  trust 
for  females  and  minors,  has  been  principally,  if  not  entirely,  purchased  since 
the  bank  went  into  operation;  ana  the  same  remark  is  generally  applicable  to 
the  stock  in  the  hands  of  small  holders.  It  is  only  when  the  character  of  a 
bank  is  fully  established,  and  when  its  stock  assumes  a  steady  value,  that 
these  descriptions  of  persons  make  investments  in  it 

It  is  morally  certain,  therefore,  that,  if  another  distinct  institution  were 
created,  on  the  expiration  of  the  present  charter,  there  would  be  a  much  great- 
er portion  of  its  capital  subscribed  by  men  of  large  fortunes,  than  is  now  own- 
ed by  persons  of  this  description,  of  the  stock  of  the  United  States'  Bank. 
Indeed,  it  might  be  confidently  predicted,  that  the  large  capitalists  who  now 
hold  stock  in  that  bank,  would,  from  their  local  position  and  other  advanta- 
ges, be  the  first  to  forestall  the  subscriptions  to  the  new  bank,  while  the  small 
stockholders,  scattered  over  the  country,  would  be  probably  excluded,  and 
the  females  and  minors,  and  others  interested  in  trust  investments  made  by 
decrees  in  equity,  would  be  almost  necessarily  excluded,  as  the  sanction  of 
a  court  could  scarcely  be  obtained,  after  the  passage  of  the  new  act  of  incor- 
poration, in  time  to  authorize  a  subscription. 

T9  destroy  the  existing  bank,  therefore,  after  it  has  rendered  such  signal 
services  to  the  country,  merely  with  a  view  to  incorporate  another,  would  be  an 
act  rather  of  cruelty  and  caprice,  than  of  justice  and  wisdom,  as  it  regards 
the  present  stockholders.  It  is  no  light  matter  to  depreciate  the  property  of 
individuals,  honestly  obtained,  and  usefully  employed,  to  the  extent  of  five 
millions  six  hundred  thousand  dollars,  and  the  property  of  the  Government, 
to  the  extent  of  one  million  four  hundred  thousand  dollars,  purely  for  the 
sake  of  change.  It  would  indicate  a  fondness  for  experiment,  which  a  wise 
Government  will  not  indulge  upon  slight  considerations. 
95 


754  BANK  OF  THE  UNITED  STATES. 

But  the  great  injury  which  would  result  from  the  refusal  of  Congress  to  re- 
new the  charter  of  the  present  bank,  would,  beyond  all  question,  be  that  which 
would  result  to  the  community  at  large.  It  would  be  difficult  to  estimate  the 
extent  of  the  distress  which  would  naturally  and  necessarily  result  from  the 
sudden  withdrawal  of  more  than  forty  millions  of  credit,  which  the  community 
now  enjoys  from  the  bank.  But  this  would  not  be  the  full  extent  of  the  ope- 
ration. The  Bank  of  the|United  States,  in  winding  up  its  concerns,  would 
not  only  withdraw  its  own  paper  from  circulation,  and  call  in  its  debts,  but 
would  unavoidaly  make  such  heavy  draughts  onthelocal  institutions  for  specie 
as  very  greatly  to  curtail  their  discounts.  The  pressure  upon  the  active,  in- 
dustrious, snd  enterprising  classes,  who  depend  most  on  the  facilities  of  bank 
credit,  would  be  tremendous.  A  vast  amount  of  property  would  change 
hands  at  half  its  value,  passing,under  the  hammer,  from  the  merchants,  manu- 
facturers, and  farmers,  to  the  large  moneyed  capitalists,  who  always  stand 
ready  to  avail  themselves  of  the  pecuniary  embarrasments  of  the  community. 
The  large  stockholders  of  the  present  bank,  the  very  persons  whose  present 
lawful  gains  it  would  be  the  object  of  some  to  cut  on,  having  a  large  surplus 
money  capital  thrown  upon  their  hands,  would  be  the  very  hrst  to  speculate 
upon  the  distresses  of  the  community,  and  build  up  princely  fortunes  upon  the 
ruins  of  the  industrious  and  active  classes.  On  the  other  hand,  the  females 
and  minors,  and  persons  in  moderate  circumstances,  who  hold  stock  in  the 
institution,  would  sustain  an  injury,  in  no  degree  mitigated  by  the  general  dis  - 
tress  of  the  commuuity. 

A  very  grave  and  solemn  question  will  be  presented  to  Congress,  when  they 
come  to  decide  upon  the  expediency  of  renewing  the  charter  of  the  present 
bank.  That  institution  has  succeeded  in  carrying  the  country  through  the 
painful  process  necessary  to  cure  a  deep  seated  disease  in  the  national  cur- 
rency. The  nation,  after  having  suffered  the  almost  convulsive  agonies  of 
this  necessary  remedy,  is  now  restored  to  perfect  health.  In  this  state  of 
things,  it  will  be  for  Congress  to  decide  whether  it  is  the  part  of  wisdom  to 
expose  the  country  to  a  degree  of  suffering,  almost  equal  to  that  which  it  has 
already  suffered,  for  the  purpose  of  bringing  back  that  very  derangement  of 
the  currency,  which  has  been  remedied  by  a  process  as  necessary  as  it  was 
distressing. 

If  the  Bank  of  the  United  States  were  destroyed,  and  the  local  institutions 


compel  them  either  to  curtail  their  discounts,  when  most  needed,  or  to  sus- 
pend specie  payments.  It  is  not  difficult  to  predict  which  of  these  alter 
natives  they  would  adopt,  under  the  circumstances  in  which  they  would  be 
placed.  The  imperious  wrants  of  a  suffering  community  would  call  for  dis- 
counts, in  language  which  could  not  be  disregarded.  The  public  necessities 
would  demand,  and  public  opinion  would  sanction,  the  suspension,  or  at  least 
an  evasion  of  specie  payments. 

But,  even  if  this  desperate  resort  could  be  avoided  in  a  period  of  peace  and 
general  prosperity,  neither  reason  nor  experience  will  permit  us  to  doubt  that 
a  state  of  war  would  speedily  bring  about  all  the  evils  which  so  fatally  affected 
the  credit  of  the  Government  and  the  national  currency,  during  the  late  war 
with  Great  Britain.  We  should  be  again  driven  to  the  same  miserable  round 
of  financial  expedients,  which,  in  little  more  than  two  years,  brought  a 
wealthy  community  almost  to  the  very  brink  of  a  declared  national  bank- 
mptcy,  and  placed  the  Government  completely  at  the  mercy  of  speculating 
stockjobbers. 

The  committee  feel  warranted,  by  the  past  experience  of  the  country,  in 
expressing  it  as  their  deliberate  opinion,  that,  in  a  period  of  war,  the  financial 
resources  of  the  country  could  not  be  drawn  into  efficient  operation,  without 
the  aid  of  a  national  bank,  and  that  the  local  banks  would  certainly  resort  to 
a  suspension  of  specie  payments.  The  maxim  is  eminently  true,  in  modern 
times,  that  money  is  the  sinew  of  military  power.  In  this  view  of  the  sub- 


ttfcPORT  OF  COMMITTEE,    1830  755 

ject,  it  docs  appear  to  the  committee,  that  no  one  of  the  institutions  of  the 
country,  not  excepting  the  army  or  navy,  is  of  more  vital  importance  than  a 
national  bank.  It  has  this  decided  advantage  over  the  army  and  navy :  while 
they  are  of  scarcely  any  value  except  in  war,  the  bank  is  not  less  useful  than 
either  of  them  in  war,  and  is  also  eminently  useful  in  peace.  It  has  another 
advantage,  still  greater.  If,  like  the  army  or  navy,  it  should  cost  the  nation 
millions  annually  to  sustain  it,  the  expediency  of  the  expenditure  might  be 
doubted.  But,  when  it  actually  saves  to  the  Government  and  to  the  country, 
as  the  committee  have  heretofore  attempted  to  show,  more  millions  annually 
than  are  expended  in  supporting  both  the  army  and  navy,  it  would  seem  that, 
if  there  were  any  one  measure  of  national  policy,  upon  which  all  the  political 
parties  of  the  country  should  be  brought  to  unite,  by  the  impressive  lessons  of 
experience,  it  is  that  of  maintaining  a  national  bank. 

It  is  due  to  the  persons,  who,  for  the  last  ten  years,  have  been  concerned 
in  the  administration  of  the  bank,  to  state,  that  they  have  performed  the  deli- 
cate and  difficult  trust  committed  to  them,  in  such  a  manner,  as,  at  the  same 
time,  to  accomplish  the  great  national  ends  for  which  it  was  established,  and 
promote  the  permanent  interest  of  the  stockholders,  with  the  least  practica- 
ble pressure  upon  the  local  banks.  As  far  as  the  committee  are  enabled  to 
form  an  opinion,  from  careful  inquiry,  the  bank  has  been  liberal  and  indul- 
gent in  its  dealings  with  these  institutions,  and,  with  scarcely  an  exception, 
now  stands  in  the  most  amicable  relation  to  them.  Some  of  those  institutions 
have  borne  the  most  disinterested  and  unequivocal  testimony  in  favor  of  the 
bank.  \ 

It  is  but  strict  justice  also  to  remark,  that  the  direction  of  the  mother  bank 
appears  to  have  abstained,  with  scrupulous  care,  from  bringing  the  power  and 
influence  of  the  bank  to  bear  upon  political  questions,  and  to  have  selected, 
for  the  direction  of  the  various  branches,  business  men,  in  no  way  connected 
with  party  politics.  The  committee  advert  to  this  part  of  the  conduct  of  the 
directors,  not  only  with  a  view  to  its  commendation,  but  for  the  purpose  of 
expressing  their  strong  and  decided  conviction  that  the  usefulness  and  stabi- 
lity of  such  an  institution  will  materially  depend  upon  a  steady  and  undevi- 
ating  adherence  to  the  policy  of  excluding  party  politics  and  political  parti- 
zans  from  all  participation  in  its  management.  It  is  gratifying  to  conclude 
this  branch  oi  the  subject,  by  stating  that  the  affairs  of  the  present  bank, 
under  the  able,  efficient,  and  faithful  guidance  of  its  two  last  presidents,  and 
their  associates,  have  been  brought  from  a  state  of  great  embarrassment,  into 
a  condition  of  the  highest  prosperity.  Having  succeeded  in  restoring  the 
paper  of  the  local  banks  to  a  sound  state,  its  resources  arc  now  such  as  to 
justify  the  directors  in  extending  the  issue  and  circulation  of  its  paper,  so  as 
to  satisfy  the  wants  of  the  community,  both  as  it  regards  bank  accommodations 
and  a  circulating  medium.  Upon  the  soundest  principles  of  banking,  the 
very  ample  resources  of  the  institution  would  justify  the  directors  in  grant- 
ing accommodations  to  a  much  greater  extent  than  they  have  yet  done;  and 
though  they  have  increased  the  circulation  of  their  paper  from  four  and  a  half 
to  fourteen  millions,  since  January,  1823.  they  are  ready  and  willing  t9  in- 
crease it  still  further,  by  discounting  bills  of  exchange  and  other  business 
paper.  It  is  believed  that  the  discounts  and  issues  of  the  institution  are  now 
actually  limited  by  the  vyant  of  application  resting  upon  these,  the  only  sub- 
stantial and  safe  foundations  of  bank  credit  and  circulation. 

III.  Having  said  thus  much  on  the  constitutionality  and  expediency  of  an 
incorporated  National  Bank,  the  only  question  which  remains  to  be  examined 
by  the  committee  is^  the  expediency  of  establishing  "a National  Bank  founded 
upon  the  credit  of  the  Government  and  its  revenues." 

It  is  presumed  to  have  been  the  intention  of  the  President,  in  suggesting 
the  inquiry  as  to  a  bank  founded  upon  the  credit  and  revenues  of  the  Govern- 
ment, to  be  understood  as  having  allusion  to  a  bank  of  discount  and  deposite. 
Such  a  bank,  it  is  taken  for  granted,  would  have  branches  established  in  va- 
rious parts  of  the  Union,  similar  to  those  now  established  by  the  Bank  of  the 
United  States,  and  co-extensive  with  them.  The  great  object  of  furnishing 


756  BANK    OF    THE    UNITED    STATES. 

a  national  currency  could  not  be  accomplished,  with  an  approach  to  unifor- 
mity, without  the  agency  of  such  branches;  and  another  object,  second  only 
in  importance  to  the  one  just  stated,  the  extension  of  the  commercial  facili- 
ties of  bank  accommodations  to  the  different  parts  of  the  Union,  could  not  be 
at  all  effected  without  such  agency.  If  there  should  be  simply  a  great  central 
bank  established  at  the  seat  of  Government,  without  branches  to  connect  its 
operations  with  the  various  points  of  the  commerce  of  the  Union,  the  promise 
to  pay  specie  for  its  notes,  whenever  presented,  would  be  almost  purely  no- 
minal. Of  what  consequence  would  it  be  to  a  merchant  or  planterof  Louisi- 
ana, or  a  manufacturer  or  farmer  of  Maine,  that  he  could  obtain  specie  for 
bills  of  the  National  Bank,  on  presenting  them  at  the  city  of  Washington — 
a  place  wholly  unconnected  either  with  Louisiana  or  Maine,  by  any  sort  of 
commercial  intercourse,  and  where,  consequently,  these  bills  would  never 
come  in  the  regular  course  of  trade?  A  promise  to  pay  specie  at  a  place  so 
remote  from  the  place  of  circulation,  and  where  the  bills  would  never  come 
but  at  a  great  expense,  and  for  the  sole  purpose  of  being  presented  for  pay- 
ment, would  neither  give  credit  to  the  notes,  nor  operate  as  an  effective  check 
upon  excessive  issues.  Whatever  credit  such  notes  might  have  at  a  distance 
from  the  place  of  issue,  would  not  be  because  they  were  redeemable  at  the 
pleasure  of  the  holder,  for  such  would  not  be  the  fact;  but  principally  because 
ol  the  ultimate  responsibility  of  the  Government,  and  of  their  being  receiva- 
ble in  payment  of  all  dues  to  the  treasury.  They  would  rest,  therefore,  upon 
almost  precisely  the  same  basis  of  credit  as  the  paper  money  of  our  Revolu- 
tion,  the  assignats  of  revolutionary  France,  and  the  treasury  notes  of  the 
late  war.  These  were  receivable  in  discharge  of  debts  due  to  the  treasury, 
and  the  Government  was  of  course  ultimately  responsible  for  their  payment; 
yet  the  two  former  depreciated  almost  to  nothing,  and  the  latter,  though  bear- 
ing interest,  sunk  to  twenty  per  cent,  below  par.  But  the  notes  of  a  central 
Government  Bankr  without  branches,  would  be  subject  to  depreciation  from 
a  cause  which  constitutes  a  conclusive  objection  to  such  an  institution. 
There  would  be  nothing  to  limit  excessive  issues  but  the  discretion  and  pru- 
dence of  the  Government  or  of  the  direction.  Human  wisdom  has  never  de- 
vised any  adequate  security  against  the  excessive  issues,  and,  consequently;,, 
the  depreciation  of  bank  paper,  but  its  actual,  and  easy,  and  prompt  converti- 
bility into  specie,  at  the  pleasure  of  the  holder.  Experience  has  shown  that* 
where  the  paper  of  a  bank  is,  by  any  means,  habitually  circulated  at  places 
remote  from  the  point  where  it  is  issued,  and  not  connected  with  it  by  a  re- 
gular commercial  intercourse,  there  will  not  exist  that  easy  and  prompt  con- 
vertibility which  is  so  essential  to  the  credit  of  bank  paper.  When  bank  bills- 
are  confined  to  their  appropriate  sphere  of  circulation,  a  redundant  issue  ia 
certainly  and  immediately  followed  by  a  run  upon  the  bank  for  specie.  This 
timely  admonition  is  as  useful  to  the  bank  as  it  is  to  the  community:  for  it  en- 
ables the  directors  to  avoid,  with  unfailing  certainty,  an  excess  equally  inju- 
rious to- both,  and  which  no  human  sagacity  could  anticipate  or  prevent,  by 
calculation  merely.  Whatever, _  therefore,  in  a  system  of  bank  circulation,  pre- 
vents the  reflux  of  redundant  issues,  necessarily  destroys  the  only  adequate 
security  against  these  injurious  and  ruinous  excesses. 

But  a  Government  Bank,  without  branches,  would  be  obnoxious  to  another 
objection,  which  could  not  be  obviated.  Its  loans  would  be  confined  to  the 
District  of  Columbia;  or,  if  extended  to  the  various  parts  of  the  Union,  to  say 
nothing  of  the  inconvenience  to  which  it  would  expose  those  at  a  distance,  who 
obtained  accommodations,  they  would  be  unavoidably  granted  without  any 
knowledge  of  the  circumstances  of  the  persons  upon  whose  credit  the  Govern- 
ment would  depend  for  re-payment.  It  would,  in  fact,  be,  for  all  useful  pur- 
poses, a  mere  District  Bank. 

These  views  of  the  subject  have  brought  the  committee  to  the  conclusion* 
that,  if  a  Government  Bank  should  be  established,  it  would  have  at  least  as 
many  branches  as  the  Bank  of  the  United  States,  and  probably  a  much  great- 
er number.  Few  administrations  would  have  the  firmness  to  resist  an  appli- 
cation to  establish  a  branch,  coining  from  any  quarter  of  the  Union,  however 


REPORT  OF  COMMITTEE,  1830.  757 

injudicious  the  location  might  be,   upon  correct  principles  of  commerce  and 
banking. 

The  Bank  of  the  United  States  now  employs  five  hundred  agents,  in  the 
various  parts  of  the  Union,  where  its  offices  are  established.  From  this  fact 
some  idea  may  be  formed  of  the  very  great  addition  which  would  be  made  to 
the  patronage  of  the  Executive  Government,  by  the  establishment  of  such  a 
bank  as  the  one  under  consideration. 

But  the  patronage  resulting  from  the  appointment,  the  annual  appointment, 
of  these  agents,  great  as  it  would  doubtless  be,  would  be  insignificant  and 
harmless,  when  compared  to  that  which  would  result  from  the  dispensation  of 
bank  accommodations  to  the  standing  amount  of  at  least  fifty  millions  of  dol- 
lars !  The  mind  almost  instinctively  shrinks  from  the  contemplation  of  an  idea 
so  ominous  to  the  purity  of  the  Government,  and  the  liberties  of  the  People. 
No  government  of  which  the  committee  have  any  knowledge,  except,  perhaps, 
the  despotism  of  Russia,  was  ever  invested  with  a  patronage  at  once  so  prodi- 
gious in  its  influence,  and  so  dangerous  in  its  character.  In  the  most  despe- 
rate financial  extremities,  no  other  European  government  has  ever  ventured 
upon  an  experiment  so  perilous.  If  the  whole  patronage  of  the  English  mo- 
narchy were  concentrated  in  the  hands  of  the  American  Executive,  it  may  be 
well  doubted  whether  the  public  liberty  would  be  so  much  endangered  by  it, 
as  it  would  by  this  vast  pecuniary  machine,  which  would  place  in  the  hands 
of  every  administration  fifty  millions  of  dollars,  as  a  fund  for  rewarding  politi- 
cal partizans. 

Without  assuming  that  a  corrupt  use  would  be  made  of  this  new  species  of 
Government  patronage,  a  very  slight  acquaintance  with  the  practice  of  all  po- 
litical parties,  whatever  may  be  their  professions,  will  be  sufficient  to  satisfy 
any  reflecting  mind  that  all  the  evil  consequences  of  corruption  would  flow 
from  its  exercise.  Have  not  our  political  contests  too  frequently  degenerated 
into  a  selfish  scramble  for  the  offices  of  the  country?  Are  there  not  those 
who  sincerely  and  honestly  believe  that  these  offices  are  legitimate  objects  of 
political  warfare,  and  the  rightful  reward  of  the  victorious  party?  And,  dis- 
interested and  patriotic  as  the  great  body  of  every  political  party  is  admitted 
to  be,  the  fact  is  no  less  true  than  it  is  lamentable?  that  the  most  devoted  and 
active  partizans  are  very  often  mere  soldiers  of  fortune,  who  watch  the  poli- 
tical signs,  and  enlist  at  the  eleventh  hour,  under  the  banners  of  the  party 
most  likely  to  prove  successful.  Such  being,  more  or  less,  the  composition 
of  all  political  parties,  what  would  be  the  probable  use  made  of  fifty  millions 
of  bank  patronage,  by  a  political  party  which  conscientiously  held  the  doctrine 
thatall  the  offices  in  the  gift  of  the  Executive  should  be  divided  among  the 
partizans  of  a  successful  political  leader?  Would  not  the  same  principle  be 
even  more  applicable  to  bank  loans?  And  would  not  the  treasury  of  the  Unit- 
ed States,  under  the  sanctifying  influence  of  party  delusion  and  party  infatua- 
tion, be  literally  plundered  by  mercenary  retainers,  bankrupts  in  fortune,  and 
adventurers  in  politics? 

Even  if  the  administration  should  be  ever  so  much  disposed  to  restrain  the 
abuse  of  this  patronage,  it  would  be  utterly  impracticable  to  exercise  any  effi- 
cient control  over  the  great  number  of  bank  directors  who  would  be  scattered 
over  the  Union,  and  who,  upon  all  the  known  principles  of  human  nature,  it 
may  be  confidently  predicted,  would  principally  consist  of  busy  and  officious 
political  partizans. 

Such  would  be  the  depositories,  acting,  not  under  the  public  eye,  but  under 
the  protecting  mystery  of  a  sort  of  concealment  and  secrecy,  deemed  indispen- 
sable in  banking  operations,  to  whom  not  only  the  whole  treasury  of  the  Union 
would  be  confided,  to  be  squandered,  perhaps,  in  profligate  favoritism,  but 
the  tremendous  power  of  putting  the  \yhole  property  of  the  nation  under 
mortgage,  for  the  redemption  of  the  bills  issued  at  their  discretion.  To  say 
nothing  of  the  utter  insecurity  of  the  public  revenues  under  such  a  system,  a 
new  species  of  legislative  power,  unknown  to  the  constitution,  would  be  com- 
mitted to  these  irresponsible  bank  driectors,  of  which  no  human  sagacity  can 
predict  the  consequences. 


758  BANK  OF  THE  UNITED  STATES 

A  just  analysis  of  the  operation  of"  granting  loans  by  this  Government 
bank,  in  exchange  for  the  notes  of  private  individuals,  will  show,  that  it  in- 
volves the  exercise,  on  the  part  of  the  directors,  of  the  two-fold  power  of  ap- 
propriating the  public  revenue  in  the  most  dangerous  of  all  forms,  discretion- 
ary loans,  and  of  pledging  the  reponsibility  of  the  Government,  to  an  unlimited 
extent,  for  the  payment  of  the  debts  at  the  same  time  created  against  it. 
These  are  among  the  highest  functions  of  legislative  power,  and  have  been 
expressly  and  exclusively  vested  in  Congress.  Unless,  therefore,  it  be  as- 
sumed that  Congress  may  rightfully  transfer  the  powers  with  which  it  is  in- 
vested to  these  bank  directors,  it  will  be  difficult  to  find  any  warrant,  either 
in  the  letter  or  spirit  of  the  constitution,  for  the  creation  of  this  tremendous 
engine  of  pecuniary  influence.  It  may?  indeed,  be  doubted,  whether  all  the 
branches  of  the  legislative  authority  united  have  any  constitutional  power  to 
lend  the  public  revenue,  either  to  individuals,  corporations,  or  States,  with- 
out reference  to  the  objects  to  which  it  shall  be  applied.  But,  \yhatever  may 
be  the  power  of  Congress  on  this  subject,  it  appears  to  the  committee  to  be  in- 
expedient, in  every  view  of  the  question,  that  the  Government  should  be  con- 
verted into  a  great  money  lender.  There  is  no  species  of  trade  in  which  it 
would  be  wise  for  the  Government  to  embark;  but  of  all  the  variety  of  pur- 
suits known  to  human  enterprise,  that  of  lending  money  by  the  Government 
to  the  citizens  of  the  country,  would  be  fraught  with  the  most  pernicious  con- 
sequences. 

In  the  first  place,  it  is  a  business  to  which,  in  the  very  nature  of  things,  no 
government  is  adapted,  and,  least  of  all,  a  popular  government.  There  is 
no  employment  of  capital  that  requires  a  more  vigilant  and  skilful  superin- 
tendence. Nothing  but  the  ever  active  motive  of  individual  interest  can  sup- 
ply the  watchfulness  necessary  to  secure  a  banking  institution  against  the 
grossest  frauds  and  impositions.  In  pecuniary  transactions,  few  men  are  to 
be  found  who  will  serve  others,  in  cases  involving  the  exercise  of  discretiona- 
ry power,  with  the  same  fidelity  that  they  would  serve  themselves;  and  when 
we  consider  the  strong  motives,  both  of  private  friendship  and  political  at- 
tachment, which  would  operate  on  the  directors  of  a  government  bank,  to 
bestow  its  favors  without  impartiality  or  prudence,  it  requires  but  little  saga- 
city to  foresee  that  enormous  losses  would  be  annually  sustained  hy  the  insol- 
vency of  the  government  debtors. 

All  governments  have  found  it  expedient  to  place  the  public  treasury  un- 
der the  guardianship  of  a  high  and  confidential  officer,  aided,  in  the  enforce* 
ment  ot  a  rigid  responsibility,  by  a  system  of  checks  and  counterchecks,  ope- 
rating upon  all  the  subordinate  officers  concerned  in  collecting  and  disburs- 
ing the  public  revenue.  Such  is  our  own  system.  No  discretion  is  vested 
in  the  chief  officer  of  the  treasury,  much  less  in  those  that  are  sudordinate, 
in  the  appropriation  of  a  single  dollar  of  the  public  money.  "  No  money 
can  be  drawn  from  the  treasury  but  in  consequence  of  appropriations 
made  by  law."  How  far  these  wise  and  provident  safeguards,  and  this  con- 
stitutional barrier,  would  be  prostrated  by  placing  not  only  the  public  re- 
venue, but  the  public  credit,  at  the  disposal  of  some  hundreds  of  bank  di- 
rectors, in  various  parts  of  the  Union,  is  a  very  grave  question  for  the  conside- 
ration of  the  House. 

Our  own  experience  has  demonstrated  the  great  danger  of  having  large 
masses  of  the  community  indebted  to  the  Government.  It  was  a  deep  convic- 
tion of  this  danger  that  induced  Congress  to  abolish  the  system  of  credit 
sales  in  the  disposition  of  the  public  lands.  Congress  has  been  compelled  to 
yield  to  the  pressing  importunities  of  the  purchasers  of  these  lands,  bv  grant- 
ing them  not  only  repeated  indulgencies,  but  by  remitting  some  millions  of 
the  debt.  What,  then,  would  be  the  situation  of  the  Government,  with  a  debt 
of  fifty  millions  diffused  throughout  the  country,  and  due  to  it  from  the  most 
active,  enterprising,  and  influential  classes  of  the  community?  Nothing  that 
has  not  happened  can  be  more  certain,  than  that  every  unfavorable  vicissitude 
in  trade,  every  period  of  commercial  distress  and  embarrassment,  would  give 
rise  to  importunate  and  clamorous  calls  for  indulgence,  and  for  an  injudicious 


REPORT  OF  COMMITTEE,    1830.  759 

extension  of  discounts,  which  no  administration  would  have  the  firmness  to  re- 
sist. Every  one  who  has  witnessed  the  urgency  and  unanimity  with  which  the  re- 
presentatives of  the  States  indebted  for  public  lands,  have  pressed  the  claims 
of  their  citizens  for  indulgence  and  remission,  must  be  satisfied  that,  if  the 
cittzens  of  all  the  States  should  become  indebted  much  more  largely  for  bank 
loans,  the  Government  would  have  scarcely  any  faculty  of  resistance,  when 
appeals  for  indulgence  should  come  from  all  quarters  of  the  Union,  sustained 
by  the  strong  plea  of  public  distress  and  embarrassment. 

The  policy  of  extending  indulgence  to  the.  public  debtors,  and  of  granting 
more  liberal  loans  to  the  community,  would,  m  the  natural  course  of  things, 
become  the  favorite  theme  of  those  who  aspired  to  popular  favor.  Political 
parties  would  come  to  be  divided  upon  the  question  of  observing  towards  the 
public  debtors  a  strict  banking  policy,  indispensable  to  the  maintenance  of 
specie  payments,  on  the  one  hand,  or  a  liberal  Government  policy,  necessa- 
rily involving  a  suspension  of  specie  payments,  on  the  other.  Ana  when  it  is 
considered  that  the  whole  class  of  debtors,  always  the  most  numerous  and 
active  portion  of  the  community?  would  be  naturally  in  favor  of  increasing 
bank  issues,  and  extending  bank  indulgences,  it  can  scarcely  be  doubted  that 
specie  payments  would  be  suspended  in  the  first  great  pecuniary  exigency, 
growing  out  of  embarrassments  in  our  commerce,  or  deficiencies  in  our  re- 
venue. 

The  Government,  therefore,  which  is  under  the  most  sacred  obligations  to 
constrain  all  the  banks  to  maintain  specie  payments,  with  a  view  to  the  uni- 
formity and  soundness  of  the  currency,  would,  by  its  own  example,  perpetuate 
the  great  national  evil  of  a  fluctuating  and  depreciated  circulating  medium. 

These  evils,  which  would  be  so  highly  probable  in  time  of  peace,  would  be 
almost  certain  in  the  event  of  war.  'Ihe  temptation  to  supply  the  Federal 
treasury  by  the  easy  process  of  bank  issues,  rather  than  resort  to  the  unpopu- 
lar process  of  internal  taxation,  would  be  too  fascinating  to  be  resisted.  We 
should  thus  experience,  what  every  nation  has  experienced  in  like  circum- 
stances, the  manifold  evils  of  a  mere  paper  currency,  haying  no  relation  to 
any  standard  of  intrinsic  value.  In  these  views  the  committee  are  fully  sus- 
tained by  the  opinion  of  Mr.  Lowndes,  expressed  in  1819.  These  are  his 
words:  "  That  the  destruction  of  the  [United  States]  Bank  would  be  follow- 
ed by  the  establishment  of  paper  money,  he  firmly  believed,-  he  might  almost 
say,  he  knew.  It  was  an  extremity  trom  which  the  House  would  recoil,  if 
now  proposed;  but,  if  the  resolution  on  the  table  were  passed,  it  would  very 
soon  be  proposed.  The  subject  was  too  large  for  an  incidental  discussion. 
Gentlemen  thought  the  amount  of  Government  paper  might  be  limited,  and 
depreciation  prevented,  by  the  rate  of  interest  which  should  be  exacted.  In- 
adequate every  where,  the  security  was  particularly  ineffectual  in  the  United 
States." 

But  the  inevitable  tendency  of  a  Government  bank  to  involve  the  country 
in  a  paper  system,  is  not,  in  the  opinion  of  the  committee,  the  greatest  objection 
to  it.  The  powerful,  and,  in  the  hands  of  a  bad  administration,  the  irresisti- 
ble and  corrupting  influence  which  it  would  exercise  over  the  elections  of 
the  country,  constitutes  an  objection  more  imposing  than  all  others  united. 
No  matter  by  what  means  an  administration  might  get  into  power,  with  such 
a  tremendous  engine  in  their  hands  it  would  be  almost  impossible  to  displace 
them,  without  some  miraculous  interposition  oj*  Providence. 

Deeply  impressed  with  the  conviction  that  the  weak  point  of  a  free  Govern- 
ment is  the  absorbing  tendency  of  Executive  patronage,  and  sincerely  believ- 
ing that  the  proposed  bank  would  invest  that  branch  of  the  Government  with 
a  weight  of  moneyed  influence,  more  dangerous  in  its  character,  and  more  pow- 
erful in  its  operation,  than  the  entire  mass  of  its  present  patronage,  the  com- 
mittee have  felt  that  they  were  imperiously  called  upon,  by  the  highest  con- 
siderations of  public  duty,  to  express  the  views  they  have  presented,  with  a 
frankness  and  freedom  demanded  by  the  occasion.  It  is,  at  the  same  time, 
due  to  their  own  feelings,  that  they  should  state,  unequivocally,  their  convic- 
tion, that  the  suggestion  of  the  Chief  Magistrate,  which  they  have  thus  freely 


760  BANK  OF  THE  UNITED  STATES. 

examined,  proceeded  from  motives  of  the  most  disinterested  patriotism,  and 
was  exclusively  designed  to  promote  the  welfare  of  the  country.  This  is  not 
the  mere  formal  and  heartless  homage,  sometimes  offered  up  to  official  station, 
either  from  courtesy  or  interest,  but  a  tribute  which  is  eminently  due,  and 
cheerfully  rendered,  to  the  exalted  character  of  the  distinguished  individual 


on  whom  it  is  bestowed. 


Extracts  of  a  letter  from  an  intelligent  merchant  in  Charleston,  South  Caro- 
lina^ to  the  Chairman  of  the  Committee  of  Ways  and  Means*  illustrating 
the  exchange  operations  of  the  Bank  of  the  United  States,  and  accompany- 
the  foregoing  report. 

44  This  effect  of  diminishing  the  vast  difference  of  exchange  between  the 
various  points  of  the  country,  was  evidently  produced  by  the  bank.  The  ad- 
vantages produced  by  this  institution,  in  the  intercourse  between  the  Western 
and  Atlantic  States,  can  be  duly  appreciated  only  by  one  who  sees,  passing 
before  him,  the  actual  operation  of  the  system  of  exchange  it  has  created.  For 
example:  Lexington,  in  Kentucky,  annually  accumulates  a  large  surplus  of 
funds  to  her  credit  in  Charleston,  derived  from  the  sale  of  horses,  hogs,  and 
other  live  stock,  driven  to  that  as  well  as  to  other  Southern  markets  by  her 
citizens.  Philadelphia  is  indebted  to  Charleston  for  exchange  remitted,  divi- 
dends on  bank  stock,  &c.  and  Lexington  is  indebted  to  Philadelphia  for  mer- 
chandise. Without  the  transportation  of  a  single  piece  of  coin,  Lexington 
draws  on  Charleston,  and  remits  the  check  to  Philadelphia  in  payment  of  her 
debt  there;  which  operation  adjusts  the  balance  between  the  three  points  of 
the  triangle,  almost  without  expense  or  trouble.  Could  such  facilities  be  ob- 
tained from  any  other  than  an  institution  having  branches  in  different  parts  of 
the  Union,  acting  as  co-partners  in  one  concern?  Local  banks,  whatever 
might  be  their  willingness,  could  not  accommodate  in  the  same  manner,  and 
to  a  like  extent." 

44  The  discounting  of  bills,  on  the  low  terms  established  by  the  branch  bank 
at  this  place,  is  a  great  benefit  to  the  agricultural  interest,  particularly  in  en- 
hancing the  price  of  cotton  and  rice;  and  were  the  bank  to  stop  its  operations, 
there  is  no  saying  how  far  these  staples  would  be  depressed.  The  private 
dealers  in  exchange  would  take  the  place  of  the  bank  in  that  business,  and 
their  profits  on  bills  would  be  taken  out  of  the  pockets  of  the  planters,  as  the 
merchants  would  always  regulate  the  price  they  would  give  for  an  agricultu- 
ral production,  by  the  high  or  low  rate  at  which  they  could  negotiate  their 
bills.  On  account  of  its  connexion  with  all  parts  of  the  Union,  the  bank 
affords  this  important  advantage  to  the  public:  it  is  always  a  purchaser  and 
always  a  seller  of  exchange,  at  fixed  and  low  rates,  and  thus  prevents  extor- 
tion by  private  dealers."  44  Before  this 
Ibank  went  into  operation,  exchange  was  from  eight  to  ten  percent.,  either  for 
or  against  Charleston,  which  was  a  loss  to  the  planter  to  that  amount  on  all 
the  produce  of  Georgia  and  South  Carolina,  and,  indeed,  you  might  say,  all 
the  produce  of  the  Southern  and  Western  States." 
44  If  the  Bank  of  the  United  States  were  destroyed,  the  local  banks  would 
again  issue  their  paper  to  an  excessive  amount;  and  while  a  few  adventurous 
speculators  would  be  much  benefi tted  by  such  an  issue,  the  honest  and  unsus- 
pecting citizens  of  pur  country  would,  finally,  be  the  losers.  If  we  look  back 
to  what  took  place  in  New  York,  Pennsylvania,  the  Western  States,  and  even 
in  our  own  State,  we  shall  see  the  grossest  impositions  committed  by  banks, 
commencing  with  a  few  thousand  dollars  in  specie,  buying  up  newspapers  to 
puff  them  as  specie  paying  banks,  in  order  to  delude  the  public,  and,  after 
getting  their  bills  in  circulation,  blowing  up,  and  leaving  the  unsuspecting 
planter  and  farmer  victims  of  a  fraud,  by  which  they  were  deprived  of  the 
hard  earnings  of  years  of  honest  industry.  But,  sir,  I  believe  the  bank  owes 
a  great  deal  of  the  opposition  which  exists,  and  has  existed,  to  the  fact  that 


REPORT  OF  COMMITTEE,  1830.  751 

it  has  put  down  these  fraudulent  institutions,  got  up  by  combinations  and 
conspiracies  of  speculators;  and  who,  after  receiving  large  dividends,  ma- 
naged to  destroy  the  credit  of  their  own  paper,  and,  by  the  agency  of  brokers, 
bought  it  up  at  half  its  nominal  value. 

"  Since  I  last  wrote  you,  I  had  a  conversation  with  a  gentleman  in  the  con- 
fidence of  some  of  the  moneyed  men  of  the  North,  and  he  says  they  are  deter- 
mined to  break  up  the  United  States'  Bank,  to  enable  them  to  use  their  mo- 
ney to  advantage;  as  that  institution  gives  so  many  facilities  to  the  communi- 
ty, as  to  deprive  them  of  their  former  profits." 

'"There  is  another  consideration:  the  distress  would  be  immense,  which  a 
refusal  to  renew  the  charter  would  produce  among  those  who  are  indebted  to 
Ihe  institution:  for  I  find  that,  to  this  branch,  the  planters  owe  upwards  of  a 
million  of  dollars;  and  I  have  no  hesitation  in  saying,  as  safe  a  debt  as  is  ow- 
ing to  any  bank  in  the  Union.  But  if  the  bank  should  wind  up  its  affairs, 
these  planters  could  not  get  credit  from  other  institutions;  and  as  the  bank 
can  sue  in  the  United  States'  court,  where  judgment  is  obtained  almost  at 
once,  property  would  be  greatly  depressed,  and  moneyed  men  would  buy  it 
up  for  half  its  value.  Throughout  me  Union,  all  classes  would  suffer,  except 
those  who  should  hold  up  their  money  to  go  into  the  brokerage  business,  or 
buy  property  at  a  sacrifice.  If  I  were  sure  the  bank  would  not  be  re-char- 
tered, I  would  convert  my  property  into  money,  with  a  view  to  dealing  in  ex- 
change. I  could  make  a  vast  fortune  by  it," 


96 


762 


BANK   OF   THE    UNITED   STATES. 


.1 

~i  •> 

!H 

NH  ^ 

g     •§ 

/H  -*S 


^  Q 


I 


- 


8 


.22  22       2 

'S  -3  03-5 

«  .      ' 

"3  « 

^  0. 


'S'S-g-g-g 
°  ,S32^^«  ,  S3 

ease         ^ 

o  o  to  <» 

CQ  ^ 


^ 


^*^>«s*v*  ««»•« 

^3*    -    v-    ^  >So-    - 

«i  ,  ^ 

^l«                    Hc«  H« 

00  »^  l>  t^  05  T-I  •*  O 


.a 

fc-  Si  e          .22C05CCQO 

'    '    '   H,'   S,1   «5    '^ 


.22          .22 


.22      .22 


.    ,      ...s 

T3        «       H3  Q^CJ  c 
I>        O        CO  ^H  CO  O 


.        i 


22.22       22 


<:    '  & 


REPORT   OF  COMMITTEE,    1830. 


763 


i-,         •— 

as. 


S 


5 


.£ 


. 

g. 


cs         ,    cs  e« 

o  rt<  w 


^  C 


i 


°° 

e      e 

*°  0         00 


764 


BANK   OF  THE    UNITED    STATES. 


ed,  by  the  Sank  of  the  United  States  and 


ENDIX,  No.  2. 

tic  Sills  purchased  or 
Discount  and  Deposit 


APP 

omes 
s  of 


s  are  sold, 


f 


Kat 


its 


Bill 
cha 


e 

i 


ls  p 


55  SS 


aaaaa     a  aa     aa 


:->   in   t_   t_i    i     i.    :-    i.   ;-;_:_:_ 

aaaa  aaaaaaa 


^       "  i     "  n\*t  t  "  ; 

:-  t-  s-  ;_,      —    t-  u      ~ 


•— i  •--  t*   I   b«  b  (tf  M  M  L«  b<  Xri  --'l-tcc^f  ^lc»  ^-< 

aaa  aaaaaaaa  ^ 


aa  aaa  laaa  aa  aa  a 


a     a 


e  e  e  »,,,,«  «eN,  ,   « 

t-    fc-    )U    S-  '-    t-  U 

aaaa        aa     a 


fcn  t-   r   »   S-   f   t-  U  t-  t.-l^  f 

aa  a  aaaa 


'hj«oht~l«»  ^^  i  "iM'-lct  t-i 

b- 


REPORT   OF  COMMITTEE,    1830. 


765 


2    - 


b 

p-2      C§ 

5  -C 

pq  o 


1 


a  a 


,  e  o      e         e  ««^     e 
•-.•—•-.  -^      ~         •—  -~,         •— 

g,s.  aa  a     aa     a 


i    rt  rt    i 

C.  Cu 


a 


e         -- 


a 


^.  i.     t-     — 

a  aaa  a 


aa     a 


Q 

i-        M  -l^ 

aa 


a     aaaa  aa  aa  aa 


K 


S-a 

C.  « 


:_    :_         UU         i-         —         •_    i. 

"10*  a  a  '  a  •  a  •  a  a  •  "»-£** 


cj 
B. 


eirt 
B.& 


""  '  a 


allaaa  aaaaaa  aa  aa  aa 


766 


BANK  OF  THE  UNITED  STATES. 


1 


3  TJ 


«  « 


-<  -ic»  i—  P-I 


!-:-.!- 


fi-o 

P    w 


,  e  «       ,  a  ,   e  erthp  , 


P. 

,3 


5-6 
1? 


,,  , 


i  ° 

Q  * 


a  a 

t-    i- 


aaaaa 


aa 


a  aaaa 


e^,   ,  a  enhr 

w  «     U 

a     aa 


—   i» 


^^-i  js§" 


REPORT  OF  COMMITTEE,    1830. 


767 


s 


Ef 


e  e 


II 


« 

*N" 


O. 


* 

•a 
3 


l 

Q  8 


1  111 


f      |      | 


a 


- 

a 


uu     ^u^u^ 

aa     aaaa  a 


aa     aaa     a 


l  -g 


• 


7(58  BANK  OF  THE  UNITED  STATES. 

APPENDIX,  No.  3. — List  of  7*ransfers  by  the  Secretary  of  the  Treasury  from 
and  to  Bank  United  States  and  Offices,  from  Gth  June  to  14th  Dec.  1829. 


No. 

Date. 

Where  from.                         Where  to, 

Amount. 

1 
2 

June  8,  1829 

44            4< 

New  York,             -     Washington, 
Bank  United  States,  j        Ditto, 

$100,000 
50,000 

3 

t  ;             44 

New  York, 

Ditto, 

150,000 

Ditto, 

Bank  United  States, 

1,865,000 

New  Orleans, 

Ditto, 

75,000 

Louisville, 

Ditto, 

50,000 

Cincinnati, 
Bank  United  States, 

Ditto, 
Baltimore, 

115,000 
135,000 

Ditto, 

Norfolk, 

80,000 

Ditto, 

Fayetteville, 

20,000 

Ditto, 

Charleston, 

200,000 

Ditto, 

Savannah, 

15,000 

Ditto, 

Mobile, 

35,000 

Portland, 

Portsmouth, 

20,000 

Ditto, 

Boston, 

90,000 

New  York,    - 

Ditto, 

40,000 

Providence, 

New  York,    - 

140,000 

Hartford, 

Ditto, 

35,000 

New  York,    - 

Richmond, 

70,000 

Ditto, 

Charleston, 

80,000 

Cincinnati,    - 

Pittsburgh,     - 

15,000 

31 

July    8,    " 

New  York,     - 

Washington, 

100,000 

32 

Aug.    3,    " 

Ditto, 

Ditto, 

100,000 

33 

44                     44 

Baltimore, 

Ditto, 

50,000 

Sept.    1,    " 

New  York,    - 

Ditto, 

100,000 

9,     « 

44                    44 

Louisville, 
Charleston,    - 

Pittsburgh,     - 
Fayetteville, 

20,000 
10,000 

(4                    4C 

Bank  United  States, 

Norfolk, 

20,000 

4'                     44 

New  York,  - 

Ditto, 

20,000 

44                     44 

Louisville, 

Nashville, 

20,000 

44 
45 

14,     " 

(4                     44 

New  York,     - 
Boston, 

Washington, 
Ditto, 

100,000 
40,000 

47 

21,     " 

Charleston, 

Fayetteville. 

20,000 

49 

Oct.     5,     " 

New  York,    - 

Norfolk, 

50,000 

50 

12,     " 

Ditto, 

Washington. 

100,000 

51 

Nov.    2,     " 

Bank  United  States, 

Norfolk, 

50,000 

52 

(4                     44 

New  York,    - 

Washington, 

100,000 

53 

Boston, 

Ditto, 

50,000 

63 

Bank  United  States, 

Norfolk, 

50,000 

64 

New  York,    - 

Washington, 

100,000 

65 

Ditto, 

Norfolk, 

50,000 

66 

Ditto, 

Washington, 

100,000 

67 

Bank  United  States, 

Ditto,                             100,000 

68 

Boston, 

Ditto, 

25,000 

69 

Dec.  14,1829 

Ditto, 

Bank  United  States, 

500,000 

70 

a             44 

New  York,    - 

Ditto, 

1,000,000 

71 

44                    44 

New  Orleans, 

Ditto, 

400,000 

72 

44                   44 

Bank  United  States. 

Baltimore, 

300,000 

73 
74 

44                   (( 
(I                  4( 

Ditto. 
Savannah, 

Charleston, 
Norfolk, 

50,000 
50,000 

$7,055,000 

From  the  above  statement,  the  annual  amount  of  the  transfers  made  for  the  Govern- 
ment, free  of  expense,  may  be  inferred. 


REPORT  OF  COMMITTEE.    1830- 


769 


OOTt«O»-1 

ocoot- 


c*  o 


^  CO  CO 


of 


OO 
OO 


i  '  '£ 


§ 


o-     o  oo  o      o  -H  

TJ«         t^  t^  CO         O  O         00  00  l^  O 

^         -*  Oi  :0         O  t-         —  O  OS  O 


fe 


—         -HOCOl-OOOOtOOCiM  -J«O         0 

O         OOOCiOOOOCiCOOO  OO         O 


to  to 

O^  CO  O^         ^^ 

?JM  o  '  2 


CO  00 


S  g  •  2 


Ci     i 
r«T 


Ci         Ci 

—       o 


O 

o 


s 


.2 


co       «o  — 


CitO         Ci^O         —  CJ  CO  -H  —<         «ft 


Oi«OOM<OJ^-<«*" 

—  t-oooi-oco 
to  t^  o  >— 


^H  —  i  CO 


s  »  ^=5 

2  §  .S  3 
fe  -€--  £  c_ 

o  |j2  o 

S  oS   •' 


-Hco^^-^^^^ooi^to^^ 
a.  i^  c*       o  c*       co  r-*  *-  uo 


o-^r-^o 
to  to  co  c-J  — 


1! 

^  as 


97 


770 


X 

§ 


BANK  OF  THE  UNITED  STATES. 

Cl  CO         CO         COOOOOO"*         O  "-<  CO  O  O?  OS 
O*O         »O         -^OOOOiOCO         O  00  O4  •»#  OS  00 


04  o 

ClO 


l^  CO         •*?  CD 

*£~      efof 


irT      •«^' 
o      »-i 


OD  co  i-  r^  oo 
t-  5  w  ^ 


O  ^-<         O  C$  O  ^« 

CM  o      tn  r^  o  t^ 

O  CQ         OD  O  O  OD 

^J  I      i      •      i       ,t^|00^0<N 

O  CO         •-•                i-i 


oS      § 


r»  o?-^      O4<N       ooj      04 

o    i       o  o      o  — » 


o 

i    O 


Tt<  « 


O  Cl  O 


(M  04 


O         O 


-^ 

O 


«0«3OCOrt< 
C*  CO,  O  00  »-< 


1^1  OO 

rt<)      itoioi      i      t 
0>CO 


~  ' 

e» 


CJ  O 


00 


^H     ,      ,    04  (M 
O  "^  I*" 

~T  CO'^H' 


O  00 

04  04 


00  00  O  CJ  O 

CD  O  O  iO  O 


i  , 


oco 

CO  CS 


»ft 
CO 


00  CD 
CD  GO 

sK 


oco 


^  ,  to 

*v    ^ 

04  f-i 


,s  . 

i 


OO 
COO 


£g 

tii 


O  —  CO 

§O  CO 
CO  O4 


COOOCOOOOOOO 
T^OOCOCOOCIOO 


OO 
OO 


I-  CO 
CO 


i>  o  ifi 

t^CJ  O 

cf     «-J 


to^oo^ 
oToo' 


§s 

2«l 


t^-CO 

04  G* 


COOOO         t^O»-<'-<O         OO 
000000         OOO^CT 


o  o 

CO  <M  OJ  CO  GO     i     O 


SS  '     j: ^  '  S  '  -P 

CO  — <  TH         ^H         OG<Jm         CCi-HCOO^ 

—  00  CO          O          ^0  ^"*  CO          C^  ^O 


OO(N 

000 

Ol~*O 


1 

=3 

Q 


o 

it 

I- 


1 

i 


X 

s 


REPORT  OF  COMMITTEE,  1830. 

00  »O  ©  tO  O  CO  — 'O 
i— i  t>»         O  Ci  © 

©    ©  CO    T*»  "*    —I    © 


SO  ©         t^ 
O  ©         «-i 


O  50  <•*  00  £- 
**^  CO  O<  O  O 

--  t-  o  o»  --? 


eo 


c» 


oo 


0 


w  t^ 

kC  00 

§  ,    £ 

©  kO 


coaoo 

l^ODO 


5' 


c» 

(?» 


i    A     •      ' 

i^ 


00  ©  '-O  CO  0»         00 

•1 ' 


§ 


2   § 

§  , 


£  -«  CO  O  ©  -O 

©     •          CO     i          iO  O)  ©  O     i      t 


e*  ©  ©  co 

Cl  O  ©  iO 


771 

S 


«T 

CO 
CO 


§ 


Iff 


C3 

I-' 

Cj 


1  .frffifW 


~^ 

.  „     . .  rf ^ 

OJ  C 

Jf  J-5    liatrfj'if'ft 

*J  <o  »  2    -^  3r=i^  -ti,  a  =:  <r 


1TZ  BANK    OF  THE  UNITED  STATES. 

State  of  the,  Bank  of  the  United  States,  April  i,  1830. 

Notes  discounted,  $32,138,270  89 

Domestic  bills  discounted,  10,506,882  54 

Funded  debt  held  by  the  bank,        -  11,122,530  90 

Real  estate,       -  2,891,890  75 

Funds  in  Europe,  equal  to  specie,  -  2,789,498  54 

Specie,  9,043,748  97 

Public  deposites,  -                                   8,905,501  87 

Private  deposites,  -                                  7,704,256  87 

Circulation,       -  -                             *  16,083,894  00 


IN  SENATE. 

MARCH  29,  1830. 
Mr.  SMITH,  of  Maryland,  made  the  following  report: 

The  Committee  on  Finance,  to  which  yvas  referred  a  resolution  of  the  30th 
December,  1829,  directing  the  committee  to  inquire  into  the  expediency  of 
establishing  an  uniform  national  currency  for  the  United  States,  and  to  re- 
port thereon  to  the  Senate,  report: 

That  nothing,  short  of  the  imperative  order  of  the  Senate,  could  induce  the 
committee  to  enter  on  a  subject  so  surrounded  with  difficulty.  They  under- 
take it  with  diffidence,  and  a  distrust  of  their  capacity  to  elucidate  a  subject 
that  has  engaged  many  nations  and  the  pens  of  the  ablest  writers,  without,  aa 
yet,  coming  to  anv  definite  conclusion.  It  still  remains  to  be  determined, 
What  is  the  soundest  and  most  uniform  currency?  One  nation  assumes  one 
system,  another  a  different  plan.  In  one  nation,  a  plan  is  devised,  and  suc- 
ceeds, for  a  time,  by  prudent  and  restrictive  emissions.  Elated  with  success, 
larger  and  more  extensive  emissions  are  risqued;  a  rapid  nominal  ri=>e  of  all 
property  takes  place;  the  people  are  not  aware  that  such  nominal  rise  is  the 
effect  of  depreciation;  the  bubble  bursts,  and  ruin  to  the  unsuspecting  is  the 
consequence.  All  history  show3  such  a  result  in  several  nations,  and,  par- 
ticularly, in  that  of  the  United  States.  The  committee,  engaged  on  a  variety 
of  subjects,  cannot  devote  so  much  time  on  the  resolution  as  the  mover  must 
believe  would  be  necessary  to  develop  fully  the  question  before  them,  to  wit: 
A  sound  and  uniform  national  currency.  Presuming,  from  the  tenor  of  the 
resolution,  that  the  uniform  national  currency  proposed  must  be  prepared  by 
the  National  Government,  circulated  under  its  authority,  and  mantained  by 
its  credit,  the  committee  have  complied  with  the  instruction  of  the  Senate,  by 
endeavoring  to  devise  some  plan,  through  which  the  agency  of  the  Govern- 
ment, in  such  a  measure,  could  be  safe  or  useful;  but,  after  giving  to  it  all 
the  consideration  they  could  bestow,  their  reflections  have  resulted  in  a  be- 
lief that  any  such  measure  must  resolve  itself,  at  last,  into  a  mere  system  of 
paper  money,  issued  by  the  Government.  The  resort  to  the  issue  of  a  paper 
money  has  been  often  the  desperate  expedient  of  the  wants  of  a  nation.  It 
has  then  found  its  justification  only  in  the  necessity  which  created  it:  yet, 
such  are  its  inevitable  evils,  that  every  prudent  Government  has,  the  moment 
its  pressing  exigencies  permitted,  returned  to  the  only  safe  basis  of  a  circula- 
ting medium —  the  precious  metals,  and  the  private  credits  attached  to  the  use 
of  them.  Such  were  the  expedients  of  the  Government  of  the  United  States 
during  its  two  wars;  such  its  immediate  abandonment  of  them  at  the  return 

*  This  is  the  circulation  from  the  office  returns.  We  know,  however,  that  a  part 
of  it  is  received  at  other  offices,  and  is  in  passage  from  one  to  the  other.  So  that  the 
nett  circulation  is  $14,176,927. 


REPORT  OF  SENATE  COMMITTEE,    1830,  773 

of  peace.  But,  in  the  present  condition  of  the  treasury  of  the  United  States, 
with  a  revenue  far  beyond  its  wants,  with  a  debt  almost  nominal,  and  hasten- 
ing to  its  entire  extinguishment,  such  a  measure  is  not  needed  by  the  interests 
of  the  Government,  nor  is  there  the  slightest  indication  of  its  being  demanded 
by  the  wants  of  the  country.  Of  such  an  issue  of  paper  money,  the  Execu- 
tive at  Washington  would  be  the  natural  fountain.  The  agents  of  the  Execu- 
tive, the  natural  channels.  The  individuals,  and  corporations,  and  States, 
who  borrowed  it,  must  become  debtors  to  the  Government;  and  the  inevitable 
consequence  would  be?  the  creation  of  a  moneyed  engine,  of  direct  depen- 
dence on  the  officers  oj  Government,  at  variance  with  the  whole  scheme  of  our 
institutions.  The  limit  to  which  this  currency  should  be  issued,  the  persons 
to  whom  it  would  be  lent,  the  securities  taken  for  its  repayment,  the  places 
where  it  should  be  redeemed,  involve  great  complication  and  great  hazard, 
regarding  it  merely  in  a  financial  point  of  view;  while,  on  more  enlarged  con- 
siderations of  political  expediency,  the  objections  to  it  are,  in  the  opinion  of 
the  committee,  insuperable  and  fatal. 

Believing  such  a  scheme  to  be  impracticable,  the  committee  were  consoled 
with  the  reflection  that  it  is  unnecessary,  as  they  are  satisfied  that  the  coun- 
try is  in  the  enjoyment  of  an  uniform  national  currency,  not  only  sound  and 
uniform  in  itself,  and  perfectly  adapted  to  all  the  purposes  of  the  Government 
and  the  community,  but  more  sound  and  uniform  than  that  possessed  by  any 
other  country.  The  importance  of  this  truth  will  justify  the  committee  in 
stating  some  details  to  establish  it. 

The  currency  of  the  United  States,  the  only  legal  currency,  is  gold  and  sil- 
ver— all  debts  to  the  Government,  and  all  debts  to  individuals,  being  receiv- 
ed in  that  medium,  and  in  no  other.  As,  however,  the  amount  of  coin  requi- 
site for  these  purposes  would  be  unmanageable  and  inconvenient,  the  United 
States,  like  other  commercial  countries,  have  adopted  the  system  of  making 
credit  supply  many  of  the  cases  of  coin;  and  numerous  banking  companies 
have  been  established,  issuing  notes,  promising  to  pay,  on  demand,  gold  and 
silver.  The  Government  of  the  United  States  has  established  one  of  a  simi- 
lar character;  and,  for  the  convenience  of  the  community,  the  public  revenue 
is  collected  in  gold  and  silver,  the  notes  of  the  Bank  of  the  United  States, 
and  the  notes  of  such  solvent  State  banks  as  the  Bank  of  the  United  States 
and  its  branches  will  receive  as  cash. 

The  currency,  therefore,  of  the  United  States,  in  its  relation  to  the  Go- 
vernment of  the  United  States,  consists  of  gold  and  silver,  and  of  notes  equi- 
valent to  gold  and  silver.  And  the  inquiry  which  naturally  presents  itself,  is, 
whether  this  mixed  mass  of  currency  is  sound  and  uniform  for  all  the  practi- 
cal purposes  of  the  Government,  and  the  trade  of  the  Union.  That  it  is  so, 
will  appear  from  the  following  facts: 

1st.  The  Government  receives  its  revenue  from — 
343  Custom  Houses, 
42  Land  Offices, 
8,004  Post  Offices, 
134  Receivers  of  Internal  Revenue, 
37  Marshals, 
33  Clerks  of  Courts. 

These,  with  other  receiving  officers,  which  need  not  be  specified,  compose 
an  aggregate  of  more  than  9?000  persons,  dispersed  through  the  whole  of  the 
Union,  who  collect  the  public  revenue.  From  these  persons,  the  Government 
has,  for  the  ten  years  preceding  January  1,  1830,  received  $230,068,855  17. 
This  sum  has  been  collected  in  every  section  of  this  widely  extended 
country.  It  has  been  disbursed  at  other  points,  many  thousand  miles  distant 
from  the  places  where  it  was  collected;  and  yet  it  has  been  so  collected  and 
distributed,  without  the  loss,  as  far  as  the  committee  can  learn,  of  a  single 
dollar,  and  without  the  expense  of  a  single  dollar  to  the  Government.  That 
a  currency,  by  which  the  Government  has  been  [thus  enabled  to  collect  and 
transfer  such  an  amount  of  revenue  to  pay  its  army  and  navy,  and  all  its  ex- 


774  BANK  OF  THE  UNITED  STATES. 

penses,  and  the  national  debt,  is  unsafe  and  unsound,  cannot  readily  be  be- 
lieved: for  there  can  be  no  surer  test  of  its  sufficiency,  than  the  simple  fact 
that  every  dollar,  received  in  the  form  of  a  bank  note,  in  the  remotest  parts 
of  the  interior,  is,  without  charge,  converted  into  a  silver  dollar,  at  every 
one  of  the  vast  number  of  places  where  the  service  of  the  Government  requires 
its  disbursement.  The  Secretary  of  the  Treasury,  in  his  report  of  the  6th  of 
December,  1828,  declares,  that,  during  the  four  years  preceding,  the  receipts 
of  the  Government  had  amounted  to  more  than  ninety-seven  millions  of  dol- 
lars, and  that  ' 4  all  payments  on  account  of  the  public  debt,  whether  for  inter- 
est or  principal;  all  on  account  of  pensions;  all  for  the  civil  list;  for  the  army; 
for  the  navy;  or  for  whatever  purpose  wanted,  in  any  part  of  the  Union,  have 
been  punctually  met."  The  same  officer  states,  that  "it  is  the  preservation 
of  a  good  currency  that  can  alone  impart  stability  to  property,  and  prevent 
those  fluctuations  in  its  value,  hurtful  alike  to  individuals,  and  to  national 
wealth.  This  advantage,  the  bank  has  secured  to  the  community,  by  confin- 
ing within  prudent  limits  its  issues  of  paper,  &c.  &c. 

3d.  If  this  currency  is  thus  sound  and  uniforn  for  the  Government,  it  is  not 
less  so  to  the  community. 

The  basis  of  all  good  currency  should  be  the  precious  metals,  gold  and 
silver;  and  in  a  mixed  currency  of  paper  circulating  with  gold  or  silver,  and 
convertible  into  it,  the  great  object  to  be  attained  is,  that  the  paper  should  al- 
ways be  equal  to  gold  or  silver;  that  is,  it  should  always  be  exchangeable  for 
gold  or  silver.  Such  a  currency  is  perfect,  uniting  the  convenience  of  a  por- 
table material  with  the  safety  of  a  metallic  medium.  Now  it  cannot  be 
doubted  that,  throughout  this  whole  country,  the  circulating  bank  notes  are 
equal  to  specie,  and  convertible  into  specie.  There  may  be,  and  probably  are 
exceptions;  because,  among  banks,  as  among  men,  there  are  some  who  make 
a  show  of  unreal  strength.  But  it  is  a  fact,  so  familiar  to  the  experience  of 
every  citizen  in  the  community,  as  to  be  undeniable,  that,  in  all  the  Atlantic 
and  commercial  cities,  and,  generally  speaking,  throughout  the  whole  country, 
the  notes  of  the  State  banks  are  equal  to  gold  or  silver.  The  committee  do 
not  mean  to  say  that  there  may  not  be  too  many  banks,  or  that  insolvencies 
do  not  occasionally  occur  among  them;  but,  as  every  bank  which  desires  to 
maintain  its  character,  must  be  ready  to  make  settlements  with  the  Bank  of 
the  United  States,  as  the  agent  of  the  Government,  or  be  immediately  dis  • 
credited,  and  must  therefore  Keep  its  notes  equal  to  gold  or  silver,  there  can 
be  little  danger  to  the  community,  while  the  issues  of  the  banks  are  restrained 
from  running  to  excess,  by  the  salutary  control  of  the  Bank  of  the  United 
States,  whose  own  circulation  is  extremely  moderate,  compared  with  the 
amount  of  its  capital.  Accordingly,  the  fact  is,  that  the  general  credit  of  the 
banks  is  good,  and  that  their  paper  is  always  convertible  into  gold  or  silver, 
and  for  all  local  purposes  forms  a  local  currency  equivalent  to  gold  and  silver. 
There  is,  however,  superadded  to  this  currency,  a  general  currency,  more 
known,  more  trusted,  and  more  valuable,  than  the  local  currency,  which  is 
employed  in  the  exchanges  between  different  parts  of  the  country.  These  are 
the  notes  of  the  national  bank.  These  notes  are  receivable  for  the  Govern- 
ment, by  the  9,000  receivers,  scattered  throughout  every  part  of  the  country. 
They  are,  in  fact,  in  the  course  of  business,  paid  in  gold  or  silver,  though 
they  are  not  legally,  or  necessarily  so  paid,  by  the  branches  of  the  bank  in 
every  section  of  the  Union.  In  all  commercial  places  they  are  received,  in  all 
transactions,  without  any  reduction  in  value,  and  never,  under  any  circum- 
stances, does  the  paper,  from  the  remotest  branches,  vary  beyond  a  quarter 
of  one  per  cent  in  its  actual  exchange  for  silver.  Here,  then,  is  a  currency 
as  safe  as  silver;  more  convenient,  and  more  valuable  than  silver;  which, 
through  the  whole  Western  and  Southern,  and  interior  parts  of  the  Union,  is 
eagerly  sought  in  exchange  for  silver;  which,  in  those  sections,  often  bears  a 
premium  paid  in  silver;  which  is,  throughout  the  Union,  equal  to  silver  in  pay- 
ment to  the  Government  and  payments  to  individuals  in  business;  and  with 
which,  whenever  silver  is  needed,  in  any  part  of  the  country,  will  command 
it,  without  the  charge  of  the  slightest  fraction  of  a  per  centage-  By  means  of 


REPORT  OF  SENATE  COMMITTEE,    1830. 

this  currency,  funds  are  transmitted  at  an  expense  less  than  in  any  other 
country.  In  no  other  country  can  a  merchant  do  what  every  citizen  of  the 
United  States  can  do — deposite,  for  instance,  his  silver  at  St.  Louis,  or  Nash- 
ville, or  New  Orleans,  and  receive  notes,  which  he  can  carry  with  him  1,000 
or  1,500  miles,  to  the  Atlantic  cities,  and  there  receive  for  them  an  equivalent 
amount  of  silver,  without  any  expense  whatever;  and  in  no  possible  event, 
an  expense  beyond  a  quarter  of  one  per  cent.  If,  however,  a  citizen  does  not 
wish  to  incur  the  anxiety  of  carrying  these  notes  with  him,  or  to  run  the  ha- 
zard of  the  mail,  he  may,  instead  of  them,  receive  a  draft,  payable  to  himself 
or  his  agent  alone,  so  as  to  ensure  the  receipt  of  an  equal  amount,  at  an  ex- 
pense ot  not  one-half,  and  often  not  one-fourth,  of  the  actual  cost  of  carrying 
the  silver.  The  owner  of  funds,  for  instance,  at  St.  Louis  or  Nashville,  can 
transfer  them  to  Philadelphia  for  one-half  per  cent.j  from  New  Orleans 
generally,  without  any  charge  at  all — at  most,  one-halt  per  cent.;  from  Mo- 
bile, from  par  to  one-half  per  cent. ;  from  Savannah,  at  one-half  per  cent.;  and 
from  Charleston,  at  from  par  to  one-quarter  per  cent. 

This  seems  to  present  a  state  of  currency  approaching  as  near  to  perfection 
as  could  be  desired:  for  here  is  a  currency  issued  at  twenty-four  different 
parts  of  the  Union,  obtainable  by  any  citizen  who  has  money  or  credit. 
\Vhen  in  his  possession,  it  is  equivalent  to  silver  in  all  its  dealings  with  all 
the  9,000  agents  of  the  Government,  throughout  the  Union.  In  all  his  deal- 
ings with  the  interior,  it  is  better  than  silver;  in  all  his  dealings  with  the 
commercial  cities,  equal  to  silver;  and  if,  for  any  purpose,  he  desires  the  sil- 
ver with  which  he  bought  it,  it  is  at  his  disposal,  almost  universally,  without 
any  diminution,  and  never  more  than  a  diminution  of  one-quarter  per  cent. 
It  is  not  easy  to  imagine,  it  is  scarcely  necessary  to  desire,  any  currency 
better  than  this. 

It  is  not  among  its  least  advantages,  that  it  bears  a  proper  relation  to  the 
real  business  and  exchanges  of  the  country,  being  issued  only  to  those  whose 
credit  entitles  them  to  it,  increasing  with  the  wants  of  the  active  operations 
of  society,  and  diminishing,  as  these  subside,  into  comparative  inactivity; 
while  it  is  the  radical  vice  of  all  government  paper  to  be  issued  without  re- 
gard to  the  business  of  the  community,  and  to  be  governed  wholly  by  con- 
siderations of  convenience  to  the  Government. 

After  escaping  so  recently  from  the  degradation  of  a  depreciated  paper  cur- 
rency, the  committee  would  abstain  from  every  thing  which  might,  however 
remotely,  revive  it.  The  period  is  not  remote,  when,  in  the  language  of  the 
late  Secretary  of  the  Treasury,  the  country  was  oppressed  by  a  '"  currency 
without  any  basis  of  coin,  or  other  effective  check,  and  of  no  value,  as  a  me- 
dium of  remittance  or  exchange,  beyond  the  jurisdiction  of  the  State  whence 
it  had  been  issued — a  currency  that  not  unfrequeritly  imposed  upon  the  trea- 
sury the  necessity  of  meeting,  by  extravagant  premiums,  the  mere  act  of 
transferring  the  revenue,  collected  at  one  point,  to  defray  unavoidable  expense 
at  another/'  It  is  still  within  the  recollection  of  the  Senate,  when,  at  the  seat 
of  Government  itself,  specie  could  only  be  had  at  twenty  or  twenty-two  per 
cent,  in  exchange  for  the  bank  paper  promises  to  pay  specie;  that  for  bank 
notes  of  Baltimore,  two  per  cent,  were  paid;  for  those  of  Philadelphia,  six  to 
ssven  per  cent.;  for  those  of  New  York,  fifteen  to  sixteen  per  cent.;  and  for 
those  of  Boston,  twenty  to  twenty-two  percent.;  ruinous  inequalities,  which 
have  now  happily  disappeared. 

3d.  The  sonudness  of  the  currency  may  be  further-illustrated  by  the  pre- 
sent condition  of  the  foreign  exchanges. 

Exchange  on  England  is,  at  the  present  moment,  more  than  one  per  cent, 
under  par;  that  is,  more  than  one  per  cent,  in  favor  of  the  United  States:  this 
being  the  real  fact,  disguised  by  the  common  forms  of  quoting  exchange  on 
England  at  between  eight  and  nine  per  cent,  premium. 

It  would  lead  the  committee  too  far  from  its  present  purpose  to  explain  that 
the  original  estimate  of  the  American  dollar,  as  being  worth  four  shillings  and 
sixpence,  and  that,  therefore,  the  English  pound  sterling,  is  worth  $4  44,  is 
wholly  erroneous,  and  occasions  a  constant  misapprehension  of  the  real  state 


776  BANK  OF  THE  UNITED  STATES. 

of  our  intercourse  \yi1h  Great  Britain.  The  Spanish  dollar  has  not,  fora  cen- 
tury, been  worth  four  and  sixpence:  the  American  dollar  never  was;  and 
whatever  artificial  value  we  may  assign  to  our  coins,  is  wholly  unavailing  to 
them  in  the  crucibles  of  London  or  Paris.  According  to  the  latest  accounts 
from  London,  at  the  close  of  December  last,  the  Spanish  dollar,  instead  of 
being  worth  four  shillings  and  sixpence,  or  54  pence,  was  worth  only  49? 
pence;  the  American  dollar  at  least  one-fourth  per  cent,  less;  so  that,  to  pro- 
duce one  hundred  times  four  and  sixpence,  it  would  be  necessary  to  send  to 
England,  not  100  dollars,  but  109^  Spanish  dollars,  or  109|  of  the  United 
States' dollar.  If  to  this  be  added,  the  expenses  and  charges  of  sending  the 
money,  and  converting  it  into  English  gold,  it  will  cost  111;  so  that  111  is,  at 
this  moment,  the  real  par  of  exchange  between  the  United  States  and  Eng- 
land. Ifj  therefore,  a  bill  at  sight  can  be  procured  for  less  than  this  sum,  or 
a  bill  at  sixty  days  for  one  per  cent,  less,  say  HO  per  cent,  it  is  cheaper  than 
sending  silver;  that  is  to  say,  he  who  has  silver  to  send  to  England  can  pur- 
chase a  bill  on  London  for  a  greater  amount  than  he  would  get  if  he  shipped 
the  silver  itself,  and  of  course  exchange  would  be  in  favor  of  the  United 
States  against  England.  Now,  such  bills  can  be  bought  at  a  less  rate,  by 
more  than  one  per  cent,  in  every  city  in  the  United  States. 

This  fact  is  conclusive  as  to  the  state  of  the  currency.  If  the  bank  notes  of 
the  country  were  not  equal  to  specie,  specie  would  be  at  a  premium,  which  it 
no  where  is  at  present.  If  the  currency  were  unsound,  more  must  be  paid  of 
that  currency  in  order  to  produce  an  equal  amount  of  coin  in  another  country, 
where  these  bank  notes  do  not  circulate.  But  if,  as  is  the  case  at  present, 
the  bank  notes  are  convertible  into  specie;  if  you  can  buy  with  bank  notes  as 
much  as  you  can  buy  with  silver;  and  if,  in  the  transactions  of  the  country 
abroad,  the  merchants,  who,  if  the  notes  were  not  equal  to  coin,  would  go  to 
the  bank  and  ship  the  coin,  can  pay  as  much  debt  in  foreign  countries  with  the 
notes,  as  by  sending  the  coin,  there  seems  nothing  wanting  to  complete  the 
evidence  of  the  soundness  and  uniformity  of  the  currency. 

On  the  whole,  the  committee  are  of  opinion  that  the  present  state  of  the 
currency  is  safe  for  the  community,  and  eminently  useful  to  the  Government; 
that,  for  some  years  past,  it  has  been  improving  by  the  infusion  into  the  cir- 
culating medium  of  a  larger  portion  of  coin,  and  the  substitution  of  the  paper 
of  more  solvent  banks,  in  lieu  of  those  of  inferior  credit;  and  that,  if  left  to  the 
progress  of  existing  laws  and  institutions,  the  partial  inconveniences,  which 
still  remain,  of  the  paper  currency  of  the  last  war,  will  be  wholly  and  insen- 
sibly remedied.  Under  these  circumstances,  they  deem  it  prudent  to  abstain 
from  all  legislation;  to  abide  by  the  practical  good  which  the  country  enjoys, 
and  to  put  nothing  to  hazard  by  doubtful  experiments. 

The  committee  submit,  for  the  information  of  the  Senate,  certain  questions 
propounded  to  the  President  of  the  Bank  of  the  United  States,  together  with 
his  answers  thereto,  and  a  document  furnished  by  that  officer,  showing  the 
rates  of  exchange  at  which  drafts  are  drawn  by  the  Bank  of  the  United 
States,  and  its  offices  of  discount  and  deposite;  and  ask  to  be  discharged  from 
the  further  consideration  of  the  subject. 


Questions   submitted  to  the,  President  of  the  Bank  of  the    United  States , 

with  his  ansivers. 

Question  1.  When  the  Bank  went  into  operation,  was  not  Philadelphia  pa- 
per ten  per  cent,  worse  than  Boston,  and  that  much  better  than  Baltimore  r 

Answer.  Philadelphia  paper  was  17  per  cent,  worse  than  Boston  paper;  9 
to  9j  worse  than  New  York  paper;  4  5  better  than  Baltimore. 

Q.  2.  Were  not  the  State  banks  indebted  to  the  Government  in  large  sums, 
which  they  could  not  have  paid  in  sound  currency?  If  so,  to  what  amount? 
And  did  not  the  Bank  in  many  instances  assume  those  debts,  and  pay  them 
in  sound  currency,  (if  so,  to  what  amount?)  and  indulge  those  banks  until  it 


REPORT  OF  SENATE  COMMITTEE,    1830.  777 

was  convenient  for  them  to  pay?  and  did  not  the  bank  lose  money  by  such  in- 
dulgence? 

A.  In  the  years  1817  and  1818,  the  Government  transferred  to  the  bank  at 
Philadelphia,  from  the  State  institutions,  $7,472,4!9  87,  which  was  cashed, 
and  $3,336,691  67  of  special  deposite,  to  be  collected  by  the  bank,  making 
$10,809,111  54.  The  loss  sustained  by  the  bank,  I  cannot  estimate.  I  should 
willingly  compromise  for  a  loss  of  only  $200,000. 

Q.  3.   Has  the  bank  at  any  time  oppressed  any  of  the  State  banks? 

A.  Never.  There  are  very  few  banks  which  might  not  have  been  destroy- 
ed by  an  exertion  of  the  power  of  the  bank.  None  have  ever  been  injured. 
Many  have  been  saved.  And  more  have  been,  and  are  constantly  relieved, 
when  it  is  found  that  they  are  solvent,  but  are  suffering  under  temporary  diffi- 
culty. 

Q.  4.  When  a  State  bank  becomes  indebted  to  the  bank  to  an  improper  ex- 
tent, what  course  do  you  pursue?  Do  you  let  them  go  beyond  a  certain 
amount?  and  what  is  that  amount? 

A.  The  great  object  is,  to  keep  the  State  banks  within  proper  limits;  to  make 
them  shape  their  business  according  to  their  means.  For  this  purpose  they 
are  called  upon  to  settle;  never  forced  to  pay  specie,  if  it  can  be  avoided,  but 
payment  is  taken  in  their  bills  of  exchange,  or  suffered  to  lie  occasionally  until 
the  bank  can  turn  round;  no  amount  of  debt  is  fixed,  because  the  principle  we 
wish  to  establish  is,  that  every  bank  should  always  be  ready  to  provide  for  its 
notes. 

Q.  5.  If  you  give  drafts  on  any  of  the  branches,  or  from  one  branch  on 
another,  or  on  the  mother  bank,  what  is  the  commission  charged? 

A.  The  charge  for  drafts  is  less  than  the  transportation  of  specie.  I  send  a 
detailed  statement  on  this  point. 

Q.  6.  Do  you,  and  at  every  branch,  pay  specie  on  demand?  Has  there  ever 
been  a  refusal? 

A.  Never. 

Q.  7.  Can  you  state  whether  specie  is  more  or  less  abundant  in  the  United 
States  at  present,  than  at  any  former  period? 

A.  At  the  present  moment  I  think  specie  is  more  abundant  than  usual.  It 
comes  in  as  usual.  And  the  state  of  the  exchanges  with  Europe,  is  such  that 
it  is  cheaper  to  buy  bills  than  to  ship  coin.  The  bank  had,  on  the  first  in- 
stant, $7,608,000,  which  is  more  than  it  has  had  for  nine  years  past. 

Q.  8.  When  the  debt  is  annually  paid  off  to  foreigners,  do  they  remit  in 
specie  or  bills  of  exchange?  Do  you  supply  the  means  in  either  way? 

A.  When  foreigners  are  paid  off,  apart  is  remitted  in  other  stocks,  apart 
goes  in  bills,  a  considerable  portion  of  which  are  bills  of  the  bank.  Specie  is 
never  resorted  to  unless  the  bill  market  is  so  high  as  to  make  that  mode  of 
remittance  cheaper. 

Q.  9.  Since  you  commenced  the  purchase  and  sale  of  bills  of  exchange,  has 
the  rate  varied;  if  so,  to  what  extent? 

A.  The  operations  of  the  bank  in  exchanges  has  had  the  effect  of  prevent- 
ing the  great  fluctuations  to  which  they  were-previously  Hable. 

Q.  10.  W'hatis  the  reason  that  exchange  on  England  continues  above  what 
was  formerly  considered  the  par,  that  is,  the  dollar,  valued  at  4s.  6d.  sterling? 
Is  it  that  the  intrinsic  value  of  the  dollar  has  been  found  to  be  less  than  4s. 
6c?.?  If  so,  what  is  that  intrinsic  value? 

A.  The  reason  is,  that  we  choose  to  call  our  dollar  4s.  6d.  when  it  never 
has  been  worth  four  and  sixpence,  and  of  course  when  it  goes  abroad,  it  is  es- 
timated not  by  the  name  we  give  it,  but  according  to  its  real  value. 


778  BANK   OF  THE   UNITED  STATES. 


[For  the  views  of  Mr.  MADISOK,  recently  expressed,  upon  the  great  constitutional 
question  so  frequently  discussed  in  the  preceding-  pag-es,  the  reader  is  referred  to 
the  following  letters,  addressed  by  this  distinguished  statesmsan  to  Mr.  IWGERSOLL, 
of  Philadelphia.  Their  insertion  at  an  earlier  period  of  the  work  was  accidentally 
omitted.  ] 

LETTERS  FROM  JAMES  MADISON  TO  C.  J.  INGERSOLL. 

MONTPELIER,  February  2,  1831. 

DEAR  SIR:  I  have  received  your  letter  of  January  21,  asking — 

1.  Is  there  any  State  power  to  make  banks? 

2.  Is  the  federal  power,  as  has  been  exercised,  or  as  proposed  to  be  exer- 

cised by  President  Jackson,  preferable? 

The  evil  which  produced  the  prohibitory  clause  in  the  constitution  of  the 
United  States,  was  the  practice  of  the  States  in  making  bills  of  credit,  and, 
in  some  instances,  appraised  property,  "  a  legal  tender."  If  the  notes  of  State 
banks,  therefore,  whether  chartered  or  unchartered,  be  made  a  legal  tender, 
they  are  prohibited;  if  not  made  a  legal  tender,  they  dp  not  fall  within  the 
prohibitory  clause.  The  number  of  the  "  Federalist"  referred  to,  was  written 
with  that  view  of  the  subject;  and  this,  with  probably  Other  cotemporary  ex- 
positions, and  the  uninterrupted  practice  of  the  States  in  creating  and  permit- 
ting banks,  without  making  their  notes  a  legal  tender,  would  seem  to  be  a  bar 
to  the  question,  if  it  were  not  inexpedient  now  to  agitate  it. 

A  virtual  and  incidental  enforcement  of  the  depreciated  notes  of  State 
banks,  by  their  crowding  out  a  sound  medium,  though  a  great  evil,  was  not 
foreseen;  and  if  it  had  been  apprehended,  it  is  questionable  whether  the  con- 
stitution of  the  United  States,  which  had  so  many  obstacles  to  encounter, 
would  have  ventured  to  guard  against  it  by  an  additional  provision.  A  vir- 
tual, and,  it  is  hoped,  an  adequate  remedy,  may  hereafter  be  found  in  the 
refusal  of  State  paper  when  debased,  in  any  of  the  federal  transactions,  and  in 
the  control  of  the  federal  bank,  this  being  itself  controlled  from  suspending  its 
specie  payments  by  the  public  authority. 

On  tne  other  question,  I  readily  decide  against  the  project  recommended 
by  the  President.  Reasons  more  than  sufficient  appear  to  have  been  presented 
to  the  public,  in  the  reviews  and  other  comments  which  it  has  called  forth. 
How  far  a  hint  for  it  may  have  been  taken  from  Mr.  Jefferson,  I  know  not. 
The  kindred  ideas  of  the  latter  may  be  seen  in  his  memoirs,  &c-  vol.  4,  pages 
196,  207,  526,  and  in  his  view  of  the  State  banks,  vol.  4,  pages  199,  220. 

There  are  sundry  statutes  of  Virginia,  prohibiting  the  circulation  of  notes 
payable  to  bearer,  whether  issued  by  individual  or  unchartered  banks. 

These  observations,  little  new  or  important  as  they  may  be,  would  have 
been  promptly  furnished,  but  for  an  indisposition  in  which  your  letter  found 
me.  and  which  has  not  yet  entirely  left  me.  I  hope  this  will  find  you  in  good 
health,  and  you  have  my  best  wishes  for  its  continuance,  and  the  addition  of 
every  other  blessing. 

JAMES  MADISON. 

CHARLES  J.  INGERSOLL,  Esq.  Harrisburg,  Pa. 


MONTPELIER,  June  25,  1831. 

DEAR  SIR:  I  have  received  your  friendly  letter  of  the  18th  inst.  The  few 
lines  which  answered  your  former  one  of  the  21st  of  January  last,  were  writ- 
ten in  haste  and  in  bad  health:  but  they  expressed,  though  without  the  atten- 
tion in  some  respects  due  to  the  occasion,  a  dissent  from  the  views  of  the 
President,  as  to  a  Bank  of  the  United  States  and  a  substitute  for  it;  to  which 


VIEWS  OF  MR.   MADISON,    1831.  779 

1  cannot  but  adhere.  The  objections  to  the  latter  have  appeared  tome  to 
predominate  greatly  over  the  advantages  expected  from  it,  and  the  constitu- 
tionality of  the  former  I  still  regard  as  sustained  by  the  considerations  to  which 
I  yielded  in  giving  my  assent  to  the  existing  bank. 

The  charge  of  inconsistency  between  my  objection  to  the  constitutionality 
of  such  a  bank,  in  1791,  and  my  assent  in  1817,  turns  on  the  question,  how  far 
legislative  precedents,  expounding  the  constitution, ought  to  guide  succeeding 
legislatures,  and  to  overrule  individual  opinions. 

Some  obscurity  has  been  thrown  over  the  question,  by  confounding  it  with 
the  respect  due  from  one  legislature  to  laws  passed  by  preceding  legislatures. 
But  the  two  cases  are  essentially  different.  A  constitution  being  derived 
from  a  superior  authority,  is  to  be  expounded  and  obeyed,  not  controlled  or 
varied  by  the  subordinate  authority  of  a  legislature.  A  law,  on  the  other  hand, 
resting  on  no  higher  authority  than  that  possessed  by  every  successive  legisla- 
ture, its  expediency  as  well  as  its  meaning  is  within  the  scope  of  the  latter- 

The  case  in  question  has  its  true  analogy  in  the  obligation  arising  from  judi- 
cial expositions  of  the  law  on  succeeding  judges;  the  constitution  being  a  law 
to  the  legislator,  as  the  law  is  a  rule  of  decision  to  the  judge. 

And  why  are  judicial  precedents,  when  formed  on  due  discussion  and  con- 
sideration, and  deliberately  sanctioned  by  reviews  and  repetitions,  regarded 
as  of  binding  influence,  or  rather  of  authoritative  force,  in  settling  the  meaning 
of  a  law?  It  must  be  answered,  1st,  because  it  is  a  reasonable  and  establish- 
ed axiom,  that  the  good  of  society  requires  that  the  rules  of  conduct  of  its 
members  should  be  certain  and  known,  which  would  not  be  the  case  if  any 
judge,  disregarding  the  decisions  of  his  predecessors,  should  vary  the  rule  of 
law  according  to  his  individual  interpretation  of  it.  Jblisera  est  servitus  ubi 
Jus  est  aut  vaguin  aut  incogmlum.  2nd.  because  an  exposition  of  the  law, 
publicly  made,  and  repeatedly  confirmed  by  the  constituted  authority,  carries 
with  it,  by  fair  inference,  the  sanction  of  those  who,  having  made  the  law 
through  their  legislative  organ,  appear,  under  such  circumstances,  to  have  de- 
termined its  meaning  through  their  judiciary  organ. 

Can  it  be  of  less  consequence  that  the  meaning  of  a  constitution  should  be 
fixed  and  kno\yn,  than  that  the  meaning  of  a  law  should  be  so?  Can,  indeed, 
a  law  be  fixed  in  its  meaning  and  operation,  unless  the  constitution  be  sor 
On  the  contrary,  if  a  particular  legislature,  differing  in  the  construction  of  the 
constitution,  from  a  series  of  preceding  constructions,  proceed  to  act  on  that 
difference,  they  not  only  introduce  uncertainty  and  instability  in  the  consti- 
tution, but  in  the  laws  themselves;  inasmuch  as  all  laws  preceding  the  new 
construction,  and  inconsistent  with  it,  are  not  only  annulled  for  the  future,  but 
virtually  pronounced  nullities  from  the  beginning. 

But  it  is  said  that  the  legislator  having  sworn  to  support  the  constitution, 
must  support  it  in  his  own  construction  of  it,  however  different  from  that  put 
on  it  by  his  predecessors,  or  whatever  be  the  consequences  of  the  construction. 
And  is  not  the  judge  under  the  same  oath  to  support  the  law?  Yet,  has  it 
ever  been  supposed  that  he  was  required,  or  at  liberty  to  disregard  all  prece- 
dents, however  solemnly  repeated  and  regularly  observed;  and  by  giving 
effect  to  his  own  abstract  and  individual  opinions,  to  disturb  the  established 
course  of  practice  in  the  business  of  the  community?  Has  the  wisest  and  most 
conscientious  judge  ever  scrupled  to  acquiesce  in  decisions  in  which  he  has 
been  overruled  by  the  matured  opinions  ot  the  majority  of  his  colleagues;  and 
subsequently  to  C9nform  himself  thereto,  as  to  authoritative  expositions  of 
the  law?  And  is  it  not  reasonable  to  suppose  that  the  same  view  of  the  offi  • 
cial  oatii  should  be  taken  by  a  legislature,  acting  under  the  constitution^  which 
is  his  guide,  as  is  taken  by  a  judge,  acting  under  the  law,  which  is  hisr 

There  is  in  fact,  and  in  common  understanding,  a  necessity  of  regarding  a 
course  of  practice,  as  above  characterized,  in  the  light  of  a  legal  rule  of  inter- 
preting a  law:  and  there  is  a  like  necessity  of  considering  it  a  constitutional 
rule  ot  interpreting  a  constitution. 

That  there  may  be  extraordinary  and  peculiar  circumstances  controlling 
the  rule  in  both  cases,  may  be  admitted;  but  with  such  exceptions,  the  rule 


780  BANK  OF  THE  UNITED  STATES. 

will  force  itself  on  the  practical  judgment  of  the  most  ardent  theorist.  He  will  find 
itimpossible  to  adhere  to,  and  act  officially  upon,  his  solitary  opinions  as  to  the 
meaning  of  the  law  or  constitution,  in  opposition  to  a  construction  reduced  to 
practice,  during  a  reasonable  period  of  time;  more  especially  where  no  pros- 
pect existed  of  a  change  of  construction  by  the  public  or  its  agents.  And  if 
a  reasonable  period  of  time,  marked  with  the  usual  sanctions,  would  not  bar 
the  individual  prerogative,  there  could  be  no  limitation  to  its  exercise,  although 
the  danger  of  error  must  increase  with  the  increasing  oblivion  of  explanatory 
circumstances,  and  with  the  continual  changes  in  the  import  of  words  and 
phrases. 

Let  it  then  be  left  to  the  decision  of  every  intelligent  and  candid  judge, 
which,  on  the  whole,  is  most  to  be  relied  on,  for  the  true  and  safe  construction 
of  a  constitution:  that  which  has  the  uniform  sanction  of  successive  legislative 
bodies,  through  a  period  of  years,  and  under  the  varied  ascendancy  of  parties; 
or  that  which  depends  upon  the  opinions  of  every  new  legislature,  heated  as 
it  may  be  by  the  spirit  of  party,  eager  in  the  pursuit  of  some  favorite  object, 
or  led  astray  by  the  eloquence  and  address  of  popular  statesmen,  themselves, 
perhaps,  under  the  influence  of  the  same  misleading  causes. 

It  was  in  conformity  with  the  view  here  taken  of  the  respect  due  to  deliber- 
ate and  reiterated  precedents,  that  the  Bank  of  the  United  States,  though  on 
the  original  question  held  to  be  unconstitutional,  received  the  Executive  sig- 
nature in  the  year  1817.  The  act  originally  establishing  a  bank  had  undergone 
ample  discussions  in  its  passage  through  the  several  branches  of  the  Govern- 
ment. It  had  been  carried  into  execution,  throughout  a  period  of  twenty  years, 
with  annual  legislative  recognitions;  in  one  instance,  indeed,  with  a  positive 
ramification  of  it  into  a  new  State,  and  with  the  entire  acquiescense  ot  all  the 
local  authorities,  as  well  as  the  nation  at  large;  to  all  of  which  may  be  added, 
a  decreasing  prospect  of  any  change  in  the  public  opinion  adverse  to  the  con- 
stitutionality of  such  an  institution.  A  veto  from  the  Executive,  under  these 
circumstances,  with  an  admission  of  the  expediency  and  almost  necessity  of 
the  measure,  would  have  been  a  defiance  of  all  the  obligations  derived  from  a 
course  of  precedents  amounting  to  the  requisite  evidence  of  the  national  judg- 
ment and  intention. 

It  has  been  contended  that  the  authority  of  precedents  was  in  that  case  in- 
validated by  the  consideration  that  they  proved  only  a  respect  for  the  stipulat- 
ed duration  of  the  bank  with  a  toleration  of  it  until  the  law  should  expire, 
and  by  the  casting  vote  given  in  the  Senate  by  the  Vice  President,  in  the  year 
1811,  against  a  bill  for  establishing  a  national  bank,  the  vote  being  expressly 
given  on  the  ground  of  unconstitutionally.  But,  if  the  law  itself  was  unconsti- 
tutional, the  stipulation  was  void,  and  could  not  be  constitutionally  fulfilled 
or  tolerated.  And  as  to  the  negative  of  the  Senate,  by  the  casting  vote  of  the 
presiding  officer,  it  is  a  tact,  well  understood  at  the  time,  that  it  resulted  not 
from  an  equality  of  opinions  in  that  assembly  on  the  power  of  Congress  to  es- 
tablish a  bank,  but  from  a  junction  of  those  who  admitted  the  power,  but  dis- 
approved the  plan,  with  those  who  denied  the  power.  On  a  simple  question 
of  constitutionality,  there  was  a  decided  majority  in  favor  of  it. 

JAMES  MADISON. 

Mr.  INGERSOLL. 


JUDICIAL  DECISIONS. 

JUDICIAL  DECISIONS. 

SUPREME    COURT    OF    THE    UNITED    STATES.  — 1819. 


M-CULLOCII, 
VS 

THE  STATK  OF 


LLOCH,  ) 

IS.  > 

MARYLAND,  et  a/.j 


The  following  points  were  decided: 

Congress  has  power  to  incorporate  a  bank. 

The  Government  of  the  Union  is  a  Government  of  the  People;  it  emanates  from  them; 
its  powers  are  granted  by  them;  and  are  to  be  exercised  directly  on  them,  and  for 
their  benefit. 

The  Government  of  the  Union,  though  limited  in  its  powers,  is  supreme  within  its 
sphere  of  action;  ?nd  its  laws,  when  made  in  pursuance  of  the  constitution,  form 
the  supreme  law  of  the  land. 

There  is  nothing*  in  the  constitution  of  the  United  States,  similar  to  the  articles  of  con- 
federation, which  exclude  incidental  or  implied  powers. 

If  the  end  be  legitimate,  and  within  the  scope  of  the  constitution,  all  the  means 
which  are  appropriate,  which  are  plainly  adapted  to  that  end,  and  which  are  not 
prohibited,  may  constitutionally  be  employed  to  carry  it  into  effect. 

The  power  of  establishing- a  corporation  is  not  a  distinct  sovereign  power  or  end  of  Go- 
vernment, but  only  the  means  of  carrying  into  effect  other  powers  which  are  sove- 
reign. Win  never  it  becomes  an  appropriate  means  of  exercising-  any  of  the  powers 
given  by  the  constitution  to  the  Government  of  the  Union,  it  may  be  exercised  by 
that  Government. 

If  a  certain  means  to  carry  into  effect  any  of  the  powers,  expressly  given  by  the  con- 
stitution to  the  Government  of  the  Union,  be  an  appropriate  measure,  not  prohibited 
by  the  constitution,  the  degree  of  its  necessity  is  a  question  of  legislative  discretion, 
not  of  judicial  cognizance. 

The  act  of  the  10th  April,  1816,  c.  44,  to  "  incorporate  the  subscribers  to  the  Bank  of 
the  United  States,"  isalaw  made  in  pursuance  of  the  constitution. 

The  Bank  of  the  United  States  has,  constitutionally,  aright  to  establish  its  branches, 
or  offices  of  discount  and  deposite,  within  any  State. 

The  State  within  which  such  branch  may  be  established,  cannot,  without  violating 
the  constitution,  tax  that  branch. 

The  State  Governments  have  no  right  to  tax  any  of  the  constitutional  means  employed 
by  the  Government  of  the  Union  to  execute  its  constitutional  powers. 

The  States  have  no  power,  by  taxation  or  otherwise,  to  retard,  impede,  burden,  or  in 
any  manner  control,  the  operations  of  the  constitutional  laws  enacted  by  Congress, 
to  carry  into  effect  the  powers  vested  in  the  National  Government. 

This  principle  does  not  extend  to  a  tax  paid  by  the  real  property  of  the  Bank  of  the 
United  States,  in  common  with  the  other  real  property  in  a  particular  State,  nor 
to  a  tax  imposed  on  the  proprietary  interest  which  the  citizens  of  that  State  may 
hold  in  this  institution,  in  common  with  other  property  of  the  same  description 
throughout  the  State. 


I 


This  was  an  action  of  debt,  brought  by  John  James,  who  sued,  as  well  for 
himself,  as  for  the  State  of  Maryland,  in  the  county  court  of  Baltimore, 
against  the  plaintiff  in  error,  M'Culloch,  to  recover  certain  penalties  imposed 
by  the  Legislature  of  Maryland.  By  an  act  of  that  State  it  was  made  penal 
for  any  bank,  or  branch  thereof,  established  without  authority  of  the  said 
State,  "  to  issue  notes,  in  any  manner,  of  any  other  denomination  than  five, 
ten,  twenty,  fifty,  one  hundred,  five  hundred,  and  one  thousand  dollars;" 


782  BANK  OF  THE  UNITED  STATES. 

and  such  bank,  or  branch,  was  further  prohibited  from  issuing  notes  of  these 
denominations,  except  upon  stamped  paper,  for  which  they  were  to  pay  to 
the  State  treasurer  a  duty,  at  certain  fixed  rates.  It  was  provided,  however, 
that,  by  the  annual  payment,  in  advance,  of  the  sum  of  fifteen  thousand  dol- 
lars, any  such  bank,  or  branch,  might  be  relieved  from  the  operation  of  these 
restrictions. 

For  a  violation  of  the  provisions  of  this  act,  the  officers  of  the  bank  were, 
by  the  said  act,  made  personally  and  individually  liable  to  the  penalty  of  five 
hundred  dollars,  each:  ancj  it  was  to  recover  this  penalty,  in  a  qui  tarn  action, 
that  this  suit  was  brought. 

The  decision  having  been,  in  the  county  court  of  Baltimore,  against  the  de- 
fendant M'Culloch,  and,  also,  in  the  court  of  appeals  of  Maryland,  the  cause 
was  brought,  by  writ  of  error,  to  the  Supreme  Court  of  the  United  States.  It 
was  argued  for  the  plaintiff  in  error  by  Mr.  WEBSTER,  Mr.  WIRT,  Attor- 
ney General,  and  Mr.  PINKNEY;  and,  for  the  defendants,  by  Mr.  MARTIN, 
Attorney  General  of  Maryland,  Mr.  HOPKINSON,  and  Mr.  JONES. 

MARCH  7th,  1819. 
Mr.  Chief  Justice  MARSHALL  delivered  the  opinion  of  the  court. 

In  the  case  now  to  be  determined,  the  defendant,  a  sovereign  State,  denies 
the  obligation  of  a  law,  enacted  by  the  Legislature  of  the  Union,  and  the  plain- 
tiff, on  his  part,  contests  the  validity  of  an  act  which  has  been  passed  by  the 
Legislature  of  that  State.  The  constitution  of  our  country,  in  its  most  inter- 
esting and  vital  parts,  is  to  be  considered;  the  conflicting  powers  of  the  Go- 
vernment of  the  Union,  and  of  its  members,  as  marked  in  that  constitution, 
are  to  be  discussed,  and  an  opinion  given,  which  may  essentially  influence 
the  great  operations  of  the  Government.  No  tribunal  can  approach  such  a 
question  without  a  deep  sense  of  its  importance,  and  of  the  awful  responsi- 
bility involved  in  its  decision.  But  it  must  be  decided  peacefully,  or  remain 
a  source  of  hostile  legislation,  perhaps  of  hostility  of  a  still  more  serious  na- 
ture; and  if  it  is  to  be  so  decided,  by  this  tribunal  alone  can  the  decision  be 
made.  On  the  Supreme  Court  of  the  United  States  has  the  constitution  of 
our  country  devolved  this  important  duty. 

The  first  question  made  in  the  cause  is,  has  Congress  power  to  incorporate 
a  bank  ? 

It  has  been  truly  said:  that  this  can  scarcely  be  considered  as  an  open  ques- 
tion, entirely  unprejudiced  by  the  former  proceedings  of  the  nation  respect- 
ing it.  The  principle  now  contested,  was  introduced  at  a  very  early  period 
of  our  history,  has  been  recognised  by  many  successive  Legislatures?  and  has 
been  acted  upon  by  the  Judicial  Department,  in  cases  of  peculiar  delicacy,  as 
a  law  of  undoubted  obligation. 

It  will  not  be  denied,  that  a  bold  and  daring  usurpation  might  be  resisted, 
after  an  acquiescence  still  1  jnger  and  more  complete  than  this.  But  it  is  con- 
ceived that  a  doubtful  question— one  on  which  human  reason  may  pause,  and 
the  human  judgment  be  suspended — in  the  decision  of  which  the  great  princi- 
ples of  liberty  are  not  concerned,  but  the  respective  powers  of  those  who  arc 
equally  the  representatives  of  the  People,  are  to  be  adjusted,  if  not  put  at 
rest,  by  the  practice  of  the  Government?  ought  to  receive  a  considerable  im- 
pression from  that  practice.  An  exposition  of  the  constitution,  deliberately 
established  by  legislative  acts,  on  the  faith  of  which  an  immense  property  has 
been  advanced,  ought  not  to  be  lightly  disregarded. 

The  power,  now  contested,  was  exercised  by  the  first  Congress  elected 
under  the  present  constitution.  The  bill  for  incorporating  the  Bank  of  the 
United  States  did  not  steal  upon  an  unsuspecting  legislature,  and  pass  unob- 
served. Its  principle  was  completely  understood,  and  was  opposed  with  ecjual 
zeal  and  ability.  After  being  resisted,  first,  in  the  fair  and  open  field  of  de- 
bate, and,  afterwards,  in  the  Executive  cabinet,  with  as  much  persevering 
talent  as  any  measure  has  ever  experienced,  and  being  supported  by  argu- 
ments which  convinced  minds  as  pure  and  as  intelligent  as  this  country  can 


JUDICIAL  DECISIONS.  733 

boast,  it  became  a  law.  The  original  act  was  permitted  to  expire;  but  a  short 
experience  of  the  embarrassments  to  which  the  refusal  to  revive  it  exposed 
the  Government,  convinced  those  who  were  most  prejudiced  against  the  mea- 
sure, of  its  necessity,  and  induced  the  passage  of  the  present  Taw.  It  would 
require  no  ordinary  share  of  intrepidity  to  assert,  that  a  measure  adopted  un- 
der these  circumstances,  was  a  bold  and  plain  usurpation,  to  which  the  con- 
stitution gave  no  countenance. 

These  observations  belong  to  the  cause;  but  they  are  not  made  under  the 
impression  that,  were  the  question  entirely  new,  the  law  would  be  found 
irreconcileable  with  the  constitution. 

In  discussing  this  question,  the  counsel  for  the  State  of  Maryland  have 
deemed  it  of  some  importance,  in  the  construction  of  the  constitution,  to  con- 
sider that  instrument,  not  as  emanating  from  the  People,  but  as  the  act  of 
sovereign  anil  independent  States.  The  powers  of  the  General  Government, 
it  has  been  said,  are  delegated  by  the  States,  who  alone  are  truly  sovereign, 
and  must  be  exercised  in  subordination  to  the  States,  who  alone  possess  su- 
preme dominion. 

It  would  be  difficult  to  sustain  this  proposition.  The  convention  which 
framed  the  constitution  was  indeed  electee!  by  the  State  Legislatures.  But 
the  instrument,  when  it  came  from  their  hands,  was  a  mere  proposal,  with- 
out obligation,  or  pretensions  to  it.  It  was  reported  to  the  then  existing  Con- 
gress of  the  United  States,  with  a  request  that  it  might  "  be  submitted  to  a 
convention  of  delegates  chosen  in  each  State  by  the  People  thereof,  under  the 
recommendation  ot  its  legislature,  for  their  assent  and  ratification."  This 
mode  of  proceeding  was  adopted;  and,  by  the  convention,  by  Congress,  and 
by  the  State  Legislatures,  the  instrument  was  submitted  to  the  People.  They 
acted  upon  it  in  the  only  manner  in  which  they  can  act  safely,  effectively,  and 
wiselv,  on  such  a  subject,  by  assembling  in  convention.  It  is  true,  they  as- 
sembled in  their  several  States.  And  where  else  should  they  have  assembled  ? 
No  political  dreamer  was  ever  wild  enough  to  think  of  breaking  down  the 
lines  which  separate  the  States,  and  of  compounding  the  American  People  into 
one  common  mass.  Of  consequence,  when  they  act,  they  act  in  their  States. 
But  the  measures  they  adopt  do  not,  on  that  account,  cease  to  be  the  mea- 
sures of  the  People  themselves,  or  become  the  measures  of  the  State  Govern- 
ments. 

From  these  conventions  the  constitution  derives  its  whole  authority.  The 
Government  proceeds  directly  from  the  People;  is  "  ordained  and  established" 
in  the  name  of  the  People;  and  is  declared  to  be  ordained,  "•  in  order  to  form 
a  more  perfect  union,  establish  justice,  ensure  domestic  tranquillity,  and  se- 
cure the  blessings  of  liberty  to  themselves  and  to  their  posterity."  The  assent 
of  the  States,  in  their  sovereign  capacity,  is  implied  in  calling  a  convention, 
and  thus  submitting  that  instrument  to  the  People.  But  the  People  were  at 
perfect  liberty  to  accept  or  reject  it;  and  their  act  was  final.  It  required  not 
the  affirmance  of,  and  could  not  be  negatived  by.  the  State  Governments.  The 
constitution,  when  thus  adopted,  was  of  complete  obligation,  and  bound  the 
State  sovereignties. 

It  has  been  said,  that  the  People  had  already  surrendered  all  their  powers 
to  the  State  sovereignties,  and  had  nothing  more  to  give.  But,  surely,  the 
question  whether  they  may  resume  and  modify  the  powers  granted  to  Govern- 
ment, does  not  remain  to  be  settled  in  this  country.  Much  more  might  the 
legitimacy  of  the  General  Government  be  doubted,  had  it  been  created  by  the 
States.  The  powers  delegated  to  the  State  sovereignties,  were  to  be  exercis- 
ed by  themselves,  not  by  a  distinct  and  independent  sovereignty,  created  by 
themselves.  To  the  formation  of  a  league,  such  as  was  the  confederation,  the 
State  sovereignties  were  certainly  competent.  But  when,  bt  in  order  to  form 
a  more  perfect  union,"  it  was  deemed  necessary  to  change  this  alliance  into 
an  effective  government,  possessing  great  and  sovereign  powers,  and  acting 
directly  on  the  People,  the  necessity  of  referring  it  to  the  People,  and  of  de- 
riving its  powers  directly  from  them,  was  felt  and  acknowledged  by  all. 


784  BANK   OF  THE  UNITED   STATES. 

The  Government  of  the  Union,  then,  (whatever  may  be  the  influence  of 
this  fact  on  the  case)  is,  emphatically  and  truly,  a  Government  of  the  Peo- 
ple. In  form,  and  in  substance,  it  emanates  from  them.  Its  powers  are  grant- 
ed by  them,  and  are  to  be  exercised  directly  on  them,  and  for  their  benefit. 

This  Government  is  acknowledged,  by  all,  to  be  one  of  enumerated  pow- 
ers. The  principle,  that  it  can  exercise  only  the  powers  granted  to  it,  would 
seem  too  apparent  to  have  required  to  be  enforced  by  all  those  arguments 
which  its  enlightened  friends,  while  it  was  depending  before  the  People,  found 
it  necessary  to  urge.  That  principle  is  now  universally  admitted.  But  the 
question  respecting  the  extent  of  the  powers  actually  granted,  is  perpetually 
arising,  and  will,  probably,  continue  to  arise,  as  long  as  our  system  shall 
exist. 

In  discussing  these  questions,  the  conflicting  powers  of  the  General  and 
State  Governments  must  be  brought  into  view,  and  the  supremacy  of  their 
respective  laws,  when  they  are  in  opposition,  must  be  settled. 

If  any  one  proposition  could  command  the  universal  assent  of  mankind,  we 
might  expect  it  would  be  this:  that  the  Government  of  the  Union,  though 
limited  in  its  powers,  is  supreme  within  its  sphere  of  action.  This  would 
seem  to  result  necessarily  from  its  nature.  It  is  the  Government  of  all;  ite 
powers  are  delegated  by  all ;  it  represents  all;  and  acts  for  all.  Though  any 
one  State  may  be  willing  to  control  its  operations,  no  State  is  willing  to  allow 
others  to  control  them.  The  nation,  on  those  subjects  on  which  it  can  act, 
must  necessarily  bind  its  component  parts.  But  this  question  is  not  left  to 
mere  reason;  the  People  have,  in  express  terms,  decided  it,  by  saying,  "  this 
constitution,  and  the  laws  of  the  United  States  which  shall  be  made  in  pur- 
suance thereof,"  "shall  be  the  supreme  law  of  the  land,"  and  by  requiring 
that  the  members  of  the  State  Legislatures,  and  the  officers  of  the  executive 
and  judicial  departments  of  the  States,  shall  take  the  oath  of  fidelity  to  it. 

The  Government  of  the  United  States,  then,  though  limited  in  its  powers, 
is  supreme;  and  its  laws,  when  made  in  pursuance  of  the  constitution,  form 
the  supreme  law  of  the  land,  "any  thing  in  the  constitution  or  laws  of  any 
State  to  the  contrary  notwithstanding." 

Among  the  enumerated  powers,  we  do  not  find  that  of  establishing  a  bank, 
or  creating  a  corporation.  But  there  is  no  phrase  in  the  instrument  which, 
like  the  articles  of  confederation,  excludes  incidental  or  implied  powers,  and 
which  requires  that  every  thing  granted  shall  be  expressly  and  minutely  de- 
scribed. Even  the  tenth  amendment,  which  was  framed  for  the  purpose 
of  quieting  the  excessive  jealousies  which  had  been  excited,  omits  the  word 
"expressly,"  and  declares  only  that  the  powers  "not  delegated  to  the  United 
States,  nor  prohibited  to  the  States,  are  reserved  to  the  States,  or  to  the  peo- 
ple;" thus  leaving  the  question,  whether  the  particular  power  which  may  be- 
come the  subject  of  contest,  has  been  delegated  to  the  one  Government,  or 
prohibited  to  the  other,  to  depend  on  a  fair  construction  of  the  whole  instru- 
ment. The  men  who  drew  and  adopted  this  amendment,  had  experienced  the 
embarrassments  resulting  from  the  insertion  of  this  word  in  the  articles  of 
confederation,  and  probably  omitted  it  to  avoid  those  embarrassments.  A 
constitution,  to  contain  an  accurate  detail  of  all  the  subdivisions  of  which  its 
great  powers  will  admit,  and  of  all  the  means  by  vvhich  they  may  be  carried 
into  execution,  would  partake  of  the  prolixity  of  a  legal  code,  and  could 
scarcely  be  embraced  by  the  human  mind.  It  would,  probably,  never  be  un- 
derstood by  the  public.  Its  nature,  therefore,  requires,  that  only  its  great 
outlines  should  be  marked,  its  important  objects  designated,  and  the  minor 
ingredients  which  compose  those  objects  be  deduced  from  the  nature  of  the 
objects  themselves.  That  this  idea  was  entertained  by  the  framers  of  the 
American  constitution,  is  not  only  to  be  inferred  from  the  nature  of  the  in- 
strument, but  from  the  language.  Why  else  were  some  of  the  limitations, 
found  in  the  ninth  section  of  the  first  article,  introduced?  It  is,  also,  in  some 
degree,  warranted  by  their  having  omitted  to  use  any  restrictive  term  which 
might  prevent  its  receiving  a  fair  and  just  interpretation.  In  considering  this 


JUDICIAL  DECISIONS 

question,  then,  \ve  must  never  forget  lhat  it  is  a  constitution  we  are  ex- 
pounding* 

Although.,  among  the  enumerated  powers  of  Government,  we  do  not  find 
the  word  "  bank,"  or  *'  incorporation,"  we  find  the  great  powers  to  lay  and 
collect  taxes;  to  borrow  money;  to  regulate  commerce;  to  declare  and 
conduct  a  war;  and  to  raise  and  support  armies  and  navies.  The  sword 
and  the  purse,  all  the  external  relations,  and  no  inconsiderable  portion  of 
the  industry  of  the  nation,  are  entrusted  to  its  government.  It  can 
never  be  pretended  that  these  vast  powers  draw  after  them  others  of  in- 
ferior importance,  merely  because  they  are  inferior*  Such  an  idea  can 
never  be  advanced.  But  it  may,  with  great  reason,  be  contended,  that 
a  Government,  entrusted  with  such  ample  powers,  on  the  due  execution  of 
which  the  happiness  and  prosperity  of  the  nation  so  vitally  depends,  must  also 
be  entrusted  with  ample  means  for  their  execution.  The  power  being  given, 
it  is  the  interest  of  the  nation  to  facilitate  its  execution.  It  can  never  be  their 
interest,  and  cannot  be  presumed  to  have  been  their  intention,  to  clog  and 
embarrass  its  execution,  by  withholding  the  most  appropriate  means.  Through- 
out this  vast  republic,  from  the  St.  Croix  to  the  Gulf  of  Mexico,  from  the  At- 
lantic to  the  Pacific,  revenue  is  to  be  collected  and  expended,  armies  are  to 
be  marched  and  supported.  The  exigencies  of  the  nation  may  require  thatthe 
treasure  raised  in  the  north  should  be  transported  to  the  south,  that  raised  in 
the  east  conveyed  to  the  west,  or  that  this  order  should  be  reversed.  Is  that 
construction  of  the  constitution  to  be  preferred,  which  would  render  these 
operations  difficult,  hazardous,  and  expensive?  Can  we  adopt  that  construc- 
tion, (unless  the  words  imperiously  require  it)  which  would  impute  to  the 
framers  of  that  instrument,  when  granting  these  powers  for  the  public  good, 
the  intention  of  impeding  their  exercise,  by  withholding  a  choice  of  means? 
If,  indeed,  such  be  the  mandate  of  the  constitution,  we  have  only  to  obey; 
but  that  instrument  does  not  profess  to  enumerate  the  means  by  which  the 
powers  it  confers  may  be  executed;  nor  does  it  prohibit  the  creation  of  a  cor- 
poration, if  such  a  being  be  essential  to  the  benehcial  exercise  of  those  powers. 
It  is,  then,  the  subject  of  fair  inquiry,  how  tar  such  means  may  be  employed. 

It  is  not  denied,  that  the  powers  given  to  the  Government  imply  the  ordi- 
nary means  of  execution.  That,  for  example,  of  raising  revenue,  and  applying 
it  to  national  purposes,  is  admitted  to  imply  the  power  of  conveying  money  from 
place  to  place,  as  the  exigencies  of  the  nation  may  require,  and  of  employing 
the  usual  means  of  conveyance.  But  it  is  denied  that  the  Government  has  its 
choice  of  means;  or,  that  it  may  employ  the  most  convenient  means,  if,  to  em- 
ploy them,  it  be  necessary  to  erect  a  corporation. 

On  what  foundation  does  this  argument  rest?  On  this  alone:  The  power  of 
creating  a  corporation  is  one  appertaining  to  sovereignty,  and  is  not  expressly 
conferred  on  Congress.  This  is  true;  but  all  legislative  powers  appertain  to  so- 
vereignty. The  original  power^of  giving  the  law,  on  any  subject  whatever,  is  a 
sovereign  power;  and  it  the  Government  of  the  Union  is  restrained  from  cre- 
ating a  corporation,  as  a  means  for  performing  its  functions,  on  the  single  reason 
that  the  creation  of  a  corporation  is  an  act  of  sovereignty;  if  the  sufficiency  of 
this  reason  be  acknowledged,  there  would  be  some  difficulty  in  sustaining  the 
authority  of  Congress  to  pass  other  laws  for  the  accomplishment  of  the  same 
objects. 

'I  he  Government  which  has  a  right  to  do  an  act,  and  has  imposed  on  it  the 
duty  of  performing  that  act,  must,  according  to  the  dictates  of  reason,  be  al- 
lowed to  select  the  means;  and  those  who  contend  that  it  may  not  select  any 
appropriate  means,  that  one  particular  mode  of  effecting  the  object  i^ex 
cepted,  take  upon  themselves  the  burden  of  establishing  that  exception..! 

The  creation  of  a  corporation,  it  is  said,  appertains  to  sovereignty,  "fhis  is 
admitted.  But  to  what  portion  of  sovereignty  does  it  appertain?  Does  it  be- 
long to  one  more  than  to  another?  In  America,  the  powers  of  sovereignty  are 
divided  between  the  Government  of  the  Union,  and  those  of  the  States.  They 
are  each  sovereign,  with  respect  to  the  objects  committed  to  it,  and  neither 
sovereign  with  respect  to  the  objects  committed  to  the  other.  We  cannot 
99 


786  BANK   OF   THE    UNITED    STATES. 

comprehend  that  train  of  reasoning  which  would  maintain,  that  the  extent  of 
power  granted  by  the  People  is  to  be  ascertained,  not  by  the  nature  and  terms 
of  the  grant,  but  by  its  date.  Some  State  constitutions  were  formed  before-, 
some  since  that  of  the  United  States.  We  cannot  believe  that  their  relation 
to  each  other  is,  in  any  degree,  dependent  upon  this  circumstance.  Their 
respective  powers  must,  we  think,  be  precisely  the  same  as  if  they  had  been 
formed  at  the  same  time.  Had  they  been  formed  at  the  same  time,  and  had 
the  People  conferred  on  the  General  Government  the  power  contained  in  the 
constitution,  and  on  the  States  the  whole  residuum  of  power,  would  it  have 
been  asserted  that  the  Government  of  the  Union  was  not  sovereign,  with  re- 
spect to  those  objects  which  were  entrusted  to  it,  in  relation  to  which  its  laws 
were  declared  to  be  supreme?  If  this  could  not  have  been  asserted,  we  can- 
not well  comprehend  the  process  of  reasoning  which  maintains,  that  a  power 
appertaining  to  sovereignty  cannot  be  connected  with-  that  vast  portion  of  it 
which  is  granted  to  the  General  Government,  so  far  as  it  is  calculated  to  sub- 
serve the  legitimate  objects  of  that  Government.  The  power  of  creating  a 
corporation,  though  appertaining  to  sovereignty,  is  not,  like  the  power  of 
making  war,  or  levying  taxes,  or  of  regulating  commerce,  a  great  substantive 
and  independent  power,  \vhich  cannot  be  implied  as  incidental  to  other  pow- 
ers, or  used  as  a  means  of  executing  them.  It  is  never  the  end  for  which 
other  powers  are  exercised,  but  a  means  by  which  other  objects  are  accom- 
plished. No  contributions  are  made  to  charity  for  the  sake  of  incorporation, 
put  a  corporation  is  created  to  administer  the  charity;  no  seminary  of  learning 
is  instituted  in  order  to  be  incorporated,  but  the  corporate  charter  is  conferred 
to  subserve  the  purposes  of  education.  No  city  was  ever  built  with  the  sole 
object  of  being  incorporated,  but  is  incorporated  as  affording  the  best  means  of 
being  well  governed.  The  power  of  creating  a  corporation  is  never  used  for 
its  own  sake,  but  for  the  purpose  of  effecting  something  else.  No  sufficient 
reason  is,  therefore,  perceived,  why  it  may  not  pass  as  incidental  to  those 
powers  which  are  expressly  given,  if  it  be  a  direct  mode  of  executing  them. 

But  the  constitution  of  the  United  States  has  not  left  the  right  of  Congress 
to  employ  the  necessary  means,  for  the  execution  of  the  power*  conferred  on 
the  Government,  to  general  reasoning.  To  its  enumeration  of  powers  is 
added  that  of  making  "  all  laws  which  shall  be  necessary  and  proper  for  car- 
rying into  execution  the  foregoing  powers,  and  all  other  powers  vested  by  this* 
constitution  in  the  Government  ot  the  United  States,  or  in  any  department 
thereof." 

The  counsel  for  the  State  of  Maryland  have  urged  various  arguments,  to 
prove  that  this  clause,  though  in  terms  of  a  grant  ot  power,  is  not  so  in  effect; 
out  is  really  restrictive  of  the  general  right,  which  might  otherwise  be  implied, 
of  selecting  means  for  executing  the  enumerated  powers. 

In  support  of  this  proposition,  they  have  found  it  necessary  to  contend,  that 
this  clause  was  inserted  for  the  purpose  of  conferring  on  Congress  the  power 
of  making  laws.  That,  without  it,  doubts  might  be  entertained,  whether 
Congress  could  exercise  its  powers  in  the  form  of  legislation. 

But  could  this  be  the  object  for  which  it  was  inserted?  A  government  is 
created  by  the  People,  having  legislative,  executive,  and  judicial  powers.  It* 
legislative  powers  are  vested  in  a  Congress,  which  is  to  consist  of  a  Senate 
and  House  of  Representatives.  Each, House  may  determine  the  rule  of  its 
proceedings;  and  it  is  declared  that  every  bill,  which  shall  have  passed  both 
Houses,  shall,  before  it  becomes  a  law,  be  presented  to  the  President  of  the 
United  States.  The  7th  section  describes  the  course  of  proceedings,  by  which 
a  bill  shall  become  a  law;  and,  then,  the  8th  section  enumerates  the  powers 
of  Congress.  Could  it  be  necessary  to  say,  that  a  legislature  should  exercise 
legislative  powers,  in  the  shape  of  legislation?  After  allowing  each  House  to 
prescribe  its  own  course  of  proceeding,  after  describing  the  manner  in  which 
a  bill  should  become  a  law,  would  it  have  entered  the  mind  of  a  single  mem- 
ber of  the  convention,  that  an  express  power  to  make  laws  was  necessary  to' 
enable  the  legislature  to  make  them?  That  a  legislature,  endowed  with  legis- 
lative powers,  can  legislate,  is  a  proposition  too  self-evident  to  have  been 
questioned. 


JUDICIAL  DECISIONS,  7^7 

But  the  argument  on  which  most  reliance  is  placed,  is  drawn  from  the  pe- 
culiar language  of  this  clause.  Congress  is  not  empowered  by  it  to  make  all 
laws  which  may  have  relation  to  the  powers  conferred  on  the  Government, 
but  such  only  as  may  be  "necessary  and  proper"  for  carrying  them  into  exe- 
cution. The  word  "  necessary'''  is  considered  as  controlling  the  whole  sen- 
tence, and  as  limiting  the  right,  to  pass  laws  for  the  execution  of  the  granted 
powers,  to  such  as  arc  indispensable,  and  without  which  the  power  would  be 
nugatory.  That  it  excludes  the  choice  of  means,  and  leaves  to  Congress,  in 
each  case,  that  only  which  is  most  direct  and  simple, 

Is  it  true,  that  this  is  the  sense  in  which  the  word  *4  necessary"  is  always 
used?  Does  it  always  import  an  absolute  physical  necessity,  so  strong,  that 
one  thing,  to  which  another  may  be  termed  necessary,  cannot  exist  without 
that  other?  We  think  it  does  not.  If  reference  be  had  to  its  use,  in  the 
common  affairs  of  the  world,  or  in  approved  authors,  we  find  that  it  frequently 
imports  no  more  than  that  one  thing  is  convenient,  or  useful,  or  essential,  to 
another.  To  employ  the  means  necessary  to  an  end,  is  generally  understood 
as  employing  any  means  calculated  to  produce  the  end,  and  not  as  being  con- 
fined to  those  single  means,  without  which  the  end  would  be  entirely  unat- 
tainable. Such  is  the  character  of  human  language,  that  no  word  conveys  to 
the  mind,  in  all  situations,  one  single  definite  idea;  and  nothing  is  more  com- 
mon than  to  use  words  in  a  figurative,  sense.  Almost  all  compositions  contain 
words,  which,  taken  in  their  rigorous  sense,  would  convey  a  meaning  differ- 
ent from  that  which  is  obviously  intended.  It  is  essential  to  just  construc- 
tion, that  many  words  which  import  something  excessive,  should  be  under- 
stood in  a  more  mitigated  sense — in  that  sense  which  common  usage  justifies. 
The  word  "necessary"  is  of  this  description.  It  has  not  a  fixed  character 
peculiar  to  itself.  It  admits  of  all  degrees  of  comparison:  and  is  often  con- 
nected with  other  words,  which  increase  or  diminish  the  impression  the  mind 
receives  of  the  urgency  it  imports.  A  thing  may  be  necessary,  very  necessa- 
ry, absolutely  or  indispensably  necessary.  ^To  no  mind  would  the  same  idea 
be  conveyed,  by  these  several  phrases.  This  comment  on  the  word  is  well 
illustrated  by  the  passage  cited  at  the  bar,  from  the  tenth  section  of  the  first 
article  of  the  constitution.  It  is,  we  think,  impossible  to  compare  the  sen- 
tence which  prohibits  a  State  from  laying  " imposts,  or  duties  on  imports  or 
exports,  except  what  may  be  absolutely  necessary  for  executing  its  inspection 
laws,"  with  tnat  which  authorizes  Congress  "  to  make  all  laws  which  shall  be 
necessary  and  proper  for  carrying  into  execution"  the  powers  of  the  General 
Government,  without  feeling  a  conviction  that  the  convention  understood 
itself  to  change  materially  the  meaning  of  the  word  "  necessary,"  by  prefix- 
ing the  word  "absolutely."  This  word,  then,  like  others,  is  used  in  various 
senses;  and,  in  its  construction,  the  subject,  the  context,  the  intention  of  the 
person  using  them,  are  all  to  be  taken  into  view. 

Let  this  be  done  in  the  case  under  consideration.  The  subject  is  the  exe- 
cution of  those  great  powers  on  which  the  welfare  of  a  nation  essentially  de- 
pends. It  must  have  been  the  intention  of  those  who  gave  these  powers,  to 
ensure,  as  far  as  human  prudence  could  ensure,  their  beneficial  execution. 
This  could  not  be  done  by  confiding  the  choice  of  means  to  such  narrow  limits 
as  not  to  leave  it  in  the  power  of  Congress  to  adopt  any  which  might  be  ap- 
propriate, and  which  were  conducive  to  the  end.  This  provision  is  made  in 
a  constitution  intended  to  endure  for  ages  to  come,  and,  consequently,  to  be 
adapted  to  the  various  crises  of  human  affairs.  To  have  prescribed  the  means 
by  which  Government  should,  in  all  future  time,  execute  its  powers,  would 
have  been  to  change,  entirely,  the  character  of  the  instrument,  and  give  it  the 
properties  of  a  legal  code.  It  would  have  been  an  unwise  attempt  to  pro- 
vide, by  immutable  rules,  for  exigencies  which,  if  foreseen  at  all,  must  have 
been  seen  dimly,  arid  which  can  be  best  provided  for  as  they  occur.  To  have 
declared  that  the  best  means  shall  not  be  used,  but  those  alone  without  which 
the  power  given  would  be  nugatory,  would  have  been  to  deprive  the  legisla- 
ture of  the  capacity  to  avail  itself  of  experience,  to  exercise  its  reason,  and  to 
accommodate  its  legislation  to  circumstances.  If  we  apply  this  principle  of 


733  BANK   OF   THE   UNITED  STATES. 

construction  to  any  of  the  powers  of  the  Government,  we  shall  find  it  so  per- 
nicious in  its  operation  that  we  shall  be  compelled  to  discard  it.  The  powers 
vested  in  Congress  may  certainly  be  carried  into  execution,  without  pre- 
scribing an  oath  of  office.  The  power  to  exact  this  security  for  the  faithful 
performance  of  duty,  is  not  given,  nor  is  it  indispensably  necessary.  The  dif- 
ferent departments  may  be  established;  taxes  maybe  imposed  and  collected; 
armies  and  navies  may  be  raised  and  maintained;  and  money  may  be  borrowed, 
without  requiring  an  oath  of  office.  It  might  be  argued,  with  as  much  plau- 
sibility as  other  incidental  powers  have  been  assailed,  that  the  convention 
was  not  unmindful  of  this  subject.  The  oath  which  might  be  exacted — that 
of  fidelity  to  the  constitution — is  prescribed,  and  no  other  can  be  required. 
Yet,  he  would  be  charged  with  insanity  who  should  contend,  that  the  Legisla- 
ture might  not  superadd,  to  the  oath  directed  by  the  constitution,  such  other 
oath  of  office  as  its  wisdom  might  suggest. 

So,  with  respect  to  the  whole  penal  code  of  the  United  States:  whence 
arises  the  power  to  punish  in  cases  not  prescribed  by  the  constitution?  All 
admit  that  the  Government  may,  legitimately,  punish  any  violation  of  its 
laws;  and  yet,  this  is  not  among  the  enumerated  powers  of  Congress.  The 
right  to  enforce  the  observance  of  law,  by  punishing  its  infraction,  might  be 
denied  with  the  more  plausibility,  because  it  is  expressly  sjven  in  some  cases. 
Congress  is  empowered  "to provide  for  the  punishment  of  counterfeiting  the 
securities  and  current  coin  01  the  United  States,"  and  "to  define  and  punish 
piracies  and  felonies  committed  on  the  high  seas,  and  offences  against  the  law 
of  nations."  The  several  powers  of  Congress  may  exist,  in  a  very  imperfect 
state  to  be  sure,  but  they  may  exist,  and  be  carried  into  execution,  although 
no  punishment  should  be  inflicted  in  cases  where  the  right  to  punish  is  not  ex- 
pressly given. 

Take,  for  example,  the  power  "to  establish  post  offices  and  post  roads." 
This  power  is  executed  by  the  single  act  of  making  the  establishment.  But, 
from  this  .has  been  inferred  the  power  and  duty  of  carrying  the  mail  along  the 
post  road,  from  one  post  office  to  another.  And,  from  this  implied  power, 
nas  again  been  inferred  the  right  to  punish  those  who  steal  letters  from  the 
post  office,  or  rob  the  mail.  It  may  be  said,  with  some  plausibility,  that  the 
right  to  carry  the  mail,  and  to  punish  those  who  rob  it,  is  not  indispensably 
necessary  to  the  establishment  of  a  post  office  and  post  road.  This  right  is 
indeed  essential  to  the  beneficial  exercise  of  the  power,  but  not  indispensably 
necessary  to  its  existence.  So,  of  the  punishment  of  the  crimes  of  stealing  or 
falsifying  a  record  or  process  of  a  court  of  the  United  States,  or  of  perjury  in 
such  court.  To  punish  these  offences  is  certainly  conducive  to  the  due  ad- 
ministration of  justice.  But  courts  may  exist,  and  may  decide  the  causes 
brought  before  them,  though  such  crimes  escape  punishment. 

The  baneful  influence  of  this  narrow  construction,  on  all  the  operations  of 
the  Government,  and  the  absolute  impracticability  of  maintaining  it  without 
rendering  the  Government  incompetent  to  its  great  objects,  might  be  illustrat- 
ed by  numerous  examples,  drawn  from  the  constitution,  and  from  our  laws. 
The  good  sense  of  the  public  has  pronounced,  without  hesitation,  that  the 
power  of  punishment  appertains  to  sovereignty,  and  may  be  exercised  when- 
ever the  sovereign  has  a  right  to  act,  as  incidental  to  his  constitutional  pow- 
ers. Ft  is  a  means  for  carrying  into  execution  all  sovereign  powers,  and  may 
be  used,  although  not  indispensably  necessary.  It  is  a  right  incidental  to  the 
power,  and  conducive  to  its  beneficial  exercise. 

If  this  limited  construction  of  the  word  "necessary"  must  be  abandoned  in 
order  to  punish,  whence  is  derived  the  rule  which  would  reinstate  it,  when 


the  infraction  of  law,  why  is  it  not  equally  comprehensive  when  required^  to 
authorize  the  use  of  means  which  facilitate  the  execution  of  the  powers  of  Go- 
vernment, without  the  infliction  of  punishment?" 


JUDICIAL  DECISIONS.  739 

In  ascertaining  the  sense  in  which  the  word  '*  necessary"  is  used  in  this 
clause  of  the  constitution,  we  may  derive  some  aid  from  that  with  which  it  is 
associated.  Congress  shall  have  power  "  to  make  all  laws  which  shall  be  ne- 
cessary and  proper  to  carry  into  execution"  the  powers  of  the  Government. 
If  the  word  *fc  necessary"  was  used  in  that  strict  and  rigorous  sense  in  which 
the  counsel  for  the  State  of  Maryland  contend,  it  would  bean  extraordina- 
ry departure  from  the  usual  course  of  the  human  mind,  as  exhibited  in  com- 
position, to  add  a  word,  the  only  possible  effect  of  which  is  to  qualify  that 
strict  and  rigorous  meaning;  to  present  to  the  mind  the  idea  of  some  choice  of 
means  of  legislation,  not  straitened  and  compressed  within  the  narrow  limits 
for  which  gentlemen  contend. 

But  the  argument  which  most  conclusively  demonstrates  the  error  of  the 
construction  contended  for  by  the  counsel  for  the  State  of  Maryland,  is  found- 
ed on  the  intention  of  the  convention,  as  manifested  in  the  whole  clause.  To 
waste  time  and  argument  in  proving  that,  without  it,  Congress  might  carry  its 
powers  into  execution,  would  be  not  much  less  idle  than  to  hold  a  lighted  taper 
to  the  sun.  As  little  can  it  be  reauired  to  prove  that,  in  the  absence  of  this 
clause,  Congress  w  ould  have  some  choice  of  means.  That  it  might  employ  those 
which,  in  its  judgment,  would  most  advantageously  effect  the  object  to  be  ac- 
complished. That  any  means  adapted  to  the  end,  any  means  which  tended 
directly  to  the  execution  of  the  constitutional  powers  of  the  Government, 
were  in  themselves  constitutional.  This  clause,  as  construed  by  the  State  of 
Maryland,  would  abridge,  and  almost  annihilate,  this  useful  and  necessary 
right  of  the  Legislature  to  select  its  means.  That  this  could  not  be  intended, 
is,  we  should  think,  had  it  not  been  already  controverted,  too  apparent  for 
controversy.  We  think  so  for  the  following  reasons: 

1st.  The  clause  is  placed  among  the  powers  of  Congress,  not  among  the 
limitations  on  those  powers. 

2d.  Its  terms  purport  to  enlarge,  not  to  diminish,  the  powers  vested  in  the 
Government.  It  purports  to  be  an  additional  power,  not  a  restriction  on 
those  already  granted.  No  reason  has  been,  or  can  be  assigned,  for  thus  con- 
cealing an  intention  to  narrow  the  discretion  of  the  National  Legislature,  un- 
der words  which  purport  to  enlarge  it.  The  framersof  the  constitution  wish- 
ed its  adoption,  arid  well  knew  that  it  would  be  endangered  by  its  strength, 
not  by  its  weakness.  Had  they  been  capable  of  using  language  which  would 
convey  to  the  eye  one  idea,  and,  after  deep  reflection,  impress  on  the  mind 
another,  they  would  rather  have  disguised  the  grant  ot  power,  than  its  limita- 
tion. If,  then,  their  intention  had  been,  by  this  clause,  to  restrain  the  free 
use  of  means  which  might  otherwise  have  been  implied,  that  intention  would 
have  been  inserted  in  another  place,  and  would  have  been  expressed  in  terms 
resembling  these:  "  In  carrying  into  execution  the  foregoing  powers,  and  all 
others,"  &c.  4t  no  laws  shall  be  passed  but  such  as  are  necessary  and  proper." 
Had  the  intention  been  to  make  this  clause  restrictive,  it  would  unquestiona- 
bly have  been  so  in  form  as  well  as  in  effect. 

The  result  of  the  most  careful  and  attentive  consideration  bestowed  upon 
this  clause  is,  that,  if  it  does  not  enlarge,  it  cannot  be  construed  to  restrain  the 
powers  of  Congress,  or  to  impair  the  right  of  the  Legislature  to  exercise  its 
best  judgment  in  the  selection  of  measures  to  carry  into  execution  the  consti- 
tutional powers  of  the  Government.  If  no  other  motive  for  its  insertion  can 
be  suggested,  a  sufficient  one  is  found  in  the  desire  to  remove  all  doubts  re- 
pecting  the  right  to  legislate  on  that  vast  mass  of  incidental  powers  which 
must  be  involved  in  the  constitution,  if  that  instrument  be  not  a  splendid 
bauble. 

We  admit,  as  all  must  admit,  that  the  powers  of  the  Government  are  limit- 
ed, and  that  its  limits  are  not  to  be  transcended.  But  we  think  the  sound 
construction  of  the  constitution  must  allow  to  the  National  Legislature  that 
discretion,  with  respect  to  the  means  by  which  the  powers  it  confers  are  to  be 
carried  into  execution,  which  will  enable  that  body  to  perform  the  high  duties 
assigned  to  it,  in  the  manner  most  beneficial  to  the  People.  Let  the  end  be 
legitimate;  let  it  be  within  the  scope  of  the  constitution;  and  all  means  which 


790  BANK    OF  THE    UNITED    STATES. 

are  appropriate,  which  are  plainly  adapted  to  that  end,  which  are  not  prohi- 
bited, but  consist  with  the  letter  and  spirit  of  the  constitution,  are  constitu- 
tional. 

That  a  corporation  must  be  considered  as  a  means  not  less  usual,  not  of 
higher  dignity,  not  more  requiring  a  particular  specification  than  other  means, 
has  been  sufficiently  proved.  If  we  look  to  the  origin  of  corporations,  to  the 
manner  in  which  they  have  been  framed  in  that  Government  from  which  we 
have  derived  most  of  our  legal  principles  and  ideas,  or  to  the  uses  to  which 
they  have  been  applied,  we  find  no  reason  to  suppose  that  a  constitution, 
omitting,  and  wisely  omitting,  to  enumerate  all  the  means  for  carrying  into 
execution  the  great  powers  vested  in  Government,  ought  to  have  specified 
this.  Had  it  been  intended  to  grant  this  power  as  one  which  should  be  dis- 
tinct and  independent,  to  be  exercised  in  any  case  whatever,  it  would  have 
found  a  place  among  the  enumerated  powers  of  Government.  But  being  con- 
sidered as  a  means,  to  be  employed  only  for  the  purpose  of  carrying  into  exe- 
cution the  given  powers,  there  could  be  no  motive  for  particularly  mention- 
ing it. 

The  propriety  of  this  remark  would  seem  to  be  generally  acknowledged,  by 
the  universal  acquiescence  in  the  construction  which  has  been  uniformly  put 
on  the  third  section  of  the  fourth  article  of  the  constitution.  The  power  to 
44 make  all  needful  rules  and  regulations  respecting  the  territory,  or  other 
property  belonging  to  the  United  States,"  is  not  more  comprehensive  than 
the  power  "to  make  all  laws  which  shall  be  necessary  and  proper  for  carrying 
into  execution"  the  powers  of  the  Government.  Yet  all  admit  the  constitu- 
tionality of  a  territorial  Government,  which  is  a  corporate  body. 

If  a  corporation  may  be  employed  indiscriminately  with  other  means  to  car- 
ry into  execution  the  powers  of  the  Government,  no  particular  reason  can  be 
assigned  for  excluding  the  use  of  a  bank,  if  required  for  its  fiscal  operations. 
To  use  one,  must  be  within  the  discretion  of  Congress,  if  it  be  an  appropriate 
mode  of  executing  the  powers  of  Government.  That  it  is  a  convenient,  a 
useful,  and  essential  instrument  in  the  prosecution  of  its  fiscal  operations,  is 
not  now  a  subject  of  controversy.  All  those  who  have  been  concerned  in  the 
administration  of  our  finances,  have  concurred  in  representing  its  importance 
and  necessity;  and  so  strongly  have  they  been  felt,  that  statesmen  of  the  first 
class,  whose  previous  opinions  against  it  had  been  confirmed  by  every  circum- 
stance which  can  fix  the  human  judgment,  have  yielded  those  opinions  to  the 
exigencies  of  the  nation.  Under  the  confederation,  Congress,  justifying  the 
measure  by  its  necessity,  transcended,  perhaps,  its  powers  to  obtain  the  ad- 
vantage of  a  bank;  and  our  own  legislation  attests  the  universal  conviction  of 
the  utility  of  this  measure.  The  time  has  passed  away  when  it  can  be  neces- 
sary to  enter  into  any  discussion  in  order  to  prove  the  importance  of  this  in- 
strument as  a  means  to  effect  the  legitimate  objects  of  the  Government. 

But,  were  its  necessity  less  apparent,  none  can  deny  its  being  an  appropri- 
ate measure;  and  if  it  is,  the  degree  of  its  necessity,  as  has  been  very  justly 
observed,  is  to  be  discussed  in  another  place.  Should  Congress,  in  the  exe- 
cution of  its  powers,  adopt  measures  which  are  prohibited  by  the  constitution; 
or  should  Congress,  under  the  pretext  of  executing  its  powers,  pass  laws  for 
the  accomplishment  of  objects  not  entrusted  to  the  Government,  it  \vould  be- 
come the  painful  duty  of  this  tribunal,  should  a  case  requiring  such  a  decision 
come  before  it,  to  say  that  such  an  act  was  not  the  law  of  the  land.  But  where 
the  law  is  not  prohibited,  and  is  really  calculated  to  effect  any  of  the  objects 
entrusted  to  the  Government,  to  undertake  here  to  inquire  into  the  degree  of 
its  necessity,  would  be  to  pass  the  line  which  circumscribes  the  judicial  de- 
partment, and  to  tread  on  legislative  ground.  This  court  disclaims  all  pre- 
tensions to  such  a  power. 

After  this  declaration,  it  can  scarcely  be  necessary  to  say,  that  the  exist- 
ence of  State  banks  can  have  no  possible  influence  on  the  question.  No  trace 
is  to  be  found  in  the  constitution,  of  an  intention  to  create  a  dependence 
of  the  Government  of  the  Union  on  those  of  the  States,  for  the  execution  of 
the  great  powers  assigned  to  it.  Its  means  are  adequate  to  its  ends;  and  on 

- 


JUDICIAL    DECISIONS. 

those  means  alone  was  it  expected  to  rely  for  the  accomplishment  of  its  ends. 
To  impose  on  it  the  necessity  of  resorting  to  means  which  it  cannot  control, 
which  another  government  may  furnish  or  withhold,  would  render  its  course 
precarious,  the  result  of  its  measures  uncertain,  and  create  a  dependence  on 
other  governments,  which  might  disappoint  its  most  important  designs,  and  is 
incompatible  with  the  language  of  the  constitution.  But  were  it  otherwise, 
the  choice  of  means  implies  a  right  to  choose  a  National  Bank  in  preference  to 
State  banks,  and  Congress  alone  can  make  the  selection. 

After  the  most  deliberate  consideration,  it  is  the  unanimous  and  decided 
opinion  of  this  court,  that  the  act  to  incorporate  the  Bank  of  the  United  States 
is  a  law  made  in  pursuance  of  the  constitution,  and  is  a  part  of  the  supreme 
law  of  the  land. 

The  branches  proceeding  from  the  same  stock,  and  being  conducive  to  the 
complete  accomplishment  of  the  object,  are  equally  constitutional.  It  would 
have  been  unwise  to  locate  them  in  the  charter,  and  it  would  be  unnecessarily 
inconvenient  to  employ  the  legislative  power  in  making  those  subordinate  ar- 
rangements. The  great  duties  of  the  bank  are  prescribed;  those  duties  require 
branches;  and  the  bank  itself  may,  we  think,  be  safely  trusted  with  the  selec- 
tion of  places  where  those  branches  shall  be  fixed;  reserving  always  to  the 
Government  the  right  to  require  that  a  branch  shall  be  located  where  it  may 
be  deemed  necessary. 

It  being  the  opinion  of  the  court,  that  the  act  incorporating  the  bank  is  con- 
stitutional; and  that  the  power  of  establishing  a  branch  in  the  State  of  Mary- 
land, might  be  properly  exercised  by  the  bank  itself,  we  proceed  to  in- 
quire— 

II.  Whether  the  State  of  Maryland  may,  without  violating  the  constitution, 
tax  that  branch? 

That  the  power  of  taxation  is  one  of  v  ital  importance;  that  it  is  retained  by 
the  States;  that  it  is  not  abridged  by  the  grant  of  a  similar  power  to  the  Go- 
vernment of  the  Union;  that  it  is  to  be  concurrently  exercised  by  the  two 
Governments;  are  truths  which  have  never  been  denied.  But?  such  is  the 
paramount  character  of  the  constitution,  that  its  capacity  to  withdraw  any 
subject  from  the  action  of  even  this  power,  is  admitted.  The  States  are  ex- 
pressly forbidden  to  lay  any  duties  on  imports  or  exports,  except  what  may 
be  absolutely  necessary  for  executing  their  inspection  laws.  If  the  obligation 
of  this  prohibition  must  be  conceded;  if  it  may  restrain  a  State  from  the  ex- 
ercise of  its  taxing  power  on  imports  and  exports;  the  same  paramount  cha- 
racter would  seem  to  restrain,  as  it  certainly  may  restrain,  a  State  from  such 
other  exercise  of  this  power,  as  is  in  its  nature  incompatible  with,  and  repug- 
nant to,  the  constitutional  laws  of  the  Uuion.  A  law,  absolutely  repugnant 
to  another,  as  entirely  repeals  that  other,  as  if  express  terms  of  repeal  were 
used. 

On  this  ground,  the  counsel  for  the  bank  place  ^its  claim  to  be  exempted 
from  the  power  of  a  State  to  tax  its  operations.  There  is  no  express  provi- 
sion for  the  case,  but  the  claim  has  been  sustained  on  a  principle  which  so 
entirely  pervades  the  constitution,  is  so  intermixed  with  the  materials  which 
compose  it,  so  interwoven  with  its  web,  so  blended  with  its  texture,  as  to 
be  incapable  of  being  separated  from  it,  without  rending  it  into  shreds. 

This  great  principle  is,  that  the  constitution,  and  the  laws  made  in  pursu- 
ance thereof,  are  supreme;  that  they  control  the  constitution  and  la\vs  of  the 
respective  States,  and  cannot  be  controlled  by  them.  From  this,  which  may 
be  almost  termed  an  axiom,  other  propositions  are  deduced  as  corollaries,  on 
the  truth  or  error  of  which,  and  on  their  application  to  this  case,  the  cause 
has  been  supposed  to  depend.  These  are, — 1st.  That  a  power  to  create,  im- 
plies a  power  to  preserve.  3d.  That  a  power  to  destroy,  if  wielded  by  a  dif- 
ferent hand,  is  hostile  to,  and  incompatible  with,  these  powers  to  create  and 
to  preserve.  3d.  That,  where  this  repugnancy  exists,  that  authority  which  is 
supreme  must  control,  not  yield  to  that  over  which  it  is  supreme. 

i'liese  propositions,  asabstract  truths,  would,  perhaps,  never  be  controverted. 
Their  application  to  this  case,  however,  has  been  denied;  and,  both  in  main- 


792  BANK  OF  THE  UNITED  STATES. 

taining  the  affirmative  and  the  negative,  a  splendor  of  eloquence  and  strength 
of  argument,  seldom,  if  ever,  surpassed,  have  been  displayed. 

The  power  of  Congress  to  create,  and  of  course  to  continue,  the  bank,  was 
the  subject  of  the  preceding  part  of  this  opinion;  and  is,  no  longer,  to  be  con- 
sidered as  questionable. 

That  the  power  of  taxing  it  by  the  States,  may  be  exercised  so  as  to  destroy 
it,  is  too  obvious  to  be  denied.  But  taxation  is  said  to  be  an  absolute  power, 
which  acknowledges  no  other  limits  than  those  expressly  prescribed  in  the 
constitution,  and,  like  sovereign  power  of  every  other  description,  is  trusted 
to  the  discretion  of  those  who  use  it.  But  the  very  terms  of  this  argument 
admit  that  the  sovereignty  of  the  State,  in  the  article  of  taxation  itself,  is  sub- 
ordinate to,  and  may  be  controlled  by,  the  constitution  of  the  United  States. 
How  far  it  has  been  controlled  by  that  instrument,  must  be  a  question  of  con- 
struction. In  making  this  construction,  no  principle,  not  declared,  can  be  ad- 
missible, which  would  defeat  the  legitimate  operations  of  a  supreme  govern- 
ment. It  is  of  the  very  essence  of  supremacy  to  remove  all  obstacles  to  its 
action  within  its  own  sphere,  and  so  to  modify  every  power  vested  in  subor- 
dinate governments,  as  to  exempt  its  operations  from  their  own  influence. 
This  ettect  need  not  be  stated  in  terms.  It  is  so  involved  in  the  declaration 
of  supremacy,  so  necessarily  implied  in  it,  that  the  expression  of  it  could  not 
make  it  more  certain.  We  must,  therefore,  keep  it  in  view  while  construing 
the  constitution. 

The  argument  on  the  part  of  the  State  of  Maryland  is,  not  that  the  States 
may  directly  resist  a  law  of  Congress,  but  that  they  may  exercise  their  ac- 
knowledged powers  upon  it,  and  that  the  constitution  leaves  them  this  right 
in  the  confidence  that  they  will  not  abuse  it. 

Before  we  proceed  to  examine  this  argument,  and  to  subject  it  to  the  test  of 
the  constitution,  we  must  be  permitted  to  bestow  a  fevy  considerations  on  the 
nature  and  extent  of  this  original  right  of  taxation,  which  is  acknowledged  to 
remain  with  the  States.  It  is  admitted  that  the  power  of  taxing  the  people 
and  their  property,  is  essential  to  the  very  existence  of  government,  and  may 
be  legitimately  exercised  on  the  objects  to  which  it  is  applicable,  to  the  ut- 
most extent  to  which  the  Government  may  choose  to  carry  it.  The  only  se- 
curity against  the  abuse  of  this  power,  is  found  in  the  structure  of  the  Govern- 
ment itself.  In  imposing  a  tax,  the  Legislature  acts  upon  its  constituents. 
This  is,  in  general,  a  sufficient  security  against  erroneous  and  oppressive  tax- 
ation. 

The  People  of  a  State,  therefore,  give  to  their  Government  a  right  of  taxing 
themselves  and  their  property,  and,  as  the  exigencies  of  Government  cannot 
be  limited,  they  prescribe  no  limits  to  the  exercise  of  this  right,  resting  confi- 
dently on  the  interest  of  the  legislator,  and  on  the  influence  of  the  constituents 
over  their  representative,  to  guard  them  against  its  abuse.  But  the  means 
employed  by  the  Government  of  the  Union  have  no  such  security,  nor  is  the 
right  of  a  State  to  tax  them  sustained  by  the  same  theory.  Those  means  are 
not  given  by  the  people  of  a  particular  State,  not  given  by  the  constituents  of 
the  legislature  which  claim  the  right  to  tax  them,  but  by  the  People  of  all  the 
States.  They  are  given  by  all,  for  the  benefit  of  all;  and  upon  theory,  should 
be  subjected  to  that  government  only  which  belongs  to  all. 

It  may  be  objected  to  this  definition,  that  the  power  of  taxation  is  not  con- 
fined to  the  people  and  property  of  a  State.  It  may  be  exercised  upon  every 
object  brought  within  its  jurisdiction. 

This  is  true.  But  to  what  source  do  we  trace  this  right?  It  is  obvious, 
that  it  is  an  incident  of  sovereignty,  and  is  co-extensive  with  that  to  which  it 
is  an  incident.  All  subjects  over  which  the  sovereign  power  of  a  State  ex- 
tends, are  objects  of  taxation;  but  those  over  which  it  does  not  extend,  are, 
upon  the  soundest  principles,  exempt  from  taxation.  This  proposition  may 
almost  be  pronounced  self-evident. 

The  sovereignty  of  a  State  extends  to  every  thing  which  exists  by  its  own 
authority,  or  is  introduced  by  its  permission;  but  does  it  extend  to  those 
means  which  are  employed  by  Congress  to  carry  into  execution  powers  con- 


JUDICIAL   DECISIONS.  793 

tarred  on  that  body  by  the  People  of  the  United  StatesT?  We  think  it  demon- 
strable that  it  does  not.  Those  powers  are  not  given  by  the  People  of  a  single 
State,  They  are  given  by  the  People  of  the  United  States,  to  a  Government 
whose  laws,  made  in  pursuance  of  the  constitution,  are  declared  to  be  su- 
preme. Consequently,  the  People  of  a  single  State  cannot  confer  a  sovereign- 
ty which  will  extend  over  them. 

If  we  measure  the  power  of  taxation  residing  in  a  State,  by  the  extent  of 
sovereignty  which  the  people  of  a  single  State  possess,  and  can  confer  on  its 
Government,  we  have  an  intelligible  standard,  applicable  to  every  case  to 
which  the  power  may  be  applied.  We  have  a  principle  which  leaves  the 
power  of  taxing  the  People  and  property  of  a  State  unimpaired;  which  leaves 
to  a  State  the  command  of  all  its  resources;  and  which  places  beyond  its 
reach,  all  those  powers  which  are  conferred  by  the  People  of  the  United  States 
on  the  Government  of  the  Union,  and  all  those  means  which  are  given  for  the 
purpose  of  carrying  those  powers  into  execution.  We  have  a  principle  which 
is  safe  for  the  States,  and  safe  for  the  Union.  We  are  relieved,  as  we  ought 
to  be,  from  clashing  sovereignty;  from  interfering  powers;  from  a  repugnancy 
between  a  ri§ht  in  one  government  to  pull  down  what  there  is  an  acknow- 
ledged right  in  another  to  build  up;  from  the  incompatibility  of  a  right  in  one 
government  to  destroy  what  there  is  a  right  in  another  to  preserve.  We  are 
not  driven  to  the  perplexing  inquiry,  so  unfit  for  the  judicial  department,  what 
degree  of  taxation  is  the  legitimate  use,  and  what  degree  may  amount  to  the 
abuse  of  the  power.  The  attempt  to  use  it  on  the  means  employed  by  the  Go- 
vernment ol  the  Union,  in  pursuance  of  the  constitution,  is  itself  an  abuse, 
because  it  is  the  usurpation  of  a  power  which  the  people  of  a  single  State 
cannot  give. 

\Ve  find,  then,  on  just  theory,  a  total  failure  of  this  original  right  to  tax  the 
means  employed  by  the  Government  of  the  Union,  for  the  execution  of  its 
powers.    The  right  never  existed,  and  the  question  whether  it  has  been  sur 
rendered,  cannot  arise. 

But,  waiving  this  theory  for  the  present,  let  us  resume  the  inquiry,  whether 
this  power  can  be  exercised  by  the  respective  States,  consistently  with  a  fair 
construction  of  the  constitution. 

That  the  power  to  tax,  involves  the  power  to  destroy;  that  the  power  to 
destroy,  may  defeat  and  render  useless  the  power  to  create;  that  there  is  a 
plain  repugnance  in  conferring  on  one  government  a  power  to  control  the 
constitutional  measures  of  another,  which  other,  with  respect  to  those  very 
measures,  is  declared  to  be  supreme  over  that  which  exerts  the  control;  are 
propositions  not  to  be  denied.  But  all  inconsistencies  are  to  be  reconciled 
by  the  magic  of  the  word  CONFIDENT*:.  Taxation,  it  is  said,  does  not  neces- 
sarily and  unavoidably  destroy.  To  cany  it  to  the  excess  of  destruction, 
would  be  an  abuse,  to  presume  which,  would  banish  that  confidence  which  is 
essential  to  all  government. 

But  is  tin's  a  case  of  confidence?  Would  the  People  of  any  one  State  trust 
those  of  another  with  a  power  to  control  the  most  insignificant  operations  of 
their  State  Government?  We  know  they  would  not.  Why,  then,  should  we 
suppose  that  the  People  of  any  one  State  should  be  willing  to  trust  those  of 
another  with  a  power  to  control  the  operations  of  a  government  to  which  they 
have  confided  their  most  important  and  most  valuable  interests?  In  the  Legis- 
lature of  the  Union,  alone,  are  all  represented.  The  Legislature  of  the  Union, 
alone,  therefore,  can  be  trusted  by  the  People  with  the  power  of  controlling 
measures  which  concern  all,  in  the  confidence  that  it  will  not  be  abused. 
This,  then,  is  not  a  case  of  confidence,  and  we  must  consider  it  as  it  really  is. 
If  we  apply  the  principle  for  which  the  State  of  Maryland  contends,  to  the 
constitution  generally,  we  shall  find  it  capable  of  changing  totally  the  charac- 
ter of  that  instrument.  We  shall  find  it  capable  of  arresting  all  the  measures 
of  the  Government,  and  of  prostrating  it  at  the  foot  of  the  States.  The  Ame- 
rican People  have  declared  their  constitution,  and  the  laws  made  in  pursu- 
ance thereof,  to  be  supreme;  but  this  principle  would  transfer  the  supremacy, 
in  fact,  to  the  States. 
100 


794  BANK  OF  THE  UNITED  STATES. 

If  the  States  may  tax  one  instrument,  employed  by  the  Government  in  the  ex- 
ecution of  its  powers,  they  may  tax  any  ami  every  other  instrument.  They  may 
tax  the  mail*  they  may  tax  the  mint;  they  may  tax  patent  rights;  they  may  tax 
the  papers  of  the  custom  house?  they  may  tax  judicial  process;  they  may  tax  ail 
the  means  employed  by  the  Government,  to  an  excess  which  would  defeat  all 
the  ends  of  Government.  This  was  not  intended  by  the  American  People. 
They  did  not  design  to  make  their  Government  dependent  on  the  States. 

Gentlemen  say,  they  do  not  claim  the  right  to  extend  State  taxation  to 
these  objects.  They  limit  their  pretensions  to  property.  But  on  what  prin- 
ciple is  this  distinction  made  ?  Those  who  make  it  have  furnished  no  reason 
for  it,  and  the  principle  for  which  they  contend  denies  it.  They  contend  that 
the  power  of  taxation  has  no  other  limit  than  is  found  in  the  10th  section  of  the 
1st  article  of  the  constitution;  that,  with  respect  to  every  thing  else,  the  pow- 
er of  the  States  is  supreme,  and  admits  of  no  control.  If  this  be  true,  the 
distinction  between  property  and  other  subjects,  to  which  the  power  of  taxa- 
tion is  applicable,  is  merely  arbitrary,  and  can  never  be  sustained.  This  is 
not  all.  If  the  controlling  power  of  the  States  be  established;  if  their  supre- 
macy, as  to  taxation,  be  acknowledged;  what  is  to  restrain  their  exercising 
this  control  in  any  shape  they  may  please  togive  it  ?  Their  sovereignty  is  not 
confined  to  taxation.  That  is  not  the  only  mode  in  which  it  might  be  display- 
ed. The  question  is,  in  truth,  a  question  of  supremacy;  and,  if  the  right  of  the 
States  to  tax  the  means  employed  by  the  General  Government  be  conceded, 
the  declaration,  that  the  constitution,  and  the  laws  made  in  pursuance  thereof, 
shall  be  the  supreme  law  of  the  land,  is  empty  and  unmeaning  declamation. 

In  the  course  of  the  argument,  the  Federalist  has  been  quoted,  and  the  opi- 
nions expressed  by  the  authors  of  that  work,  have  been  justly  supposed  to  be 
entitled  to  great  respect,  in  expounding  the  constitution.  No  tribute  can  be 
paid  to  them  which  exceeds  their  merit;  but,  in  applying  their  opinions  to  the 
cases  which  may  arise  in  the  progress  of  our  Government,  a  right  to  judge  of 
their  correctness  must  be  retained;  and,  to  understand  the  argument,  we  must 
examine  the  proposition  it  maintains,  and  the  objections  against  which  it  is 
directed.  The  subject  oi  those  numbers,  from  which  passages  have  been  cit- 
ed, is,  the  unlimited  power  of  taxation  which  is  vested  in  the  General  Go- 
rernment.  The  objection  to  this  unlimited  power,  which  the  argument  seeks 
to  remove,  is  stated  with  fullness  and  clearness.  It  is,  "  that  an  indefinite 
power  of  taxation  in  the  latter  (the  Government  of  the  Union)  might,  and 
probably  would,  in  time,  deprive  the  former  (the  Government  of  the  States) 
of  the  means  of  providing  for  their  own  necessities,  and  would  subject  them 
entirely  to  the  mercy  of  the  National  Legislature.  As  the  laws  of  the  Union 
are  to  become  the  supreme  law  of  the  land;  as  it  is  to  have  power  to  pass  all 
laws  that  may  be  necessary  for  carrying  into  execution  the  authorities  with 
which  it  is  proposed  to  vest  it;  the  National  Government  might  at  any  time 
abolish  the  taxes  imposed  for  State  objects,  upon  the  pretence  of  an  interfer- 
ence with  its  own.  It  might  allege  a  necessity  for  doing  this,  in  order  to  give 
efficacy  to  the  national  revenues;  and  thus,  all  the  resources  of  taxation  might, 
by  degrees,  become  the  subjects  of  federal  monopoly,,  to  the  entire  exclusion 
and  destruction  of  the  State  Governments." 

The  objections  to  the  constitution  which  are  noticed  in  these  numbers,  were 
to  the  undefined  power  of  the  Government  to  tax,  not  to  the  incidental  privi- 
lege of  exempting  its  own  measures  from  State  taxation.  The  consequences 
apprehended  from  this  undefined  power  were,  that  it  would  absorb  all  the  ob- 
jects of  taxation,  "  to  the  exclusion  and  destruction  of  the  State  Govern- 
ments." The  arguments  of  the- Federalist  are  intended  to  prove  the  fallacy 
of  these  apprehensions;  not  to  prove  that  the  Government  was  incapable  of 
executing  any  of  its  powers,  without  exposing  the  means  it  employed  to  the 
embarrassments  of  State  taxation.  Arguments  urged  against  these  objections 
and  these  apprehensions,  are  to  be  understood  as  relating  to  the  points  they 
mean  to  prove.  Had  the  authors  of  those  excellent  essays  been  asked, 
whether  they  contended  for  that  construction  of  the  constitution,  which  would 
place  within  the  reach  of  the  States  those  measures  which  the  Government 


JUDICIAL  DECISIONS  795 

might  adopt  for  the  execution  of  its  powers,  no  man,  who  has  read  their  in- 
structive pages,  will  hesitate  to  admit,  that  their  answer  must  have  been  in 
the  negative. 

It  has  also  been  insisted,  that,  as  the  power  of  taxation  in  the  General  and 
State  Governments  is  acknowledged  to  be  concurrent,  every  argument  which 
would  sustain  the  right  of  the  General  Government  to  tax  banks  chartered  by 
fhe  States,  will  equally  sustain  the  right  of  the  States  to  tax  banks  chartered 
by  the  General  Government. 

But  the  two  cases  are  not  on  the  same  reason.  The  People  of  all  the  States 
have  created  the  General  Government,  and  have  conferred  upon  it  the  gene- 
ral power  of  taxation.  The  People  of  all  the  States,  and  the  States  them- 
selves, are  represented  in  Congress,  and.  by  their  representatives,  exercise 
this  power.  When  they  tax  the  chartered  institutions  of  the  States,  they  tax 
their  constituents;  and  these  taxes  must  be  uniform.  But,  when  a  State  taxes 
the  operations  of  the  Government  of  the  United  States,  it  acts  upon  institu- 
tions created,  not  by  their  own  constituents,  but  by  people  over  whom  they 
claim  no  control.  It  acts  upon  the  measures  of  a  government  created  by 
others,  as  well  as  themselves,  for  the  benefit  of  others,  in  common  with  them- 
selves. The  difference  is,  that  which  always  exists,  and  always  must  exist, 
between  the  action  of  the  whole  on  a  part,  and  the  action  of  a  part  on  the 
whole;  between  the  laws  cvf  a  government  declared  to  be  supreme,  and  those 
of  a  government  which,  when  in  opposition  to  those  laws,  is  not  supreme. 

But,  if  the  full  application  of  this  argument  could  be  admitted,  it  might 
bring  into  question  the  right  ot  Congress  to  tax  the  State  banks,  and  could  not 
prove  the  right  of  the  States  to  tax  the  Bank  of  the  United  States- 

The  court  has  bestovyed  on  this  subject  its  most  deliberate  consideration. 
The  result  is,  a  conviction  that  the  States  have  no  power,  by  taxation  or  other- 
wise, to  retard,  impede,  burden,  or  in  any  manner  control,  the  operations  of 
the  constitutional  laws  enacted  by  Congress  to  cany  into  execution  the  pow- 
ers vested  in  the  General  Government.  This  is,  we  think,  the  unavoidable 
consequence  of  that  supremacy  which  the  constitution  has  declared. 

We  are  unanimously  of  opinion,  that  the  law  passed  by  the  Legislature  of 
Maryland,  imposing  a  tax  on  the  Bank  of  the  Lnited  States,  is  unconstitu- 
tional and  void. 

This  opinion  does  not  deprive  the  States  of  any  resources  which  they  origi- 
nal Iv  possessed.  It  does  not  extend  to  a  tax  paid  by  the  real  property  of  the 
bank,  in  common  with  the  other  real  property  within  the  State,  nor  to  a  tax 
imposed  on  the  interest  which  the  citizens  of  Maryland  may  hold  in  this  in- 
stitution, in  common  with  other  property  of  the  same  description  throughout 
the  State.  But  this  is  a  tax  on  the  operations  of  the  bank,  and  is,  conse- 
quently, a  tax  on  the  operation  of  an  instrument  employed  by  the  Govern- 
ment of  the  Union  to  carry  its  powers  into  execution.  Such  a  tax  must  be 
unconstitutional. 

JUDGMENT.  This  cause  came  on  to  be  heard  on  the  transcript  of  the  record 
of  the  court  of  appeals  of  the  State  of  Maryland,  and  was  argued  by  counsel. 
On  consideratiou  whereof,  it  is  the  opinion  of  this  court,  that  the  act  of  the 
Legislature  of  Maryland  is  contrary  to  the  constitution  of  the  United  States, 
and  void;  and,  therefore,  that  the  said  court  of  appeals  of  the  State  of  Mary- 
land erred  in  affirming  the  judgment  of  the  Baltimore  county  court,  in  which, 
judgment  was  rendered  against  James  W.  M'Culloch;  but,  that  the  said  court 
of  appeals  of  Maryland  ought  to  have  reversed  the  said  judgment  of  the  said 
Baltimore  county  court,  and  ought  to  have  given  judgment  for  the  said  appel- 
lant, M'Culloch.  It  is,  therefore,  adjudged  and  ordered,  that  the  said  judg- 
ment of  the  said  court  of  appeals  of  the  State  of  Maryland,  in  this  case,  be, 
and  the  same  hereby  is,  reversed  and  annulled.  And  this  court,  proceeding 
to  render  such  judgment  as  the  said  court  of  appeals  should  have  rendered,  it 
is  further  adjudged  and  ordered,  that  the  judgment  of  the  said  Baltimore 
county  court  be  reversed  and  annulled,  and  that  judgment  be  entered  in  the 
said  Baltimore  county  court  for  the  said  James  W.  M'Culloch. 


79G  BANK   OF  THE   UNITED    STATES. 


Osborn  and  others, 

vs. 

The  President,  Directors,  and  Company,  of  the  Bank  of  the  United  States, 

Respondents. 

[9th  Wheaton,  738. 

[It  was  the  intention  of  the  editors  to  have  given,  at  length,  the  opinion  of  the  learn- 
ed judge,  (Marshall)  pronounced  in  this  case,  but,  its  great  length,  forbids.  A  brief 
summary  of  the  case,  and  of  the  points  decided,  is  all  that  can  be  attempted,-  the  lat- 
ter will  be  given  in  the  words  of  the  reporter.] 

On  the  8th  of  February,  1819,  the  Legislature  of  Ohio  passed  an  act,  enti- 
tled "An  act  to  levy  and  collect  a  tax  from  all  banks  and  individuals,  and 
companies,  and  associations  of  individuals,  that  may  transact  banking  busi- 
ness, in  this  State,  without  being  authorized  to  do  so,  by  the  laws  thereof." 
The  penalty  assigned,  for  a  violation  of  this  act,  was  fifty  thousand  dollars  on 
each  office  of  discount  and  deposite.  On  the  17th  of  September,  1819,  Os- 
born, one  of  the  appellants,  who  was  auditor  of  the  State,  caused  the  office  of 
the  United  States'  Bank,  at  Chillicothe,  to  be  entered,  and,  under  color  of 
executing  the  said  law,  violently  took  therefrom,  in  specie  and  bank  notes. 
To  restrain  the  said  Osborn  from  proceeding  farther,  in  the  execution  of  the 
said  law,  and  to  obtain  a  restitution  of  the  said  sum,  a  bill  in  equity,  with  prayer 
for  an  injunction,  was  [.filed  in  the  Circuit  Court  of  Ohio.  The  injunction 
was  granted,  and,  upon  the  hearing  of  the  cause,  a  decree  was  passed,  order- 
ing a  restitution  of  the  money;  from  this  decree  an  appeal  was  taken  to  the 
Supreme  Court  of  the  United  States,  in  which  court  the  following  points  were 
decided: 

The  act  of  incorporation  of  the  Bank  of  the  United  States  gives  the  circuit  courts 
of  the  United  States  jurisdiction  of  suits  by  and  against  the  bank. 

This  provision  in  the  charter  is  warranted  by  the  3d  article  of  the  constitution, 
which  declares  that  **  the  judicial  power  shall  extend  to  all  cases,  in  law  and  equity, 
arising  under  this  constitution,  the  laws  of  the  United  States,  and  treaties  made,  or 
which  shall  be  made,  under  their  authority.'* 

It  is  unnecessary  for  an  attorney  or  solicitor,  who  prosecutes  a  suit  for  the  Bank  of 
the  United  States,  or  other  corporation,  to  produce  a  warrant  of  attorney  under  the 
corporate  seal. 

Whatever  authority  may  be  necessary  for  an  attorney  or  solicitor  to  appear  for  a 
natural  or  artificial  person,  it  is  not  a  ground  of  reversal  for  error,  in  an  appellate 
court,  that  such  authority  does  not  appear  on  the  face  of  the  record.  It  is  a  formal 
defect,  which  is  cured  by  the  statute  of  jeofails,  and  the  32d  section  of  the  judiciary 
act  of  1789,  ch.  20. 

In  general,  the  answer  of  one  defendant,  in  equity,  cannot  be  read  in  evidence 
against  another.  But  where  one  defendant  succeeds  to  another,  so  that  the  right  of 
the  one  devolves  on  the  other,  and  they  become  privies  in  estate,  the  rule  does  not 
apply,  j. 

Where  the  defendant  is  restrained  by  an  injunction,  from  using  money  in  his  pos- 
session, interest  will  not  be  decreed  against  him. 

An  injunction  will  be  granted  to  prevent  the  franchise  of  a  corporation  from  being 
destroyed,  as  well  as  to  restrain  a  party  from  violating  it,  by  attempting  to  participate 
in  its  exclusive  privileges. 

In  general,  an  injunction  will  not  be  allowed,  nor  a  decree  rendered,  against  an 
agent,  where  the  principal  is  not  made  a  party  to  the  suit.  But,  if  the  principal  be  not 
himself  subject  to  the  jurisdiction  of  the  court,  (as  in  the  case  of  a  sovereign  State) 
the  rule  may  be  dispensed  with. 

A  court  of  equity  will  interpose  by  injunction  to  prevent  the  transfer  of  a  specific 
thing,  which,  if  transferred,  will  be  irretrievably  lost  to  the  owner,  such  as  negotiable 
securities  and  stocks. 


JUDICIAL    DECISIONS.  797 

The  circuit  courts  of  the  United  States  have  jurisdiction  of  a  bill  brought  by  the 
Bank  of  the  United  States,  for  the  purpose  of  protecting-  the  bank  in  the  exercise  of 
its  franchises,  which  are  threatened  to  be  invaded,  under  the  unconstitutional  laws  of 
a  State 5  and,  as  the  State  itself  cannot,  according-  to  the  llth  amendment  of  the  con- 
stitution, be  made  a  party  defendant  to  the  suit,  it  may  be  maintained  against  the  offi- 
cers and  agents  of  the  State,  who  are  entrusted  with  the  execution  of  such  laws. 

A  State  cannot  tax  the  Bank  of  the  United  States?  and  any  attempt,  on  the  part  of 
its  agents  and  officers,  to  enforce  the  collection  of  such  tax  against  the  property  of  the 
bank,  may  be  restrained  by  injunction  from  the  Circuit  Court. 

The  following  points  have  also  been  decided  by  the  Supreme  Court  in  re- 
gard to  the  Bank  of  the  United  States,  its  powers  and  liabilities,  in  the  re- 
spective cases  referred  to: 

The  act  of  April  10,  1816,  c.  44,  (6  L.  U.  S.  35)  incorporating  the  Bank  of  the 
United  States,  does  not,  by  the  ninth  rule  of  the  fundamental  articles,  prohibit  the 
bank  from  discounting  promissory  notes,  or  receiving  a  transfer  of  notes  in  payment 
of  a  debt  due  to  the  bank. — Fleckner  v.  Sank  of  United  States,  8  Wheat.  338. 

The  Bank  of  the  United  States,  and  every  other  bank  not  restricted  by  its  charter, 
and  also  private  bankers,  on  'discounting  notes  and  bills,  have  a  right  to  deduct  the 
legal  interest  from  the  amount  of  the  note  or  bill,  at  the  time  it  is  discounted. — Ibid. 

The  statute  incorporating  the  Bank  of  the  United  States  does  not  avoid  securities 
on  which  usurious  interest  may  have  been  taken,  and  the  usury  cannot  be  set  up  as  a 
defence  to  a  note  on  which  it  is  taken.  It  is  merely  a  violation  of  the  charter,  for 
which  a  remedy  may  be  applied  by  the  Government. — Ibid. 

The  circuit  courts  of  the  United  States  have  jurisdiction  of  suits  brought  by  the 
Bank  of  the  United  States  against  a  bank  incorporated  by  a  statute  of  a  State,  and  of 
which  the  State  is  itself  a  stockholder,  together  with  private  individuals  who  are  citi- 
zens of  the  same  State  with  some  of  the  stockholders  of  the  Bank  of  the  United  States. 
Bank  of  United  States  v.  Planters'  Bank  of  Georgia,  9  Wheat.  104. 

The  Bank  of  the  United  States  may  sue  in  the  Circuit  Courts  as  endorsee  or  bearer 
of  a  promissory  note,  although  the  original  payee  or  endorser  could  not  sue  in  those 
courts,  being  a  citizen  of  the  same  State  with  defendant;  such  a  case  is  not  within  the 
llth  section  of  the  judiciary  act  of  September  24,  1789,  c.  20,  (2  Bior.  56,)  which  was 
merely  a  limitation  on  the  jurisdiction  conferred  by  that  act. — Ibid, 

In  a  suit  brought  by  the  Bank  of  the  United  States  upon  a  bond  given  to  the  bank 
to  secure  the  faithful  performance  of  the  official  duties  of  a  cashier,  evidence  of  the 
execution  of  the  bond,  and  of  its  approval  by  the  board  of  directors,  (according  to  the 
rules  and  regulations  contained  in'the  charter  of  the  bank)  is  admissible,  notwithstand- 
ing there  was  no  record  of  such  approval,  and  the  plaintiff  may  prove  the  fact  of  such 
approval  by  the  board,  by  presumptive  evidence,  in  the  same  manner  as  such  fact 
might  be  proved  in  the  case  of  private  persons,  not  acting  as  a  corporation  or  as  the 
agents  of  a  corporation. — Bank  of  United  States  v.  Dandrige  et  al.  12  Wheat.  64. 

Where,  in  such  case,  the  cashier  is  duly  appointed  and  permitted  to  act  in  his  office 
for  a  long  time,  under  the  sanction  of  the  directors,  it  is  not  necessary  that  his  official 
bond  should  be  accepted  by  the  board  of  directors  as  satisfactory,  according  to  the 
terms  of  the  charter,  in  order  to  enable  him  to  enter  legally  on  the  duties  of  his  office, 
or  to  make  his  securities  responsible  for  the  non-performance  of  those  duties;  the  char- 
ter and  by-laws  are  to  be  considered  in  this  respect  as  directory  to  the  board,  and  not 
as  conditions  precedent. — Ibid. 


APPENDIX. 


BY  the  original  plan  of  the  present  work,  the  editors  did  not  design  taextend 
their  researches,  in  point  of  time,  beyond  the  10th  of  April,  1816,  when  the 
i'xi>ting  charter  of  tha  United  States'  Bank  was  approved.  To  that  period 
they  have  endeavored,  in  the  body  of  the  work,  to  give  the  entire  proceedings 
and  debates  of  Congress,  as  minutely  as  their  sources  of  information  would 
permit. 

Without  professing  to  aim  at  the  same  accuracy  of  detail,  in  regard  to  sub- 
sequent proceedings,  they  insetted  such  of  them  as  seemed  most  prominent 
and  important;  such  as  the  report  of  the  committee  specially  appointed  to 
examine  the  books  of  ihe  bank  at  Philadelphia,  and  the  two  reports  on  the 
currency,  made  in  the  year  1830,  Sic.  With  a  view,  however,  to  render  the 
work  more  complete,  and  more  permanently  useful,  the  editors  have  thought 
it  advisable  to  insert,  in  an  appendix,  such  other  proceedings  of  Congress, 
.since  the  enactment-  of  the  charier,  as  seemed  to  indicate  the  views  of  that 
body,  in  regard  to  the  character  and  operations  of  the  institution.  The  charter 
though  diffused  as  widely  us  the  laws  of  the  Union,  is  also  inserted. 


CONTENTS  OF  THE  APPENDIX 


Sank  Charter  of  1816,  -  -  801-811 

Memorial,  by  the  Bank,  presented,  811 

Sill,  in  the  House,  to  amend  the  charter,  812 

Sill,  in  the  Senate,  812 
Report,  of  Committee  of  Ways  and  Means,  on  the  power  of  the  Bank  to 

receive  public  debt  in  pledge  for  loans  of  money,  &c.  813 
Resolution,  (Mr.  Spencer's)  as  amended,  for  an  examination  of  bank 

books,  &c.  -  813 
Bill,  reported  by  Mr.  Spencer  to  regulate  the  right  of  voting1  foy  direc- 
tors, -  .  814 
Memorials  in  favor  of  the  Bank,  presented,  from  Boston  and  New  York,  814-815 
Act,  regulating  the  right  of  voting  for  directors,  &c.  ...  815-816 
Resolution,  by  Mr.  Spencer,  asking  information  as  to  the  state  of  the  bank, 

1st  March,  1819,  817 

Memorial,  by  the  bank,  soliciting  amendments  to  its  charter,  -  817 
Sill,  in  Senate,  to  authorize  the  appointment  of  an  agent  and  register  to 

sign  bills  and  notes,  -  820 
Mr.  Smith,  of  South  Carolina,  calls  for  information,  in  regard  to  frauds  by 

officers  of  the  bank,  &c.  822 

Ohio  Proceedings,  in  regard  to  the  bank,  822 

Resolution,  by  Mr.  Colden,  respecting  usury,  -  823 

Report,  on  the  subject  of  usury  by  the  bank,  -  -  823 
Mr.  A.  Smith's  resolution  for  limiting  the  issue  of  notes  by  the  bank,  in 

proportion  to  the  amount  of  specie,  -  823 
On  the  tenure  of  offices  by  directors,  &c.  -  824-825 

Charleston  Memorial,  respecting  the  bank,  825 

Report  of  Committee,  upon  that,  and  the  bank  memorial,  826 
Mr.  P.  P.  Sarbour's  resolution,  for  the  sale  of  bank  stock  held  by  the 

United  States,  -  -  831 

Renewal  of  charter  0/1816,  application  for,  and  bill,  -  832 


CHARTER  OF  1816. 


vi?n  act  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States, 

A  Bank  of  the  United  States,  with  a  capital  of  35,000,000. 
Be  it  enacted  by  the  Senate,  and  Howe  of  Representatives  of  the  United 
Slates  of  America  in  Congress  assembled,  That  a  Bank  of  the  United  States 
of  America  shall  be  established,  with  a  capital  of  thirty  five  millions  of  dol- 
lars, divided  into  three  hundred  and  fifty  thousand  shares,  of  one  hundred 
dollars  each  share.  Seventy  thousand  shares,  amounting  to  the  sum  of  seven 
millions  of  dollars,  part  of  the  capital  of  the  said  bank,  shall  be  subscribed 
and  paid  for  by  the  United  States,  in  the  manner  hereinafter  specified;  and 
two  hundred  and  eighty  thousand  shares,  amounting  to  the  sum  of  twenty- 
eight  millions  of  dollars,  shall  be  subscribed  and  paid  for  by  individuals,  com- 
panies, or  corporations,  in  the  manner  hereinafter  specified. 

Places,  &c.  for  receiving  subscriptions. 

SEC.  2.  tfndbc.it  further  enacted,  That  subscriptions  for  the  sum  of  twenty- 
eight  millions  of  dollars,  towards  constituting  the  capital  of  the  said  bank, 
shall  be  opened  on  the  first  Monday  in  July  next,  at  the  following  places, 
that  is  to  say:  at  Portland,  in  the  District  of  Maine;  at  Portsmouth,  in  the 
State  of  New  Hampshire;  at  Boston,  in  the  State  of  Massachusetts;  at  Provi- 
dence, in  the  State  of  Rhode  Island;  at  Middletown,  in  the  State  of  Connec- 
ticut; at  Burlington,  in  the  State  of  Vermont;  at  New  York,  in  the  State  of 
New  York;  at  New  Brunswick,  in  the  State  of  New  Jersey;  at  Philadelphia, 
in  the  State  of  Pennsylvania;  at  Wilmington,  in  the  State  of  Delaware;  at 
Baltimore,  in  the  State  of  Maryland;  at  Richmond,  in  the  State  of  Virginia; 
at  Lexington,  in  the  State  of  Kentucky;  at  Cincinnati,  in  the  State  of  Ohio; 
at  Raleigh,  in  the  State  of  North  Carolina;  at  Nashville,  in  the  State  of  Ten* 
nessee;  at  Charleston,  in  the  State  of  South  Carolina;  at  Augusta,  in  the 
State  of  Georgia;  at  Ne\v  Orleans,  in  the  State  of  Louisiana;  and  at  Wash- 
ington, in  the  District  of  Columbia.    And  the  said  subscriptions  shall  be 
opened  under  the  superintendence  of  five  commissioners  at  Philadelphia,  and 
of  three  commissioners  at  each  of  the  other  places  aforesaid,  to  be  appointed 
by  the  President  of  the  United  States,  who  is  hereby  authorized  to  make 
such  appointments,  and  shall  continue  open  every  day,  from  the  time  of  open-- 
ing the  same,  between  the  hours  of  ten  o'clock  in  the  forenoon  and  four 
o'clock  in  the  afternoon,  for  the  term  of  twenty  days,  exclusive  of  Sundays, 
when  the  same  shall  be  closed,  and  immediately  thereafter  the  commissioners, 
or  any  two  of  them,  at  the  respective  places  aforesaid,  shall  cause  two  tran- 
scripts or  copies  of  such  subscriptions  to  be  made,  one  of  which  they  shall 
send  to  the  Secretary  of  the  Treasury,  one  they  shall  retain,  and  the  original 
they  shall  transmit,  within  seven  days  from  the  closing  of  the  subscriptions  as 
aforesaid,  to  the  commissioners  at  Philadelphia  aforesaid.  And  on  the  receipt 
of  the  said  original  subscriptions,  or  of  either  of  the  said  copies  thereof,  if  the 
original  be   lost,  mislaid,  or  detained,  the  commissioners  at  Philadelphia 
aforesaid,  or  a  majority  of  them,  shall  immediately  thereafter  convene,  and 
proceed  to  take  an  account  of  the  said  subscriptions.    And  if  more  than  the 
amount  of  twenty-eight  millions  of  dollars  shall  have  been  subscribed,  then 
the  said  last  mentioned  commissioners  shall  deduct  the  amount  of  such  excess 
from  the  largest  subscriptions,  in  such  manner  as  that  no  subscription  shall  be 
reduced  in  amount,  while  any  one  remains  larger:  Provided,  That,  if  the 
subscriptions  taken  at  either  of  the  places  aforesaid  shall  not  exceed  three 
thousand  shares,  there  shall  be  no  reduction  of  such  subscriptions,  nor  shall, 
in  any  case,  the  subscriptions  taken  at  either  of  the  places  aforesaid,  be  re- 
duced below  that  amount.     And  in  case  the  aggregate  amount  of  the  said  sub- 
scriptions shall  exceed  twenty-eight  millions  ofuollars,  the  said  last  mentioned 
commissioners,  after  having  apportioned  the  same  as  aforesaid,  shall  cause 
lists  of  the  said  apportioned  subscriptions  to  be  made  out.  including,  in  each 


802  APPENDIX. 

list  the  apportioned  subscription  for  the  place  where  the  original  subscription 
was  made,  one  of  which  lists  they  shall  transmit  to  the  commissioners,  or  one 
of  them,  under  whose  superintendence  such  subscriptions  were  originally 
made,  that  the  subscribers  may  thereby  ascertain  the  number  of  shares  to 
them  respectively  apportioned  us  aforesaid.  And  in  case  the  aggregate  amount 
of  the  said  subscriptions,  made  during  (he  period  aforesaid,  at  alt  the  places 
aforesaid,  shall  not  amount  to  twenty-eight  millions  of  dollars,  the  subscrip- 
tions to  complete  the  said  sum  shall  be  and  remain  open  at  Philadelphia  afore- 
said, under  the  superintendence  of  the  commissioners  appointed  for  that 
place;  and  the  subscriptions  may  be  then  made  by  any  individual,  company, 
or  corporation,  for  any  number  of  shares,  not  exceeding,  in  the  whole,  the 
amount  required  to  complete  the  said  sum  of  twenty-eight  millions  of  dollars. 

Regulations  concerning-  subscriptions,  and  payments  on  them,  &c. 

SEC.  SK  Jind  be  it  further  enacted.  That  it  shall  be  lawful  for  any  individual, 
company,  corporation,  or  State,  when  the  subscriptions  shall  be  opened  as 
herein  before  directed,  to  subscribe  for  any  number  of  shares  of  the  capital  of 
the  said  bank,  not  exceeding  three  thousand  shares,  arid  the  sums  so  subscribed 
shall  be  payable,  and  paid,  in  the  manner  following,  that  is  to  say:  seven  mil- 
lions of  dollars  thereof  in  gold  or  silver  coin  of  the  United  States,  or  in  gold 
coin  of  Spain,  or  the  dominions  of  Spain,  at  the  rate  of  one  hundred  cents  for 
every  twenty-eight  grains  and  sixty -hundredths  of  a  grain  of  the  actual  weight 
thereof,  or  in  other  foreign  gold  or  silver  coin,  at  the  several  rates  prescribed 
by  the  first  section  of  an  act  regulating  the  currency  of  foreign  coins  in  the 
United  States,  passed  tenth  day  of  April,  one  thousand  eight  hundred  and 
six,  and  twenty-one  millions  of  dollars  thereof  in  like  gold  or  silver  coin, 
or  in  the  funded  debt  of  the  United  States,  contracted  at  the  time  of  the  sub- 
scriptions, respectively.  And  the  payments  made  in  the  funded  debt  of  the 
United  States,  shall  be  paid  and  received  at  the  following  rates,  that  is  to  sav: 
the  funded  debt  bearing  an  interest  of  six  per  centum  per  annum,  at  the 
nominal  or  par  value  thereof;  the  funded  debt  bearing  an  interest  of  three  per 
centum  per  annum,  at  the  rate  of  sixty-five  dollars  for  every  sum  of  one  hun- 
dred dollars  of  the  nominal  amount  thereof;  and  the  funded  debt  bearing  an 
interest  of  seven  per  centum  per  annum,  at  the  rate  of  one  hundred  and  six 
dollars  and  fifty-one  cents,  for  every  sum  of  one  hundred  dollars  of  the  nomi- 
nal amount  thereof;  together  with  the  amount  of  the  interest  accrued  on  the 
said  several  denominations  of  funded  debt;  to  be  computed  and  allowed  to 
the  time  of  subscribing  the  same  to  the  capital  of  the  said  bank  as  aforesaid. 
And  the  payments  of  the  said  subscriptions  shall  be  made  and  completed  by 
the  subscribers,  respectively,  at  the  times,  and  in  the  manner  following,  that 
is  to  say:  at  the  time  of  subscribing  there  shall  be  paid  five  dollars  on  each 
share,  in  gold  or  silver  coin  as  aforesaid,  and  twenty -five  dollars  more  in  coin 
as  aforesaid,  or  in  funded  debt  as  aforesaid;  at  the  expiration  of  six  calendar 
months  after  the  time  of  subscribing,  there  shall  be  paid  the  further  sum  of 
ten  dollars  on  each  share,  in  gold  or  silver  coins,  as  aforesaid,  and  twenty  - 
five  dollars  more  in  coin  as  aforesaic1,  or  in  funded  debt  as  aforesaid;  at 
the  expiration  of  tvyelve  calendar  months  from  the  time  of  subscribing,  there 
shall  be  paid  the  further  sum  of  ten  dollars  on  each  share,  in  gold  or  silver 
coin  as  aforesaid,  and  twenty-five  dollars  more  in  coin  as  aforesaid,  or  in 
funded  debt  as  aforesaid. 

SEC.  4.  And  be  it  further  enacted,  That,  at  the  time  of  subscribing  to  the 
capital  of  the  said  bank  as  aforesaid,  each  and  every  subscriber  shall  deliver 
to  the  commissioners,  at  the  place  of  subscribing,  as  well  the  amount  of  their 
subscriptions,  respectively,  in  coin  as  aforesaid,  as  the  certificates  of  funded 
debt,  for  the  funded  debt  proportions  of  their  respective  subscriptions,  together 
with  a  power  of  attorney,  authorizing  the  said  commmissioners,  or  a  majority 
of  them,  to  transfer  the  said  stock,  indue  form  of  law-,  ta"the  president, 
directors,  and  company,  of  the  Bank  of  the  United  States,"  as  soon  as  the 
said  bank  shall  be  organized:  Provided,  always,  That  if,  in  consequence  of 
the  apportionment  of  the  shares  in  the  capital  of  the  said  bank  among  the  sub- 


CHARTER  OF  1816.  303 

scribers.  in  the  case,  and  in  the  manner  herein  before  provided,  any  subscri- 
ber shall  have  delivered  to  the  commissioners,  at  the  time  of  subscribing,  a 
greater  amount  of  gold  or  silver  coin  and  funded  debt  than  shall  be  .necessary 
to  complete  the  payments  for  the  share  or  shares  to  such  subscribers,  appor- 
tioned as  aforesaid,  the  commissioners  shall  only  retain  so  much  of  the  said 
gold  or  silver  coin  and  funded  debt  as  shall  be  necesssary  to  complete 
such  payments,  and  shall,  forthwith,  return  the  surplus  thereof,  on  appli- 
cation for  the  same  to  the  subscribers  lawfully  entitled  thereto.  And  the 
commissioners,  respectively,  shall  deposite  the  gold  and  silver  coin,  and  cer- 
tificates of  public  aebt,  by  them  respectively;  received  as  aforesaid,  from  the 
subscribers  to  the  capital  of  the  said  bunk,  in  rsome  place  of  secure  and  safe 
keeping,  so  that  the  same  may  and  shall  be  specifically  delivered  and  trans- 
ferred, as  the  same  were  by  them  respectively  received,  to  the  president, 
directors,  and  company,  of  the  Bank  of  the  United  States,  or  to  their  order, 
as  soon  as  shall  be  required  after  the  organization  of  the  said  bank.  Ana 
the  said  commissioners  appointed  to  superintend  the  subscriptions  to  the 
capital  of  the  said  bank  as  aforesaid,  shall  receive  a  reasonable  compensation 
for  their  services,  respectively,  and  shall  be  allowed  all  reasonable  charges 
and  expenses  incurred  in  the  execution  of  their  trust,  to  be  paid  by  the  presi- 
dent, directors,  and  company,  of  the  bank,  out  of  the  funds  thereof. 

The  United  States  may  redeem  the  funded  debt,  &c.  and  the  bank  may  sell  for  gold 

ami  silver,  &c. 

SEC.  5.  Jlml  be  it  further  enacted,  That  it  shall  be  lawful  for  the  United 
States  to  pay  and  redeem  the  funded  debt  subscribed  to  the  capital  of  the 
said  bank,  at  the  rates  aforesaid,  in  such  sums,  and  at  such  times,  as  shall  be 
deemed  expedient,  any  thing  in  any  act  or  acts  of  Congress  to  the  contrary 
thereof  notwithstanding.  And  it  shall  also  be  lawful  for  the  president,  di- 
rectors, and  company,  of  the  said  bank,  to  sell  and  transfer,  for  gold  and  silver 
coin,  or  bullion,  the  funded  debt  subscribed  to  the  capital  of  the  said  bank  as 
aforesaid:  Provided,  always,  That  they  shall  not  sell  more  thereof  than  the 
sum  of  two  millions  of  dollars  in  any  one  year;  nor  sell  any  part  thereof  at 
any  tinie,  within  the  United  States,  without  previously  giving  notice  of  their 
intention  to  the  Secretary  of  tin/  Treasury,  and  offering  the  same  to  the 
United  States  for  the  period  of  fifteen  days,  at  least,  at  the  current  price,  not 
exceeding  the  rates  aforesaid. 

The  Secretary  of  the  Treasury  to  subscribe  on  behalf  of  the  United  Slates,  &.c. 

SEC.  G.  And  be  it  further  enacted,  That,  at  the  opening  of  subscription  to 
the  capital  stock  of  the  said  bank,  the  Secreiary  ot  the  Treasury  shall  sub- 
scribe, or  cause  to  be  subscribed,  on  behalf  of  the  United  States,  the  said 
number  of  seventy  thousand  shares,  amounting  to  seven  millions  of  dollars  as 
aforesaid,  to  be  paid  in  gold  or  silver  coin,  or  in  stock  of  the  United  States, 
bearing  interest  at  the  rate  of  five  per  centum  per  annum;  and  if  payment 
thereof,  or  of  any  part  thereof,  be  made  in  public  stock,  bearing  interest  as 
aforesaid,  the  said  interest  shall  be  payable  quarterly,  to  commence  from  the 
time  of  making  such  payment  on  account  of  the  said  subscription,  and  the 
principal  of  the  said  stock  shall  be  redeemable  in  any  sums,  and  at  any  pe- 
riods, which  the  Government  shall  deem  fir.  And  the  Secretary  of  the  Trea- 
sury shall  cause  the  certificates  of  such  public  stock  to  be  prepared,  and  made 
in  the  usual  form,  and  shall  pay  and  deliver  the  same  to  the  president,  direc- 
tors, and  company,  of  the  said  bank,  on  the  first  day  of  January,  one  thousand 
eight  hundred  and  seventeen,  which  said  stock  it  shall  be  lawful  for  the  said 
president,  directors,  and  company,  to  sell  and  transfer  for  gold  and  silver 
coin  or  bullion,  at  their  discretion:  Provided,  They  shall  not  sell  more  than 
two  millions  of  dollars  thereof  in  any  one  year. 

The  subscribers  to  the  bank  incorporated,  Sec.  their  name  and  style. 
SEC.  7.  find  be  it  further  enacted,  That  the  subscribers  to  the  said  Bank  of 


8,04  APPENDIX. 

the  United  States  of  America,  their  successors  and  assigns,  shall  be,  and  are 
hereby,  created  a  corporation  and  body  politic,  by  the  name  and  style  of 
44  The  president,  directors,  and  company,  of  the  Bank  of  the  United  States," 
and  shall  so  continue  until  the  third  day  of  March,  in  the  year  one  thousand 
eight  hundred  and  thirty-six,  and  by  that  name  shall  be,  and  are  hereby,  made 
able  and  capable,  in  Law,  to  have,  purchase,  receive,  possess,  enjoy,  and  re- 
tain, to  them  and  their  successors,  lands,  rents,  tenements,  hereditaments, 
goods,  chattels,  and  effects,  of  whatsoever  kind,  nature,  and  quality,  to  an 
amount  not  exceeding,  in  the  whole,  fifty-five  millions  of  dollars,  including 
the  amount  of  the  capital  stock  aforesaid;  and  the  same  to  sell,  grant,  demise, 
alien  or  dispose  of;  to  sue  and  be  sued,  plead  and  be  impleaded,  answer  and 
be  answered,  defend  and  be  defended,  in  all  State  courts  having  competent 
jurisdiction,  and  in  any  circuit  court  of  the  United  States:  and  also  to  make, 
have,  and  use,  a  common  seal,  and  the  same  to  break,  alter,  and  renew,  at 
their  pleasure;  and  also  to  ordain,  establish,  and  put  in  execution,  such  by- 
laws, and  ordinances,  and  regulations,  as  they  shall  deem  necessary  and  con- 
venient for  the  government  ot  the  said  corporation,  not  being  contrary  to  the 
constitution  thereof,  or  to  the  laws  of  the  United  States;  and  generally  to  do 
and  execute  all  and  singular  the  acts,  matters,  and  things,  which  to  them  it 
shall  or  may  appertain  to  do;  subject,  nevertheless,  to  the  rules,  regulations, 
restrictions,  limitations,  and  provisions,  hereinafter  prescribed  and  declared. 

Twenty -five  directors — five  to  be  appointed  by  the  President,  &c. 

SEC.  8.  Jlnd  be  it  further  enacted,  That,  for  the  management  of  the  affairs 
of  the  said  corporation,  there  shall  be  twenty -five  directors,  five  of  whom, 
being  stockholders,  shall  be  annually  appointed  by  the  President  of  the  Unit- 
ed States,  by,  and  with,  the  advice  and  consent  of  the  Senate,  not  more  than 
three  of  whom  shall  be  residents  of  any  one  State;  and  twenty  of  whom  shall 
be  annually  elected  at  the  banking  house  in  the  city  of  Philadelphia,  on  the 
first  Monday  of  January,  in  each  year,  by  the  qualified  stockholders  of  the 
capital  of  the  said  bank,  other  than  the  United  States,  and  by  a  plurality  of 
votes  then  and  there  actually  given,  according  to  the  scale  of  voting  herein- 
after prescribed:  Provided,  always,  That  no  person,  being  a  director  in  the 
Bank  of  the  United  States,  or  any  of  its  branches,  shall  be  a  director  of  any 
other  bank;  and  should  any  such  director  act  as  a  director  in  any  other 
bank, it  shall  forthwith  vacate  his  appointment  in  the  direction  of  the  Bank 
of  the  United  States.  And  the  directors,  so  duly  appointed  and  elected, 
shall  be  capable  of  serving,  by  virtue  of  such  appointment  and  choice,  from 
the  first  Monday  in  the  month  of  January  of  each  year,  until  the  end  and  ex- 
piration of  the  first  Monday  in  the  month  of  January  of  the  year  next  ensuing 
the  time  of  each  annual  election  to  be  held  by  the  stockholders  as  aforesaid. 
And  the  Board  of  Directors,  annually,  at  their  first  meeting  after  their  elec- 
tion in  each  and  every  year,  shall  proceed  to  elect  one  of  the  directors  to  be 
president  of  the  corporation,  who  shall  hold  the  said  office  during  the  same 
period  for  which  the  directors  are  appointed  and  elected  as  aforesaid:  Pro- 
vided, also,  That  the  first  appointment  and  election  of  the  directors  and  pre- 
sident of  the  said  bank  shall  be  at  the  time  and  for  the  period  hereinafter 
declared:  Jlnd  provided,  also,  That,  in  case  it  should  at  any  time  happen  that 
an  appointment  or  election  of  directors,  or  an  election  of  the  president  of  the 
said  bank,  should  not  be  so  made  as  to  take  effect  on  any  day  when,  in  pur- 
suance of  this  act,  they  ought  to  take  effect,  the  said  corporation  shall  not, 
for  that  cause,  be  deemed  to  be  dissolved;  but  it  shall  be  lawful  at  any  other 
time  to  make  such  appointments,  and  to  hold  such  elections,  (as  the  case 
may  be)  and  the  manner  of  holding  the  elections  shall  be  regulated  by  the 
by-laws  and  ordinances  of  the  said  corporation:  and  until  such  appointments 
or  elections  be  made,  the  directors  and  president  of  the  said  bank,  for  the 
time  being,  shall  continue  in  office:  Jlnd  provided,  also,  That  in  case  of  the 
death,  resignation,  or  removal,  of  the  president  of  the  said  corporation,  the 
directors  shall  proceed  to  elect  another  president  from  the  directors  as  afore- 
said;  and  in  case  of  the  death,  resignation,  or  absence  from  the  United 


CHARTER  OF   1816. 

States,  or  removal  of  a  director  from  office,  the  vacancy  shall  be  supplied  by 
the  President  of  the  United  States,  or  by  the  stockholders,  as  the  case  may 
be.  But  the  President  of  the  United  States  alone  shall  have  power  to  remove 
any  of  the  directors  appointed  by  him  as  aforesaid. 

Manner  and  time  of  the  bank's  going1  into  operation,  8tc. 

SEC.  9.  Jindbe  it  further  enacted,  That,  as  soon  as  the  sum  of  eight  millions 
four  hundred  thousand  dollars,  in  gold  and  silver  coin  and  in  the  public  debt, 
shall  have  been  actually  received  on  account  of  the  subscriptions  to  the  capital 
of  the  said  bank,  (exclusively  of  the  subscription  aforesaid,  on  the  part  of  the 
United  States)  notice  thereof  shall  be  given  by  the  persons  under  whose  super- 
intendence the  subscriptions  shall  have  been  made  at  the  city  of  Philadelphia, 
in  at  least  two  newspapers  printed  in  each  of  the  places,  (if  so  many  be  print- 
ed in  such  places,  respectively)  where  subscriptions  shall  have  been  made, 
and  the  said  persons  shall,  at  the  same  time,  ana  in  like  manner,  notify  a  time 
and  place,  within  the  said  city  of  Philadelphia,  at  the  distance  of  at  least  thir- 
ty days  from  the  time  of  such  notification,  for  proceeding  to  the  election  of 
twenty  directors  as  aforesaid,  and  it  shall  be  lawful  for  such  election  to  be  then 
and  there  made.  And  the  President  of  the  United  States  is  hereby  authoriz- 
ed, during  the  present  session  of  Congress,  to  nominate,  and,  by  and  with  the 
advice  and  consent  of  the  Senate,  to  appoint,  live  directors  ot  the  said  bank, 
though  not  stockholders,  any  thing  in  the  provisions  of  this  act  to  the  contrary 
notwithstanding;  and  the  persons  who  shall  be  elected  and  appointed  as  afore- 
said, shall  be  the  first  directors  of  the  said  bank,  and  shall  proceed  to  elect 
one  of  the  directors  to  be  president  of  the  said  bank;  and  the  directors  and 
president  of  the  said  bank,  so  appointed  and  elected  as  aforesaid,  shall  be  ca- 
pable of  serving  in  their  respective  office,  by  virtue  thereof,  until  the  end  and 
expiration  of  the  first  Monday  of  the  month  of  January  next  ensuing  the  said 
appointments  and  elections;  and  they  shall  then  and  thenceforth  commence 
and  continue  the  operations  of  the  said  bank,  at  the  city  of  Philadelphia. 

The  directors  empowered  to  appoint  officers,  clerks,  servants,  &c. 

SEC.  10.  And  be  it  further  enacted,  That  the  directors,  for  the  time  being, 
shall  have  power  to  appoint  such  officers,  clerks,  and  servants  under  them, 
as  shall  be  necessary  for  executing  the  business  of  the  said  corporation,  and 
to  allow  them  such  compensation  for  their  services,  respectively,  as  shall  be 
reasonable;  and  shall  be  capable  of  exercising  such  other  powers  and  authori- 
ties for  the  well  governing  and  ordering  of  the  officers  of  me  said  corporation, 
as  shall  be  prescribed,  fixed,  and  determined,  by  the  laws,  regulations,  ana 
ordinances,  of  the  same. 

Fundamental  articles,   &c. 

SEC.  11.  And  be  it  further  enacted,  That  the  following  rules,  restrictions, 
limitations,  and  provisions,  shall  form  and  be  fundamental  articles  of  the  con- 
stitution 01  the  said  corporation,  to  wit: 

Rules  concerning  voting  for  directors. 

First.  The  number  of  votes  to  which  the  stockholders  shall  be  entitled,  in  vot- 
ing for  directors,  shall  be  according  to  the  number  of  shares  he,  she,  or  they, 
respectively,  shall  hold,  in  the  proportions  following,  that  is  to  say:  for  one 
share  and  not  more  than  two  shares,  one  vote;  for  every  two  shares  above  two, 
and  not  exceeding  ten,  one  vote;  for  every  four  shares  above  ten,  and  not  ex- 
ceeding thirty,  one  vote;  for  every  six  shares  above  thirty,  and  not  exceeding 
sixty,  one  vote;  for  every  eight  shares  above  sixty,  and  not  exceeding  one  hun- 
dred, one  vote;  and  for  every  ten  shares  above  one  hundred,  one  vote;  but  no 
person,  copartnership,  or  body  politic,  shall  be  entitled  to  a  greater  number 
than  thirty  votes;  and,  after  the  first  election,  no  share  or  shares  shall  confer  a 
right  ot  voting,  which  shall  not  have  been  holden  three  calendar  months  pre- 


806  APPENDIX. 

yious  to  the  day  of  election.  And  stockholders  actually  resident  \vithin  the 
United  States,  and  none  other,  may  vote  in  elections  by  proxy. 

Second.  Not  more  than  three-fourths  of  the  directors  elected  by  the  stock- 
holders, and  not  more  than  four-fifths  of  the  directors  appointed  by  the  Pre- 
sident of  the  United  States,  who  shall  be  in  office  at  the  time  of  an  annual 
election,  shall  be  elected  or  appointed  for  the  next  succeeding  year;  and  no 
director  shall  hold  his  office  more  than  three  years  out  of  four  in  succession: 
but  the  director  who  shall  be  the  president  at  the  time  of  an  election  may  al- 
ways be  re-appointed,  or  re-elected,  as  the  case  may  be. 

Third.  None  but  a  stockholder,  resident  citizen  of  the  United  States, 
shall  be  a  director;  nor  shall  a  director  be  entitled  to  any  emolument;  but 
the  directors  may  make  such  compensation  to  the  president  for  his  extraordi- 
nary attendance  at  the  bank,  as  shall  appear  to  them  reasonable. 

Fourth.  Not  less  than  seven  directors  slmll  constitute  a  board  for  the  trans- 
action of  business,  of  whom  the  president  shall  ahyays  be  one,  except  in  case 
of  sickness  or  necessary  absence;  in  which  case  his  place  may  be  supplied  by 
any  other  director  whom  he,  by  writing,  under  his  hand,  shall  depute  for  that 
purpose.  And  the  director  so  deputed  may  do  and  transact  all  the  necessary 
business,  belonging  to  the  office  of  the  president  of  the- said  corporation,  du- 
ring the  continuance  of  the  sickness  or  necessary  absence  of  the  president. 

Fifth.  A  number  of  stockholders,  not  less  than  sixty,  who,  together,  shall 
be  proprietors  of  one  thousand  shares  or  upwards,  shall  have  power  at  any 
time  to  call  a  general  meeting  of  the  stockholders,  for  purposes  relative  to  the 
institution,  giving  at  least  ten  weeks'  notice,  in  tvyo  public  newspapers  of  the 
place  where  the  bank  is  seated,  and  specifying  in  such  notice  the  object  or 
objects  of  such  meeting. 

Sixth.  Each  cashier  or  treasurer,  before  he  enters  upon  the  duties  of  his 
office,  shall  be  required  to  give  bond,  with  two  or  more  sureties,  to  the  satis- 
faction of  the  directors,  in  a  sum  not  less  than  fifty  thousand  dollars,  with  a 
condition  for  his  good  behavior,  and  the  faithful  performance  of  his  duties  to 
the  corporation. 

Seventh.  The  lands,  tenements,  and  hereditaments,  which  it  shall  be  law- 
ful for  the  said  corporation  to  hold,  shall  be  only  such  as  shall  be  requisite  for 
its  immediate  accommodation  in  relation  to  the  convenient  transacting  of  its 
business,  and  such  as  shall  have  been  bonafide  mortgaged  to  it  by  way  of  se- 
curity, or  conveyed  to  it  in  satisfaction  of  debts  previously  contracted  in  the 
course  of  its  dealings,  or  purchased  at  sales,  upon  judgments  which  shall  have 
been  obtained  for  such  debts. 

Eighth.  The  total  amount  of  debts  which  the  said  corporation  shall  at  any 
time  owe,  whether  by  bond,  bill,  note,  or  other  contract,  over  and  above 
the  debt  or  debts  due  for  money  deposited  in  the  bank,  shall  not  exceed  the 
sum  of  thirty-five  millions  of  dollars,  unless  the  contracting  of  any  greater 
debt  shall  have  been  previously  authorized  by  law  of  the  United  States.  In 
case  of  excess,  the  directors  under  whose  administration  it  shall  happen,  shall 
be  liable  for  the  same  in  their  natural  and  private  capacities;  and  an  action  of  debt 
may,  in  such  a  case,  be  brought  against  them,  or  any  of  them,  their  or  any  of  their 
heirs,  executors,  or  administrators,  in  any  court  of  record  of  the  United  States, 
or  either  of  them,  by  any  creditor  or  creditors  of  the  said  corporation,  and 
may  be  prosecuted  to  judgment  and  execution;  any  condition,  covenant,  or 
agreement,  to  the  contrary  notwithstanding.  But  this  provision  shall  not  be 
construed  to  exempt  the  said  corporation,  or  the  lands,  tenements,  goods,  or 
chattels,  of  the  same,  from  being  also  liable  for,  and  chargeable  with,  the  said 
excess. 

Such  of  the  said  directors,  who  may  have  been  absent  when  the  said  excess 
was  contracted  or  created,  or  who  may  have  dissented  from  the  resolution^ 
act  whereby  the  same  was  so  contracted  or  created^  may  respectively  exonerate 
themselves  from  being  so  liable,  by  forthwith  giving  notice  of  the  tact,  and  of 
their  absence  or  dissent,  to  the  President  of  the  United  States,  and  to  the 
stockholders,  at  a  general  meeting,  which  they  shall  have  power  to  call  for 
that  purpose. 


CHARTER  OF  1816.  807 

<th.  The  said  corporation  shall  not,  directly  or  indirectly,  deal  or  trade 
in  any  thing  except  bills  of  exchange,  gold  or  silver  bullion,  or  in  the  sale  ot 
goods  really  and  truly  pledged,  for  money  lent  and  not  redeemed  in  due  time, 
or  goods  which  shall  be  the  proceeds  of  its  lands.  It  shall  not  be  at  liberty 
to  purchase  any  public  debt  whatsoever,  nor  shall  it  take  more  than  at  the 
rate  of  six  per  centum  per  annum  for  or  upon  its  loans  or  discounts. 

Tenth.  No  loan  shall  be  made  by  the  ?aid  corporation,  for  the  use  or  on  ac  - 
count  of  the  Government  of  the  United  States,  to  an  amount  exceeding  five 
hundred  thousand  dollars,  or  of  any  particular  State,  to  an  amount  excecd- 
ding  fifty  thousand  dollars,  or  of  any  foreign  Prince  or  State,  unless  previously 
authorized  by  a  law  of  the  United  States. 

Eleventh.  The  stock  of  the  said  corporation  shall  be  assignable  and  trans- 
ferable, according  to  such  rules  as  shall  be  instituted  in  that  behalf,  by  the 
laws  and  ordinances  of  the  same. 

Twelfth.  The  bills,  obligatory  and  of  credit,  under  the  seal  of  the  said  cor- 
poration, which  shall  be  made  to  any  person  or  persons,  shall  be  assignable 
by  endorsement  thereupon,  under  the  hand  or  hands  of  such  person  or  persons, 
and  his,  her,  or  their  executors  or  administrators,  and  his,  her,  or  their  assignee 
or  assignees,  and  so  as  absolutely  to  transfer  and  vest  the  property  thereof  in 
each  and  everyjassignee  or  assignees,  successively,  and  to  enable  such  assignee 
or  assignees,  and  his,  her,  or  their  executors  or  administrators,  to  maintain  an 
action  thereupon,  in  his,  her,  or  their  own  name  or  names:  Provided,  That 
said  corporation  shall  not  make  any  bill,  obligatory  or  of  credit,  or  other  obliga- 
tion, under  its  seal,  for  the  payment  of  a  sum  less  than  five  thousand  dollars.  And 
the  bills  or  notes  which  may  be  issued  by  order  of  the  said  corporation,  sign- 
ed by  the  president,  and  countersigned  by  the  principal  cashier  or  treasurer 
thereof,  promising  the  payment  of  money  to  any  person  or  persons,  his,  her, 
or  their  order,  or  to  bearer,  although  not  under  the  seal  ot  the  said  corpora- 
tion, shall  be  binding  and  obligatory  upon  the  same,  in  like  manner,  and  with 
like  force  and  effect,  as  upon  any  private  person  or  persons,  if  issued  by  him, 
her,  or  them,  in  his,  her,  or  their  private  or  natural  capacity  or  capacities,  and 
shall  be  assignable  and  negotiable  in  like  manner  as  if  they  were  so  issued  by 
such  private  person  or  persons;  tiiat  is  to  say,  those  which  shall  be  payable  to 
any  person  or  persons,  his,  her.  or  their  ordor,  shall  be  assignable  bv  endorse- 
ment, in  like  manner,  and  with  the  like  effect  as  foreign  bills  of  exchange  now 
are;  and  those  which  are  payable  to  bearer  shall  be  assignable  and  negotiable 
by  delivery  only:  Provided,  ThtA  all  bills  or  notes,  so  to  be  issued  by  said  cor- 
poration, shall  be  made  payable  on  demand,  other  than  bills  or  notes  for  the 
payment  of  a  sum  not  less  than  one  hundred  dollars  eich,  and  payable  to  the 
order  of  some  person  or  persons,  which  bills  or  notes  it  shall  be  lawful  for 
said  corporation  to  make  payable  at  any  time  not  exceeding  sixty  days  from 
the  date  thereof. 

Thirteenth.  Half  yearly  dividends  shall  be  made  of  so  much  of  the  profits 
of  the  bank  as  shall  appear  to  the  directors  advisable;  and  once  in  every  three 
years  the  directors  shall  lay  before  the  stockholders,  at  a  general  meeting,  for 
their  information,  an  exact  and  particular  statement  of  the  debts  which  shall 
have  remained  unpaid  after  the  expiration  of  the  original  credit,  for  a  period 
of  treble  the  term  of  that  credit,  and  of  the  surplus  of  the  profits,  if  any,  after 
deducting  losses  and  dividends.  If  there  shall  ba  a  failure  in  the  payment  of 
any  part  of  any  sum  subscribed  to  the  capital  of  the  said  bank,  by  any  person, 
copartnership,  or  body  politic,  the  party  failing  shall  lose  the  benefit  of  any 
dividend  which  may  have  accrued  prior  to  the  time  for  making  such  payment, 
and  during  the  delay  of  the  same. 

Fourteenth.  The  directors  of  the  said  corporation  shall  establish  a  compe- 
tent oifice  of  discount  and  deposite  in  the  District  of  Columbia,  whenever  any 
law  of  the  United  States  shall  require  such  an  establishment;  also  one  such 
office  of  discount  and  deposite  in  any  State  in  which  two  thousand  shares  shall 
have  been  subscribed  or  may  be  held,  whenever,  upon  application  of  the  Le- 
gislature of  such  State,  Congress  may,  by  law,  require  the  same:  Provided, 
The  directors  aforesaid  shall  riot  be  bound  to  establish  such  office  before  the 
b 


808  APPENDIX. 

whole  of  the  capital  of  the  bank  shall  have  been  paid  up.  And  it  shall  be  law- 
ful for  the  directors  of  the  said  corporation  to  establish  offices  of  discount  and 
deposite,  wheresoever  they  shall  think  fit,  within  the  United  States  or  the 
territories  thereof,  and  to  commit  the  management  of  the  said  offices,  and  the 
business  thereof,  respectively,  to  such  persons,  and  under  such  regulations,  as 
they  shall  deem  proper,  not  being  contrary  to  law  or  the  constitution  of  the 
bank.  Or,  instead  of  establishing  such  offices,  it  shall  be  lawful  for  the  direc- 
tors of  the  said  corporation,  from  time  to  time,  to  employ  any  other  bank  or 
banks,  to  be  first  approved  by  the  Secretary  of  the  Treasury,  at  any  place  or 
places  that  they  may  deem  safe  and  proper,  to  manage  and  transact  the  busi- 
ness proposed  as  aforesaid,  other  than  for  the  purposes  ot  discount,  to  be  man- 
aged and  transacted  by  such  offices,  under  such  agreements,  and  subject  to 
such  regulations,  as  they  shall  deem  just  and  proper.  Not  more  than  thir- 
teen, nor  less  than  seven  managers  or  directors,  of  every  office  established  as 
aforesaid,  shall  ba  annually  appointed  by  the  directors  of  the  bank,  to  serve 
one  year;  they  shall  choose  a  president  from  their  own  number;  each  of  them 
shall  be  a  citizen  of  the  United  States?  and  a  resident  of  the  State,  territory, 
or  district,  wherein  such  office  is  established;  and  not  more  than  three- fourths 
of  the  said  managers  or  directors,  in  office  at  the  time  of  an  annual  appoint- 
ment, shall  be  re-appointed  for  the  next  succeeding  year;  and  no  director 
shall  hold  his  office  more  than  three  years  out  of  four,  in  succession;  but  the 
president  may  be  always  re-appointed. 

Fifteenth.  The  officer  at  the  head  of  the  Treasury  Department  of  the 
United  States  shall  be  furnished,  from  time  to  time,  as  often  as  he  may  re- 
quire, not  exceeding  once  a  week,  with  statements  of  the  amount  of  the  capi- 
tal stock  of  the  said  corporation,  and  of  the  debts  due  to  the  same;  of  the 
moneys  deposited  therein;  of  the  notes  in  circulation,  and  of  the  specie  in 
hand;  and  shall  have  a  right  to  inspect  such  general  accounts  in  the  books  of 
the  bank  as  shall  relate  to  the  said  statement:  Provided,  That  this  shall  not 
be  construed  to  imply  a  right  of  inspecting  the  account  of  any  private  indi- 
vidual or  individuals  with  the  bank. 

Sixteenth.  No  stockholder,  unless  he  be  a  citizen  of  the  United  States, 
shall  vote  in  the  choice  of  directors. 

Seventeenth.    No  note  shall  be  issued  of  less  amount  than  five  dollars. 

Penalties  for  dealing1  in  a  way  or  in  articles  interdicted. 

SEC.  12.  And  be  it  further  enacted,  That,  if  the  said  corporation,  or  any 
person  or  persons,  for,  or  to  the  use  of  the  same,  shall  deal  or  trade  in  buying 
or  selling  goods,  wares,  merchandise,  or  commodities,  whatsoever,  contrary  to 
the  provisions  of  this  act,  all  and  every  person  and  persons  by  whom  any 
order  or  direction  for  so  dealing  or  trading  shall  have  been  given,  and  all  and 
every  person  and  persons  who  shall  have  been  concerned  as  parties  or  agents 
therein,  shall  forfeit  and  lose  treble  the  value  of  the  goods,  wares,  merchan- 
dise, and  commodities,  in  which  such  dealing  and  trade  shall  have  been,  one- 
half  thereof  to  the  use  of  the  informer,  and  the  other  half  thereof  to  the  use  of 
the  United  States,  to  be  recovered  in  any  action  of  law,  with  costs  of  suit. 

Penalties  for  making  unlawful  loans  to  the  United  States  or  particular  States,  or  to 

foreign  Governments. 

SEC.  13.  And  be  it  further  enacted,  That,  if  the  said  corporation  shall  ad- 
vance or  lend  any  sum  of  money  for  the  use  or  on  account  of  the  Government 
of  the  United  States,  to  an  amount  exceeding  five  hundred  thousand  dollars; 
or  of  any  particular  State,  to  an  amount  exceeding  fifty  thousand  dollars;  or 
of  any  foreign  Prince  or  State,  (unless  previously  authorized  thereto  by  a  law 
of  the  United  States)  all  and  every  person  and  persons,  by  and  with  whose 
order,  agreement,  consent,  approbation,  and  connivance,  such  unlawful  ad- 
vance or  loan  shall  have  been  made,  upon  conviction  thereof,  shall  forfeit  and 
pay,  for  every  such  offence,  treble  the  Vxilue  or  amount  of  the  sum  or  sums 
which  have  been  so  unlawfully  advanced  or  lent;  one-fifth  thereof  to  the  use 
of  the  informer,  and  the  residue  thereof  to  the  use  of  the  United  States. 


CHARTER  OF   1816.  $09 

Notes  of  the  hank,  unless  specially  prohibited  by  la\v,  receivable  in  payments  of  all 

dues  to  the  United  States. 

SEC.  II.  And  be  it  further  enacted,  That  the  bills  or  notes  of  the  said  cor- 
poration, originally  made  payable,  or  which  shall  have  become  payable  on  de- 
mand, shall  be  receivable  in  all  payments  to  the  United  States,  unless  other- 
wise directed  by  act  of  Congress. 

The  bank  to  give  the  necessary  facilities,  \vitlioutany  charge,  for  transferring  the  funds 
of  the  United  States  to  different  quarters. 

SEC.  1 '».  .  I iid  be.  it  further  enacted*  That,  during  the  continuance  of  this 
act,  and  whenever  required  by  the  Secretary  of  tlfe  Treasury,  the  said  cor- 
poration slu'.U  give  the  necessary  facilities  for  transferring  the  public  funds 
from  place  to  place,  within  the  United  States,  or  the  territories  thereof,  and 
fur  distributing  the  same  in  payment  of  the  public  creditors,  without  charging 
commissions  or  claiming  allowance  on  account  of  difference  of  exchange,  and 
>hall  also  do  and  perform  the  several  and  respective  duties  of  the  commis- 
sioners of  loans  for  the  several  States,  or  of  any  one  or  more  of  them,  when- 
ever required  by  law. 

Deposite*  of  the  public  moneys  to  be  made  in  the  bank  or  its  branches,  or  the  reasons 
to  be  laid  before  Congress  by  the  Secretary  of  the  Treasury  for  its  not  being  done. 

Si:-,  .  It;.  ,llnd  be  it  further  enacted*  That  the  deposites  of  the  money  of  the 
rniud  States,  in  places  in  which  the  said  bank  and  branches  thereof  may  be 
I'stablished,  shall  be  made  in  said  bank,  or  branches  thereof,  unless  the  Secre- 
tary of  the  Treasury  shall  at  any  time  otherwise  order  and  direct;  in  which 
lie  Secretary  of  the  Treasury  shall  immediately  lay  before  Congress,  if 
in  session,  and  if  not,  immediately  after  the  commencement  of  the  next  ses- 
sion, the  reasons  of  such  order  or  direction. 

Corporation  prohibited  from  suspending  payments  in  specie,  by  being  made  charge- 
able with  the  payment  of  interest  at  the  rate  of  12  per  centum  per  annum. 

.  !?.  ,indbe  it  further  enacted*  That  the  said  corporation  shall  not,  at 
any  time,  suspend  or  relusv  payment  in  gold  and  silver,  of  any  of  its  notes, 
bills,  or  obligations:  nor  of  any  moneys  received  upon  deposite  in  said  bank, 
or  in  any  of  its  ofiices  of  discount  and  deposite.  And,  if  the  said  corporation 
shall,  at  any  time,  refuse,  or  neglect  to  pay,  on  demand,  any  bill,  note,  or  obli- 
gation, issued  by  the  corporation,  according  to  the  contract,  promise,  or  under- 
taking, therein  expressed;  or  shall  neglect,  or  refuse  to  pay.  on  demand,  any 
moneys  received  in  said  bank,  or  in  any  of  its  offices  aforesaid,  on  deposite, 
to  the*  person  or  persons  entitled  to  receive  the  same,  then,  and  in  every  such 
case,  me  holder  of  any  such  note,  bill,  or  obligation,  or  the  person  or  persons 
entitled  to  demand  and  receive  such  moneys  as  aforesaid,  shall,  respectively, 
be  entitled  to  receive  and  recover  interest  on  the  said  bills,  notes,  obligations, 
or  moneys,  until  the  same  shall  be  fully  paid  and  satisfied,  at  the  rate  of  twelve 
per  centum  per  annum,  from  the  time  of  such  demand  as  aforesaicj:  Provided, 
That  Congress  may,  at  any  time  hereafter,  enact  laws  enforcing  and  regulating 
the  recovery  of  the  amount  of  the  notes,  bills,  obligations,  or  other  debts,  of 
which  payment  shall  have  been  refused  as  aforesaid,  with  the  rate  of  interest 
above  mentioned,  vesting  jurisdiction  for  that  purpose  in  any  courts,  either  of 
law  or  equity,  of  the  courts  of  the  United  States,  or  territories  thereof,  or  of 
the  several  States,  as  they  may  deem  expedient. 

Penalties  for  forgoing,  counterfeiting-,  See. 

SEC.  18.  Ami  be  it  further  enacted*  That,  if  any  person  shall  falsely  make, 
forge,  or  counterfeit,  or  cause  or  procure  to  be  falsely  made,  forged,  or  coun- 


check,  on  the  said  bank  or  corporation,  or  any  cashier  thereof;  or  shall  falsely 


810  APPENDIX. 

alter,  or  cause  or  procure  to  be  falsely  altered,  or  willingly  aid  or  assist  in  false- 
ly altering,  any  bill  or  note,  issued  by  order  of  the  president,  directors,  and 
company,  of  the  said  bank,  or  any  order  or  check  on  the  said  bank  or  corpo- 
ration, or  any  cashier  thereof;  or  shall  pass,  utter,  or  publish,  or  attempt  to 
pass,  utter,  or  publish,  as  true,  any  false,  forged,  or  counterfeited  bill  or  note, 
purporting  to  be  a  bill  or  note  issued  by  order  of  the  president,  directors,  and 
company,  of  the  said  bank,  or  any  false,  forged,  or  counterfeited  order  or 
check  upon  the  said  bank,  or  corporation,  or  any  cashier  thereof,  knowing  the 
same  to  be  falsely  forged,  or  counterfeited;  or  shall  pass,  utter,  or  publish, 
or  attempt  to  pass,  utter,  or  publish,  as  true,  any  falsely  altered  bill  or  note, 
issued  by  order  of  the  president,  directors,  and.  company,  of  the  said  bank, 
or  any  falsely  uttered  order  or  check  on  the  said  bank  or  corporation,  or 
any  cashier  thereof,  knowing  the  same  to  be  falsely  altered,  with  inten- 
tion to  defraud  the  said  corporation,  or  any  other  body  politic,  or  person;  or 
shall  sell,  utter,  or  deliver,  or  cause  to  be  sold,  uttered,  or  delivered,  any 
forged  or  counterfeit  note,  or  bill  in  imitation,  or  purporting  to  be,  a  bill  or 
note,  issued  by  order  of  the  president  and  directors  ot  the  said  bank,  know- 
ing the  same  to  be  false,  forged,  or  counterfeited;  every  such  person  shall  be 
deemed  "and  adjudged  guilty  of  felony,  and  being  thereof  convicted  by  due 
course  of  law,  shall  be  sentenced  to  be  imprisoned,  and  kept  to  hard  labor, 
for  not  less  than  three  years,  nor  more  than  ten  years,  or  shall  be  imprisoned 
not  exceeding  ten  years,  and  fined  not  exceeding  five  thousand  dollars:  Provi- 
ded, That  nothing  herein  contained  shall  be  construed  to  deprive  the  courts 
of  the  individual  States  of  jurisdiction,  under  the  laws  of  the  several  States, 
over  any^offence  declared  punishable  by  this  act. 

Penalties  fo£  engraving,    after  the  similitude  of  the  plates  used  for  the  bank,  any 

plates,  &c. 

SEC.  19.  Jlnd  be  it  further  enacted,  That,  if  any  person  shall  make  or  en- 
grave, or  cause  or  procure  to  be  made  or  engraved,  or  shall  have  in  his  cus- 
tody or  possession,  any  metallic  plate,  engraved  after  the  similitude  of  any 
plate  from  which  any  notes  or  bills,  issued  by  the  said  corporation,  shall  have 
been  printed,  with  intent  to  use  such  plate,  or  to  cause  or  suffer  the  same  to 
be  used  in  forging  or  counterfeiting  any  of  the  notes  or  bills  issued  by  the  said 
corporation;  or  shall  have  in  his  custody  or  possession,  any  blank  note  or 
notes,  bill  or  bills,  engraved  and  printed  after  the  similitude  of  any  notes  or 
bills  issued  by  said  corporation,  with  intent  to  use  such  blanks,  or  cause  or 
suffer  the  same  to  be  used  in  forging  or  counterfeiting  any  of  the  notes  or  bills 
issued  by  the  said  corporation;  or  shall  have  in  his  custody  or  possession,  any 
paper  adapted  to  the  making  of  bank  notes  or  bills,  and  similar  to  the  paper 
upon  which  any  notes  or  bills  of  the  said  corporation  shall  have  been  issued, 
with  intent  to  use  such  paper,  or  cause  or  suffer  the  same  to  be  used  in  forging 
or  counterfeiting  any  of  the  notes  or  bills  issued  by  the  said  corporation,  every 
such  person,  being  thereof  convicted,  by  due  course  of  law,  shall  be  sentenced 
to  be  imprisoned,  and  kept  to  hard  labor,  for  a  term  not  exceeding  five  years; 
or  shall  be  imprisoned  for  a  term  not  exceeding  five  years,  and  fined  in  a 
sum  not  exceeding  one  thousand  dollars. 

Bonus  to  be  paid  to  the  United  States  for  this  charter. 

SEC.  20.  And  be  it  further  enacted,  That,  in  consideration  of  the  exclusive 
privileges  and  benefits  conferred  by  this  act,  upon  the  said  bank,  the  presi- 
dent, directors,  and  company  thereof,  shall  pay  to  the  United  States,  out  of 
the  corporate  funds  thereof,  the  sum  of  one  million  and  five  hundred  thou- 
sand dollars,  in  three  equal  payments,  that  is  to  say:  five  hundred  thousand 
dollars  at  the  expiration  of  two  years;  five  hundred  thousand  dollars  at  the 
expiration  of  three  years;  and  five  hundred  thousand  dollars  at  the  expiration 
of  four  years  after  the  said  bank  shall  be  organized,  and  commence  its  opera- 
tions, in  the  manner  herein  before  provided. 


CHARTER  OF   1816. 

Congress  to  establish  no  other  banks  except  in  the  District  of  Columbia,  &c. 

>EC.  21.  And  be  it  further  enacted,  That  no  other  bank  shall  be  established 
by  any  future  law  of  the  United  States,  during  the  continuance  of  the  corpo- 
ration hereby  created,  for  which  the  mith  of  the  United  States  is  hereby 
pledged:  Provided,  Congress  may  renew  existing  charters  for  banks  in  the 
District  of  Columbia,  not  increasing  the  capital  thereof,  and  may  also  esta- 
blish any  other  bank  or  banks  in  said  district,  with  capitals  not  exceeding,  in 
the  whole,  six  millions  of  dollars,  if  they  shall  deem  it  expedient.  And, 
notwithstanding  the  expiration  of  the  term  for  which  the  said  corporation  is 
created,  it  shall  be  lawful  to  use  the  corporate  name,  style,  and  capacity,  for 
the  purpose  of  suits  for  the  final  settlement  and  liquidation  of  the  affairs  and 
accounts  of  the  corporation,  and  for  the  sale  and  disposition  of  their  estate, 
real,  personal,  and  mixed;  but  not  for  any  other  purpose,  or  in  any  other 
manner  whatsoever,  nor  for  a  period  exceeding  two  years  after  the  expiration 
of  the  said  term  of  incorporation. 

Limitation  of  time  prescribed  for  this  bank's  going  into  operation. 
SEC.  22.  And  be  it  further  enacted,  That,  if  the  subscription  and  payments 
to  said  bank  shall  not  be  made  and  completed  so  as  to  enable  the  same  to 
commence  its  operations,  or  if  the  said  bank  shall  not  commence  its  operations, 
on  or  before  the  first  Monday  in  April  next,  then,  and  in  that  case,  Congress 
may,  at  any  time,  within  twelve  months  thereafter,  declare,  by  law,  this  act 
null  and  void. 

Committees  of  either  House  of  Congress  may  inspect  the  books,  &.c.  of  the  bank. 

SEC.  23.  Jlnd  be  it  further  enacted,  That  it  shall,  at  all  times,  be  lawful  for 
a  committee  of  either  House  of  Congress,  appointed  for  that  purpose,  to  in- 
spect the  books,  and  to  examine  into  the  proceedings  of  the  corporation 
hereby  created,  and  to  report  whether  the  provisions  of  this  charter  have  been 
by  the  same  violated  or  not;  and  whenever  any  committee,  as  aforesaid,  shall 
find  and  report,  or  the  President  of  the  United  States  shall  have  reason  to 
believe,  that  the  charter  has  been  violated,  it  may  be  lawful  for  Congress  to 
direct,  or  the  President  to  order  a  scire  facias  to  be  sued  out  of  the  circuit 
court  of  the  district  of  Pennsylvania,  in  the  name  of  the  United  States,  (which 
shall  be  executed  upon  the  president  of  the  corporation  for  the  time  beinz,  at 
least  fifteen  days  before  the  commencement  of  the  term  of  said  court)  calling 
on  the  said  corporation  to  show  cause  wherefore  the  charter  hereby  granted, 
shall  not  be  declared  forfeited;  and  it  shall  be  lawful  for  the  said  court,  upon 
the  return  of  the  said  scire  facias,  to  examine  into  the  truth  of  the  alleged 
violation;  and  if  such  violation  be  made  appear,  then  to  pronounce  and  ad- 
judge that  the  said  charter  is  forfeited  and  annulled:  Provided,  however, 
Every  issue  of  fact  which  may  be  joined  between  the  United  States  and  the  . 
corporation  aforesaid,  shall  be  tried  by  jury.  And  it  shall  be  lawful  for  the 
court  aforesaid  to  require  the  production  of  such  of  the  books  of  the  corpora- 
tion as  it  may  deem  necessary  for  the  ascertainment  of  the  controverted  facts; 
and  the  final  judgment  of  the  court  aforesaid  shall  be  examinable  in  the 
Supreme  Court  of  the  United  States,  by  writ  of  error,  and  may  be  there  re- 
versed or  affirmed,  according  to  the  usages  of  law. 
Approved:  April  10,  1816. 

HOUSE  OF  REPRESENTATIVES.  January  13,  1818. 

The  Speaker  presented  a  memorial  from  the  President  and  Directors  of  the 
Bank  ot  the  United  States,  praying  that  their  act  of  incorporation  may  be 
so  amended  as  to  authorize  the  president  and  cashier  of  its  several  offices 
of  discount  and  deposite  to  sign  and  countersign  the  notes  to  be  issued  at 
said  offices;  which  was  referred  to  a  select  committee,  consisting  of  Mr.  Ser- 


APPENDIX, 

geant,  Mr.  Smith,  of  Md.,  Mr.  Tallinadge,  Mr.  Robertson,  of  Kentucky,  and 
Mr.  Ten-ill. 

JANUARY  '20,  1818. 
Mr.  SERGEANT,  from  said  committee,  reported  the  following  bill: 

A  BILL  to  amend  the  act,  entitled  "An  act  to  incorporate  the  subscribers  to  the  Bank 

of  the  United  States." 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
Stales  of  America  in  Congress  assembled,  That  the  president,  directors,  and 
company,  of  the  Bank  of  the  United  States,  be,  and  they  are  hereby,  author- 
ized to  dispense  with  the  signatures  of  the  president  and  principal  cashier  of 
the  Bank  of  the  United  States,  to  all  such  bills  or  notes  as  may  be  issued 
from  the  respective  offices  of  discount  and  deposite,  which  are  now,  or  may 
hereafter  be,  established,  by  the  directors  of  the  said  corporation,  according  to 
law;  and  that  it  shall  be  lawful  for  the  said  corporation  to  authorize  the  pre- 
sidents of  the  said  offices,  respectively,  to  sign,  and  the  respective  cashiers 
thereof  to  countersign,  all  such  bills  or  notes  as  aforesaid;  which  said  bills  or 
notes,  so  signed  and  countersigned,  shall  be  binding  and  obligatory  upon  the 
said  corporation,  in  like  manner,  and  to  all  intents  and  purposes,  as  fully  and 
effectually  as  the  bills  or  notes  which  have  been,  or  may  hereafter  be,  signed 
by  the  president,  and  countersigned  by  the  principal  cashier  of  the  said  bank, 
agreeably  to  the  provisions  ot  the  act  of  incorporation:  Provided,  That 
nothing  herein  contained  shall  be  construed  to  invalidate  or  impair  the  obli- 
gation and  legal  effect  of  any  bill  or  note,  signed  by  the  president,  and  coun- 
tersigned by  the  principal  cashier  of  the  said  corporation,  although  the  same 
may  nerealterbe  issued  from  any  office  of  discount  and  deposite  of  the  said 
corporation,  established  according  to  law. 

SEC.  2.  And  be  it  further  enacted,  That  so  much  of  the  act,  entitled  "An 
act  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States,  passed  on 
the  tenth  day  of  April,  one  thousand  eight  hundred  and  sixteen,  as  is  herein 
altered  or  supplied,  and  no  more,  be,  and  the  same  is  hereby,  repealed. 

There  was  no  further  action  on  said  bill. 


Ix  SENATE,  January  13,  1818. 

A  copy  of  the  same  memorial  was  presented  in  the  Senate,  and  referred  to 
the  Committee  on  Finance,  consisting  of  Mr.  Campbell,  Mr.  Eppes,  Mr. 
King,  Mr.  Talbot,  and  Mr.  Macon. 

On  the  9th  of  April,  Mr.  CAMPBELL  reported  the  following  bill,  excepting 
the.  proviso,  which  was  added  thereto,  as  an  amendment: 

A  BILL  in  addition  to   "An  act  to  incorporate  the  subscribers  to  the  Bank  of  the 

United  States." 

Be  it  enacted,  $c.  That  bills  or  notes  which  may  be  issued  by  order  of 
"the  President,  Directors,  and  Company,  of  the  Bank  of  the  United  States," 
in  pursuance  of  the  twelfth  rule  of  the  eleventh  section  of  the  act  incorporat- 
ing the  same,  and  signed  by  an  assistant  president,  and  assistant  cashier,  who 
shall  have  been  appointed  by  the  directors  of  the  said  corporation,  for  the  spe- 
cial service  of  signing  such  bills  and  notes,  shall  be  binding  and  obligatory 
upon  the  same,  in  like  manner,  and  with  like  force  and  effect,  as  if  the  same 
were  signed  by  the  president,  and  countersigned  by  the  principal  cashier  or 
treasurer  thereof.  Provided,  always,  That  only  one  such"assistant  president, 
and  assistant  cashier,  and,  in  case  of  death,  resignation,  or  removal  from 
office,  their  successors,  respectively,  be  so  appointed,  for  the  special  purpose 
aforesaid. 

This  bill  passed  the  Senate,  but  was  indefinitely  postponed  in  the  House, 


RESOLUTIONS,  &c. 

HOUSE  OF  REPRESENTATIVES,  February  4,  1818. 

On  motion  of  Mr.  FORSYTII, 

*4  Resolved,  That  the  Committee  of  Ways  and  Means  be  instructed  to  in- 
quire whether  the  Bank  of  the  United  States  is  authorized  by  its  charter,  to 
receive  as  pledge,  or  security,  for  loans  made  to  individuals,  or  corporations, 
a  transfer  of  the  public  debt  made  to  the  bank,  or  to  any  officer  thereof;  and 
if,  in  their  opinion,  such  transfers  are  not  authorized  by  the  act  of  incorpora- 
tion, to  report  to  the  House  some  effectual  mode  of  preventing  them  from  be- 
ing Hereafter  made." 

On  the  12th  of  March,  Mr.  LOWXDES,  from  said  committee,  made  the  fol- 
lowing report;  which  was  read,  and  laid  on  the  table: 
The  Committee  of  Ways  and  Means,  to  whom  has  been  referred  a  resolution 

of  the  4th  of  February,  directing  an  inquiry  into  the  legality  of  transfers  of 

public  debt,  made  to  the  Bank  of  the  United  States,  to  secure  the  payment 

of  loans  made  to  them,  report: 

That  they  do  not  perceive  in  the  words  or  principles  of  the  law  incorpo- 
rating the  bank,  any  reason  to  object  to  the  practice  which  they  understand  to 
prevail,  of  admitting  as  a  substitute  for  personal  security,  that  which  results 
from  a  deposite  of  stock,  with  a  power  to  sell  it,  when  it  may  be  necessary  to 
enforce  payment  of  the  debt.  If  the  object  of  the  law,  in  limiting  the  articles 
in  which  the  bank  may  trade,  be  to  secure  to  the  mercantile  community  the 
facilities  which  a  large  banking  capital  should  offer,  this  practice  will  conform 
to  such  a  design.  If  the  object  be  (although  this  is  not  probable)  to  prevent 
the  competition  of  the  bank  in  the  purchase  of  stock,  and  its  consequent  en- 
hancement in  price,  although  the  practice  may  prevent  the  necessity  of  some 
sales,  this  beneficent  effect,  which  may  sometimes  instigate  commercial  dis- 
tress, cannot  be  objected  toby  a  just  and  humane  Government.  Nor  can  it 
be  objected  to  the  practice  in  question,  that  it  may  enable  the  bank  to  throw 
into  the  market  a  quantity  of  stock,  which  would  depress  its  value,  since  this 
would  be  to  injure  the  bank  as  well  as  the  Government,  and  since  itimplies 
an  absolute  power  to  dispose  of  the  property,  while  the  power  of  the  bank  is 
considered  as  contingent  and  temporary. 

On  the  whole,  the  committee  dp  not  understand  the  practice  to  be  one 
which  gives  to  the  bank  an  interest  in  the  price  of  stock,  or  an  opportunity  of 
speculating  in  its  rise  or  fall.  It  is  substantially  a  security,  which  may  be 
promptly  enforced,  useful  to  the  merchant  whose  loans  it  facilitates,  and  to 
the  bank  whose  debts  it  secures. 


NOVEMBER  30,  1818. 
Ban 

[See  the  original  resolution,  page  714,  ante.] 


Mr.  Spencer's  Resolution  for  an  examination  of  the  Bank  of  Philadelphia, 

as  amended. 


On  motion  of  Mr.  M'LANE,  the  said  resolution  was  amended,  by  striking 
out  all.thereof,  from  the  words  "violated  or  not,"  in  the  third  line,  until  the 
end  of  the  sentence  terminating  with  the  words  "  since  its  organization." — 
On  motion  of  Mr.  LOWNDES,  the  words  "  to  report  thereon"  were  inserted 
after  the  words  "  United  States,"  where  they  first  occur. 

Mr.  BARBOUR  moved  further  to  amend,  by  striking  out  the  following  words: 
"  that  the  said  committee  have  leave  to  meet  in  the  city  of  Philadelphia,  and 
to  remain  there  as  long  as  may  be  necessary." 

Which  was  disagreed  to:  ayes  34,  noes  115. 

The  resolution,  as  amended,  was  agreed  to  in  the  following  words: 

Resolved,  That  a  committee  be  appointed  to  inspect  the  books  and  examine 
into  the  proceedings  of  the  Bank  of  the  United  States;  to  report  thereon,  and 
to  report  whether  the  provisions  of  its  charter  have  been  violated  or  not; 
that  the  said  committee  have  leave  to  meet  in  the  city  of  Philadelphia,  and  to 


314  APPENDIX. 

remain  there  as  long  as  may  be  necessary;  that  they  shall  have  power  to  send 
tor  persons  and  papers,  and  to  employ  the  requisite  clerks,  the  expense  of 
which  shall  be  audited  and  allowed  by  the  committee  of  accounts,  and  paid 
out  of  the  contingent  fund  of  this  House.* 

JANUARY  16,  1818. 

Mr.  SPENCER  made  a  detailed  report,  seepage  714,  ante. 

On  the  same  day,  Mr.  SPENCER,  from  the  same  committee,  reported  the 
following  bill: 

A  BILL  to  enforce  those  provisions  of  the  act,  entitled  "An  act  to  incorporate  the  sub- 
scribers to  the  Bank  of  the  United  States,"  which  relate  to  the  right  of  voting  for 
directors. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That,  in  all  elections  of  directors 
of  the  Bank  of  the  United  States,  hereafter  to  be  held,  under,  and  by  virtue 
of,  the  "Act  to  incorporate  the  subscribers  to  the  Bank  of  the  United  States," 
whenever  any  person  shall  offer  to  the  judges  of  such  election  more  than  thir- 
ty votes  in  the  whole,  including  those  offered  in  his  own  right,  and  those 
offered  by  him  as  attorney,  proxy,  or  agent  for  any  others,  the  said  judges  of 
the  elections,  or  any  one  of  them,  are  hereby  authorized  and  required  to  ad- 
minister to  the  said  person,  so  offering  to  vote,  the  following  oath  or  affirmation, 
viz: 

I, ; ,  do  solemnly  swear,  (or  affirm,  as  the  case  my  be)  that  I 

have  no  interest,  directly  or  indirectly,  in  the  shares  upon  which  I  shall  vote 
:it  this  election,  as  attorney  for  others;  that  those  shares  are,  to  the  best  of  my 
knowledge  and  belief,  truly  and  in  good  faith,  owned  by  the  persons  in  whose 
names  they  now  stand;  and  that,  in  voting  at  this  election,  I  shall  not,  in  any 
manner,  violate  the  first  fundamental  article  of  the  "Act  to  incorporate  the 
subscribers  to  the  Bank  of  the  United  States."  And  the  said  judges  of  elec- 
tions, or  any  one  of  them,  shall  be  authorized  and  empowered,  in  their  discre- 
tion, or  at  the  instance  of  any  stockholder  of  the  bank,  to  administer  the 
said  oath  or  affirmation  to  any  person  offering  to  vote  at  any  such  election. 
And,  if  any  person  shall  wilfully  and  absolutely  swear  or  affirm  falsely,  in. 
taking  the  said  oath  or  affirmation,  such  person,  so  offending,  shall,  upon  due 
conviction  thereof,  be  subject  to  the  painsand  penalties  which  are  bylaw  pre- 
scribed for  the  punishment  of  wilful  aud  corrupt  perjury. 

SEC.  2.  Jind  be  it  further  enacted,  That,  if  the  judges  of  any  election  of 
directors,  to  be  held  as  aforesaid,  shall  permit  any  person  to  give  more  than 
thirty  votes  in  the  whole,  at  any  such  election,  without  the  said  person's  ha- 
ving taken  the  aforesaid  oath  or  affirmation,  such  of  the  said  judges  as  shall 
consent  thereto,  shall  severally  be  deemed  guilty  of  a  misdemeanor,  and,  on 

due  conviction  thereof,  shall  be  subject  to  a  fine,  not  exceeding ,  or  to 

imprisonment  not  exceeding  ,  at  the  discretion  of  the  court  before 

which  such  conviction  shall  be  had. 

FEBRUARY  9, 1818. 
Mr.  JOHNSON,  of  Virginia,  submitted  the  following  resolution: 

Resolved,  That  the  Committee  on  the  Judiciary  be  instructed  to  report  a 
bill  to  repeal  the  act,  entitled  "An  act  to  incorporate  the  subscribers  to  the. 
Bank  of  the  United  States,"  approved  April  10,  1816.  Said  resolution  was 
read,  and,  together  with  those  offered  previously,  by  Mr.  Spencer  and  Mr. 
Trimble,  were  committed  to  a  committee  of  the  whole  on  the  state  of  the 
Union. 

On  the  same  day,  Mr.  MASON,  of  Massachusetts,  presented  a  memorial, 
signed  by  sundry  stockholders/^'  the  bank,  residing  in  Boston  and  its  vicinity, 
representing  their  full  confidence  in  the  said  institution,  and  expressing  their 

*  [For  the  debate  on  this   resolution,    see  National  Intelligencer  of  1st  December, 

1818.] 


BILL  TO  REGULATE  VOTING.  815 

hope  that  no  measures  would  be  adopted,  calculated  in  any  manner  to  weaken 
or  destroy  that  confidence;  which  was  laid  on  the  table. 

On  the  15th  of  February,  a  similar  memorial  was  ^presented  by  Mr.  WEN- 
DOVER,  from  stockholders  residing  in  the  city  of  New  York,  which  was  re- 
ferred to  a  committee  of  the  whole  on  the  state  of  the  Union. 

FEBRUARY  24,   1819. 

Mr.  SMITH,  of  Maryland,  from  the  committee  of  the  whole  on  the  state  of 
the  Union,  reported  their  disagreement  to  the  resolutions  offered  by  Mr.  John- 
son and  Mr.  Trimble  [see  page  732,  and  734  ante']  and  reported  the  fore- 
going bill  with  amendments: 

Whereupon,  Mr.  SPENCER  moved  to  lay  the  whole  report  on  the  table. 

Mr.  HARRISON  called  for  a  division  of  the  question,  so  as  to  except  from  its 
effects  so  much  of  the  said  report  as  relates  to  the  foregoing  resolutions.  On 
which  the  House  adjourned. 

FEBRUARY  25,  1819. 

Mr.  SPEXCER  withdrew  his  motion,  and  the  House  affirmed  the  report  of 
the  committee  of  the  whole,  as  heretofore  stated. 

Whereupon,  the  House  proceeded  to  consider  the  aforesaid  bill  and  amend- 
ments. 

Mr.  STORRS  moved  to  lay  the  bill  and  amendments  on  the  table;  which  mo- 
tion was  rejected. 

A  motion  was  then  made  by  Mr.  PINDALL,  to  refer  the  said  bill  to  the  Com- 
mittee on  the  Judiciary,  with  instructions  to  amend  the  same  by  additional 
sections,  as  follows,  to  wit: 

1.  To  prohibit  the  offence  of  usury,  and  to  declare  the  punishment  thereof, 
when  committed  by  the  Bank  ot  the  United  States,  or  its  branches,  or  by  the 
directors,  officers,  or  agents  thereof,  whilst  employed  for,  or  on  behalf  of,  the 
bank;  and  to  prescribe  the  mode  of  prosecution  for  such  offence. 

2.  To  prohibit  the  establishment  or  continuance,  by  the  said  bank,  of  any 
office  of  discount  or  deposite.  in  any  State,  after  the  first  day  of  February, 
1820,  unless  by  the  consent  or  the  Legislature  of  such  State. 

Whereupon,  Mr.  HARRISON  moved  to  postpone  the  bill  indefinitely,  which 
motion  being  rejected,  the  question  was  taken  on  Mr.  PINDALL'S  motion,  and 
decided  in  the  negative. 

Mr.  SPENCER  moved  to  amend  the  first  amendment  of  the  committee  o^ 
the  whole,  and  Mr.  BALDWIN  moved  that  the  bill  be  postponed  indefinitely. 

Several  ineffectual  attempts  were,  afterwards,  made  to  amend  the  said  bill* 
and  another  motion  was  made,  by  Mr.  HARRISON,  to  postpone  it  indefinitely* 
which  being  rejected,  Mr.  JOHNSON,  of  Virginia,  moved  to  add  to  the  bill  a 
fourth  section,  (see  4th  section  of  the  act  hereafter)  which  was  agreed  to: 
Yeas  98,  Nays  26. 

Mr.  POINDEXTER  moved  to  add  to  the  said  bill  the  following:  "That  this 
act  shall  commence  and  be  in  force  when  the  same  shall  have  been  assented 
to  by  a  majority  of  the  stockholders  of  the  Bank  of  the  United  States;"  which 
being  rejected,  the  bill  was  ordered  to  be  engrossed  for  a  third  reading:  Ayes, 
93,  Noes,  38.  And,  on  the  following  day,  26th  February,  1819,  was  passed, 
and  without  amendment  in  the  Senate,  became  a  law,  as  follows: 

AN  ACT  to  enforce  those  provisions  of  the  act,  entitled  "  An  act  to  incorporate  the 
subscribers  to  the  Bank  of  the  United  States,"  which  relate  to  the  right  of  voting1 
for  directors,  and  for  other  purposes. 

SEC.  1.  Beit  enacted,  fyc.  That,  in  all  elections  of  directors  of  the  Bank 
of  the  United  States,  hereafter  to  be  held  under,  and  by  virtue  of,  the  "  Act 
to  incorporate  the  subscribers  to  the  Bank  of  the  United  States,"  whenever 
any  person  shall  offer  to  the  judges  of  such  election  more  than  thirty  votes, 
in  the  whole,  including  those  offered  in  his  own  right,  and  those  offered  by 
c 


816  APPENDIX. 

him  as  attorney,  proxy,  or  agent,  for  any  others,  the  said  judges  of  the  elec- 
tions, or  any  one  of  them,  are  hereby  authorized  and  required  to  administer 
to  the  said  person,  so  offering  to  vote,  the  following  oath  or  affirmation,  viz: 

I* ,  do  solemnly  swear  (or  affirm,  as  the  case  may  be.)  that  I  have  no 

interest,  directly  or  indirectly,  in  the  shares  upon  which  I  shall  vote  at  this 
election,  as  attorney  for  ol  tiers;  that  those  shares  are,  to  the  best  of  my 
knowledge  and  belief,  truly,  and  in  good  faith,  owned  by  the  per  sons  in  whose 
names  they  now  stand;  and  that,  in  voting  at  this  election,  I  shall  not,  in  any 
manner,  violate  the  first  fundamental  article  of  the  "  tfct  to  incorporate  the 
subscribers  to  the  Bank  of  the  United  States."  And  the  said  judges  of  elec- 
tions, or  any  one  of  them,  shall  be  authorized  and  empowered,  in  their  dis- 
cretion, or  at  the  instance  of  any  stockholder  of  the  bank,  to  administer  the 
said  oath  or  affirmation  to  any  person  offering  to  vote  at  any  such  election, 

SEC.  2.  That  no  person  shall  be  entitled  to  vote  at  any  such  election,  as 
attorney,  proxy,  or  agent,  for  any  other  person,  copartnership,  or  body  politic, 
without  a  power,  for  that  purpose,  being  duly  executed,  in  the  presence  of  a 
•witness,  and  filed  in  the  bank,  and  on  which  power  shall  be  endorsed  the  oath 
or  affirmation  of  the  person,  or  one  of  the  copartners,  or  of  the  head,  or  some 
of  the  officers,  of  the  body  politic  granting  such  power,  in  the  words  follow- 
ing: "7, ,  do  solemly  swear  (or  affirm,  as  the  case  may  be,)  that  I  am, 

(or  that  the  copartnership,  consisting  of  myself  and ,  are,  or  that  the  cor- 
poration known  by  the  name  of—,  is,  as  the  case  may  be,)  truly,  and  in 
in  good  faith,  the  owner,  (or  the  owners,  as  the  case  may  be,)  of  the  shares 
in  the  capital  stock  of  the  Bank  of  the  United  States,  specified  in  the  within 
power  of  attorney,  and  of  no  otfier  shares;  that  no  other  person  has  any  in- 
terest in  the  said  shares,  directly  or  indirectly,  except  as  stated  in  the  said 
j)ower,  and  that  no  other  power  has  been  given  to  any  person,  which  is  now 
in  force,  to  vote  for  me,  (or  for  the  copartnership  aforesaid,  or  for  the  body 
politic  aforesaid,  as  the  case  maybe)  at  any  election  of  directors  of  the  said 
bank;"  which  oath  or  affirmation  may  be  taken  before  a  notary  public,  judge, 
or  justice  of  the  peace,  and  shall  be  certified  by  him. 

SEC.  3.  That,  if  the  judges  of  any  election  of  directors,  to  be  held  as  afore- 
said, shall  permit  any  person  to  give  more  than  thirty  votes,  in  the  whole,  at 
any  such  election,  without  the  said  person's  having  taken  the  aforesaid  oath 
or  affirmation,  or  shall  suffer  any  person  whatever  to  vote  as  attorney,  agent,, 
or  proxy,  for  any  other  person,  or  for  any  copartnership,  or  body  politic,  with- 
out a  power  for  that  purpose,  as  prescribed  in  the  foregoing  section,  with  the 
oath  or  affirmation  and  certificate  aforesaid;  such  of  the  said  judges  as  shall 
consent  thereto,  shall  severally  be  deemed  guilty  of  a  misdemeanor,  and,  on 
due  conviction  thereof,  shall  be  subject  to  a  fine  not  exceeding  two  thousand 
dollars,  or  to  imprisonment  not  exceeding  one  year,  at  the  discretion  of  the 
court  before  which  such  conviction  shall  be  had.  And  if  any  person  shall 
wilfully  and  absolutely  swear  or  affirm  falsely,  in  taking  any  oath  or  affirma- 
tion prescribed  by  this  act,  such  person,  so  offending,  shall,  upon  due  con- 
viction thereof,  be  subject  to  the  pains  and  penalties  which  are,  by  law,  pre- 
scribed for  the  punishment  of  wilful  and  corrupt  perjury. 

SEC.  4.  That,  if  any  person  shall,  directly  or  indirectly,  give  any  sum  or 
sums  of  money,  or  any  other  bribe,  present,  or  reward,  or  any  promise,  con- 
tract, obligation,  or  security,  for  the  payment  or  delivery  of  any  money,  pre- 
sent, or  reward,  or  any  thing  to  obtain  or  procure  the  opinion,  vote,  or  inte- 
rest, of  the  president  of  the  Bank  of  the  United  States,  or  either  of  the 
directors  thereof,  or  the  president  or  a  director  of  either  of  the  branches  of  the 
said  bank,  in  any  election,  question,  matter,  or  thing,  which  shall. come  before 
the  said  president  and  directors  for  decision,  in  relation  to  the  interest  and 
management  of  the  business  of  the  said  bank,  and  shall  be  thereof  convicted ; 
such  person  or  persons,  so  giving,  promising,  contracting,  or  securing  to  be 
given,  paid,  or  delivered,  any  sum  or  sums  of  money,  present,  reward,  or 
other  bribe  as  aforesaid,  and  the  president  or  director  who  shall,  in  any  wise, 
accept  or  receive  the  same,  on  conviction  thereof,  shall  be  fined  and  impri- 
soned at  tKe  discretion  of  the  court,  and  shall  forever  be  disqualified  to  hold 


BANK  MEMORIAL 


February  26,  1819. 

On  motion  of  Mr.  SPENCER,  the  committee  of  the  whole  on  the  state  of  the 
Union,  was  discharged  from  the  further  consideration  of  his  resolution,  and  it 
was  laid  on  the  table.  [See  the  resolution,  page  732,  ante.'} 

MARCH  1,  1819. 
Mr.  Spencer  a  Resolution,  asking  hiformation  respecting  the  condition  of  the 

Bank. 
On  motion  of  MV.  SPENCER, 

4i  Resolved,  That  the  Secretary  of  the  Treasury  be  requested  to  transmit  to 
Congress,  at  an  early  period  of  the  next  session,  a  general  statement  of  the 
conclition  of  the  Bank  of  the  United  States,  and  its  offices,  similar  to  the  re- 
turns made  to  him  by  the  bank;  and  a  statement  exhibiting,  as  nearly  as  may 
be  practicable,  the  amount  of  capital  invested  in  the  different  chartered  banks 
in  the  several  States,  and  in  the  District  of  Columbia:  the  amount  of  notes 
issued  by  those  banks,  and  in  circulation;  the  public  and  private  deposites  in 
them;  the  amount  of  loans  and  discounts  made  by  them,  and  remaining  un- 
paid; and  the  total  quantity  of  specie  they  possess;  and  that  he  be  requested 
also,  to  report  such  measures,  as  in  his  opinion  may  be  expedient,  to  procure 
and  retain  a  sufficient  quantity  of  gold  and  silver  coin  in  the  United  States, 
or  to  supply  a  circulating  medium  in  place  of  specie,  adapted  to  the  exigen- 
cies of  the  country,  and  within  the  power  of  the  Government." 

On  the  24th  of  February,  1820,  the  Secretary  of  the  Treasury,  (WILLIAM 
H.  CRAWFORD,)  made  an  elaborate  reply  to  this  call,  furnishing,  at  great 
length,  the  information  required.  His  letter  may  be  found  among  the  Ex- 
ecutive Papers,  Vol.6,  of  the  1st  session  of  the  16th  Congress,  Document 
No.  86. 

HOUSE  OF  REPRESENTATIVES,  December  13,  1820. 

Mr.  SERGEANT  presented  the  following  memorial,  which  was  referred  to  a 
select  committee,  consisting  of  Mr.  Sergeant,  Mr.  Whitman,  Mr.  Tyler, 
Mr.  Gorham,  and  Mr.  Karelin. 

No  report  was  made  thereon. 

A  similar  memorial  was  presented  in  the  Senate.     It  is  as  follows: 

To  the  Honorable  the  Speaker  and  members  of  the  House  of  Representatives 
of  the  United  States. 

The  Memorial  of  the  President  and  Directors  of  the  Bank  of  the  United 
States,  on  the  part  of  the  stockholders  of  the  said  bank,  respectfully 
showeth: 

That  the  institution,  of  which  they  are  managers,  is  laboring  under  seve- 
ral grievances,  not  only  injurious  to  the  Bank,  but,  as  they  respectfully  con- 
ceive, to  the  nation  also,  which  call  for  legislative  relief.  Some  of  these  arise 
from  the  original  omission  of  appropriate  legal  enactments;  others,  from  cer- 
tain provisions  of  the  charter,  not  suited  to  the  condition  and  circumstances 
of  the  bank;  and  one,  of  very  important  character,  from  a  regulation  con- 
cerning the  fiscal  receipts  of  the  Government  of  the  Union.  For  the  remedy 
of  these  evils,  the  stockholders  of  the  Bank  of  the  United  States  can  only 
look  to  Congress.  Under  the  pledge  of  its  sacred  faith,  and  by  its  authority, 
the  institution  was  established,  ana  their  natural  refuge  is,  therefore,  to  the 
National  Legislature,  for  that  relief  and  protection  which  the  citizen  has  a 
right  to  claim  of  his  Government.  Of  that  body  they  know  they  can  obtain 


818  APPENDIX. 

nothing  forbidden  by  the  sound  policy  of  the  State;  and  could  their  interest 
dictate  a  request  inconsistent  with  that  policy,  they  would  forbear  to  make  it; 
but  it  is  under  a  conviction  of  the  justice  and  correctness  of  their  requests 
that,  as  citizens,  and  as  a  portion  of  tho?-?  whose  prosperity  constitutes  the 
public  good,  they  respectfully  ask  the  attention  of  Congress  to  the  grievances 
under  which  they  labor.  They  ask  relief,  only  if  it  be  found  to  be  consist- 
ent with  the  public  welfare;  and  if  it  be,  they  will,  they  are  convinced,  not 
ask  in  vain;  while  they  feel  satisfied  that  they  will  be  able  to  show  to  your 
honorable  body,  not  only  that  their  claims  are  consistent  with  it,  but  that  they 
are  eminently  calculated  to  advance  and  promote  it. 

Your  petitioners  are  aware  that  strong  prejudices  have  existed  against  the 
Bank  of  the  United  States,  and  certainly  there  has  been  abundant  cause  for 
more  than  prejudice,  against  some  of  the  acts  which  have  marked  the  pro- 
gress of  the  institution.  But  these  acts  have  been  offences,  not  against  the 
public  or  the  Government,  (except  as  it  is  a  stockholder)  but  against  the  in- 
nocent and  undesigning  stockholders,  on  whose  behalf  your  petitioners  now 
ask  protection  and  relief.  Offences  of  inferior  turpitude,  and  9f  inferior  pub- 
lic injury,  under  almost  all  Governments,  have  been  restrained  by  severe 
punishments.  By  the  charter  granted  by  the  Congress  of  the  Confederation, 
to  the  Bank  of  North  America,  it  was  proposed  to  make  some  of  these 
offences  felony,  and  they  were  accordingly  made  felony  by  several  acts  of  the 
Legislature  of  Pennsylvania.  But,  though  in  the  progressive  experience  of 
this  institution,  one  example  of  infidelity,  peculation,  and  fraud,  has  produ- 
ced another,  and  that  another  and  another,  and  though  it  lias  been  defrauded 
of  mil  lions  of  dollars,  it  is  yet  entirely  without  the  preventive  protection  of  effec- 
tive and  appropriate  penal  laws.  Will  it  be  believed,  too,  that  these  acts,  so  inju- 
rious to  the  Bank;  that  these  losses,  so  afflictive  to  the  innocent  and  suffering 
stockholders;  have  excited  against  the  institution  the  prejudices  which  your 
petitioners  now  so  anxiously  deprecate?  Yet  it  is  a  truth,  that  those  are  the 
sole  causes  of  which  your  petitioners  have  any  knowledge.  For  they  cannot 
believe  that  it  is  considered  a  crime,  at  least,  not  in  the  eyes  of  that  Legisla 
ture  from  whom  they  purchased  their  privileges,  for  the  stockholders  toliave 
associated  together,  and  to  have  placed  their  property  under  the  protection  of 
the  most  solemnly  considered  act  that  has  marked  the  existence  of  the  Go- 
vernment— an  act,  the  validity  of  which,  all  political  denominations  of  men 
in  the  country,  (at  long  intervals  of  time,  giving  ample  room  for  reflection  and 
investigation)  and  all  departments  of  the  Government,  have  repeatedly  and 
solemnly  considered  and  confirmed.  The  usefulness  of  the  bank  to  the  Go- 
vernment and  to  the  country;  its  purifyingeftectupon,  and  sustaining  aid  of,  the 
currency;  its  support  of  the  public  credit,  and  its  general  benign  influence  on 
the  interests  of  every  solvent  man,  and  every  solvent  institution  in  the  coun- 
try, if  not  readily  acknowledged,  your  petitioners  believe  can  be  satisfactorily 
shown.  But,  more  effectually  to  dissipate  the  public  prejudices,  if  any  re- 
main, your  petitioners  entreat  your  honorable  body  to  inquire  who  now  are  the 
persons  really  interested  in  this  much  injured  institution?  They  will  be  found 
to  be,  with  few  exceptions,  original  subscribers,  who  have  continued  to  hold 
their  stock,  alike  ignorant  and  innocent  of  the  frauds  to  which  their  interests 
were  a  prey;  or,  they  are  unfortunate  purchasers,  who,  deceived  by  the  false 
appearances  which  the  affairs  of  the  institution  exhibited,  gave  an  advance  of 
from  twenty  to  fifty  per  cent,  on  their  purchases.  Among  those  now  inter- 
ested, are  all  the  classes  of  human  helplessness;  and  among  the  funds  involv- 
ed in  the  fate  of  the  institution,  are  those  of  charity  and  religion,  to  no  in- 
considerable amount.  Of  these  facts,  your  petitioners  are  ready  to  give  satis- 
factory proof  to  your  honorable  body,  and  crave  to  be  permitted  to  do  so,  if 
it  shall  be  doubted  or  deemed  material. 

Under  these  circumstances,  your  petitioners  will  proceed,  succinctly,  to 
state  the  particular  subjects  on  which  they  respectfully  request  relief  and  pro- 
tection from  Congress. 

First.  The  charter  provides  that  no  director,  except  the  president,  shall  be 
eligible  for  more  than  three  years  in  four.  This  provision  has,  in  practice. 


BANK  MEMORIAL. 

been  found  to  deny  to  the  bank  the  services  of  those  men  who  are  best  quali- 
fied to  administer  its  affairs  with  safety  and  profit  to  the  institution.  It  is  a 
provision  not  contained,  your  petitioners  believe,  in  the  charter  of  any  re- 
spectable banking  institution.  It  was  not  contained  in  the  charter  of  the  form- 
er Bank  of  the  United  States,  and  it  would  seem  that  the  provision  of  the 
charter,  which  forbids  the  re-election  of  more  than  three -fourths  of  the  direc- 
tors in  office,  at  the  time  of  an  annual  election,  (to  which  your  petitioners 
have  no  objection)  is  calculated  to  effect  all  the  ends  of  the  embarrassing  pro- 
vision, from  which  your  petitioners  now  crave  relief. 

Second.  At  present,  there  is  no  authority,  under  the  laws  of  Congress,  to 
punish  any  fraud,  peculation,  or  violation  01  trust,  committed  by  any  of  the 
officers  of  the  bank,  or  its  offices 5  and  on  this  point  the  State  laws  are  also 
supposed  to  be  deficient.  Nor  is  there  any  adequate  civil  remedy  for  the  bank 
against  its  faithless  agents,  who  may,  the  hour  before  their  dismissal  from  office, 
while  the  investigations  necessary  to  their  removal  indicate  to  them  that  re 
suit,  take  the  property  of  the  bank  from  its  vaults,  and  withhold  it,  spend  it, 
and.  if  they  please,  give  it  inpayment  to  their  other  creditor*,  in  exclusion  of 
the  bank  from  which  it  has  been  thus  purloined. 

Third.  Under  the  charter,  it  has  been  doubted  whether  the  bank  has  pow- 
er to  authorize  the  issuing  of  notes  not  signed  by  the  president  and  counter- 
signed by  the  cashier.  The  labor  and  the  time  necessary  to  sign  notes  for  the 
bank  and  all  its  branches,  are  much  greater  than  either  of  those  officers  can 
bestow  upon  that  object,  and  hence  the  bank  has  been  unable  to  put  in  circu 
lation  a  sufficient  amount  of  notes,  of  the  smaller  denominations,  which  the 
public  most  want,  and  which  are  best  calculated  to  serve  the  interest  of  the 
bank.  If  authority  were  given  to  the  board,  from  time  to  time,  to  appoint 
one  or  more  persons  to  sign  notes  of  the  smaller  denominations,  at  the  parent 
bank,  under  the  superintendence  and  direction  of  the  board  and  its  principal 
officers,  there  would  be  no  public  risk,  and  it  would  afford  all  the  aid  which 
your  petitioners  desire  on  the  point. 

Fourth.  Under  the  fourteenth  section  of  the  act  incorporating  the  bank, 
the  bills  or  notes  of  the  bank,  originally  made  payable,  or  which  shall  have 
become  payable,  on  demand,  are  made  receivable  in  all  payments  to  the  Unit- 
ed States,  unless  otherwise  directed  by  act  of  Congress.  Under  this  regula- 
tion, the  power  of  the  bank  to  make  its  capital  available,  either  for  its  own 
profit,  or  the  public  good,  is  greatly  abridged.  The  sphere  of  its  circulation 
is  limited  to  tnose  places  where  it  is  least  wanted,  ancl  made  to  exclude  those 
>vhere  it  would  be  eminently  useful,  while  the  whole  currency  of  vast  sec- 
tions of  the  country  is  thereby  frequently  greatly  embarrassed. 

Your  petitioners  forbear  to  enter,  at  this  time,  into  a  further  exposition  of 
the  grounds  of  their  application  for  relief  on  these  points;  but  respectfully 
hope  and  request  that  your  honorable  body  will  so  dispose  of  the  subject  as  to 
give  them  an  opportunity  of  manifesting  the  justice,  as  it  regards  the  Bank, 
and  the  policy,  as  it  regards  the  public,  of  the  relief  and  protection  which 
they  respectfully  claim. 

On  behalf  of  the  Board  of  Directors. 

Attest,  L.  CHEVES,  President. 

THO.  NELSON,  Cashier. 


IN  SENATE,  December  1,  1820. 
Mr.  ROBERTS  presented  a  memorial*  similar  to  that  presented  in  the  House; 

*  Accompanying  the  memorial  was  a  document  submitted  by  a  <*  committee  of  the 
bank,"  for  that  purpose  appointed,  to  the  Committee  on  Finance,  in  the  Senate,  in 
which  are  detailed,  more  at  large  than  in  the  memorial  itself,  the  grievances  under 
which  they  suppose  the  bank  to  labor.  [See  Senate  Documents,  2d  Session  of  16th 
Congress,  Document  45y  page  7.] 


320  APPENDIX. 

which  was,  on  motion  of  Mr.  BARBOUR,  referred  to  the  Committee  on  Fi- 
nance, consisting  of  Mr.  Sanford,  Mr.  Macon,  Mr.  Dana,  Mr.  Eaton,  and 
Mr.  Holmes,  of  Maine,  by  whom,  on  the  20th  of  December,  1820,  the  follow- 
ing bill  was  reported,  to  wit: 

A  BILL  to  amend  the  act  incorporating  the  United  States'  Bank. 

Be  it  enacted,  fyc.  That  it  shall  be  lawful  for  the  directors  of  the  Bank  o* 
the  United  States  to  appoint  an  agent  and  register,-  and  that  all  bills  and 
notes  of  the  said  corporation,  issued  after  the  nrst  appointment  of  such  agent 
and  register,  shall  be  signed  by  the  agent,  and  countersigned  by  the  register: 
that  such  bills  and  notes  shall  have  the  like  force  and  effect  as  the  bills  and 
notes  of  the  said  corporation  which  are  now  signed  by  the  president,  and 
countersigned  by  the  cashier  thereof;  and  that,  as  often  as  an  agent  or  register 
of  the  said  corporation  shall  be  appointed,  no  note  or  bill  signed  by  an  agent, 
or  countersigned  by  a  register,  shall  be  issued,  until  public  notice  of  the  ap- 
pointment of  such  agent  or  register  shall  have  been  previously  given,  for  ten 
days,  in  two  gazettes  printed  in  the  city  of  Washington. 

SEC.  2.  Jind  be  it  further  enacted,  That  if  any  president,  director,  cashier, 
or  other  officer  or  servant  of  the  Bank  of  the  United  States,  or  of  any  of  its 
offices,  shall  fraudulently  convert  to  his  own  use,  any  money,  bill,  note,  se- 
curity for  money,  evidence  of  debt,  or  other  effects  whatsoever,  belonging  to 
the  said  bank,  such  person  shall,  upon  due  conviction,  be  punished  by  im- 
prisonment, not  exceeding  three  years,  and  by  standing  in  a  pillory  not  more 
than  three  times,  in  open  day,  in  some  public  place,  during  one  hour  at  a 
time,  which  standing  in  a  pillory,  when  inflicted  more  than  once,  shall  be  on 
different  days. 

IN  SENATE,  January  12, 1821. 

The  Senate  took  up  the  said  bill,  when  Mr.  SANFORD,  in  a  speech  of  con- 
siderable length,  laid  before  the  Senate  the  views  which  operated  on  the  Com- 
mittee of  Finance,  in  recommending  this  bill;  the  reasons  in  favor  of  its  pro- 
visions, and  those  which  induced  the  committee  not  to  recommend  the  two 
other  objects  petitioned  for  by  the  bank. 

Mr.  ROBERTS  moved  to  amend  the  bill  by  adding  thereto  the  following 
sections: 

"  SEC.  3.  iftnd  be  it  further  enacted*  That  the  bills  or  notes  of  the  offices 
of  discount  and  deposite  of  the  said  bank,  excepting  those  of  the  office  in  the 
District  of  Columbia,  originally  made  payable,  or  which  shall  have  become 
payable  on  demand,  shall  be  receivable,  in  all  payments  to  the  United  States, 
only  in  the  States  and  territories  in  which  they  are  made  payable,  and  in  the 
States  and  territories  in  which  no  office  of  discount  arid  deposite  shall  be 
established,  any  thing  in  the  fourteenth  section  of  the  act  incorporating  the 
subscribers  to  the  Bank  of  the  United  States,  to  the  contrary  notwithstand- 
ing: Provided,  That  all  notes  of  the  denomination  of  five  dollars,  issued 
either  by  the  bank,  or  any  of  its  offices  of  discount  and  deposite,  made  paya- 
ble on  demand,  shall  be  receivable  at  the  bank  or  any  of  its  offices:  And 
provided,  further,  That  it  shall  not  be  lawful  for  the  directors  of  the  said 
bank  to  establish  more  than  one  office  of  discount  and  deposite  in  any  State, 
without  the  consent  of  the  Legislature  thereof  first  had  and  received, 

u  SEC.  4.  And  be  it  further  enacted,  That  so  much  of  the  second  and  four- 
teenth fundamental  articles  of  the  constitution  of  the  said  bank,  contained  in 
the  eleventh  section  of  the  act  incorporating  the  subscribers  thereto,  as  pro- 
vides that  no  director  of  the  said  bank,  or  any  of  its  offices  of  discount  and 
deposite,  shall  hold  his  office  more  than  three  years  out  of  four  in  succession, 
be,  and  the  same  is  hereby,  repealed. 

"  SEC.  5.  Jind  be  it  further  enacted,  That  the  directors  of  the  said  corpo- 
ration shall  cause  a  list  of  the  stockholders  of  the  said  bank,  together  with 


CONFIDENTIAL  PAPERS. 

their  places  of  residence,  to  be  kept  in  the  banking  house  at  Philadelphia, 
open  to  the  inspection  or  any  and  every  stockholder  of  said  bank,  who  may 
apply  for  the  same  within  the  hours  of  business,  for  at  least  ninety  days  pre- 
viously to  every  annual  election  of  directors;  and  no  person  who  may  be  en- 
titled to  vote  at  any  election  for  directors  of  said  bank,  as  attorney,  proxy, 
or  agent,  for  any  other  person,  co-partnership,  or  body  politic,  shall,  as  such, 

give  a  greater  number  than votes,  underbuy  pretence  whatsoever,  and 

no  letter  of  proxy  shall  be  of  any  force  or  effect  longer  than  years,  or 

until  it  shall  have  been  revoked. 

"  SEC.  6.  And  be  it  further  enacted,  That?  whenever  the  said  corporation 
assent  to  the  provisions  of  this  act,  and  certify  such  assent  10  the  Secretary 
of  the  Treasury  Department,  by  writing,  duly  authenticated,  this  act  shall 
be  of  full  force  and  effect,  and  not  otherwise." 

After  these  amendments  had  been  otfered,  the  bill  was,  on  motion,  post- 
poned till  Wednesday. 


ON  THE  PRINTING  OF   CERTAIN  DOCUMENTS. 

Mr.  SANTFORD  haying  laid  before  the  Senate  sundry  papers  connected  with 
the  subject  of  this  bill,  which  had  been  communicated  to  the  Committee  of 
Finance,  by  the  bank,  to  enforce  the  expediency  of  granting  the  objects  prayed 
for  in  their  memorial, 

Mr.  OTIS  moved  that  those  papers  be  printed  for  the  use  of  the  Senate. 

Mr.  BARBOUR  moved  that  all  the  papers  submitted  to  the  Committee  on 
Finance,  by  the  bank,  be  printed. 

[This  motion  was  understood,  by  the  debate  which  ensued  on  it,  to  refer  to 
a  particular  paper  which  had  been  communicated  to  the  committee  by  tlu* 
bank,  with  a  request  that  it  might  be  received  confidentially;  which  paper  is 
understood  to  contain  a  statement  of  frauds  committed  on  the  bank,  and  the 
names  of  those  persons  or  officers  who  committed  them. — Note  by  the  Re- 
porter. ] 

A  good  deal  of  discussion  took  place  on  this  motion;  the  debate  turned  prin- 
cipally, on  the  propriety  of  making  public,  information  of  this  personal  cha- 
racter, which  had  been  confidentially  communicated  to  a  committee  of  the 
body  to  whom  the  subject  had  been  referred,  simply  to  show  the  expediency 
of  granting  to  the  bank  the  security  of  penal  sanctions,  against  violations  of 
trusts,  by  its  officers,  and  the  reason  which  existed  for  asking  of  Congress  this 
additional  guard  against  such  treacherous  spoliations;  some  gentlemen  being 
in  favor  of  making  the  information  public,  as  a  just  punishment  of  the  offend- 
ers, and  a  warning  to  the  world  against  them;  and  others  being  opposed  to 
disclosing  it,  under  the  circumstances  in  which  it  came  to  the  knowledge  of 
the  Senate.  In  the  course  of  the  debate,  it  appeared  that  the  document  was 
not  now  in  the  possession  of  the  committee,  and  part  of  the  discussion  related 
to  the  propriety  of  taking  measures  to  obtain  it,  the  proper  mode  of  proceed- 
ing in  that  matter,  &c.  The  debate  was  terminated  by  a  motion  by  Mr. 
SMITH,  to  postpone  the  subject  to  Monday,  with  the  view  of  submitting  a 
resolution  on  the  subject.  The  desired  postponement  took  place. 

On  the  17th  of  January,  the  subject  being  resumed,  Mr.  BARBOUR'S  motion 
was  negatived,  anil  the  original  motion  of  Mr.  OTIS  was  agreed  to. 

FEBRUARY  19,  1821. 

The  bill,  vyith  Mr.  ROBERTS'S  amendments,  being  before  the  Senate  as  in 
committee  of  the  whole,  the  amendments  were  rejected.  Yeas  7,  Nays  30. 

The  bill  was  further  amended,  and  ordered  to  be  engrossed  fora  third  read- 
ing, and  on  the  next  day  it  passed  the  Senate. 

This  bill,  "when  sent  to  the  House  of  Representatives,  was  riot  acted  on  by 
that  body. 


V 

822  APPENDIX. 

RESOLUTION  OF  MR.  SMITH,  OF  S.  C. 

IN  SENATE,  January  15,   1821. 

Mr.  SMITH,  of  S.  C.  submitted  the  following  resolution,  to-vvit: 
44  Resolved,  That,  the  better  to  enable  Congress,  in  considering  a  bill  *'  to 
amend  the  act,  entitled  an  act  to  incorporate  the  subscribers  to  the  Bank  of 
the  United  States,  to  apportion  the  punishment  to  be  inflicted  upon  the  pre- 
sidents, directors,  cashiers,  or  other  officers,  or  servants  of  the  Bank  of  the 
United  States,  and  of  its  several  offices  or  branch  banks,"  the  President  of 
the  bank  be  requested  to  transmit  to  the  Senate,  if  any  such  exists,  a  state- 
ment of  any  and  all  fraudulent  conversions  by  the  said  presidents,  directors, 
cashiers,  officers,  or  servants,  or  any  of  them,  of  any  moneys,  bills,  notes, 
securities  for  moneys,  evidences  of  debt,  or  other  effects  whatsoever,  belong- 
ing to  the  said  bank,  to  his  or  their  own  use.  And  in  what  offices  these  frauds 
have  been  practised,  and  to  what  extent,  and  by  whom  committed,  and  at 
what  times.  And  likewise  to  state  what  facilities  each  of  those  several  offi- 
cers have,  by  means  of  their  stations,  respectively,]  to  commit  frauds  of  this 
character." 

The  Senate  took  the  same  into  consideration,  and  on  motion  of  Mr.  SAN- 
FORD,  the  resolution  was  amended  by  adding  a  request  for  "a  statement  of 
the  number  of  bank  notes  issued  by  the  bank,  signed  by  the  president  and 
countersigned  by  the  cashier  thereof,  of  every  different  amount  or  denomina- 
tion; and  also  a  statement  of  the  amount  of  notes  heretofore  issued  and  made 
payable  at  the  principal  bank,  and  the  amount  of  notes  made  payable  at  the 
different  offices." 

The  resolution,  thus  amended,  was,  on  the  17th  of  January,  disagreed  to. 

THE  OHIO  PROCEEDINGS. 

IN  SENATE,  February  1,  1821. 

The  President  communicated  a  letter  from  the  Governor  of  Ohio,  trans- 
mitting the  report  and  resolutions  of  the  joint  committee  of  bath  Houses  of  the 
General  Assembly  of  that  State,  on  the  communication  of  the  auditor  of  state, 
upon  the  subject  of  the  proceedings  of  the  Bank  of  the  United  States,  against 
the  officers  of  said  State,  in  the  circuit  court  ot  the  United  States,  and  which 
were  approved  and  adopted  by  the  said  General  Assembly.  The  letter,  re- 
port, and  resolutions,  were  read,  and, 
On  motion  of  Mr.  EATON, 

Were  ordered  to  be  referred  to  the  committee  on  Finance,  and  to  be 
printed. 

On  the  21st  of  February,  on  motion  of  Mr.  SANFORD,  the  said  committee 
were  discharged  from  the  further  consideration  of  the  subject. 

The  letter  of  the  Governor  of  Ohio,  and  accompanying  report  and  resolu- 
tions, may  be  found  in  the  "  Senate  Documents,"  vol.  2d,  for  the  2d  session 
of  the  16th  Congress,  Doc.  No.  72. 

A  like  communication  was,  at  the  same  time,  made  to  the  House  of  Repre- 
sentatives, and  laid  on  the  table;  but  it  does  not  appear  to  have  been  printed 
by  their  direction;  and  no  further  order  was  taken  thereon. 

UNITED  STATES'  BANK  MEMORIAL. 

HOUSE  OF  REPRESENTATIVES,  December  12, 1821. 

Mr,  SERGEANT  again  presented  the  memorial  of  the  Bank,  being  a  copy  of 
that  presented  at  the  last  session;  and  it  was  referred  to  a  select  committee, 
consisting  of  Mr.  Sergeant,  Mr.  Gorham,  Mr.  Colden,  Mr.  Stevenson,  and 
Mr.  Little. 


RESOLUTIONS.  823 

Resolution  Respecting  Usury. 

DECEMBER  20,   1821. 

Mr.  GOLDEN  moved  the  following  resolution: 

"  Resolved,  That  the  said  committee  be  directed  to  inquire  whether  the 
Bank  of  the  United  States  has  not  taken,  and  is  not  in  the  practice  of  taking, 
more  than  six  per  cent,  per  annum  for,  or  upon,  its  loans  or  discounts." 

MARCH  7,  1822. 

Mr.  SERGEANT,  from  the  said  committee,  made  the  following  report;  which 
was  read,  and  ordered  to  lie  on  the  table. 
The  committee  on  the  memorial  of  the  Bank  of  the  United  States,  to  whom 

was  referred  a  resolution  directing  them  to  inquire   4<  whether  the  Bank  of 

the  United  States  has  not  taken,  and  is  not  in  the  practice  of  taking,  more 

than  six  per  centum  per  annum  for,  or  upon,  its  loans  or  discounts,"  report: 

That,  having  inquired  into  the  facts  deemed  to  be  material  in  relation  to  the 
question  proposed  in  the  resolution,  they  find, 

1st.  That  it  is,  and,  from  the  establishment  of  the  Bank  of  the  United 
States,  has  been,  the  practice  of  that  bank,  in  calculating  the  discount  upon  a 
note  payable  a  certain  number  of  days  after  the  date,  to  compute  the  interest 
upon  a  month  of  thirty  days,  and  the  fractions  of  such  a  month.  Thus  one 
per  cent,  is  charged  tor  sixty  days. 

In  this  respect,  the  bank  has  conformed  to  the  established,  and,  it  is  be- 
lieved, universal  usage  in  the  United  States,  prevailing  among  individuals  as 
well  as  in  moneyed  institutions,  and  to  the  most  approved  tables  heretofore  in 
use. 

2d.  That,  in  charging  the  discount  upon  a  sixtv  days'  note,  the  bank  and  its 
branches  have  followed  the  usage  of  the  place  where  the  loan  was  made,  as  to 
the  number  of  days  (including  the  days  of  grace)  for  which  the  discount 
should  be  computed.  In  general,  it  has  been  the  practice  in  the  United  States 
to  charge  the  interest  for  sixty-four  days:  but  there  are  some  places  where  the 
interest  is  charged  for  only  sixty-three  (fays,  and  the  branches  established  at 
such  places  have  conformed  to  the  practice  there  prevailing. 

The  committee  do  not  think  that  there  is  any  thing  in  either  of  the  modes  of 
computing  interest  adopted  by  the  bank  which  calls  for  legislative  interposition, 
and,  therefore,  submit  the  following  resolution: 

Resolved,  That  the  committee  be  discharged  from  the  further  consideration 
of  the  subject. 

RESOLUTION  BY  MR.   ARTHUR  SMITH. 

JANUARY  10,  1822. 

Mr.  ARTHUR  SMITH  submitted  the  following  resolution: 

44  Resolved,  That  the  Committee  to  whom  was  referred  the  memorial  of  the 
Bank  of  the  United  States,  be  instructed  to  inquire  into  the  expediency  of 
making  it  the  condition  on  which  any  alteration  of  the  charter,  for  the  benefit 
of  said  bank,  shall  be  made,  that  the  eighth  clause  of  the  fundamental  articles 
of  the  constitution  of  the  said  bank,  be  so  amended,  as  to  limit  the  said  bank 
in  the  contraction  of  debts,  and  the  issue  of  its  notes,  to  some  multiple  of  the 
gold  and  silver  coin  of  the  lawful  currency  of  the  United  States,  actually  in  its 
vaults  or  possession,  and  held  to  answer  the  demands  against  it;  that  the  said 
committee  also  inquire  into  the  expediency  of  providing,  that  the  plea  of  the 
act  of  limitations  shall  not  bar  a  recovery  in  an  action  brought  on  a  note  or  notes 
issued  by  the  Bank  of  the  United  States,  and  payable  to  bearer." 

This  resolution  was  disagreed  to  by  the  House. 

IN  SENATE,  December   27,  1821. 

Mr.  FINDLAY  presented  a  memorial  of  the  president  and  directors  of  the 
bank,  which  appears  to  have  been  a  copy  of  that  presented  by  Mr.  Roberts  at 
d 


324  APPENDIX. 

the  last  session.  It  was  referred  to  the  Committee  on  Finance,  consisting  of 
Mr.  Holmes,  of  Maine,  Mr.  Eaton,  Mr.  Macon,  Mr.  Van  Buren,  and  Mr. 
Lowrie. 

On  the  24th  of  January,  1822.  Mr.  HOLMES,  from  the  said  committee,  re- 
ported a  bill,  which  was  identical  with  that  reported  in  Senate,  on  the  20th  of 
December,  1820,  (see  p.  820)  except  that  it  substituted  a  pecuniary  fine,  instead 
of  the  punishment  of  the  pillory,  as  directed  by  the  Tormer  act,  as  trie  sanc- 
tion of  its  provisions. 

FEBRUARY  8,  1822. 

Mr.  FINDLAY  moved  to  recommit  the  bill  to  the  Committee  on  Finance, 
"with  instructions  to  introduce  a  provision  suspending,  for  five  years,  or  other- 
wise-modifying so  much  of  the  charter  of  the  Dank,  as  declares  that  the  direc- 
tors of  the  bank,  and  its  branches,  shall  be  ineligible,  who  have  served  three 
years  in  succession,  not  embracing  the  Government  directors." 

This  motion  was  not  carried . 

This  bill  being  under  consideration  in  Senate,  12th  March,  1822,  Mr. 
FINDLAY  moved  to  amend  the  bill,  by  the  addition  of  the  fol lowing  section: 

*'  And  be  it  enacted,  That  so  much  of  the  second  rule  of  the  eleventh  sec- 
tion of  the  act,  entitled  "  An  act  to  incorporate  the  subscribers  to  the  Bank  of 
the  United  States,"  as  provides  that  no  director  shall  hold  his  office  more  than 
three  years  out  of  four  in  succession,  and  so  much  of  the  14th  rule  as  pro- 
vides that  no  director  of  an  oilice  of  discount  and  deposite  shall  hold  his  office 
more  than  three  years  out  of  four  in  succession,  be,  and  the  same  is  hereby, 
repealed." 

This  amendment  was  rejected  by  a  large  majority. 

Mr.  TALBOT  moved  the  indefinite  postponement  of  the  bill:  this  motion  was 
negatived . 

Mr.  PLEASANTS  then  moved  to  strike  out  the  second  section  of  the  bill;  but 
this  motion  was,  after  debate,  lost,  by  the  casting  vote  of  the  chairman,  (Mr. 
DIOKERSON)  the  votes  being  19  for,  and  19  against  the  motion. 

Mr.  EATON  moved  an  amendment  to  the  second  section,  providing  that 
"  the  court  before  whom  the  conviction  shall  take  place,  shall  have  power  to 
enter  a  judgment  against,  the  party  for  the  amount  or  value  of  the  thing  so 
fraudulently  converted,"  &c. 

The  amendment  was  lost. 

MARCH  14,  1822. 

Mr.  WILLIAMS,  of  Tennessee,  offered  an  amendment  to  the  first  section, 
going  to  require  of  the  bank  to  make  all  its  notes,  of  and  under  ten  dollars, 
payable  at  the  principal  bank,  or  any  of  its  branches. 

This  proposition  was  supported  by  the  mover,  and  by  Mr.  TALBOT,  and  was 
opposed  by  Mr.  OTIS,  and  Mr.  KING,  of  New  York.  After  an  ineffectual 
attempt  by  Mr.  VAN  DYKE,  to  limit  the  operation  of  the  amendment  to  five 
dollar  bills,  the  question  was  taken  on  the  amendment,  and  the  same  was 
agreed  tojby  the  following  vote: 

AYES. — Messrs.  Barb  our,  Barton,  Brown,  of  Ohio,  Chandler,  Elliott,  Gaillard,  John- 
son, of  Kentucky,  King-,  of  Alabama,  Lanman,  Lloyd,  Macon,  Noble,  Palmer,  Plea- 
sants,  Rugg-les,  Smith,  Talbot,  Taylor,  Thomas,  Walker,  Ware,  and  Williams,  of 
Tennessee, — 22. 

NOES. — Messrs.  Boardman,  D'Wolf,  Dickerson,  Eaton,  Findlay,  Holmes,  of  Maine, 
Holmes,  of  Miss.  Johnston,  of  Louisiana,  King1,  of  New  York,  Knig-ht,  Lowrie,  Mills, 
Otis,  Parrott,  Seymour,  Southard,  Stokes,  Van  Dyke,  and  Williams,  of  Miss. — 19. 

Mr.  HOLMES,  of  Maine,  moved  an  amendment,  requiring  the  bank,  within 
six  months,  to  accept  all,  or  relinquish  all  the  provisions  of  the  first  section: 
but  this  motion  was  afterwards  withdrawn  by  the  mover. 


€ttAKLESTOX   MEMORIAL.  325 

Mr.  BARBOUR  moved  to  strike  out  the  first  section  of  the  bill,  together  with 
\\ieprovi80,  making  all  notes  of,  and  under,  ten  dollars,  p'ayable  at  the  bank, 
or  cither  of  the  branches. 

After  debate,  the  motion  to  strike  out  was  decided  in  the  affirmative,  as 
follows: 

AVKS. — Messrs.  Barbour,  Benton,  Brown,  of  Ohio,  Chandler,  D'Wolf,  Eaton, 
Holmes,  of  Miss.  Knight,  Lanman,  Lloyd,  Macon,  Mills,  Palmer,  Parrott,  Pleasants, 
Uug-g-les,  Seymour,  Smith,  Talbot,  Taylor,  Thomas,  Van  Dyke,  and  Williams,  of 
Miss.— 23. 

XIIES. — Messrs.  Barton,  Brown,  of  Lou.  Dickerson,  Edwards,  Elliott,  Findlay, 
Holmes,  of  Maine,  Johnson,  of  Kentucky,  Johnston,  of  Lou,  King-,  of  Alabama,  King', 
of  New  York,  Lowrie,  Merrill,  Noble,  Southard,  Stokes,  Walker,  Ware,  and  Wil- 
liams, of  Tennessee. — 19. 

The  remaining  section  v.as  then  ordered  to  be  engrossed,  and  read  a  third 
time. 

The  bill,  as  amended,  was  afterwards  pissed,  and  sent  to  the  Hou.-»o  of  Re- 
presentath 

IN  THE  HOUSK,  the  bill  was  referred  to  the  Commitiee  on  the  Judiciary,  who 
were  di>char«ed  from  the  consideration  of  it.  and  it  was  afterwards  referred 
to  a  select  committee,  to  whom  the  memorial  of  the  president  and  directors  of 
the  bank  had  been  referred;  but  it  does  not  appear  that  any  action  of  the 
House  took  place  on  it  during  the  session. 

JANUAKY  -JO,  18-23. 

Mr.  HAMILTON,  of  S.  ('..  piv-i-nied  a  memorial  of  sundry  banking  institu- 
tions, insurance  companies,  and  individuals,  of  Charleston,  S.  G.,  which  is  as 
follows: 

To  the  Honorable  the  Hoaxc  of  Representatives  oj'  the  U.  S.  of  America: 
Your  petitioners,  interested  in  the  commercial  prosperity  of  the  United 
States,  and  of  South  Carolina  in  particular,  having  learnt,  from  the  proceed- 
ings of  the  stockholders  of  the  Bank  of  the  United  States,  that  a  petition  would 
again  be  presented  to  your  honorable  body,  praying  for  an  alteration  in  their 
charter,  by  which  that  bank  ami  its  offices  would  be  released  from  the  obli- 
uation  of  receiving  in  payment  of  all  dues  to  the  Government  the  notes  of  all 
the  different  offices  of  the  said  Bank  of  the  United  State*,  in  whatever  part 
of  the  Union  such  office  may  be  located,  respectfully  pray  that  such  petition 
may  be  granted. 

Your  petitioners  are  perfectly  satisfied,  if  the  notes  of  each  office  of  the 
Bank  of  the  United  States  were  made  receivable  only  at  such  office,  and 
thereby  confined  in  their  circulation  to  the  State  in  which  they  were  issued, 
and  to  those  parts  of  the  adjoining  States  more  immediately  connected  with 
it  ill  commerce,  that  very  great  benefits  would  result  to  the  different  banking 
institutions  in  particular,  and  to  the  community  in  general.  The  offices 
would  then  issue  their  notes  on  precisely  the  same  principles  and  in  the  same 
proportions  as  the  State  banks,  and  their  business  would  be  conducted  ac 
cording  to  their  several  capitals,  on  terms  of  perfect  reciprocity.  The  rates 
of  exchange  would  then  become  more  uniform  and  moderate,  by  an  increase 
of  competitors  in  regular  exchange  operations.  The  different  moneyed  insti- 
tutions and  the  community  would  be  relieved  from  the  exactions  which  they 
occasionally  feel,  and  of  which  they  are  always  apprehensive.  Good  will 
would  exist  towards  an  institution  very  capable  of,  and  even  now  affording 
great  advantages  to,  the  Government,  and  harmony  would  be  restored  be- 
tween it  and  every  part  of  the  community. 
CHARLESTON-,  November,  18-2-2. 

[On  the  17th  December,  1823,  a  copy  of  this  memorial  was  again  presented, 
by  Mr.  POINSETT,  and  referred  to  the  Committee  of  Ways  and  Means,  upon 
which  no  report  was  made.] 


326  APPENDIX, 

Ordered*  That  the  said  petition  be  referred  to  Mr.  Hemphill,  Mr.  Cam- 
breleng,  Mr.  Mercer,  Mr.  Mallary,  and  Mr.  M'Kim- 

JANUARY  28,  1823. 

Mr.  HEMPHILL  (by  leave  of  the  House)  presented  a  memorial  of  the  presi- 
dent and  directors  of  the  Bank  of  the  United  States,  on  the  part  of  the  stock- 
holders of  the  said  bank,  stating  certain  grievances  under  which  they  labor, 
arising  from  defects  and  omissions  in  the  act  for  their  own  incorporation; 
which  memorial  was  referred  to  the  said  committee. 

FEBRUARY  27. 

Mr.  HEMPHILL,  from  the  said  committee,  made  the  following  report: 
The  committee,  to  which  were  referred  the  memorial  from  several  banking 
institutions,  and  insurance  companies,  in  the  State  of  South  Carolina,  and 
the  memorial  from  the  President  and  Directors  of  the  Bank  of  the  United 
States,  praying  for  certain  laws  to  be  passed  in  relation  to  the  bank,  and 
for  certain  alterations  to  be  made  in  the  charter,  report: 

That  the  memorials  claim  the  interposition  of  Congress  in  four  particulars: 

1.  To  change  that  part  of  the  charter  which  provides  that  no  director,  ex- 
cept the  president,  shall  be  eligible  for  more  than  three  years  in  four. 

2.  To  provide,  by  law,  for  the  punishment  of  persons  who  may  be  convicted 
of  practising  fraud  on  the  bank. 

3.  To  authorize  the  board  to  appoint  one  or  more  persons  to  sign  notes  of 
the  smaller  denominations  at  the  parent  bank. 

4.  To  pass  a  law  by  which  the  notes  of  the  bank  shall  only  be  receivable, 
in  payments  to  the  United  States,  at  the  bank  or  branch  where  they  are  made 
payable. 

As  to  the  first,  there  are  many  inconveniences  which  arise  from  the  short 
duration  which  is  allowed  to  a  directorship;  but  the  committee  are  not  in- 
clined at  present  to  make  the  change  prayed  for. 

As  to  the  second,  the  committee  report  in  favor  of  it,  to  the  fullest  extent 
prayed  for,  and  think  that  salutary  penal  laws  ought  immediately  to  be  passed 
on  the  subject. 

As  to  the  third,  the  committee  think  it  is  reasonable,  and  that  it  ought  to  be 
granted.  The  almost  constant  manual  labor  of  signing  notes  must  too  much 
exhaust  the  two  principal  officers  of  the  bank,  and,  in  a  greater  or  less  de- 
gree, disqualify  them  from  a  due  application  of  their  minds  to  the  extensive, 
critical,  and  important  concerns  of  the  bank. 

As  to  the  fourth,  the  committee  are  obliged  t9  go  into  some  detail  upon  it. 
If  the  arrangement  prayed  for  would  be  beneficial  to  the  bank,  and  not  inju- 
rious to  the  Government,  nor  to  local  banks,  nor  to  the  community  at  large, 
it  ought  to  be  granted;  but  more  especially  ought  it  to  be  granted,  if  it  will 
not  only  be  beneficial  to  the  bank,  but  productive  of  public  good. 

Under  the  14th  section  of  the  act  incorporating  the  bank,  the  bills  or  notes 
of  the  bank,  originally  made  payable,  or  which  shall  have  become  payable  on 
demand,  are  made  receivable  in  all  payments  to  the  United  States,  unless 
otherwise  directed  by  act  of  Congress. 

It  will  be  observed,  in  the  first  instance,  that  no  alteration  of  the  charter  in 
relation  to  this  provision  is  prayed  for.  It  will1  also  be  observed,  that  the  act 
incorporating  the  bank  did  not  consider  this  arrangement  as  unalterable;  it 
was  to  undergo  the  test  of  time  and  experience;  on  the  one  hand,  Congress 
reserved  the  power  to  change  this  provision  whenever  the  public  good  should 
require  it,  and,  on  the  other,  the  stockholders  had  every  reason  to  expect 
that,  if  this  provision  should  distress  the  bank,  that  Congress  would  remove 
it,  if,  by  doing  so,  no  disadvantage  would  accrue  to  the  Government.  The 
question  now,  after  a  fair  and  full  experiment  on  the  subject,  is,  whether  this 
provision  is  judicious  or  otherwise;  and  we  can  only  arrive  at  the  truth  of 
this  inquiry  by  comparing  the  consequences  of  this  provision  with  that  state 
of  things  which  will  most  probably  exist  if  it  should  be  removed. 


CHARLESTON  MEMORIAL.  327 

The  bank  is  to  place  the  funds  of  the  Government  at  any  given  point,  and 
it  is  the  duty  of  the  bank,  as  far  as  possible,  to  preserve  a  sound  currency  in 
the  country;  the  bank  is  not  bound  to  pay  its  notes,  presented  by  the  Govern- 
ment, except  where  the  notes  are  payable:  but  as  it  is  bound  to  transfer  the 
funds,  little  time  only  could  be  gained  by  refusing  to  pay  them  wherever  re- 
ceived, and  that  refusal,  perhaps,  would  be  attended  with  inconvenience  to 
the  Government,  and  accordingly  the  bank  pays  the  notes  wherever  received, 
without  reference  to  the  places  where  they  are  payable;  the  result  is  at  times 
embarrassing  to  the  bank.  The  practical  effect  of  the  provision  under  con- 
sideration, will  be  more  clearly  perceived,  by  attending  to  the  usual  course  of 
business,  and  to  the  state  of  exchange.  The  exchanges  between  the  West  and 
Atlantic,  have  always  been  against  the  former.  The  exchanges  between  the 
North  and  the  South,  are,  for  one  portion  of  the  year,  against  the  latter,  and 
for  another,  in  its  favor.  When  the  exchanges  are  unfavorable  to  the  South 
and  West,  the  notes  of  the  Southern  and  Western  branches  are  taken  to  the 
North,  to  pay  the  balance  of  debt;  they  are  equal  to  cash,  without  the  expense 
of  transfer,  as  they  are  receivable  in  payment  of  duties  to  the  Government. 
To  give  the  best  view  of  this  part  of  the  subject,  the  committee  will  incorpo- 
rate a  part  of  the  report  of  the  committee  of  the  bank,  presented  to  Congress 
in  the  session  of  1820. 

Speaking  of  the  branch  notes,  it  says,  "  they  are  equal  to  cash,  or  very  nearly 
so,  in  all  the  principal  cities  north  of  the  Potomac.  They  are  so  because  they 
are  receivable  in  payment  of  duties  to  the  Government,  the  portion  of  which, 
payable  to  the  north  of  the  Potomac,  in  any  quarter  of  the  fiscal  year  of  1819, 
was,  taking  that  year  as  an  example,  nearly  as  much  as  the  whole  circulation 
of  the  Bank  of  the  United  States  at  the  same  time,  and  of  course  kept  up  a 
steady  demand  for  the  notes  of  the  Southern  and  Western  branches.  7  he 
union  of  this  demand  with  the  course  of  exchanges,  draws  the  whole  of  the 
notes  of  the  Western  offices  to  the  Atlantic,  and,  at  particular  seasons  of  the 
year,  the  greater  part  of  the  notes  of  the  Southern  offices  to  the  North.  The 
revenue  collected  to  the  South  being  comparatively  small,  there  can  never  be 
any  material  reflux  of  their  notes,  because  they  will  be  absorbed  by  the  north- 
ern demand  before  the  exchanges  turn,  and  the  balance  of  payments  being 
always  against  the  West,  there  is  never  anyj  towards  that  quarter.  We  will 
now  proceed  to  enumerate  some  of  the  evils  resulting  from  the  receipt  of  the 
notes  of  the  bank  and  its  branches  in  this  manner  and  under  these  circum- 
stances. 

"  1st.  It  greatly  deranges  and  distresses  the  money  market,  both  of  the 
places  where  the  notes  are  received,  and  where  they  are  payable.  7'he  bank 
at  Philadelphia  and  the  offices  at  New  York  and  Boston,  did  not  receive  less 
than  between  five  and  six  millions  of  the  notes  of  the  offices  south  and  west 
of  them,  in  the  short  period  of  fourteen  months,  exclusive  of  the  notes  of  the 
office  at  Washington.  These  points  were  obliged  to  pay  the  Government  the 
amount  of  these  notes,  and  in  vain  sought  for  speedy  reimbursement  from  the 
offices  where  they  were  payable.  The  state  of  the  exchanges  which  caused 
this  flux  of  their  notes,  created  an  inability  to  reimburse  the  offices  which  had 
received  them,  until  the  exchanges  turned.  7'he  offices  receiving  them  were 
of  necessity  obliged  to  curtail  their  business  suddenly,  to  provide  the  means 
of  paying  them.  Accordingly,  the  curtailments  at  Philadelphia,  New  York, 
ana  Boston,  within  the  same  period,  amounted  to  upwards  of  four  and  a  half 
millions  of  dollars,  and  exhausted  almost  the  whole  of  the  capital  placed  at 
these  points.  The  capital  of  New  York  and  Boston,  united,  was  at  some 
periods  less  than  nothing.  What  distress  and  embarrassment  must  have  beer 
caused  by  these  circumstances,  will  easily  be  conceived  by  those  who  hav< 
reflected  on  the  nature  and  effects  of  the  sudden  withdrawal  of  a  large  portioi 
of  the  active  capital  of  a  trading  community. 

''  The  evil  suffered  in  the  community  where  the  notes  were  thus  receive 
and  paid,  was  not  all.    7'he  offices  whose  notes  were  thus  received  and  paid 
were  necessarily  called  upon  to  provide  the  means  of  reimbursement,  and 
curtailments  to  a  corresponding  amount  were  ordered  in  them,  and  lilr*  A: 


828  APPENDIX. 

tress  and  embarrassment  produced  in  the  communities  where  they  were  lo- 
cated. Double  the  amount  of  the  notes  thus  circulated  was  in  this  way  with- 
drawn from  use  to  provide  for  their  payment.  The  aggregate  curtailments  in 
the  fourteen  months  before  alluded  to,  (from  1st  September,  1818,  to  1st  No- 
vember, 1819,)  were  upwards  of  lO.j  millions  of  dollars,  and  it  is  confidently 
believed  it  would  not  have  been  necessary  to  have  reduced  the  discounts  of 
the  bank  a  single  cent,  but  for  this  cause.  When  these  reductions  com- 
menced, the  discounts  were  very  moderate  for  the  capital  of  the  bank.  They 
did  not  amount  to  $42,000,000. 

"  Nor  is  the  extent  of  the  distress  and  embarrassment  measured  by  the 
immediate  effects  of  the  reduction  of  the  discounts  of  the  bank  and  its  branches. 
These  reductions,  in  their  operation,  throw  back  upon  the  State  banks  a  por- 
tion of  their  circulation,  and  reduce  their  deposites,  and  they  also  are  obliged 
to  curtail  their  business,  and  add  to  the  general  mass  of  distress. 

"  The  uncertain  liability  of  the  bank  and  its  branches,  as  each  is  in  a  cer- 
tain degree  liable  to  pay  the  notes  of  all  the  rest,  and  the  perpetual  alteration 
of  the  capital  of  each,  by  paying  the  notes  of  the  others,  and  having  its  notes 
paid  by  them,  put  it  beyond  the  power  of  calculation  to  determine  the  extent 
of  business  which  can  be  safely  done,  and  leaves  the  bank  to  vacillate  be- 
tween the  hazards  of  rashness,  and  the  fruitless  results  of  a  torpid  prudence. 
To  day,  a  branch  shall  have  a  million  of  capital,  and  in  three  months  it  may 
be  without  a  cent. 

"  2.  It  diminishes  and  deranges  the  currency  of  (he  whole  country.  The 
bank  was  under  the  necessity,  to  protect  itself  from  danger,  and  to  avoid 
charging  itself  to  an  unlimited  amount  with  the  cost  of  adverse  exchanges,  to 
forbid  the  offices  with  which  the  exchanges  were  unfavorable  to  issue  their 
notes.  It,  however,  issued  its  own  notes,  and  the  offices  against  which  the 
exchanges  did  not  run,  issued  their  notes  without  any  limit  but  that  of  the 
demand;  yet  the  circulation  of  the  bank  was  by  this  cause  greatly  decreased. 
Thus,  for  example,  in  the  short  space  of  five  months,  from  the  1st  April,  1819, 
to  the  30th  August,  1819,  it  was  reduced  from  $6,045,428  to  $3,838,386. 

<fc  This,  however,  does  not  shew  the  entire  extent  of  the  abstraction  from 
the  currency,  which  this  cause  produces.  Let  it  be  supposed  that  the  circu- 
lation of  the  bank  is  four  millions  of  dollars,  and  that  one-half  of  it  has  been 
issued  by  offices  to  the  South  and  West,  and  it  is  in  use  for  the  purposes  of 
being  remitted  to  the  North  and  East.  It  is,  thereby,  as  much  taken  out  of  the 
currency  as  if  it  were  destroyed;  and  it  leaves  only  two  millions  of  currency 
furnished  by  Ihe  bank.  But,  the  bank  will,  probably,  have  four  millions  of 
specie  in  its  vaults,  and  it  cannot  safely  have  less  under  these  peculiar  cir- 
cumstances; this  sum,  also,  is  withdrawn  from  circulation.  Thus,  the  bank, 
not  by  its  fault,  but  by  the  necessity  which  is  imposed  upon  it,  has  withdrawn 
jfour  millions  of  specie  from  the  currency,  and  has  given  a  substitute,  in  its 
notes,  only  to  the  amount  of  two  millions.  In  this  view,  the  currency  has 
been  diminished  two  millions.  But  even  this  is  not  the  worst  view  of  it.  Let 
us  suppose,  that  the  notes  of  the  bank  and  its  branches  could  not  be  converted 
into  bills  of  exchange,  and  there  is  no  doubt,  it  is  presumed,  that,  with  its 
high  credit,  it  could  easily  do  what  many  local  banks  have  accomplished.  It 
could  circulate  t\yo  dollars  of  its  bills  for  every  dollar  it  should  have  in  its 
vaults.  Then,  it  is  supposed  to  have  four  millions  of  dollars  in  its  vaults, 
and  could  circulate  eight  millions  of  its  notes,  which  would  be  equal  to  gold 
and  silver.  It  then  would  have  added  four  millions  to  the  currency,  while, 
at  present,  it  diminishes  it  to  the  amount  of  two  millions,  making  a  practical 
difference  of  no  less  than  six  millions  in  the  sound  currency  of  the  country. 
The  view  may  even  be  extended,  because  the  Bank  of  the  United  States 


decreasing  currency.    In  the  words  of  a  great  man,  "  poverty,  and  beggary, 
and  sloth,  follow  in  its  train." 


REPORT  ON  MEMORIALS.  $29 

"But  this  evil  of  a  decreasing  currency  will  not  occur  as  a  rare  calamity, 
once,  perhaps,  in  a  century,  but  will  be  renewed  with  every  flux  and  reflux 
of  the  exchanges  between  the  different  portions  of  the  country,  as  long  as  the 
bills  of  the  Bank  of  the  United  States  are  thus  receivable  by  the  Government. 
"3d.  It  makes  the  necessary  public  burthens,  in  some  instances,  doubly 
oppressive.  In  all  the  States  south  of  Virginia,  and  in  nearly,  if  not  all,  the 
Western  States,  the  Government  of  the  United  States  does  not  expend  half 
the  revenue  it  collects;  the  surplus  must  be  remitted  toother  points,  where  it 
is  necessarily  to  be  expended.  This  draws  so  much  of  the  capital  of  those 
States  from  'them,  and  adds  it  to  the  capital  of  another— New  York,  for  ex- 
ample. This  is  not  a  subject  of  complaint,  though  it  is  certainly  an  evil;  but, 
when  the  revenue  of  New  York  is  collected  in  the  notes  of  the  offices  of  the 
South  and  West,  perhaps  to  an  equal  amount,  and  drawn  from  the  necessary 
currency  of  these  portions  of  the  country,  the  evil  produced  by  the  remittance 
of  the  surplus  revenue  becomes  intolerable,  because  the  means  of  making  it 
have  been  taken  away.  The  capital  of  these  States  is  fettered  by  the  neces- 
sary curtailments  of  their  banks,  their  currency  is  diminished,  and  that  state 
of  things  which  is  called  a  scarcity  of  money,  is  produced,  exchange  rises, 
and  when  the  revenue  is  to  be  remitted,  the  means  of  doing  it  no  longer 
e\ist>." 

As  bank  notes  represent  specie,  such  a  relationship  should  be  maintained 
between  them,  as  to  enable  a  given  amount  of  specie  to  .sustain  as  large  a  pa- 
per circulation  as  could  be  instantly  converted  into  specie;  but  this  can  never 
be  accomplished  while  specie  must  be  provided  at  so  many  different  places  for 
the  payment  of  the  same  note;  the  uncertainty  of  the  places  where  the  notes 
will  be  presented  lor  payment,  must  at  all  times  confound  the  most  discreet 
calculation  for  the  maintenance  of  a  proper  relation  between  the  specie  and 
paper  circulation.  To  the  Government,  it  can  be  of  no  advantage,  as  debts 
must  be  paid  to  the  Government  where  due,  and  its  funds,  the  bank  is  obliged 
to  transfer  from  place  to  place,  at  the  pleasure  of  Government. 

In  the  opinion  of  the  Secretary  of  the  Treasury,  in  his  report  to  the  second 
session  of  the  16th  Congress,  the  alteration  would  be  beneficial  to  the  com- 
munity. It  is  as  follows: 

4*  Preliminary  to  a  resort  to  internal  taxation  of  any  kind,  the  charter  of  the 
Bank  of  the  United  States  ought  to  be  amended,  so  as  to  make  the  bills  of  all 
the  offices  of  the  bank,  except  that  at  the  seat  of  Government,  receivable  only 
in  the  States  where  they  are  made  payable,  and  in  the  States  and  territories 
where  no  office  is  established.  The  effect  of  this  modification  would  be,  to 
make  the  notes  of  the  offices  of  the  Bank  of  the  United  States,  except  the 
office  in  this  district,  a  local  currency,  which  will  enter  and  continue  in  the 
local  circulation  of  the  States  in  which  they  are  issued.  The  notes,  thus  issued, 
will  render  the  local  circulation  of  the  States  sound,  and  furnish  to  the  citi- 
zens the  means  of  discharging  their  contributions  to  the  Government. 

"This  measure  will  also  place  the  State  institutions,  to  the  south  and  west 
of  this  city,  in  a  more  eligible  situation,  in  relation  to  the  offices  of  the  Bank 
of  the  United  States,  by  enabling  them  to  adjust  their  accounts  with  these  offi- 
ces by  the  exchange  of  notes,  instead  of  liquidating  their  balances  by  the  pay- 
ment of  specie." 

To  the  portions  of  the  country  where  the  balance  of  trade  is  generally  un- 
favorable, it  must  be  injurious,  as  it  deprives  them  of  every  benefit  which  the 
sound  currency  of  the  Bank  of  the  United  States  is  capable  of  affording  to 
them;  the  bank,  in  such  places,  for  its  own  defence,  being  obliged  entirely  to 
suspend  the  issuing  of  notes. 

To  the  portions  of  the  country  where  the  exchange  is  at  intervals  unfavora- 
ble, it  is  injurious,  because  it  occasions  an  unprofitable  and  distressing  fluc- 
tuation in  the  paper  circulation  of  the  place:  for,  in  proportion  to  the  disap- 
pearance of  branch  notes,  must  inevitably  follow  curtailments,  not  only  of  the 
branch,  but  of  the  local  banks.  The  Southern  banks  sensibly  feel  the  effects 
of  this  vacillating  and  disordered  state  of  things;  and  their  memorial  con- 
•-  *hp.  following  remarks  on  the  subject:  That  uthey  are  perfectly  satisfied, 


$30  APPENDIX. 

if  the  notes  of  each  office  of  the  Bank  of  the  United  States  were  made  re- 
ceivable only  at  such  office,  and  thereby  confined  in  their  circulation  to  the 
State  in  which  they  were  issued,  and  to  those  parts  of  the  adjacent  States 
more  immediately  connected  with  it  in  commerce,  that  very  great  benefits 
would  result  to  the  different  banking  institutions  in  particular,  and  to  the  com- 
munity in  general. 

"  The  offices  would  then  issue  their  notes  on  precisely  the  same  principles, 
and  in  the  same  proportions,  as  the  State  banks;  and  their  business  would  be 
conducted,  according  to  their  several  capitals,  on  terms  of  perfect  reciprocity; 
the  rates  of  exchange  would  then  become  more  uniform  and  moderate,  by  an 
increase  of  competitors  in  regular  exchange  operations.  The  different  money- 
ed institutions,  and  the  community,  would  be  relieved  from  the  exactions 
which  they  occasionally  feel,  and  of  which  they  are  always  apprehensive. 
Good  will  would  exist  towards  an  institution,  very  capable  of  even  now  af- 
fording great  advantages  to  the  Government;  and  harmony  won  Id  be  restored 
between  it  and  every  part  of  the  community." 

The  regulation,  as  it  now  exists,  operates  as  a  practical  prohibition  to  issue 
any  notes  in  the  Western  States,  and  to  a  like  prohibition  to  issue  them  to 
the  South,  during  six  months  in  the  year;  while  the  collection  of  the  revenue, 
and  the  convenience  of  the  People,  in  these  quarters  of  the  Union,  require 
them  to  be  issued  continually.  , 

To  simplify  the  case,  let  any  given  district  be  selected,  where  there  is  no 
sound  currency,  and  where  no  notes  of  the  Bank  of  the  United  States  can, 
at  present,  be  issued,  for  the  reasons  already  given. 

If  the  notes,  when  issued,  could  only  be  receivable  at  the  office  issuing 
them,  their  circulation  would  be  limited.  The  office,  for  its  own  benefit,  must 
do  business;  the  notes  of  solvent  individuals  would  be  discounted,  and  a 
sound  paper  would  be  put  in  circulation,  which  could  not  leave  the  boundary 
which  practice  would  prescribe  for  it.  The  holders  of  branch  notes  could 
demand  silver  whenever  wanted  for  transportation,  and  the  expense  of  this 
transfer,  as  in  the  ordinary  cases  of  trade,  would  soon  bring  business  to  a  safe 
and  proper  level;  and  some  sound  standard  among  the  local  banks  would  fol- 
low as  a  necessary  consequence. 

The  same  reasoning  would,  in  part,  apply  to  places  where  exchanges  fluc- 
tuate. At  present  the  branch  notes  are  often  unnaturally  taken  from  the 
places  at  which  they  are  wanted,  and  carried  to  places  where  they  are  not 
wanted. 

If  the  desired  arrangement  was  effected,  the  bank  would  be  enabled  to  put 
into  circulation  a  much  larger  quantity  of  sound  paper  than  at  present;  by 
which  the  bank,  and  the  Government,  being  the  owner  of  one-fifth  of  the  stock, 
would  be  greatly  benefitted;  and,  from  its  operation,  it  is  believed  that  the 
community  at  large  would  enjoy  real  advantages. 

What  substantial  reason  can  be  given  for  an  adherence  to  this  provision  of 
the  law? 

In  what  manner  does  it  produce  any  public  good? 

Its  operation  on  exchange  is  ineffectual. 

In  reference  to  any  two  given  places,  when  the  balance  of  trade  is  against 
the  one,  gold  and  silver  there,  will  be  of  less  value  than  at  the  other,  by  the 
expense  of  transportation;  and  the  exchange  will  always  be  about  equal  to  this 
expense.  The  nature  of  trade  will  keep  this  balance  alternating,  and  it  may 
be,  generally,  against  one  place  in  a  certain  direction,  while,  at  the  same  time, 
it  is  in  its  favor  in  another  direction;  but  the  design  of  making  paper  circula- 
tion for  the  purpose  of  exchange  better  than  the  specie  it  represents,  appears  to 
be  in  a  great  degree  fallacious.  The  bank  can  never  equalize  exchange;  the 
expense  of  exchange  must  be  borne  by  the  debtors,  in  the  debtor  part  of  the 
country,  and  every  attempt  to  give  a  different  direction  to  it,  will  be  baffled. 
It  is  alien  to  the  inflexible  laws  of  trade,  and  cannot  be  realized. 

Indeed,  if  the  branch  notes  can  be  drawn  directly  from  the  office,  they  will, 
of  course,  be  free  of  the  usual  expense  of  exchange;  but  this  rarely  happens; 
the  real  debtor  who  uses  them  as  exchange,  has  generally  to  pay  to  the  money 


MOTION  FOR  A  SALE  OF  U.  S.  BANK  STOCK. 

dealers  a  premium  higher  than  a  just  premium  on  exchange  in  its  accustomed 
form. 

The  Southern  institutions,  and  the  most  respectable  citizens  in  Charleston, 
who  are  materially  interested,  and  who  have  witnessed  the  effect  produced  in 
practice,  have  informed  us,  in  their  memorial,  that  the  business  of  exchange 
will  be  improved,  and  the  exchange  itself  moderated. 

There  are  exceptions,  which,  perhaps,  it  will  be  proper  to  make. 

The  notes  of  the  parent  bank  may  be  receivable  at  any  of  the  branches. 

The  notes  of  the  office  at  Washington  might  be  receivable  at  the  parent  bank 
and  the  branches,  and,  for  the  convenience  of  travellers,  the  five  dollar  bills? 
of  the  bank  ought  to  be  receivable  every  where,  and  all  the  notes  of  the  bank 
and  its  branches  may  be  received  in  the  States  and  Territories  where  the  bank 
;ias  no  establishment. 

A«i  it  is  no  part  of  the  charter,  the  law  can  be  repealed  at  the  pleasure  of 
Congress;  ana,  to  guard  it,  in  the  most  effectual  manner,  let  the  law,  for  the 
sake  of  an  experiment,  be  limited  to  two  years;  it  will  then  require  a  re-enact- 
ment, which  cannot  be  procured,  unless  its  utility  shall  have  been  proved  by 
experience. 

There  are  but  few  considerations  that  are  more  momentous  than  that  which 
relates  to  the  currency  of  the  country;  and  it  belongs  to  the  Bank  of  the 
'  'nited  States,  as  far  as  possible,  to  preserve  its  soundness.  It  is  an  institu- 
tion that  is  entitled  to  a  patient  and  calm  hearing;  its  advantages  to  the  coun- 
try have  been  great,  v/hile  its  sufferings  are  but  too  well  known.  Errors,  if 
any  have  been  committed,  it  is  hoped  experience  will  correct;  prejudices,  if 
any  existed,  it  is  hoped  have  now  subsided,  and  that  reason  alone  will,  in  the 
end,  prevail. 

The  following  resolution  is  offered: 

Itexolucd,  That  the  Committee  on  the  Bank  of  the  United  States  be  in- 
structed to  prepare  and  bring  in  a  bill  agreeable  to  the  above  report 

No  such  bill,  however,  was  brought  in. 

The  same  memorial  was,  on  the  27th  of  January,  1823,  presented  in  the 
SKXATE,  by  Mr.  Findley,  and  referred  to  the  Committee  on  Finance,  who  were 
discharged  from  the  consideration  thereof.  Nothing  farther  was  done  in  that 
body  during  the  session. 


HOUSE  OF  REPRESENTATIVES,  December ,  1826. 
On  motion  of  Mr.  McLANE, 

Ordered,  That  the  petition  of  the  president,  directors,  and  company,  of  the 
Bank  of  the  United  States,  heretofore  presented  on  the  28th  of  January,  1823, 
be  referred  to  the  Committee  of  Ways  and  Means. 

No  report  appears  to  have  been  made  by  that  committee. 

DECEMBER  13^,  1827. 

Mr.  PHILIP  P.  BARBOUR  submitted  the  following  resolution: 
"  Resolved,  That  the  Committee  of  Ways  and  Means  be  directed  to  report 
a  bill  for  the  sale  of  that  portion  of  the  stock  of  the  Bank  of  the  United  States 
which  is  held  by  the  Government  of  the  United  States,  and  the  application  of 
the  proceeds  thereof  to  the  payment  of  the  public  debt." 

On  motion  of  Mr.  GORHAM,  said  resolution  was  ordered  to  lie  on  the  table. 

On  the  20th  of  December,  the  said  resolution  was  again  considered  in  the 
House,  and  debated. 

On  the  2 1st  December,  after  further  debate,  a  motion  was  made  by  Mr. 
RANDOLPH,  that  the  resolution  do  lie  on  the  table;  which  was  decided  in  the 
negative:  Yeas  79,  Nays  107. 

The  said  resolution  was  thereupon  disagreed  to  by  the  House:  Yeas  9, 
Nays  174. 


APPENDIX. 

the  renewal  of  the  Charter  of  1310. 

Soon  after  the  meeting  of  the  present  Congress,  memorials  were  presented 
by  the  bank  to  both  Houses,  praying  a  renewal  of  their  charter.  These  were 
referred—in  the  Senate,  to  a  Select  Committee;  in  the  House,  to  the  Com- 
mittee of  Ways  and  Means.  This  latter  committee,  on  the  9th  of  February, 
1832,  made  a  report  favorable  to  the  application,  and  accompanied  it  by 
"  A  bill  to  renew  and  modify  the  charter  of  the  Bank  of  the  United  States.5' 

The  provisions  of  this  bill  are,  briefly,  as  follows: 

SEC.  1.  That  the  charter  be  continued  in  force  for  the  period  of  twenty 
years  from  the  3d  day  of  March,  1836,  w-ith  a  power  reserved  to  Congress  to 
repeal  it  at  any  time  after  ten  years,  upon  giving  three  years'  notice  to  the 
bank. 

SEC.  2.  That  the*  President  of  the  United  States  have  power  to  appoint  one 
of  the  directors  of  each  branch  of  the  bank,  as  he  now  does  a  portion  of  those 
of  the  principal  bank. 

SEC.  3.  That  any  of  the  officers  of  the  mother  bank  who  may  be  designated 
by  the  Secretary  of  the  Treasury,  shall  have  power  to  sign  and  countersign 
the  notes  and  bills. 

SEC.  4.  That  the  bank  be  prohibited  from  issuing  any  notes  except  such  as 
are  payable  at  the  office  from  which  they  are  issued;  and  also,  from  drawing 
checks  or  drafts  of  twenty  dollars  or  any  less  amount. 

SEC.  5.  A  list  to  be  furnished  annually  to  each  State,  of  the  stockholders 
residing  therein,  with  the  amount  of  their  stock;  and  the  States  to  have  the 
power  of  taxing  it  as  they  do  that  of  their  own  banks. 

SEC.  6.  The  bank  to  pay  to  the  United  States  interest  at  the  rate  of 

per  cent,  upon  Government  deposites. 

SEC.  7.  Bank  not  to  establish  any  additional  branch  thereof  without  the 
consent  of  Congress. 

Upon  this  bill  no  action  has  yet  taken  place. 


THE  END. 


INDEX. 


pa  J«P 

dkton,  Willis,  of  N.  C.,  his  speech  against  renewal  of  charter  in  1811,  .  190 

Ames,  Mr.,  of  Mass.,  his  speech  in  favor  of  bill  of  1791,     -  -  45 

Amendments  —  Mr.  Swoope's  to  bill  to  renew  charter,  moved  20th  April,  1810,  134 

Mr.  Love's,  -  -  134 

Various  to  Fisk's  bill,  in  1814,     -  526-529 

Anderson,  Joseph,  of  Tenn.,  in  Senate,  moves  to  strike  out  the  first  section  of 

bill  to  renew  the  charter,                  -  -  302 

dyes  and  Noex—  In  Senate,  on  bill  of  1791,        -  -  36 

In  the  House,  on  same,                                                                 -  -  85 

In  the  House,  on  the  postponement  of  the  bill  to  renew  charter  in  1811,  274 

In  Senate,  on  the  motion  to  strike  out  the  first  section  of  bill  renewing 

the  old  charter,  446 
On  the  resolution  declaring  that  it  is  expedient  to  establish  a  national 

bank,  with  branches,  in  1814,  .  486 

On  engrossing  Mr.  Fisk's  bill,  28th  November,  1814,  -  534 

On  section  requiring  bank  to  lend  to  Government,  -  530 

In  Senate,  5th  December,  1814,  on  motion  to  reduce  capital,  -  548 

On  Mr.  King's  bill,  in  Senate,  9th  December,  1814,  -  548 

On  the  third  reading,  in  House,  of  Mr.  King's  bill,  -  560 

In  House,  on  passage  of  Mr.  K's  bill,          -  -  570 

On  reducing  capital  from  fifty  to  thirty  millions,       -  -  577 

On  the  passage  of  the  bill,  7th  January,  1815,  in  the  House,  -  579 

In  Senate,  on  suspension  of  specie  payments,  -  585 

In  Senate,  on  bill,  after  President's  veto,  -  596 

on  Harbour's  bill,  -  605 

In  House,  on  indefinite  postponement  of  bill,  -  608 

on  appointment  of  directors  by  President,  -  679 

on  engrossment  of  bill,  -  680 

on  its  passage,                                                                 -  -  681 

In  Senate,  on  passage  of  bill,  3d  April,  1816,  -  706 

In  House,  on  indefinite  postponement  of  the  bill,    -                  -  -  712 

Bank  of  North  America.-  Proceedings  on  the  institution  of,  11,  12 

Ordinance  of  incorporation  of^                    -                                   -  -  12 

Utility  of  said  bank,                   -                                                      -  -  25 

Bank  of  the.  United  States:  Plan  of,  submitted  by  Hamilton,  .  ^.31 

Kill  to  incorporate,  introduced  into  the  Senate,        -  .  35 

Bill  passed  the  Senate,                                                                     -  -  36 

First  reading  of  the  bill  in  the  House,       -                 -                 -  -  36 

Passed  the  House,                                                                             .  .  g5 

Resolution  calling  for  names  of  stockholders  of,       -                 -  .  133 

Do.                   for  list  of  directors  of,  &c.                              -  .  138 
In  1811,  apply  for  a  temporary  continuation  of  their  powers  —  their  pray- 

er denied,                                                                  .                 .  447-8 

Barbour,  Mr.,  of  Va.  ,  reports  to  Senate  a  bill  to  incorporate  a  bank,  &c.  -  596 

Speech  on  Mr.  Mason's  motion  respecting  specie,                      -  .  687 

Barry,  W.  T.,  of  Ken.,  his  speech  against  renewal  of  the  charter,  in  1811,  -  211 

Bibb,  Mr.,  of  Geo.,  remarks  on  payments  of  specie  on  each  share  of  stock,  -  685 

Bill  to  incorporate  subscribers  to  the  old  bank,  (see  Bank  of  U.  S.) 

Presented  to,  and  signed  by,  the  President,               -                 -  -  85 

In  extenso,  reported  2d  April,  1810,  to  establish  a  bank,          -  -  122 

To  continue  in  force  the  act  of  Feb.  1791,  introduced  by  Mr.  Taylor,  -  132 

Bill  to  renew  charter  of  1791,  introduced  into  the  House  by  Mr.  Burwell,  137 

postponed  indefinitely,                   .  .  274 

In  Senate,  reported  by  Mr.  Crawford,  1811,             -                 -  -  300 

Rejected,                    -                 .                 .                 .                 .  -  446 

To  repeal  the  tenth  section  of  the  old  charter,         -                 -  .  447 

Reported,  to  establish  a  bank  in  Washington,          -                 -  .  473 
[This  bill  was  not  acted  on.] 


800  INDEX. 

Page. 

Bill  reported  by  Committee  of  Ways  and  Means,  487 

Same  bill  as  amended  in  Committee  of  the  Whole,                                    -  519 

Rejected,  on  motion  for  engrossing1,         -                                                      .  534 

Reported  by  Mr.  King-,  of  Senate,  2d  December,  1814,                              -  539 

Passed  the  Senate,     -                                                                                         .  549 

Rejected  in  the  House,  by  Speaker's  vote,                                                  -  570 

Vote  reconsidered,      -                                  -                                                   .  574 

Recommitted  to  Select  Committee,                                             -                 -  576 

Passed  the  House,     -                                  ....  579 

Copy  of,  as  passed  by  the  two  Houses,     -                                                   -  585 

Reported  in  Senate,  by  Mr.  Barbour,       -                                                   .  596 

Passed  the  Senate,    -                                                                                      .  605 
Reported  by  Mr.  Calhoun,  in  House,       -                                                      -621 

Committee  of  the  Whole  to  the  House,                                  -  668 

Ordered  to  be  engrossed — ayes  and  noes,                                                    -  680 

Passed  the  House,     -                 -                 -                 -                 -                 -  681 

Passed  the  Senate,  3d  April,  1816,  706 

Bonus,  Bank:  Mr.  Troup  moves  to  strike  out  of  the  bill  to  renew  the  charter  the 

clause  requiring-  a  bonus  to  be  paid  for  the  renewal,                                -  135 
Debate  on  said  motion,                                                                                   467-471 

Motion  to  apply  it  to  internal  improvement  of  the  country,      -  675 

Books  of  Bank:  May  be  inspected  by  a  committee  of  Congress,         -                 -  706 

Ordered  to  be  inspected  by  a  committee,                                                    -  714 

Boudinot,  Mr.,  of  N.  J.,  his  speech  in  favor  of  old  bank,                                      -  56 

Boyd,  Mr.,  of  N.  J.,  opposed  to  a  renewal  of  charter  in  1811 — his  speech,       -  204 

Bradbury,  Mr.,  of  Mass.,  his  motion  respecting-  subscriptions  in  Government 

stock,  and  debate  on  motion,            .                 .                 .                 .                 .  492 

Branches  of  Bank:  Proviso  moved,  that  they  should  not  be  established  with- 
out the  consent  of  the  States,            -                                                                     -  678 

Brent,  Mr.,  of  Va.,  advocates,  in  the  Senate,  the  renewal  of  the  charter,  though 

instructed  by  the  Legislature  of  Virginia  to  vote  against  it,                    .  393 

His  second  speech  on  the  same  subject,                   .                 .                 .  426 

Burwell,  Mr.,  of  Va.,  introduces  a  bill  to  renew  charter  of  1791,  .  .  137 
Moves  to  strike  out  first  section,  .  .  .  .138 
His  speech  on  said  motion,  .  .  .  .  .139 

•*•  Calhoun,  J.  C.,  of  S.  C.,  outline  of  his  plan  of  a  bank,  as  detailed  in  debate, 

16th  November,  1814,  .  ,  .  .  .495 

Moves  to  divest  the  Government  of  all  share  in  the  proposed  bank,  &c.       496 
-    His  motion  carried,  .  .  .  .  .513 

Moves  to  strike  out  the  section  of  the  bill  authorizing- the  U.  S.  to  sub- 
scribe twenty  millions  in  six  per  cent,  stock  to  the  capital  of  bank,      .       514 
This  motion  debated  and  carried,  .  .  .  514-517 

Bill  reported  by  him  8th  January,  1815,  .  .  .621 

His  speech  on  presenting  the  bill,  ....       630 

Capital  of  Bank:  Motion  of  Mr.  Gaston  to  reduce  from  fifty  to  twenty  millions,  531 
Motion  by  Mr.  Lowndes  to  reduce,  ....  533 

Do.         Mr.  Mason,  in  Senate,  to  reduce,  .  .  .       548 

Mr.  Sergeant's  motion  to  reduce — thirty-five  to  twenty  millions,  ,       638 

negatived,  .  .  .       653 

Clause  of  bill  allowing  prospective  increase  of  capital,  struck  out,  .       653 

"Casting  vote  of  the  Vice  President  defeats  bill  to  renew  the  old  charter,  .       446 

V^  of  Speaker,  defeats  bill  reported  by  Mr.  King, 

Cheves,  Mr.,  of  S,  C-,  (Speaker)  gives  casting  vote  against  Mr.  King's  bill,        .       571 
Clay,  Henry,  of  Ken.,  opposed  to  renewal  of  the  charter  of  old  bank  in  1811,   .       353 
His  speech  in  favor  of  bill  of  1816,  .  .  .  .669 

Clinton,  George,  Vice  President,  gives  a  casting  vote  on  motion  to  strike  out  1st 

section  of  bill  to  renew  the  charter,  and  defeats  the  bill,  .  .       446 

Clapton,  Mr.,  of  Va,,  moves,  23d  December,  1814,  to  strike  out  the  first  sec- 
tion of  bill  from  Senate  «*  to  incorporate,"  &c. — his  speech,  .  .       549 
Columbia,  District  of,  committee  to  inquire  into  the  expediency  of  establishing  a 

bank  in,  ....       472 


INDEX.  301 

Page. 

Columbia,  Bill  reported  to  establish  a  bank  in,                                       .                 .  473 

Committee.-  In  Congress  of  1 780,  to  confer  on  the  subject  of  a  bank,                    .  9 

In  Congress  of  1781,  on  same  subject,      .  .  .  .10 

Of  the  Whole  House  to  have  charge  of  Hamilton's  report  in  1 79 1 ,            .  15 
In  Senate,  on  said  report,         .                 .                  .                 .                 .35 

On  petition  for  renewal  of  charter,  16th  December,  1810,       .                 ,  135 
Of  Senate,  ask  the  opinion  of  the  Secretary  of  the  Treasury,  as  to  the 

renewal  of  bank  charter,       .....  300 

Of  Ways  and  Means  report  ag-ainst  power  of  Congress  to  incorporate  a 

bank,    .                                                    .                                   .                 .  472 

Of  Ways  and  Means  directed  to  inquire  iuto  the  expediency  of  establish- 
ing1 a  bank  within  the  District  of  Columbia,           ,                  .                  .  472 
Report  a  bill  for  that  purpose,                                      .                  .                  .  473 
On  motion  of  Mr.  Grundy  to  determine  the  expediency  of  establishing  a 

bank,    .  .  .  .  .     '  ,  475-480 

Of  the  Whole  House,  24th  October,  1814,  report  that  it  is  expedient  to 

establish  a  bank,                    .....  484 

Of  Ways  and  Means  report  a  bill  fora  bank,              .                  .                 .  487 

On  National  Currency,  6th  December,  1815,           .                 .                 .  609 

Of  Congress  may  inspect  books,  &c.  of  bank,          .                  .                 .  706 

Appointed  to  inspect  books  and  make  report,           .                 .                 ,  714 

Report  of,  appointed  by  Congress,            ....  714 

of  Committee  of  Ways  and  Means,  (Mr.  McDuffie's)    .                 .  735 

Condict,  Mr.,  of  N.  J.,  moves  to  locate  the  bank  at  New  York,             .                  .  675 

Constitutional  power  to  create  a  bank  denied  to  Congress,                  .                  .  472 

Opinions  of  various  gentlemen  upon  the  question,  in  1814,       .                  .  484-5 

Courts:  Bank  may  "sue  and  be  sued"  in  State  courts,         .                  .                  .  675 

Crawford,  Mr.,  of  Pa.,  his  speech  in  opposition  to  a  renewal  of  charter,                .  269 
Crawford,  W.  H ,  of  Geo.,  reports  a  bill  to  the  Senate  to  renew  the  charter  of 

1791,     .                 .                                   ....  300 

His  speech  ou  the  motion  to  strike  out  the  first  section  of  the  bilJ,            .  303 

Second  speech  on  the  same  subject,                           .                 .                 .  434 
Cuthbert,  Mr.  of  Geo.,  opposed  the  motion  of  Mr.  Sergeant  to  reduce  capital — 

his  speech,       .                  .                                    ....  649 

Dallas,  (Secretary)  letter  to  Committee  of  Ways  and  Means  in  1814,  upon  a 

bank,     -                                  .  ...      481 

letter  to  Mr.  Lowndes,  (Chairman,)  ....       535 

his  proposition  relative  to  bank,  ....       609 

his  letter  to  Secretary  of  Treasury,  with  plan  of  bank,  -       613 

Dana,  Mr.  of  Con.  on  the  amount  to  be  paid  in  specie,  on  each  share  of  stock,        691 

DEBATES  on  the  bill  of  1791,  -     "37-85 

Speech  of  Mr.  Madison,     -  -     39,  82 

Mr.  Ames,         -  45 

Mr.  Sedgwick,  50 

Mr.  Lawrence,  53 

Mr.  Jackson,  54 

Mr.  Boudinot,  56 

Mr.  Smith,  of  S.  C.,  -                                                               63 

Mr.  Stone,         -  .                                                64 

Mr.  Giles,  69 

Mr.  Gerry,        -  75 

Mr.  Vining,       -  81 

On  bill  to  renew  charter  of  1791,  in  the  House. 

Speech  of  Mr.  Burwell,  ....       139 

Mr.  Fisk,  ofN.  Y.  149-160 

Mr.  Seybert,        -  -               160-166 

Mr.  P.'B.  Porter,  166-180 

Mr.  Desha,  -                                                  181-186 

Mr.  Pickman,      -  .                186-190 

Mr.  W.  Alston,  .                190-193 
101 


\ 


INDKX. 


Delates.-    Speech  of  Mr.  Key, 

Mr.  Wright, 

Mr.  Boyd, 

Mr.  McKee. 

Mr.  Barry, 

Mr,  Findley, 

Mr.  McKim, 

Mr.  Gold, 

Mr.  Johnson, 

Mr.  Sheffey, 

Mr.  Garland, 

Mr.  Tallmadge, 

Mr.  Nicholson, 

Mr.  Crawford,  of  Pa. 

Mr.  Rhea.  of  Ten. 

Mr.  Eppes,  of  Va. 

Mr.  Stanley,  ofN.  C. 

Mr.  Taylor,  of  S.  C.  in  1810, 

In  the  Senate. 

On  bill  to  renew  the  charter  in  1811. 
Speech  of  Mr.jlCrawford,  of  Georgia, 
Mr.  Leib,  of  Pa. 
Mr.  Lloyd,  of  Mass. 
Mr.  Giles,  of  Va. 
Mr.  Clay,  of  Ken. 
Mr.  Pope,  of  Ken. 
Mr.  Smith,  of  Md; 
Mr.  Brent,  of  Va. 
Mr.  Taylor,  of  S.  C. 
Mr.  Pickering,  of  Mass. 
Mr.  Love,  of  Va. 
Mr.  Findley, 
Mr.  Troup, 


Pag?. 

193-196 

197-264 

204 

206,  295 

-  211 

-  215 

-  219 

-  223 

-  226 

-  235 

-  248 
.   252 

-  257 
.   269 
.   275 

-  282 
.   286 

-  457 


303,  434 

-  315 

-  317 

-  329 

-  352 
360,  393 

-  374 
393,  426 

-  410 

-  420 

-  451 
462 
469 


On  Mr.  Grundy's  motion  for  an  inquiry  into  the  expediency  of  a 

bank,         -  -  475-480 

On  Mr.  Gaston's  motion  to  reduce  capital  of  bank  from  sixty  to 

twenty  millions,  15th  Nov.  1814,  .      490 

Speech  of  Mr.  Ingham  of  Pa.,  17th  November,  1814,         •  498-506 

Mr.  Ingersoll,  of  Pa.  on  Mr,  Calhoun's  motion  to  amend 

the  bill,  -  .       506 

On  motion  to  strike  out  section  of  bill  allowing  United  States  to  sub- 

scribe twenty  millions,  -  -  514-517 

Speech  of  Mr.  Clopton,  of  Va.  on  Mr.  King's  bill,  .       549 

Mr.  Webster,  2d  January,  1815,         -  .       563 

Mr.  Calhoun,  on  bill  of  1816,  .  .  -       630 

Mr.  Calhoun's  bill,  in  House,  .  -       630 

Messrs.  Randolph,  Ward,  Sergeant,  Calhoun,  Pitkin,         634-5 

Speech  of  Mr.  Smith,  on  motion  to  reduce  capital,  -       636 

Mr.  Sergeant  on  same  motion,  -       638 

Remarks  of  Mr.  Ward,  of  Mass.  -       641 

Speech  of  Mr.  Tucker,  of  Va.  on  same  motion,  -       642 

Mr.  Webster  on  same,  >  -  -  .  -       646 

Mr.  Cuthbert,  of  Geo.         -  .       649 

Mr.  Hopkinson,  -  -       650 

Mr.  Sharpe,  of  Ken.  -       651 

Debate  on,  to  strike  out  clause,  allowing  Government  to  subscribe 

seven  millions  —  by  Mr.  Cady,  Mr.  Calhoun,   Mr.  Randolph, 

Mr.  Smith,  of  Md.,  Mr.  Wright,  Mr.  Jewett,  Mr.   Ross,  and 

Mr.  Goldsborough,  653-658 


INDEX. 

Page. 

Debate  on  motion  to  strike  out  the  clause  giving-  to  the  President  and  Se- 
nate the  appointment  of  a  part  of  the  Directors,        -  661 
on  this  motion  by  Mr.  Forsyth,  and  Mr.  Telfair,                  »                 662-666 
Speech  of  Mr.  Clay  in  favor  of  bill  of  1816,        -                                  .669 
in  Senate  on  motion  that  specie  payments  be  ten  instead  of  five  dol- 
lars on  each  share;  by  Mr.  Mason,  Mr.  King,  Mr.  Mr.  Bibb,  Mr. 
Barbour,  Mr.  Dana,  Mr.  Taylor,  and  Mr.  Sanford    ,                683-692 
Speech  of  Mr.  Wells,  of  Del.,  in  Senate  against  bill,         -                 -       694 
On   Mr.  Randolph's  motion  to  postpone  the  bill;  by  Messrs.   Cal- 
houn,    Grosvenor,    Randolph,    Webster,     Hurlbut,   Wright, 
McKee,  Sheffey,  and  others,                                                        707-71  2 
in  1819,  on  resolution  repeal  of  charter,  referred  to,                             .       734 
Deposites,  in  United  States'  Bank,  motion  to  repeal  part  of  an  act  directing 

them,     -  -180 

Desha,  Mr.  of  Ken.  his  speech  against  the  renewal  of  charter  in  1811,  -       181 

Directors  of  Sank,  motion  to  strike  out  clause  giving  to  President  and  Senate 

the  appointment  of  -       661 

Motion  to  strike  out  clause  which  confined  appointment  of  to  those  no- 
minated by  President  of  United  States,  •  .       666 
Of  appointment  of  President  from,                                                               666,  667 
Proposal  to  allow  those  appointed  by  Government  a  salary,  made  and  ne- 
gatived,                                                                                                      676,  677 
Motion,  as  to  appointment  of,  by  President,  renewed,                .  .       678 
Mr.  King  moves  to  strike  out  power  of  appointment  by  the  President,       693 
Mr.  Goldsboruugh  makes  the  same  motion,  on  contingency  of  a  sale  of 

United  States'  stock  .  .  .  .694 

Dividends  of  the  U.  S.  Sank  from  1792  to  to  1809,  .  117-120 

Eppes,  Mr.  of  Va.  denies  the  expediency  of  renewing  the  Bank  charter^  his 

speech,  .  .  .  .282 

Expediency  of  a  bank  declared  by  a  resolution,  .  484-486 

Findley,  Mr.  ofPenn.  advocates  the  renewal  of  charter  in  1811;  his  speech,          215 
his  speech  on  Mr.  Taylor's  bill,         ....          462 

Fisk,  Mr.  of  New  York,  speech  of,  on  motion  to  strike  out'first  section  of  bill  to 

renew  charter  in  1811,        .  .  .  '  .  149 

speech  of,  on  motion  to  reduce  capital  of  bank,     .  .  .         490 

Forfeiture  of  Charter.  Committee  of  the  Whole  had  amended  the  bill,  so  as  to 
make  this  the  penalty  of  a  non-payment  of  notes  by  bank — on  motion 
of  Mr.  Wright,  this  amendment  was  struck  out  in  the  House,  673 

Gallatin,  Albert,  reports  in  favor  of  a  bank,       .                  .  .116 

his  opinion  of  its  utility,          .                   .                  .                   .  jjg 

his  letter  to  a  Committee  of  Senate  upon  the  uses  of  a  bank,  300 

Garland,  Mr.  ofVa.  moves  postponement  of  bill  to  renew,  196 

advocates  renewal  of  charter;  his  speech,               .                  .  248 

Gaston,  Mr.  of  N.  C.  his  views  respecting  Fisk's  bill,  in  1814,  .         499 

moves  to  reduce  capital  from  fifty  to  twenty  millions,             .  490,  53 1 

his  motion  negatived,  15th  November,  1814,           .                  ,  '  493 

his  remarks  in  relation  to  Mr.  King's  bill,               .                 ,  .         55-7 

Gerry,  Mr.  of  Mass,  for  the  old  bank-;  his  speech,           .                  .  75 

Giles,  of  Va.  opposed  to  the  bill  of  1791,  his  speech,       .                 .  69 

and  to  renewal  of  charter  in  1811,                           .                 .  *        339 

his  opinion  upon  legislative  instructions,                  .                  .  343 

Gold,  Mr.  ofN.  Y.  advocates  the  renewal  of  the  charter;  his  speech,  in  1811,         223 

Grundy,  Mr.  ofTenn.  moves  the  appointment  of  a  committee  to  inquire  into 

the  expediency  of  establishing  a  National  Bank,                  .  .         475 

Hall,  Mr.  of  Georgia,  moves  a  reconsideration  of  bill  rejected  by  Speaker's 

vote>  •  ...         571 

moves  to  apply  bonus  of  bank  to  internal  improvement  of  the  country,         675 


804  INDEX. 

Hamilton,  Alexander,  proposes  the  establishment  of  a  National  Bank,  and  sub- 
mits a  plan  thereof,              .                 .                 .                 .  .15 
his  report  to  Congress  on  the  subject  of  a  bank,                      .  .     15-35 
his  argument  on  the  constitutionality  of  the  bill,    .                  .  .  95-112 
his  opinion  upon  the  time  the  President  may  retain  a  bill  before  it  be- 
comes a  law,            .                 .                 .                 .                 .  .113 

Hophinson,  Mr.  of  Pa.  speaks  in  favor  of  a  reduction  of  capital,       .  .         650 

Ingham,  Mr.  of  Pa.  his  speech  on  Mr.  Calhoun's  motion,,  16th  November,  1814, 
to  amend  the  bill,  and  to  allow  subscriptions  to  be  one-tenthin  specie, 
and  nine-tenths  in  Treasury  notes,  ....  498 

Instructions,  Legislative.     Quere,  whether  binding1  upon  Senators — Mr.  Brent's 

opinion  thereon,  .....         394 

Mr.  Pickering's  observations  upon,       ....         420 

Interest  on  notes  not  paid  on  demand,  20  per  cent.,  proposed  by  Mr.  Randolph,      673 

Internal  Improvement ,  proposition  for  applying-  profits  of  banks,  to  purposes 

of,  &c.  .....  120,  121 

motion, to  apply  bank  bonus  to,  .  . .  ,  .         675 

Jackson,  Mr.  of  Georgia,  opposes  the  bill  of  1791,  .  .  .54 

Jackson,  (President)  extract  from  his  first  message  in  regard  to  bank,  734 
Jefferson,  Thomas,  gives  his  opinion  to  Washington  against  the  constitutionality 

of  the  bank  bill,                    .                  ...  91 

Johnson,  Mr.  of  Ken.  opposes  the  renewal  of  the  charter  in  181 1;  his  speech,  226 
Johnson,  Mr.  of  Fa.  moves  a  resolution  for  the  repeal  of  the  bank  charter, 

Judicial  Decisions.               .                .                 ,                 .                 .  781 

Jurisdiction,  whether  Congress  can  give,  to  State  courts,                                    •  675 

Key,  Philip  Barton,  of  Md.  his  speech  in  favor  of  a  renewal  of  charter  in  1811,       193 
his  remarks  on  power  to  incorporate  a  bank»          .  .  469-470 

Kilbourn,  Mr.  of  Ohio,  proposes  a  plan  of  a  bank,  .  .  .         538- 

King,  Mr.  of  N.  Y.  reports*  in  Senate,  a  bill  to  incorporate  a  Bank  of  United 

States,  2d  December,  1814,  ..  .  .  .         539' 

proposes  sundry  amendments  to  bill,     .  .  .  548-549 

his  remarks  on  payments  of  specie,         .  .  •         664 

Lawrence,  Mr.  his  remarks  in  favor  of  the  bill  of  1791,     .  53" 

Legislative  Instructions,  various  opinions  upon,  .  '          394,  343,  420- 

Leib,  Mr.  of  Pa.  opposed  to  renewal  of  charter,  .  315 

Loans,  clause  in  bill  requiring  bank  to  make  loans  to  Government  struck  out,         529 
motion  in  Senate,  to  strike  out  clause  requiring  forced  loans,  .          605 

Location  of  Bank,  motion  to  substitute  Washington  in  place  of  Philadelphia,  for 

parent  bank,       ...  .         659 

New  York  proposed,  and  carried,,  ....         676 

vote  in  favor  of  New  York  reconsidered,  and  reversed,         .  677 

Lloyd,  Mr.  of  Mass,  in  favor  of  renewal  of  charter;  his  speech  on  motion  to 

strike  out  first  section  of  the  bill  to  renew,          .  .317 

Love,  Mr.  of  Fa.  introduces  resolutions  that  the  Secretary  of  the  Treasury  fur- 
nish the  names  and  titles  of  stockholders  of  the  bank,  the  number  of 
shares  voted  on,  &c.  and  also  his  data  for  the  statement  of  the  dividends 
in  1809,  with  other  information, 

for  a  statement  of  the  debts  and  concerns  of  the  bank,  19th  Dec.  1810,         135 
his  speech  on  bill  to  renew  the  charter,  •         451 

Lowndes,  Mr.  of  S.  C.  his  views  of  bill  reported  in  1814,  by  Committee  of  Ways 

and  Means,  .  .  .  .  51 6r  518,  526,  532 

moves  to  reduce  capital  of  bank,  •         533 

Madison,  Mr.  his  speech  in  opposition  to  the  first  bank  bill;  denies  its  constitu- 
tionality and  expediency,  . 

his  second  speech  on  same  subject,       .  , 

his  veto  on  bill  passed  by  both  Houses, 
extract  from  his  message,  5th  December,  1815,     . 
his  letters  to  Mr.  Ingersoll»  »  778 


INDEX.  8Q5 

Page. 
Marshall,  Chief  Justice,  his  opinion  in  the  case  of  M'Culloch  vs.  The  State  of 

Maryland,                                                                                                       .  782 
Mason,  Mr.  of  N.  H.  moves,  in  Senate,  that  the  specie  payment  on  shares  of 

stock  be  ten  instead  of  Jive  dollars,      ....  683 

debate  on  this  motion,                                .                                                      683,  692 
moves  the  reservation  of  a  power  to  repeal  the  act  in  case  of  suspension 

of  specie  payments,  &c.     ...                                   .  705 

Memorial  of  Bank,  for  renewal  of  charter,  presented  in  House,  26th  Mar.  1808,  115 

same  in  Senate,  20th  April,  1808,  .  .  .115 

to  the  Senate,  presented  18th  December,  1810,                                      .  300 

referred  to  a  Select  Committee,  .  .  460,451 

petition  of  inhabitants  of  New^York  for  a  national  bank,        .  472-480 

of  citizens  of  New  York  for  a  bank,        .  539 

M'Duffie,  Mr.  of  8.  C.  his  report  on  subject  of  bank  made  in  1830,                   .  735 

M'Kee,  Mr.  of  Km.  in  favor  of  renewing- the  old  charter — his  speech,              .  206 

his  second  speech  on  same  subject,        .                 .                                   .  295 

M'Kim,  Mr.  of  Md.  opposes  the  renewal  of  the  charter  in  1811 — his  speech,  219 

M'Lean,  Mr.  of  Ken.  moves  a  proviso,  that  no  branch  shall  be  established  in  a 

State  without  the  consent  thereof,     ....  678 

Morris,  Robert,  submits  plan  of  a  bank,             .                 .                 .  11 

Morris,  Gouverneur,  agency  in  forming  Bank  of  North  America,                      .  14 

Motions— of  Mr.  Burwell,  to  strike  out  first  section  of  bill  to  renew  charter,  138 

by  Mr.  Newton,  to  postpone  indefinitely  the  bill  to  renew  the  oldcharter,  196 
of  Mr.  Grundy,  for  appointment  of  a  committee  to  inquire  into  the  expe- 
diency of  establishing-  a  bank,  and  debate  on  said  motion,                     475-480 

to  locate  bank  at  Washington,  negatived,               .                  «                  .  489 
by  Mr.  Calhoun,  to  deprive  the  Government  of  all  stock  in  bank,  and 

respecting  payment  in  specie,              .  496 

Mr.  Ingham's  speech  on  that  motion,     ....  498 
to  reduce  capital  from  50  to  20  millions,                  .                 ,                 .531 

same  motion  by  Mr.  Mason,  in  Senate,                     .                 .                 .  548 
to  amend,  so  as  to  give  Congress  the  power  to  declare  the  charter  void, 

in  certain  cases,                     .....  530 

by  Mr.  Webster,  to  recommit  bill,  with  certain  instructions  to  committee,  562 

motion  negatived,         ....  570 

by  Mr.  Sergeant,  to  reduce  capital,        ....  635 

negutived,                     ....  653 

to  strike  out  clause  allowing1  Government  to  subscribe  seven  millions,  653 

to  exclude  the  Government  from  the  appointment  of  directors  of  bank,  661 

motion  neg-atived,                     .....  666 

by  Mr.  Randolph,  to  impose  an  interest  of  20  per  cent,  upon  notes  not 

paid  on  demand,                   .....  673 

motion  negatived,                     .                                                     .  674 

Mr.  Mason's  on  specie  payments,            .                  .                  .  683 

for  a  repeal  of  charter,  in  certain  cases,                 .                 .  693 

New  York,  motion  to  locate  the  bank  at                               .                                   .  675 

"         "           "           "         carried,                                .                 .  676 

vote  for,  reconsidered,  and  reversed,       ....  677 
Nicftolson,  Mr.  of  N.  Y.  speaks  in  favor  of  the  bill  for  a  renewal  of  the  charter 

of  1791,    .                                                                        ...  257 

North  America,  Bank  of,  instituted      .                 .                 .                 .  10-14 

utility  of  this  bank,  .  .  .  .25 

Opinion  of  E.  Randolph,  Attorney  General,  given  to  Washington,  on  the  consti- 
tutionality of  the  first  act  of  incorporation,  .  .  86-89 
of  Th.  Jefferson,  Secretary  of  State,  against  the  bank,  .  .91 
of  A.  Hamilton,  in  support  of  bill,  .  .  95-112 
of  A.  Gallatin,  of  the  advantages  of  a  bank.  .  .  .118 
of  President  Jackson,  in  regard  to  bank,  .  .  .  734 
of  Chief  Justice  Marshall,  .  ...  782 


806  INDEX. 

Pickering,  Mr.  of  Mass,  in  Senate,  urges  a  renewal  of  the  old  charter,  .       420 

Pickman,  Mr.  of  Mass.,  speaks  in  favor  of  a  renewal  of  charter  in  1811,  .        186 

Pitkin,  Mr.  of  Conn.,  in  committee  of  the  whole,  moves  to  strike  out  the  clause 

allowing'  the  Government  to  appoint  directors,     .  .  .661 

renews  his  motion  in  the  House.  ....       678 

Plan  of  Bank  of  North  America,        .  .  .  .11 

of  old  Bank  of  United  States,  embraced  in  Hamilton's  report,  .         31 

Mr.  Calhoun's,  in  1814,  .....       495 

by  Mr.  Kilbourn,  of  Ohio,        .....       538 

Outline  of  Mr.  King's  bill,  in  1814,  .  .  .  549-558 

by  Secretary  Dallas,  with  letter,  .  .  .  613-619 

Pope,  Mr.  of  Ken,  urges  a  renewal  of  charter — his  speech,  .  .       360 

in  explanation,  after  Mr.  Smith,  of  Md.  .  .       393 

Porter,  P.  B.  ofN.  Y.  his  speech  against  renewal  of  charter  in  1811,  .       166 

Postponement.     Mr.  Wells  moves  postponement  of  bill  to  next  session — his 

speech,  .  .  .  .       694 

President  of  United  States,  (Madison)  his  veto  message  on  bank  bill,  30th  Janu- 
ary, 1815,  .  .  .  .  .594 

Extract  from  his  message,  (Mr.  Madison's)  in  1815,  .  .       609 

"        from  General  Jackson's  to  21st  Congress,  .  .       734 

Proceedings,  in  the  old  Congress,  on  the  incorporation  of  the  Bank  of  North 

America,  .  .  .  .  .  .10 

in  Senate,  on  the  first  Bank  of  United  States,          .  ,  35,  36 

in  the  House  and  Senate,  in  1808,  on  memorial  for  renewal  of  charter,         115 
in  Senate,  on  motion  to  strike  out  the  1st  section  of  bill  to  renew  the  old 

charter,  ......       302 

in  Senate,  on  Mr.  King's  bill,  .  .  .  539-585 

Randolph,  Attorney  General:  His  argument  against  the  constitutionality  of  the 
first  bank  bill,    °  ......  86-89 

Randolph,  Mr.,  of  Va.  his  opinion  of  the  currency,  .  .  .       634 

His  speech  upon  striking  out  clause  allowing  the  Government  to  hold 

stock,    .  .  ...       654 

On  penalty  for  non-payment  of  notes,       ....       674 

Moves  the  indefinite  postponement  of  bill,  .  .       707 

Reconsideration  of  vote  on  Mr.  King's  bill,  moved,  .  .  .571 

debate  on  said  motion,  ....  572-574 

motion  carried.  ...  ...          574 

Reference:  Debate  on  reference  of  bill  to  establish  a  bank  to  be  located  in 

Washington,          '.....       473 
Motion  to  refer  bill  to  select  committee — negatived,  .       604 

Renewal  of  charter,  solicited  in  1808,  .  .  .115 

Proceedings  thereon  in  House  and  Senate,  .  .  .115 

Petition  of  stockholders  for,  18th  December,  1810,  .        135 

Bill  for,  presented  by  Mr.  Taylor,  .  .132 

Do.  do.  Mr.  Burwell,          .  .  .137 

Bill  for,  in  House,  postponed,  ....       274 

in  Senate,     .  .  .  .  ,  .446 

Repeal  of  charter:  Motion  that,  in  case  of  non-payment  of  bills  and  notes,  Con- 
gress may  effect  a,  .....       693 
This  motion  renewed  and  negatived,        ....       705 
Moved  by  Mr.  Johnson,  of  Va.,  February  9,  1819,  .  .       734 
Report  of  Alexander  Hamilton,  Secretary  of  the  Treasury,  recommending  the 

establishment  of  a  bank,        .  .  .  .15 

of  Secretary  of  the  Treasury  (Gallatin)  on  the  subject  of  a  bank,  made 

to  Senate,  3d  March,  1809,  .  .116 

of  Select  Committee  on  the  memorial  of  bank  for  a  renewal  of  charter, 

29th  January,  1810,  .  .  .  .        121 

Report,  of  committee  on  Mr.  Love's  resolution  declaring  it  expedient  to  esta- 
blish a  bank,          .  .        122 
Gallatin's,  of  affairs  of  bank,  3d  January,  1811,       .                .  .136 


INDEX.  307 

Report  of  Committee  of  Ways  and  Means,  denying-  power  of  Congress  to  esta- 
blish a  bank,  ....       472 

of  committee  under  Mr.  Spencer's  resolution,          .  .  .714 

of  Committee  of  Ways  and  Means,  (McDuifie's)     .  ,  .       735 

in  Senate,  of  Mr.  Smith,  of  Md.,  ....       772 

Resolutions  in  old  Congress,  approving  of  the  plan  of  a  bank,  .   10, 11 

of  Mr.  Nicholas  for  a  "  general  national  establishment  of  banks  through- 
out the  United  States,"         .  .  .  .  .120 

Love's,  of  4th  April,  1810,  asking  names  and  titles  of  stockholders,  &c.       132 
for  a  list  of  directors  of  bank  and  stock  held  by  foreigners,   by  Mr. 

Wright,  .  .  .  .  .  .138 

by  Mr.  Love,  to  repeal  an  act  directing  deposites  to  be  made  in  the  Unit- 
ed States'  Bank,    .  .  .  .  .  .180 

of  the  State  of  Virginia,  instructing  members  to  oppose  renewal  of  the 

charter,  ......       299 

by  Mr.  Webster,  to  recommit  bill  with  certain  instructions,      .  .       562 

Rhea,  Mr.  of  Ten.,  his  speech  in  opposition  to  the  renewal  of  the  charter,  in  181 1,  275 
Root,  Mr.  ofN.  Y.,  moves  that  six  per  cent.  United  States'  stock  be  subscriba- 

ble  at_ninety  per  cent.  .  .  .  660-675 

Sedgwick,  Mr.,  of  Mass,  his  speech  in  favor  of  bill  of  1791,  .  .         50 

Sergeant,  Mr.,  of  Pa,,  moves  to  reduce  capital  of  the  proposed  bank  from  thir- 
ty-five to  twenty  millions,     .....       635 
His  speech  in  support  of  the  motion,        ....       638 
Seybert,  Mr.,  of  Pa.,  his  speech  in  1811,  on  motion  to  strike  out  the  first  sec- 
tion of  bill  to  renew  charter,  .  .  .  .  .160 
Scire  facias:  Provision  for  issuing  of,  against  bank,              .                  ,  588-9 
Resolution  submitted  ordering  a,                                                    .  732 
Sharpe,  Mr.,  of  Ken.,  moves  to  refer  bill  to  a  select  committee,  with  certain  in- 
structions, 13th  February,  1815,           .                 .                 .                 .606 
opposed  to  a  reduction  of  capital — his  speech,         ,                 .                 ,       651 
Shares,  Bank:  Motion  to  make  them  one  instead  of  Jive  hundred  dollars,             .       492 
of  the  specie  to  be  paid  on  each,               ....       683 
Sheffey,  Mr.,  of  Va  ,  urged  the  renewal  of  the  charter  in  1811 — his  speech,      .       235 
Smith,  Mr.,  of  S.  C.,  speech  in  favor  of  the  old  bank,         .                  .                  .63 
Smith,  Mr.,  of  Md-,  opposes  the  renewal  of  the  charter — his  speech  on  motion 

to  strike  out  first  section,     .....       374 
Speech  on  Sergeant's  motion  to  reduce  capital,       .  .  .       636 

His  report  in  1830,  on  bank,    .  .  .  .  .773 

Smilie,  Mr.,  of  Pa.,  presented  a  resolution  of  t.h*»  Legislature  of  that  State  in- 
structing her  members  to  vote  ag-alnsc  renewal  of  charter  of  1 79 1 ,  .       247 
Specie.-   Motion  to  make  notes  payable  in,  at  branches,         .                                    .561 
payments — propositions  for  suspension  of,                 .                 .  581-2 
Senate  refuse  to  allow  suspension  of,                          .                 „                  .       585 
Motion  to  strike  out  clause  dispensing  with  payments  of,          .                  .       605 
to  pay  ten  instead  of  five  dollars  per  share,  ,                  .                  .       650 
Clause  allowing  suspension  of  payments  of,  struck  out,            ,                 .       668 
Motion  that  ten  dollars  of,  be  paid  on  each  share,                     .                  .       683 
Spencer,  Mr.,  of  N.  Y,,  moves  the  appointment  of  a  committee  to  inspect  the 
books  of  bank,  and  report  whether  the  provisions  of  the  charter  had 
been  violated,  &c.                  .                 .                 .                 .                 ,714 
His  report  made  in  1819,           .....       714 
Speeches:  See  "Debates," 

Stanley,  Mr.,  of  N,  C-,  in  favor  of  renewal  of  charter,  .  .  .       286 

States.-  Motion  that  books  for  subscription  be  so  opened  that  stock  should  be 

distributed  in  proportion  of  representation  of,  ,  ,  .       693 

Statement  of  affairs  of  United  States'  Bank  in  1 809,  .  .117 

Do  madeinlSll,  .  .  .  .136 

Stock  of  Sank:  Motion  by  Mr.  Wright,  of  Md.,   for  an  apportionment  of  it 

among  the  States,  &c.       ,  .  .  .  .  .489 

Government:  Propositions  as  to  the  terms  on  which  it  might  be  subscribed, 

as  part  capital  to  the  bank,  ....       493 


808  TNDEX- 

Page. 

Stockt  Government)  Motion  that  it  be  subscribed  at  ninety  per  cent.  660,  676 

Stone,  Mr*  of  Md,,  against  the  bill — his  speech,  .  .  .64 

Supplementary  acts,  under  the  old  charter,         «  .  1 14 

Tallmadgc,  Mr.  of  Conn,  in  favor  of  renewal,  .  .         252 

Taylor,  Mr.  of  S.  C.  in  favor  of  the  renewal  of  the  bank  charter;  his  speech  in 

the  Senate  thereon,  .  .  .  .  .410 

reports  a  bill  to  renew  the  charter,         .  .  .132 

his  speech,  in  the  House,  on  said  bill,     .  .  .         457 

on  amount  to  be  paid  in  specie,  ,  .  ,691 

Taylor,  Mr.  of  N.  Y.  reports  a  bill  to  establish  a  bank,  .  .         473 

Treasury,  Secretary  of,  (A.  Hamilton)  his  report  upon  a  National  Bank,  with  a 

plan  thereof,        .  .  .  .'  .  .15 

his  opinion  to  Washington  upon  the  constitutionality  of  the  bill  to  esta- 
blish it,  .  .  .  .  .  .95 

(A.  Gallatin)  his  report  upon  a  bank,     .  .  .116 

his  letter  to  a  committee  of  the  Senate,  upon  the  utility  of  a 
bank,  .  .,  ...         300 

Letter  of  Secretary  Dallas,  to  Committee  of  Ways  and  Means,   17th  Oc- 
tober, 1814,  in  regard  to  currency  and  a  bank5  .  .         481 
Letter  of  Mr.  Dallas  to  Mr.  Lowndes,  27th  November,  1814,  .         535 
proposition  of,  relative  to  currency  and  bank,         .         609 
Dallas's  letter  to  Committee  on  currency,  with  plan  of  bank,  December, 

1815,  ,  .  613-619 

Treasury  Notes,  subscriptions  to  bank,  not  payable  in,  .  ,         660 

Trimble,  Mr.  of  Ken.  his  resolution  for  a  sciere  foci  as  against  the  bank,  .         732 

Troup,  Mr.  of  Georgia,  moves  to  strike  out  clause  requiring  payment  of  a  bonus 

by  thebank,  in  1810,  .....          135 

his  remarks  on  that  motion,     ....  467-469 

his  motion  rejected,  .  .  .  .  .471 

Tucker,  Mr.  of    Fa.   opposes  Mr.  Sergeant's  motion  for  reducing  capital  of 

bank — his  speech,  ,  .  642 

United  States,  motion  to  strike  out  clause  of  bill  allowing  them  to  subscribe  seven 

millions,  ,...,,  653 

motion  negatived,  .....  658 

stocks  of,  at  what  rate  subscribable,      ....  660 

rV:«   Madison  to  bank  bill,  30th  January,  1815,     .  .  .594 

Fining,  Mr.  of  Del  in  favor  of  *,!<!  bank— his  speech,       .  .  .81 

Virginia  instructs  her  members  to  oppose  renewal  of  charter,  .  ,         299 

Washington,  his  note  to  Hamilton,  requiring  his  opinion  on  bank  bill.  .          94 

asks  the  opinion  of  Hamilton  as  to  the  time  he  may  retain  a  bill  presented 

for  his  approbation,  .  ,  .  .  .113 

City  of,  motion  to  locate  bank  there,     .  ,  .          473,  489,  659 

Ward,  Mr.  of  Mass,  on  motion  to  reduce  capital,  .  .  .         641 

Ways  and  Means,  report  of  Committee  of,  on  part  of  President  Jackson's  mts- 

sage  relating  to  the  Bank,  (Mr.  M'Duffie,  chairman)         .  .         735 

Webster,  Mr.  ofN.  H.  his  views  of  bill  reported  *by  Committee  of  Ways  and 

Means,  15th  November,  1814,  .  .  .  .531 

moves  sundry  resolutions,  29th  December,  1814,  by  way  of  amendment 

to  bill,  .  .  ,  .  ,  .562 

his  speech  in  support  of  resolutions,      .  ,  .  563-569 

his  motion  to  recommit  bill,  negatived,  .  .  .         570 

speech  on  Mr.  Sergeant's  motion  to  reduce  capital,  .  .         646 

Wells,  Mr.  of  Del.  his  speech,  in  Senate,  against  the  passage  of  bill  of  1816,  694 

Wright,  Mr.  of  Md.  speaks  in  opposition  to  a  renewal  of  the  charter  of  the  old 

bank,  ,  .197 

in  favor  of  a  capital  of  forty-five  millions,  .  ,  .         677 


RETURN    CIRCULATION  DEPARTMENT 

202  Main  Library 


LOAN  PERIOD  1 
HOME  USE 

2 

3 

4 

5 

6 

ALL  BOOKS  MAY  BE  RECALLED  AFTER  7  DAYS 

Renewals  and  Recharges  may  be  made  4  days  prior  to  the  due  date. 

Books  may  be  Renewed  by  calling        642-3405 


DUE  AS  STAMPED  BELOW 

APR  2  3  199 

AUMDiSCcnic 

-~     *"»  —i  'A  * 

R 

*>  22  94 

FORM  NO.  DD6 


UNIVERSITY  OF  CALIFORNIA,  BERKELEY 
BERKELEY,  CA  94720 


GENERAL  LIBRARY  -  U.C.  BERKELEY 


LI' 


RETURN 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


